Kenversations: Disney’s Changing Playing Field (Part 1 of 3) - Feb 12, 2007

Kenversations: Disney’s Changing Playing Field (Part 1 of 3)
Page 1 of 3

by Ken Pellman (archives)
February 12, 2007
Ken begins a three part series taking a detailed look at Disney's recent history in theme parks and animation.

Kenversations™
Disney’s Changing Playing Field

There has been much that has happened within Disney over the last few years:
  • The second Roy Disney/Stanley Gold revolt that started on November 30, 2003.
  • The restoration of Disneyland Park in 2004 and 2005 for the 50th Anniversary.
  • The opening of Hong Kong Disneyland on September 12, 2005.
  • The September 30, 2005 departure of Miramax founders the Weinstein brothers and their Dimension Films label, and their subsequent creation of the Weinstein Company.
  • The departure of Michael Eisner (also on September 30, 2005) and ascension of Bob Iger.
  • The acquisition of Pixar and Pixar talent, announced January 24, 2006, and ongoing changes to Disney animation; assigning John Lasseter a role with Walt Disney Imagineering; Steve Jobs joining the Disney Board of Directors.
  • The announcement on February 2, 2006 of a proposed merger of some of Disney’s radio assets with Citadel Broadcasting to form Citadel Communications, a majority of which will be owned by Disney shareholders.
  • Despite some gigantic box office hits, Nina Jacobson was forced out in July of 2006 as President of the Buena Vista Motion Pictures Group, replaced by marketing chief Oren Aviv, and cutbacks were made to reduce the number of films Disney will be distributing.
  • On August 14, 2006, Disney announced a global reorganization of its "home entertainment" division into Buena Vista Worldwide Home Entertainment, another sign of Disney’s push for international expansion, one of three driving principles of Iger’s leadership.
  • The overhaul of Disney.com announced at the annual Consumer Electronics Show in January 2007.
  • The shifting of executives at Walt Disney Parks & Resorts:
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  • The departure of Matt Ouimet in July 2006 from the Disneyland Resort presidency after a stint there of less than three years following the October 2003 departure of Cynthia Harriss
  • Ed Grier moving into the Disneyland Resort presidency from Japan.
  • Meg Crofton being promoted to President of the Walt Disney World Resort on August 7, 2006 to replace Al Weiss, who’d been promoted to President of Walt Disney Parks & Resorts.
    •

    We're all here because of our interest in Disney, and the events described above have been a lot to follow.

    But not everything that should be news to people like us is directly about Disney. What has happened around Disney has also dramatically changed the landscape in which The Walt Disney Company operates, including corporate structures.

    The corporate structures themselves have changed. Just consider Viacom, one of Disney’s biggest competitors and partners - a paradox that is practically unavoidable in today’s media production or communications fields. The result of several acquisitions and mergers in recent times, Viacom reorganized by splitting into "Viacom" and "CBS" on December 31, 2005. A visible sign of this split to any is all of those "Viacom" billboards that switched to having a "CBS" label. This past September, Sumner Redstone, the Chairman of both Viacom and CBS, shook up the management of Viacom. After the split, CBS subsequently announced that it was reviving the CBS Records label, and getting into film production, potentially becoming a rival to its former partner.

    Some investors in Time Warner, another Disney competitor/partner, have been talking about splitting that behemoth into as many as four companies. A deal was recently announced to sell 18 of Time Warner’s magazines. The company sold its book publishing business in March of 2006. Some of Time Warner’s AOL properties have been sold off, and AOL, which was once so powerful that it bought Time Warner, is now relying more on advertising revenue and less on subscription funding, just like Time Warner’s television properties.

    There have been changes underway at NBC Universal, as the NBC TV network cut jobs and gave the first hour of prime time to reality/game shows, which usually can be made for less money and with fewer personnel than dramas or sitcoms. The NBC-Universal combination came about in May of 2004 after General Electric’s NBC, which had been the only broadcast television network left without a film studio partner, combined with Vivendi’s Universal, which had previously been controlled by talent agency MCA, then electronics company Matsushita, and then beverage maker Seagram’s. As a side note to all of this, consider that General Electric, a company that goes back to Thomas Edison, was a longtime sponsor of Disney theme park attractions (Carousel of Progress, Horizons, Innoventions at EPCOT Center), and NBC once tried to get Disney to build a theme park in the New York area.

    After decades of acquisitions, mergers, consolidations, and integrations, large entertainment/media corporations are trying to deal with the changing world, new technologies, political pressure, investor desires, and executive ego clashes with splits, spin-offs, and shutdowns. On the other hand, the cable and telecom companies that provide the pipelines have been continuing to consolidate.

    But let’s take a look at some changes inside Disney before we go further.
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