The Disney Shakeup - Bloomberg

[janiak1285]

Article on the recent changes at the top of Disney and their thoughts on the whole matter.

http://www.bloomberg.com/news/artic...cost-cutters-gaining-clout-in-post-staggs-era

 

[Unplugged]

That explains everything. You don't have to cut costs when a company is profitable, unless people are unhappy with the margins. Those pepple are the investors, board of directors, and thus execs. This is why we've seen such a drop in quality across the board. Wall Street greed has over powered the Walt mentality that pushed creative and quality even at a higher cost. While they've cut costs in many ways for years, this is the final step in Wal-mart-ification. A real loss as Disney was one of the few hold-out companies regarding the greed factor.

 

[hpyhnt 1000]

It's what we've known for a while now - a great creative company has been taken over by a bunch of numbers and spreadsheets guys.

The Walt Disney Company has basically become The Roy Disney Company.

 

[jt04]

This will allow them to better invest in the parks. That will be a positive trend long term.

 

[mightynine]

I wonder if @WDW1974 is as positive about what's happening at the top of Disney as he was when the Staggs news broke.

 

[DDLand]

It's what we've known for a while now - a great creative company has been taken over by a bunch of numbers and spreadsheets guys.

The Walt Disney Company has basically become The Roy Disney Company.

Roy actually was nothing like these guys.

I'd take the Roy Disney who built the Magic Kingdom and spared no expense to create an awesome guest experience over any of these executives.

 

[hpyhnt 1000]

Roy actually was nothing like these guys.

I'd take the Roy Disney who built the Magic Kingdom and spared no expense to create an awesome guest experience over any of these executives.

True in large part. Associating Roy with the current "leaders" is an insult to him.

It's the larger point that the company bears the name of it's creative head, not financial head, and thus should be led accordingly.

 

[Rodan75]

This is a good article, but it doesn't foreshadow the Disney Apocalypse. Profitable businesses need to be constantly looking at new ways to increase profit and reduce costs. Since this is a 'Disney is a Business' Thread, let's focus on the business side of this.

We've all said for years that Disney is inefficient at building new attractions and expansions are unbelievably expensive. Having someone come in and take a cost cutting approach isn't a bad thing. What sucks is that in these instances, execs will likely cut customer experience before they take cuts to the middle management layer. However, with Disney being targeted/marketed as a 'luxury' experience that will likely be temporary. Sooner or later the axe always falls on the middle management layer and when it does, I believe it makes the organization more streamlined and effective.

Some of the upcharges seem pretty ridiculous, but they don't take away from the basic daily park-going experience, so I don't think they are bad business or customer offerings. (I wouldn't pay for many of them, which means they may not be successful offerings)

We've seen Universal come out with a staggering expansion schedule, on a pretty effective budget and timeline. Disney must see that as well and are likely going thru their transformation pains to get to something that is hopefully more efficient, without being creatively bankrupt.
I'm willing to give them time to do that, however, I'll still complain if they make Guardians Tower...it is okay to see Disney as a Business but also disagree with their creative choices.

 

[andysol]

Some of the upcharges seem pretty ridiculous, but they don't take away from the basic daily park-going experience, so I don't think they are bad business or customer offerings.

Its not just upcharges though- while those, specifically dont- they are doing things outside of those that take away from the basic daily park-going experience. Like running one side of primevil whirl instead of two when the other side is working fine, even though there is a 50 minute wait. Like cutting 60% of the street performers at DHS. Like cutting massive amounts of staff, like cutting hours.

Heres just a real quick snapshot of one park the last month.

March 16 - April 16 2015:
16 regular 8am opens at DAK
18 evenings DAK stayed open after 7pm

March 16 - April 16 2016:
0 regular 8am opens at DAK
0 evenings DAK stayed open after 7pm

And thats just the last month at one park- you'll find that all across the board. The cost cutting is awful. Less staff, less trains going, and less hours- all the while they have massive attendance. That sounds like management is taking away from the daily park-going experience to me. Even @CaptainAmerica has to agree with that.

 

[Rodan75]

Its not just upcharges though- they are doing things that take away from the basic daily park-going experience. Like running one side of primevil whirl instead of two when the other side is working fine, even though there is a 50 minute wait. Like cutting 60% of the street performers at DHS. Like cutting massive amounts of staff, like cutting hours.

Heres just a real quick snapshot of one park the last month.

March 16 - April 16 2015:
16 regular 8am opens at DAK
18 evenings DAK stayed open after 7pm

March 16 - April 16 2016:
0 regular 8am opens at DAK
0 evenings DAK stayed open after 7pm

And thats just the last month at one park- you'll find that all across the board. The cost cutting is awful. Less staff, less trains going, and less hours- all the while they have massive attendance. That sounds like management is taking away from the daily park-going experience to me.

