Christine McCarthy, the Walt Disney Co.’s longtime CFO, is stepping down, citing a family medical leave. She will be replaced in the interim, beginning July 1, by Kevin Lansberry, CFO at Disney Parks and Resorts, until a permanent successor is found.
“I am immensely grateful for the opportunity [CEO] Bob [Iger] provided me to serve as CFO of this iconic company and am proud of the work my talented team has done to position Disney to capitalize on the business possibilities that lie ahead,” McCarthy said in a statement.
McCarthy, who joined Disney in 2000, became CFO in 2015 under Iger. She was reportedly instrumental in the termination of previous CEO Bob Chapek, which ushered in the return of Iger as CEO.
Her exit comes as Iger has initiated a 7,000-person employee downsizing in an effort to reduce costs as the company grapples with escalating overhead expenses related to its streaming services, which include Disney+, Disney + Hotstar in India, Star +, Hulu, Hulu + Live TV and ESPN+.
In 2021, Disney extended McCarthy’s employment contract through 2024.
“Among her many contributions to the company, one of the things I admire most about Christine is the generous mentorship she has provided to so many of her colleagues over the years, including countless women,” Iger said in a statement. “She has opened doors, created opportunities, and served as a role model for women at every level of business — not just at Disney, but around the world.”
The Walt Disney Co. Feb. 8 announced it has restructured internal operations to return management control, accountability and fiscal result responsibility to content creators through the establishment of three core business units: Disney Entertainment, ESPN, and Disney Parks, Experiences and Products.
Speaking on the fiscal call, CEO Bob Iger, who late last year replaced his successor Bob Chapek as chief executive, said the restructuring would include the elimination of 7,000 jobs worldwide as part of $5.5 billion in projected cost savings.
“While this is necessary to address the challenges we are facing today, I do not make this decision lightly,” Iger said. “I have enormous respect and appreciation for the talent and dedication of our employees worldwide and I am mindful of the personal impact of these changes.”
Alan Bergman and Dana Walden have been named co-chairmen of Disney Entertainment, which includes Disney Studios, Disney+, Hulu and television operations worldwide.
Jimmy Pitaro will continue as chairman of ESPN, which includes ESPN networks and the ESPN+ streaming service. Josh D’Amaro continues as chairman of Disney Parks, Experiences and Products.
Iger said Disney’s mission statement remains driven by “great storytelling and creativity,” which he said requires returning entertainment operational control to content creators.
Content teams will now be in charge of determining what content is created, how it is distributed and monetized, and how it is marketed. Managing costs, maximizing revenue and driving growth from the content being created will be the teams’ respective responsibility, according to Iger.
“Virtually every dollar we earn, every transaction, every interaction with our consumers emanates from something created,” Iger said. “I’ve always believed that the best way to spur great creativity, is to make sure the people who are managing the creative processes feel empowered.”
At the Walt Disney Co.’s D23 Expo Sept. 9, the cast and creative team of “The Simpsons” announced that season 33 of the animated series will stream Oct. 5 on Disney+.
The season originally aired from 2021 to 2022 on Fox. Season 34 begins Sept. 25 on Fox.
In celebration of Disney+ Day Sept. 8, “Welcome to the Club,” a new short from “The Simpsons,” was released on the streaming service. In the latest short, it’s Disney+ Day and Lisa Simpson has her heart set on the ultimate princess transformation. After meeting some of Disney’s most notorious villains, Lisa is surprised to learn being bad just might be more fun.
“Welcome to the Club” is the latest in a collection of shorts from “The Simpsons” created exclusively for Disney+ that highlight the service’s marquee brands and content. “When Billie Met Lisa” was nominated for Outstanding Short Form Animated Program at this year’s Emmy Awards. The previously released shorts “Maggie Simpson in ‘The Force Awakens from Its Nap,’” “The Good, The Bart, and The Loki” and “The Simpsons in Plusaversary” are currently available on Disney+.
Nippon TV Holdings, the parent company of Nippon TV, March 10 announced a strategic collaboration with The Walt Disney Company to include co-production of local language content ranging from drama series, animation to variety shows on Disney+ for both Japanese and global audiences. Nippon TV also owns Hulu Japan.
The latest season of Nippon TV’s enduring (since 1995) drama series, “The Files of Young Kindaichi” (starring Shunsuke Michieda from Naniwa Danshi), will begin broadcasting on Nippon TV in April, and thereafter will be made available on Disney+ for Japanese and worldwide audiences.
Based on an original manga boasting more than 100 million copies in circulation across 12 countries, the new fifth season of “The Files of Young Kindaichi” marks the first time that Nippon TV content will become available to viewers globally on Disney’s direct-to-consumer platform.
Yoshikuni Sugiyama, president, Nippon Television Holdings, said the company has worked together with Disney on many business initiatives, notably broadcast of Disney titles on “Friday Roadshow.”
“I look forward to leveraging the creativity, vast reach, and brand power that both companies possess to deliver Japan’s content to viewers the world over,” Sugiyama said in a statement.
Carol Choi, managing director, The Walt Disney Company (Japan) Ltd., said the partnership underscores Disney’s move into local content production across foreign markets.
