Studios, retail on Iger's fix-it list
Claudia Eller, Meg James and Richard Verrier | Los Angeles Times and Sentinel Staff Writers
Posted September 28, 2005
Since being tapped as Michael Eisner's successor in March, Robert Iger has taken the Walt Disney Co. for a spin as de facto chief executive.
On Saturday, he gets the keys, and with them a chance to look exhaustively under the hood to figure out how to finally get the company firing on all four cylinders.
For years, the entertainment giant has been unable to get its movies, television, theme parks and merchandise operations working in sync.
Its once-ailing network and cable operation finally roared back, thanks to a turnaround by the ABC network and its ESPN profit juggernaut. But its film studio tumbled into the red, and is struggling to regain its perch atop the animation field.
Previously Disney's second-in-command, Iger inherits a top tier media company that nonetheless faces steep challenges. Among them: changes in moviegoing and DVD-buying habits, the continued splintering of television viewership and figuring out how to exploit Disney's vast array of entertainment in the digital and wireless world.
Here's an analysis of Disney's four major operations Iger inherits:
Studio entertainment
With its $100 million-plus computer-generated Chicken Little due in November, Walt Disney Studios is out to show investors it can revive an anemic animation division that used to crank out box-office and home-video profits.
Once known for such blockbusters as The Lion King and Beauty and the Beast, Disney's home-grown animation foundered with such disappointments as Home on the Range, Brother Bear and Treasure Planet. Meanwhile, rivals DreamWorks Animation SKG and 20th Century Fox are taking a bigger bite out of the genre Disney long dominated.
Look for Iger to try to salvage Disney's long and lucrative distribution relationship with Pixar Animation Studios -- maker of such blockbusters as The Incredibles, Finding Nemo and the upcoming Cars -- or risk losing the computer animation leader to a rival.
The studio's struggling live action business finally got a much needed box-office lift this past weekend when the Jodie Foster suspense thriller Flightplan debuted as the top-grossing film with $24 million.
But other recent offerings, including Dark Water, Herbie: Fully Loaded, The Hitchhiker's Guide to the Galaxy and Ice Princess, were disappointments.
Media networks
Iger is intimately familiar with the company's biggest and most profitable division, Media Networks.
Powered by ESPN and ABC, the unit now brings in nearly half of all of Disney's operating profit is on track for an even bigger year as ABC continues its rebound. The network already is off to a fast start, finishing the first week of the season atop the prized 18-49 year-old demographic.
As little as two years ago ABC was stuck in fourth place among the major networks.
Iger, who worked two decades at ABC before Disney bought the network in 1996, staked his future on the network's recovery. He can now roll down his shirt sleeves since ABC is back in the black. The network last year launched a string of monster hits including Desperate Housewives, Grey's Anatomy and Lost.
Theme parks and resorts
Customers are steadily returning to Disney's theme parks, which were hammered when tourists cut back on travel in the wake of 9-11.
Hotel bookings are up at Walt Disney World, and attendance is growing at Disneyland in Anaheim, Calif., now celebrating its 50th anniversary.
But Disney would like to see more international tourists, who tend to spend more money and stay longer at the parks than Americans. Analysts also worry that a tourism recovery could be dampened by high gas prices and airline financial woes.
Visitors also aren't flocking to the money-losing Euro Disney near Paris, which continues to struggle with massive debts and steep losses.
Disney has much riding on Hong Kong Disneyland, its recently opened $3.2 billion theme park. Although the park is expected to do well, prospects for a possible second park in Shanghai are less certain.
Consumer products
Disney's consumer products division -- the operation behind Disney toys, lunch boxes, Mickey Mouse figurines and stuffed Winnie the Pooh dolls -- has undergone its own extreme makeover in recent years.
Disney turned to former Nike executive Andy Mooney, tapped to turn around the once struggling unit, has shuttered or sold most of the money-draining Disney Stores, slashed the number of companies Disney licenses its products to while forging relations with such mass merchandisers as Wal-Mart Stores Inc. and Target Corp.
The company has introduced new product lines including Disney Princess, which has generated more than $3 billion in retail sales.
Claudia Eller and Meg James are reporters for the Los Angeles Times, a Tribune Publishing newspaper. Richard Verrier can be reached at richard.verrier@latimes.com or 1-800-528-4637, Ext. 77936.
