The Walt Disney Company recently reported their earnings for its first quarter ended 31 December 2022. Though the company recorded growth in their revenues, the decrease in streaming subscribers and other results, the company’s chief executive officer Robert A. Iger who returned in November announced major restructuring.
Disney+ witnessed a decrease of 2.4 million subscribers in the previous quarter, marking the streamer’s first decline since its launch in 2019. During the earnings call Iger revealed that the restructuring plan also includes job cuts. It is learnt that as many as 7000 employees can face the brunt.
“After a solid first quarter, we are embarking on a significant transformation, one that will maximise the potential of our world-class creative teams and our unparalleled brands and franchises. We believe the work we are doing to reshape our company around creativity, while reducing expenses, will lead to sustained growth and profitability for our streaming business, better position us to weather future disruption and global economic challenges, and deliver value for our shareholders,” Iger said in a statement.
The major highlights of the First Quarter Earnings for Fiscal 2023 are:
- Revenues for the quarter grew eight per cent.
- Diluted earnings per share (EPS) from continuing operations for the quarter increased to $0.70 from $0.63 in the prior-year quarter.
- Excluding certain items(1), diluted EPS for the quarter decreased to $0.99 from $1.06 in the prior-year quarter.
The Walt Disney Company announced details of its strategic restructuring that will refocus the organisation on creativity, empower creative leaders and ensure they are accountable for all aspects of their businesses globally, and put the company’s streaming business on a path to sustained growth and profitability.
“For nearly 100 years, storytelling and creativity have fueled The Walt Disney Company, with virtually every interaction we have with our consumers emanating from something creative.I am committed to positioning this company for a new era of growth. Our strategic restructuring will return creativity to the centre of the company, increase accountability, improve results, and ensure the quality of our content and experiences,” Iger revealed.
Effective immediately, the company will be organised into three core, collaborative business segments: Disney Entertainment, ESPN, and Disney Parks, Experiences and Products. The leaders of each business segment will have full operational control and financial responsibility for creative development, marketing, technology, sales, and distribution, and will be accountable for driving business efficiencies globally.
Disney Entertainment will be co-chaired by Alan Bergman and Dana Walden who will be responsible for the company’s full portfolio of entertainment media and content businesses globally, including streaming. ESPN will include ESPN networks and ESPN+ and will be led by Jimmy Pitaro. Pitaro will also be responsible for the management and supervision of the company’s full portfolio of sports content, products and experiences across all of Disney’s platforms worldwide, including its international sports channels.
The streaming business remains a top priority for the company. Disney’s unparalleled collection of renowned and trusted franchises and brands, combined with the reach of the streaming portfolio (consisting of Disney+, ESPN+, Hulu, Star+ and Hotstar) creates rich and direct connections between the consumer and the company’s stories and characters, powering growth across the entire company.
Disney Entertainment co-chairmen Alan Bergman and Dana Walden will oversee the company’s global entertainment streaming businesses and manage all content decisions for those services, including Disney+ and Hulu. Bergman will also have primary oversight of the following businesses and content brands: Disney Live Action, Walt Disney Animation Studios, Pixar Animation Studios, Marvel Studios, Lucasfilm, 20th Century Studios, and Searchlight Pictures as well as Disney Music Group and Disney Theatrical Group.
Walden will also have primary oversight of the following businesses and content brands: ABC Entertainment, ABC News, ABC Owned Televisions Stations, Disney Branded Television, Disney Television Studios, Freeform, FX, Hulu Originals, National Geographic Content, and Onyx Collective. Pitaro will continue to oversee eight linear networks, including ESPN and ESPN2; sports content across all Disney domestic and, going forward, international platforms; ESPN+; ESPN Audio; ESPN Digital; ESPN Social; ESPN Fantasy and a variety of owned sports events.
Effective immediately, several shared-service organisations across the company will support both Disney Entertainment and ESPN, facilitating company-wide efficiencies and creating a more cost-effective, coordinated, and streamlined approach to operations. These include Product and Technology led by Aaron LaBerge; Advertising Sales led by Rita Ferro and Platform Distribution led by Justin Connolly excluding Theatrical Distribution and Music, which will be overseen by Bergman.
Outside of North America, the company’s media, entertainment, and sports content and operations will continue to be managed regionally by Asia Pacific president Luke Kang, EMEA president Jan Koeppen, LATAM president Diego Lerner, and India president K Madhavan,. These leaders will report to Bergman, Walden, and Pitaro as part of their global responsibilities. As a result of the changes, International Content and Operations chairman Rebecca Campbell, has decided to leave the Company. An esteemed leader and longtime industry veteran, Campbell will stay on through June to help with the transition.
Disney Parks, Experiences and Products- encompassing the company’s award-winning theme parks, cruise line, resort destinations and Adventures by Disney and National Geographic Expeditions, as well as Disney’s global consumer products, games, and publishing businesses will continue under the leadership of chairman Josh D’Amaro.
The organisational changes will be implemented immediately, and the company will begin reporting financial results under the new business structure by the end of the fiscal year.