Apple Inc. is the world's most valuable corporation, but the company's board of directors is relatively small. If Apple were a country, its fiscal 2012 revenues of $156.5 billion would rank 55th in the world in terms of GDP, but the company has only eight directors on its board, and that includes CEO Tim Cook. This is the first in a series looking at each of the board members and what they bring to Apple Inc.
Apple board member and Disney CEO Bob Iger is a high profile media mogul who has been a good friend to Apple since ascending to the throne of Disney in 2005.
So far, his company has been quick to partner with Apple in bringing TV, movies, and music to Apple's iTunes Store, and Disney's success with those ventures has helped pave the way for other media companies to work with Apple, too. With Apple rumored to be interested in disrupting the television set market, Mr. Iger is Apple's media mogul up the sleeve.
How He Got There
Bob Iger is the newest member of Apple's board of directors, having joined joined November 15th, 2011, the month after Apple cofounder Steve Jobs passed away. Understanding his role at Apple starts with understanding the relationship between Apple, Disney, and Steve Jobs's other company, Pixar.
Steve Jobs sold Pixar to Disney for more some $7.4 billion in 2006. As part of that deal, Steve Jobs became Disney's largest shareholder, owning some 7.7 percent of the company. Mr. Jobs also joined Disney's board of directors, and corporate governance standards largely prevented Mr. Iger from serving on Apple's board at the same time.
Bob Iger and Steve Jobs after Apple’s “It's Showtime” Media Event in 2006
Photo credit: Bryan Chaffin
(Click the image for a larger version)
The Michael Eisner Story
Pixar and Disney are at the heart of Bob Iger's relationship with Apple, but the Pixar/Disney story started long before Mr. Iger came to Disney. Pixar's first major motion picture, Toy Story, was distributed by Disney in a deal that originated in 1991. Michael Eisner was CEO of Disney at the time, and over the years relations between the two executives soured.
In 2002 this began to culminate when Mr. Jobs talked smack about Disney's home grown animated movies. In 2004, he talked openly about looking for a new partner for Pixar and was very critical of Mr. Eisner as head of the company.
Things came to a head in 2005 when Roy Disney was finally able to lead a shareholder revolt against Mr. Eisner, resulting in his ouster and Bob Iger taking over. It was Mr. Iger who then convinced Disney's board that the company needed to buy Pixar.
That initiative led to not only the Pixar buyout, but by extension, a close relationship between Mr. Jobs and Mr. Iger. It was that relationship that helped them also forge a relationship between Apple and Disney.
I Love You, Bro
In Walter Isaacson's biography Steve Jobs (Amazon, iBooks), Steve Jobs put it this way about the bromance that budded between the two men:
"That's why I just loved Bob Iger," recalled Jobs. "He just blurted (that Disney badly needed Pixar) out. Now that's the dumbest thing you can do as you enter a negotiation, at least according to the traditional rule book. He just put his cards on the table and said, 'We're screwed.' I immediately liked the guy, because that's how I work too. Let's just immediately put all the cards on the table and see where they fall."
2006 saw the Pixar buyout, but it also saw the introduction of Bob Iger in a Steve Jobs keynote. Apple's "It's Showtime" event in September of that year announced the addition of movies and TV shows on the iTunes Store, with Disney—including its now wholly-owned Pixar assets—as the flagship participant of this new effort. During that presentation, Mr. Iger called Apple "creative" and generally sung its praises.
During a conference call with Disney analysts later in Septembers, Mr. Iger had this to say about Steve Jobs:
The opportunity to talk to Steve Jobs about new media opportunities, [or] go to Apple and spend the day with his team to see iTV or the next generation iPods, or talk about the iTunes customer and the experience they have with [movie downloads], TV downloads, music downloads—it is a great, great opportunity for me and for the company. He has become very quickly not only a great sounding board but a great adviser and someone that I can turn to readily for advice in a lot of these areas. And I think we're lucky to have him.
Note that "iTV" in this context refers to Apple TV, which was introduced under its iTV codename and later christened "Apple TV."
And I Love Your Company, Too
In February 2010—one month after Apple announced the iPad, but two months before it shipped—Mr. Iger was one of the first media executives to praise the iPad, calling it a "game changer." This was when there was great doubt about the future of the device, putting Mr. Iger in the vanguard of its fans.
"With ESPN, you have ScoreCenter, which is a great app on the iPhone and provides rudimentary information and scores," Mr. Iger said at the time. "Suddenly we have a platform where you can really make those scores come to life."
In September of that same year, Disney was the first major studio—along with Fox—to add TV show rentals to iTunes. Apple has since discontinued TV show rentals, though you can still rent movies.
All the while, Steve Jobs served on Disney's board, with Mr. Jobs helping the company redesign and re-imagine its fleet of retail stores, integrate iPhones and iPads into the company's corporate culture, and think differently about digital distribution, as noted above.
Mr. Iger Goes to Cupertino
When Steve Jobs died in October of 2011, the path was open for Mr. Iger to join Apple's board and return some of those favors, so to speak. He joined the board in November of that same year at the same time that long-time board member Arthur Levinson of Genentech was named non-executive chairman.
Mr. Iger brings his experience with media to Apple at a time when Apple is rumored to be working hard on disrupting the television set market with new hardware and a new way of integrating an Internet-connected experience to the living room TV.
While other TV and movie executives fear Apple's ability to do things right, Mr. Iger has embraced Apple. His ability to deliver Disney's enormous catalog of media properties (Disney itself, Pixar, Marvel, Lucasfilms) to any new effort by Apple in this industry could make him one of the single most important members of the company's board of directors for the next several years.