Disney's No. 2 exec, in line for Magic Kingdom's throne

Robert A Iger was grasping for words. Standing before shareholders in San Francisco last month, the normally quick-witted Iger, chief executive of the Walt Disney Co., had been caught off guard by Brooke Ledwith, an inquisitive six-year-old. “Who was the first Disney princess to walk on a Disney cruise ship?” she asked, standing on tiptoe to reach a microphone.
As leader of the world’s largest entertainment company, Iger has command of many facts, but the nautical history of princesses is not one of them. “Tom?” he finally said, as titters rose from the audience. “Can you answer?”
Thomas O. Staggs, who became Disney’s number two executive in February, instantly supplied a satisfying response from his seat in the front row. “We couldn't choose just one,” he told the girl. “But Cinderella was definitely one.”
For 25 years, Staggs has devoted himself to the Disney brand, whether closing the $7.4 billion purchase of Pixar in 2006 as chief financial officer, or christening Walt Disney World’s Seven Dwarfs Mine Train last year as theme park chairman. (Yes, Snow White was there, too.)
But now Staggs finds himself under intense scrutiny as next in line for the Magic Kingdom’s throne. Can he step in smoothly when Iger retires as expected in 2018? It’s a tantalising question given Disney’s rocky history of succession. Disney has made it clear that his elevation to chief operating officer in February was not a coronation. So Staggs must now walk one of corporate America’s most daunting gauntlets, working to convince board members that he is up to an almost impossible task — following in Iger’s colossal footsteps — while remaining carefully subordinate to his mentor. By 2018, Staggs will either get the job, possibly Hollywood’s biggest, or he will be facing the end of his Disney career.
As princes go, Staggs has his own list of accomplishments. In the 12 years he spent as chief financial officer, he worked not only on the Pixar deal, but also on the $4 billion acquisition of Marvel Entertainment in 2009. In the five years he spent as chairman of Disney Parks and Resorts, Staggs more than doubled theme park operating profit, to $2.66 billion, and fixed the kinks in an important $1 billion Disney World technology project.
But none of those successes cut to the heart of why Staggs beat out another internal candidate, James A. Rasulo, to become the favoured contender to lead Disney, a company that is viewed as a national treasure by its many passionate fans.
Time and again while running Disney’s vast theme park operation, Staggs, 54, proved he understood how crucial it was that generations of consumers continued to feel a primal connection to the company. That has been one of Iger’s fundamental beliefs during his tenure as chief: In a world of infinite entertainment choices, enhancing and protecting Disney’s warm, fuzzy, family-friendly brand must be priority number one, even above quick-hit profits.
“Tom definitely knows Disney and what it takes to make Disney so special,” Iger said at that shareholder meeting. Staggs, in a light gray suit, stood and offered a humble wave to the crowd, where Roy P Disney, Walt Disney's grandnephew, smiled and clapped.
It’s an understanding that goes well beyond Staggs’ training as a financial steward. Consider his creative input for a coming $500 million ‘Avatar’-inspired addition to Disney’s Animal Kingdom in Florida. In 2011, Iger and Staggs had breakfast with James Cameron, the director of Avatar, and Jon Landau, who produced the movie. They were discussing a deal to make Avatar, which took in $2.8 billion worldwide, part of Disney’s Hollywood Studios theme park.
Out of the blue, according to Landau, Staggs floated a more ambitious idea: What about instead adding an entire ‘Avatar’ land to Animal Kingdom, a park with an ecological theme that could use a kick in the pants? “It was Tom who had the vision to say, ‘Hey, maybe this isn’t just part of a studio tour — let’s think bigger,’” Landau said. “Tom is not going to spend Disney’s money frivolously. But he is capable of making the best creative decision despite it not being the most economical decision, and that is crucial for the Disney brand.” Landau added, “You don't get to run Disney if you’re an accountant.”
MBA with imagination
On paper, Thomas Owen Staggs is exactly that — a number cruncher. That perception led to a ripple of dismay in Hollywood’s creative ranks when he was elevated in February: Oh, great, another entertainment mogul with limited experience in the actual making of entertainment. After earning an MBA from Stanford, Staggs, who declined to be interviewed for this article, worked at the investment bank Dain Bosworth and then at Morgan Stanley. He joined Disney in 1990, helping pull together deals like the purchase of Capital Cities/ABC for $19 billion in 1995, and was named chief financial officer in 1998 by Michael D Eisner, who was then Disney’s chief executive.
“Tom was a star CFO,” said Alan D. Schwartz, the executive chairman of the investment firm Guggenheim Partners, who previously ran Bear Stearns. In particular, Schwartz said Staggs had helped calm Wall Street when Disney endured an unsuccessful 2004 hostile takeover attempt by Comcast and a simultaneous shareholder effort to oust Eisner, which was ultimately successful.
Staggs, known for his ever-present Gucci loafers and thrust-forward chest, is also a natural showman. Some might even call him a ham. In 2011, he appeared onstage at a Disney fan convention wearing a gaudy earring that dangled to his shoulder, an insider reference to the colorful style of Joe Rohde, the Disney imagineer leading the ‘Avatar’ park design. In 2012, while attending the unveiling of new attractions at Disney’s California Adventure in Anaheim, Staggs did the limbo under a security rope.
Most notably, not long after he took over the parks division from Rasulo in January 2010 — they switched jobs, with Rasulo becoming chief financial officer — Staggs cast himself as the star of a comedic video. Used at fan conventions, the video showed Staggs in costume performing various Disney theme park jobs: wisecracking Jungle Cruise skipper, balloon salesman, topiary clipper, barbershop quartet singer.
“Nice and juicy!” he said in one segment, handing out a barbecued turkey leg. (At the time, a Disney public relations operative winced at the turkey leg bit as too corny. Staggs kept it in). Some Disney insiders suspect the willingness of Staggs to show a warm, wacky side was a calculated effort to differentiate himself from Rasulo, who is not known for lightheartedness. To put it in Disney terms, if Staggs is Woody from Toy Story — the popular Everyman — Rasulo can come across like Stromboli from ‘Pinocchio’, a hot-tempered character focused on commerce.
Whatever the motivation, it worked, at the very least helping Staggs win the loyalty of important members of Disney’s creative core, including John Lasseter, the Pixar co-founder who now oversees Disney’s entire animation operation. Speaking at an event for fans of the movie ‘Cars’ in 2012, Lasseter squeezed Staggs’ arm and compared him to an ice cream truck, “because of his good humor”.
Lasseter’s high opinion of Staggs may seem beside the point, but that kind of warm connection is critical to Disney’s future. In many ways, the company’s continued success turns on the ability of Staggs — should he indeed win Iger’s crown — to sustain a corporate environment where creative powerhouses like Lasseter are happy and can flourish.
Iger’s tenure has largely been about acquiring boutique content factories, including Lucasfilm, the ‘Star Wars’ studio purchased in 2012 for $4 billion. To continue to grow, Disney needs those creative assembly lines to keep humming, a difficult task given the imagination-numbing realities of life inside a megacorporation.
The theme park division that Staggs led is much bigger than most people realise. Walt Disney Parks and Resorts employs 130,000 people on three continents, with 13 parks attracting an estimated 133 million visitors annually. Rounding out the division: four Disney Cruise ocean liners, about 40 hotels, a condo time-share empire, the stand-alone Aulani resort in Hawaii and the Adventures by Disney private tour business.