Disney is reorganizing its sprawling businesses under three core segments, Entertainment, ESPN and Parks, Experiences & Products, as CEO Bob Iger moves to restructure the company.
The move follows his dismantling of DMED, or Disney Media & Entertainment Distribution, set up by previous CEO Bob Chapek, that wrested control over content decisions by the company’s creative executives. Now we know what the new structure will look like. It’s aimed at returning creative authority to Disney’s “world-class creative team” and its “unparalleled brands and franchises,” he said during a conference call following the company’s latest quarterly earnings.
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The reorganization is a key element of a transformation that he said will also help rationalize the streaming business for sustained growth and profitability and reducing expenses in a world of increased competition and global economic challenges.
The DTC business, except for ESPN+, will be under Entertainment.
Dana Walden and Alan Bergman will co-chair Disney Entertainment; Jimmy Pitaro will continue as head of ESPN and Josh D’Amaro as parks chief.
Iger said the moves announced today cumulatively reflect a new era in the company’s transformation over the past two decades. The first was a period of rapid growth in its core IP that saw Disney acquire Pixar, Marvel and LucasFilm. The second, from 2016, was the lead-up to Disney’s acquisition of 20th Century Fox, and subsequent foray into streaming with the launch of ESPN+ and Disney+.
The booming parks and resorts division, which includes cruise ships and consumer products, remains as is.
With linear networks in decline and the cost of sports rights on the rise, ESPN has been a target of Disney investors like Third Point’s Daniel Loeb, who said it should be spun off, but then retracted that opinion, given its “potential as a stand-alone business and another vertical for Disney to reach a global audience to generate ad and subscriber revenues.” Iger said today that making ESPN a standalone business unit is in no way a presaged a sale of the business.
Another activist, Nelson Peltz, is currently engaged in a proxy battle for a seat on Disney’s board.
ESPN+ had 24.9 paid subscribers at the end of last year, up 2% (from 24.3 million) the year before. It is offered alone or in a bundle with Disney+ and Hulu.