Claudia Eller, Meg James and Richard Verrier | Los Angeles Times and Sentinel Staff Writers
Posted September 28, 2005
Since being tapped as Michael Eisner's successor in March, Robert Iger has taken the Walt Disney Co. for a spin as de facto chief executive.
On Saturday, he gets the keys, and with them a chance to look exhaustively under the hood to figure out how to finally get the company firing on all four cylinders.
For years, the entertainment giant has been unable to get its movies, television, theme parks and merchandise operations working in sync.
Its once-ailing network and cable operation finally roared back, thanks to a turnaround by the ABC network and its ESPN profit juggernaut. But its film studio tumbled into the red, and is struggling to regain its perch atop the animation field.
Previously Disney's second-in-command, Iger inherits a top tier media company that nonetheless faces steep challenges. Among them: changes in moviegoing and DVD-buying habits, the continued splintering of television viewership and figuring out how to exploit Disney's vast array of entertainment in the digital and wireless world.
Here's an analysis of Disney's four major operations Iger inherits:
Studio entertainment
With its $100 million-plus computer-generated Chicken Little due in November, Walt Disney Studios is out to show investors it can revive an anemic animation division that used to crank out box-office and home-video profits.
Once known for such blockbusters as The Lion King and Beauty and the Beast, Disney's home-grown animation foundered with such disappointments as Home on the Range, Brother Bear and Treasure Planet. Meanwhile, rivals DreamWorks Animation SKG and 20th Century Fox are taking a bigger bite out of the genre Disney long dominated.
Look for Iger to try to salvage Disney's long and lucrative distribution relationship with Pixar Animation Studios -- maker of such blockbusters as The Incredibles, Finding Nemo and the upcoming Cars -- or risk losing the computer animation leader to a rival.
The studio's struggling live action business finally got a much needed box-office lift this past weekend when the Jodie Foster suspense thriller Flightplan debuted as the top-grossing film with $24 million.
But other recent offerings, including Dark Water, Herbie: Fully Loaded, The Hitchhiker's Guide to the Galaxy and Ice Princess, were disappointments.
Media networks
Iger is intimately familiar with the company's biggest and most profitable division, Media Networks.
Powered by ESPN and ABC, the unit now brings in nearly half of all of Disney's operating profit is on track for an even bigger year as ABC continues its rebound. The network already is off to a fast start, finishing the first week of the season atop the prized 18-49 year-old demographic.
As little as two years ago ABC was stuck in fourth place among the major networks.
Iger, who worked two decades at ABC before Disney bought the network in 1996, staked his future on the network's recovery. He can now roll down his shirt sleeves since ABC is back in the black. The network last year launched a string of monster hits including Desperate Housewives, Grey's Anatomy and Lost.
Theme parks and resorts
Customers are steadily returning to Disney's theme parks, which were hammered when tourists cut back on travel in the wake of 9-11.
Hotel bookings are up at Walt Disney World, and attendance is growing at Disneyland in Anaheim, Calif., now celebrating its 50th anniversary.
But Disney would like to see more international tourists, who tend to spend more money and stay longer at the parks than Americans. Analysts also worry that a tourism recovery could be dampened by high gas prices and airline financial woes.
Visitors also aren't flocking to the money-losing Euro Disney near Paris, which continues to struggle with massive debts and steep losses.
Disney has much riding on Hong Kong Disneyland, its recently opened $3.2 billion theme park. Although the park is expected to do well, prospects for a possible second park in Shanghai are less certain.
Consumer products
Disney's consumer products division -- the operation behind Disney toys, lunch boxes, Mickey Mouse figurines and stuffed Winnie the Pooh dolls -- has undergone its own extreme makeover in recent years.
Disney turned to former Nike executive Andy Mooney, tapped to turn around the once struggling unit, has shuttered or sold most of the money-draining Disney Stores, slashed the number of companies Disney licenses its products to while forging relations with such mass merchandisers as Wal-Mart Stores Inc. and Target Corp.
The company has introduced new product lines including Disney Princess, which has generated more than $3 billion in retail sales.
Claudia Eller and Meg James are reporters for the Los Angeles Times, a Tribune Publishing newspaper. Richard Verrier can be reached at richard.verrier@latimes.com or 1-800-528-4637, Ext. 77936.