“This is a perfect fit for Disney as we focus on stories that connect people across generations and places, and stories that move people,” Choi said. “We look forward to more long-term collaborative opportunities with Japanese creators, so as to bring … Japan’s creative excellence to the global stage.”
Star+ will launch in Latin America on Aug. 31 as a standalone streaming service that will offer a full slate of ESPN content, including live events from the top leagues and sports shows; series, animated comedies, movies and documentaries; and regional and international original Star productions, including exclusive content, Disney Media & Entertainment Distribution announced May 14.
“Star+ will offer a never-before-seen customized experience and will expand our connection with the different audiences,” Diego Lerner, president of The Walt Disney Company Latin America, said in a statement. The strength of the content, that will include all of ESPN, makes Star+ a unique and relevant offering with its own identity that will become a recognized digital service, independent from Disney+. Having said that, its arrival will represent a service that is complementary to Disney+ and it will consolidate The Walt Disney Company’s presence in Latin America’s streaming market. With Star+, we will also reinforce our constant commitment of over 20 years to develop, produce, and offer local content that represents the taste of consumers of the whole region, producing original content with well-known local production companies and talents, to tell stories that connect with Latin American audiences. We will do so through different genres, addressing original fiction stories, and social and historic themes that are relevant and of general interest.”
The service will be available on Internet-connected devices and users can subscribe separately or as part of a bundled offer with Disney+.
The service includes exclusive premieres of general entertainment TV series and movies from The Walt Disney Company’s content studios, including Disney Television Studios, FX, 20th Century Studios, STAR Original Productions, National Geographic Original Productions and more, and the streaming service for live sports from ESPN. From dramas to comedies (including all seasons of “The Simpsons”) and thrillers for adults, Star+ also features exclusive original programming from the Star general entertainment brand, along with a collection of regional original productions from Latin America.
Walt Disney Co. CEO Bob Chapek has seen the direct-to-consumer future and he’s not looking back. Speaking March 1 on the virtual Morgan Stanley Technology, Media and Telecommunications Conference, Chapek said that while Walt Disney Studios embraces the theatrical market, consumer reality — with or without the pandemic — has altered the playing field.
“I think the consumer is probably more impatient than they’ve ever been before because now they’ve had the luxury of an entire year of getting [movies] at home pretty much when they want them,” Chapek said. “I’m not sure there’s a going back, but we certainly don’t want to cut the legs off a theatrical exhibition run.”
The executive doubts consumers will have much tolerance for the traditional theatrical window keeping a movie out of the marketplace for months with another distribution model “just sitting there getting dust.”
On March 5, Disney will offer Raya and the Last Dragon to consumers via Premier Access, only the second Disney title since Mulan afforded the more-expensive PVOD retail distribution model.
“It makes a lot of sense right now in a COVID world to have [another] option,” Chapek said. “Theaters are not going to be 100% back. It’s nice to know that people have that choice. But we like to let the consumer be our guide in almost all situations.”
Disney survived a calamitous 2020 — a year that saw the company’s legacy parks and amusements, cruise business and studio shuttered overnight a year ago due to the pandemic. Switching gears, the company focused on streaming video, specifically Disney+, Hulu (Hulu+Live TV) and ESPN+, ending last year with upwards of 150 million combined subscribers when excluding India.
“We essentially had to make a decision: Are we going to stay the course? Are we going to slow down investment and reserve cash? As you know, we stepped on the throttle pretty heavily and accelerated, figuring this was the time to make a giant leap forward,” Chapek said.
The former home entertainment executive contends Disney’s addressable DTC market is 1.1 billion people. As a result, he said the company chose investing “dramatically” in content and restructuring the company to better deal with the direct-to-consumer challenges in the pandemic era and beyond.
When asked about Disney’s move toward engaging consumers directly rather than through retail, Chapek said the company is well-versed with the strategy from its amusement and hospitality businesses. He said that unlike those legacy businesses, direct-to-consumer affords increased “frequency of engagement” and number of touch points.
“There’s an exponential benefit when you take the deep knowledge of our parks guest and … the direct-to-consumer, and put it all together by technology,” he said.
The executive said management has been surprised by the global appeal of Disney+, especially among non-families. Indeed, 50% of Disney+ subs worldwide do not have children, which he said opens up the possibility for more-expansive content offerings.
“That’s a big difference,” Chapek said.
He dismissed suggestions about a streaming war with Netflix, Amazon Prime Video, HBO Max and Peacock, saying there doesn’t have to one winner, but rather several.
“We think we’re tremendously positioned for DTC services,” Chapek said, alluding to the company’s planned $8 billion to $9 billion in streaming video investment through 2024. Disney unveiled 100 new titles at its recent investor day event in December.
Disney earned $11 billion at the global box office in 2019, which Chapek said remains “a big deal to us.” Notably, the CEO finds “more profound” the changes in consumer behavior towards movie consumption. To meet the rapidly evolving changes, Chapek said Disney has to be a “a nimble organization,” while acknowledging that the “sands under our feet” are shifting.
