Moody’s skeptical of Disney CFO change


Disney CEO Bob Iger’s surprise decision to have two of his top lieutenants flip jobs has raised eyebrows at Moody’s Investors Service. For now, Disney’s credit rating remains stable, but Moody’s has questions about the resume of CFO-to-be James Rasulo.

Come New Year’s Day, Tom Staggs will segue from over a decade as Chief Financial Officer of The Walt Disney Company to succeed Rasulo as Chairman, Walt Disney Parks and Resorts. At the same time, Rasulo, who goes by “Jay,” will move to Staggs’ former post as CFO.

That promoted this commentary from the credit rating service:

“Moody’s Investors Service said that The Walt Disney Company’s announcement that James Rasulo will replace Thomas Staggs as Disney’s Chief Financial Officer raises mild concern regarding the potential for a diverging view from the company’s present financial credit profile toward a new and different direction. The rating remains stable.

While Moody’s believes Mr. Rasulo will provide new depth from an operational standpoint given his significant operational role as head of the important global theme park division, we remain cautious given his apparent lack of experience in a significant financial role and uncertainty surrounding the financial policies he will recommend to the board and senior management. A new direction could add positive or negative volatility for the company’s credit rating, depending upon the direction of change, but given the company’s relatively weak position in its A2 rating category due to cyclical pressure on revenues, and significant capital commitments such as for the Marvel acquisition, new cruise ships, and new parks and resort projects, any change to Disney’s financial policy that tilts towards more shareholder-friendly activity and higher leverage before clear signs of an economic rebound, could negatively impact the company’s A2 long term debt ratings and its short term Prime-1 commercial paper rating. While we favor a proactive and disciplined approach to the development of senior talent, we are also mildly concerned about Mr. Staggs new role as he is also entering into new territory as operating head of the company’s global theme parks division, an appointment which typically would be considered very unusual for any stand alone company of equal scale.”

After seeing the Moody’s comment, RBR-TVBR went looking for bios of the two execs. Both have MBAs from prestigious universities and both worked at financial firms before joining Disney. Here are condensed bios put out by the company:

Rasulo joined Disney in 1986 as Director, Strategic Planning and Development, advancing to more senior positions there, and later became Senior Vice President, Corporate Alliances. He then led Disney Regional Entertainment before moving to Paris as President, Euro Disney before eventually becoming its Chairman and CEO in 2000. A native New Yorker, Rasulo has a degree in economics from Columbia University and both an MA in economics and an MBA from the University of Chicago. Before joining Disney, he held positions with Chase Manhattan Bank and the Marriott Corp.

Click here for a more detailed bio of Jay Rasulo.

Staggs joined Disney in 1990 as Manager of Strategic Planning and soon advanced through a series of positions of increased responsibility, becoming Senior Vice President of Strategic Planning and Development in 1995 before becoming CFO and Executive Vice President in 1998. Born in Illinois, Staggs received a BS in business from University of Minnesota and an MBA from Stanford University. He worked in investment banking at Morgan Stanley & Co. before joining Disney.

Click here for a more detailed bio of Tom Staggs.

RBR-TVBR observation: This shuffle is being viewed by some as Iger grooming Tom Staggs, who is roughly a decade younger, to be his successor as CEO. Of course, neither Iger nor Staggs was willing to talk about that possibility. Rather, Iger acknowledged that he’d benefited from taking on new challenges during his career at Disney and said he’d made both men offers they couldn’t refuse.