I agree on the cost cutting, that is the middle management first reaction to a situation like this. That reaction deserves the strong criticism and complaints being leveraged at it. Those complaints will have a business impact and more importantly from a business standpoint won't be sustainable cost cutting measures, so when that fails the middle management layer will get cut heavily.

In my original post, I said that upcharge events aren't taking away from the park-going experience. But you are correct, the Cost Cutting is a knee jerk reaction to cost control measures.

 

[marni1971]

Painful and frank reading.

Savings must start at the top.

 

[ParentsOf4]

I agree on the cost cutting, that is the middle management first reaction to a situation like this.

To be clear, Disney's middle management is one of the many victims here.

Corporate Disney has layers upon layers of management, so "middle management" covers a lot of ground.

However, the powers-that-be are demanding that this broadly-defined middle management figure out ways to quickly cut millions out of previously approved budgets. These middle managers are simply doing what they're being told in order to keep their jobs.

Guess what? If they protest or push back, they'll quickly find themselves on the street, replaced by someone who will make these cuts.

 

[ford91exploder]

To be clear, Disney's middle management is one of the many victims here.

Corporate Disney has layers upon layers of management, so "middle management" covers a lot of ground.

However, the powers-that-be are demanding that this broadly-defined middle management figure out ways to quickly cut millions out of previously approved budgets. These middle managers are simply doing what they're being told in order to keep their jobs.

Guess what? If they protest or push back, they'll quickly find themselves on the street, replaced by someone who will make these cuts.

Has Disney finally entered a death spiral here, @ParentsOf4 is absolutely correct those managers who do not make the requested cuts will be replaced with those who will

 

[DGracey]

Insightful piece, and quite disheartening to lift the veil behind the drama at the house of mouse.

Once again looming in the shadows, yet mentioned in paragraph one is ... Ike Perlmutter.

Now one of Disney's single largest shareholders, who is well known as a consistent, constant, cost cutter.

It is of course absolutely no coincidence Chapek and Pitaro are close to Perlmutter. The most dramatic cost cutting Parks and Resorts has seen in years is a result of Chapek at the helm. The largest shareholder supports and encourages this.

Perlmutter notoriously - and publicly - disliked Staggs. And now he is gone.

The Marvel and Perlmutter culture is entirely different than Disney's business model has been. The two don't dance well together. And yet, here we are.

This deep, rapid cost cutting culture is poisoning the once healthy watering hole at The Walt Disney Company.

In nature when the water in the well runs dry, the animals treat each other differently. More drama to come no doubt.

 

[danv3]

That was an unpleasant read as a Disney fan.

 

[Rodan75]

To be clear, Disney's middle management is one of the many victims here.

Corporate Disney has layers upon layers of management, so "middle management" covers a lot of ground.

However, the powers-that-be are demanding that this broadly-defined middle management figure out ways to quickly cut millions out of previously approved budgets. These middle managers are simply doing what they're being told in order to keep their jobs.

Guess what? If they protest or push back, they'll quickly find themselves on the street, replaced by someone who will make these cuts.

Understood. When I say 'middle management' I really am referring to folks with entry level VP and Director titles and not folks who are leading the first layer or so of frontline teams. Those VP and Director type folks are cutting front line staff hours first, but that never works for long. They will eventually need to 'flatten' the organization and get rid of some of the layers of management to successfully cut costs over the long term.

 

[Pumbas Nakasak]

This will allow them to better invest in the parks. That will be a positive trend long term.

You are just programmed to burble nonsense aren't you? I blame the chemicals.

 

[PhotoDave219]

Maybe it's time for parks & resorts to spun off and become their own entity?

I absolutely despise that idea by the economic realities of the company as a whole are making it a possibility.

 

[Rodan75]

Maybe it's time for parks & resorts to spun off and become their own entity?

I absolutely despise that idea by the economic realities of the company as a whole are making it a possibility.

The problem with that thought is that Parks is very capital intensive, cost pressures would hurt Parks and Resorts as a standalone company far more than they do today. Plus, I think at this point Disney leadership has pretty much sold the idea that the company is better off with Parks & Resorts within the company. (Comcast seems to have also solidified this strategy as well with analysts)

 

[asianway]

The problem with that thought is that Parks is very capital intensive, cost pressures would hurt Parks and Resorts as a standalone company far more than they do today. Plus, I think at this point Disney leadership has pretty much sold the idea that the company is better off with Parks & Resorts within the company. (Comcast seems to have also solidified this strategy as well with analysts)

Uni only has 4(to be 5) hotels though, and they are a JV. Remember, WDW isnt a Theme park division, its a hotel division with theme parks incidental to them.