“Consumer behavior is shifting,” he said. “Consumer preferences are shifting. We want to make sure that as that happens, we are on the front of those waves, anticipating those changes.”
SVOD pioneer Hulu will offer its 38.8 million subscriber access to the ESPN+ sports streaming service in 2021. Hulu’s online TV platform, Hulu With Live TV, now tops 4 million subscribers, making it the top online TV platform and fifth-largest pay-TV operator in the U.S.
“Users can sign up or enjoy existing ESPN+ subscriptions without ever having to leave the Hulu app,” Hulu president Kelly Campbell said on Disney’s Investor Day Dec. 10. Campbell said the SVOD platform in 2021 would bow original movies from 20th Century Studios and Searchlight. The platform also greenlighted a fifth season of original hit series “The Handmaid’s Tale.”
ESPN+, which had 11.5 million subscribers as of Dec. 2, will begin streaming select Southeastern Conference college football games in 2021. ABC TV (and ESPN+) will become the exclusive SEC broadcasters in 2024 for 10 years, including the SEC Championship. The SEC, which is currently broadcast on CBS and ESPN, includes perennial national champion contender University of Alabama, in addition to the University of Georgia, University of Florida and Louisiana State University, among other schools.
“This is a significant day for the Southeastern Conference and for the future of our member institutions. Our agreement with ESPN will greatly enhance our ability to support our student-athletes in the years ahead and to further enrich the game day experience for SEC fans around the world,” Greg Sankey, SEC Commissioner, said in a statement. “One of our primary goals was to improve the television scheduling process in ways that will benefit our students, coaches, alumni and fans. By working in collaboration with ESPN, we were able to secure an agreement that includes more lead time for many game time announcements, and in many ways modernizes the college football scheduling process.”
Billionaire investor Daniel Loeb continues to see opportunity in the pandemic-throttled entertainment sector — most notably at The Walt Disney Co.
Loeb’s Third Point Management, which has more than $10.8 billion in assets, has spent much of the COVID-19 era buying up a depressed Disney stock undermined by amusement park and cruise ship closures, and waylaid studio releases, among other issues, that were reportedly costing the company $30 million in daily overhead.
Now Loeb, who is one of Disney’s largest single investors, is calling on Disney CEO Bob Chapek and the board not to authorize the company’s annual $3 billion dividend — a surprising stance considering most activist investors implore companies to give back more to stock holders; not less.
In an Oct. 7 letter to Chapek, Loeb wants the board to re-direct dividend funds to content spending on Hulu, ESPN+ and Disney+, the latter Disney’s high-profile subscription streaming video-on-demand platform the investor contends has a legitimate shot at usurping market behemoth Netflix — both in subscribers and content.
“By reallocating a dividend of a few dollars per share, Disney could more than double its Disney+ original content budget,” Loeb wrote. “The ability to drive subscriber growth, reduce churn, and increase pricing present the opportunity to create tens of billions of dollars in incremental value for Disney shareholders in short order, and hundreds of billions once the platform reaches larger scale.”
Specifically, the investor contends Disney+ has largely outdistanced subscriber growth projections by offering classic Disney, Pixar and “Star Wars” movies, with little spent on original programming except for “The Mandalorian,” among other content. Disney ended the most-recent fiscal period with more than 60.5 million subscribers. The company had originally projected 60 million to 90 million subs by 2024.
Indeed, while Disney is spending about $1 billion on original content in 2020, Netflix is reportedly spending nearly $17 billion, with plans to spend upwards of $28 billion by 2028.
“A more aggressive content roadmap will distinguish Disney as the only traditional U.S. media company able to thrive in a world beyond the box office and the cable TV ecosystem, alongside digital-first businesses like Netflix and Amazon,” Loeb wrote.
Disney has called off the March 29 launch of its branded subscription streaming video service, Disney+, in India due to myriad issues involving the global coronavirus pandemic. The planned March 24 launch of the service in Europe remains on.
With India halting all commercial airline traffic within its borders and the suspension of the Indian Premier League (IPL) cricket tournament, Disney planned promotions around the service’s launch with its Hotstar over-the-top video platform came to a halt. Hotstar reportedly generates more than 300 million monthly views with its app and website.
“We recently announced that Disney Plus would launch in India through the Hotstar service in conjunction with beginning of the Indian Premier League cricket season,” Uday Shankar, president of The Walt Disney Company APAC, and chairman of Star and Disney India, said in a statement. “Given the delay of the [cricket] season, we have made the decision to briefly pause the roll-out of Disney Plus and will announce a new revised premiere date for the service soon.”
After a wave of school closures were announced March 13 due to concerns over the coronavirus, the Walt Disney Co. that night announced that Frozen II will be available for viewing on Disney+ three months ahead of schedule, beginning March 15.
Bob Chapek, the former Disney home entertainment chief who recently was elevated to CEO of the Walt Disney Co., said, “Frozen II has captivated audiences around the world through its powerful themes of perseverance and the importance of family, messages that are incredibly relevant during this time, and we are pleased to be able to share this heartwarming story early with our Disney+ subscribers to enjoy at home on any device.”