Hong Kong Disneyland expansion financing approved

A Hong Kong legislative committee today approved the financial terms for a major expansion of Hong Kong Disneyland, representing another milestone in plans to add three new areas to the park by 2014.

Disney will invest about $448 million in the construction and swap its outstanding loans totaling about $353 million into additional equity in a joint venture company, Hong Kong International Theme Parks. The Hong Kong government will retain the majority ownership in the venture, however.

The deal would expand the park by increasing the number of theme areas to seven from four over the next five years, tackling criticism that the world's smallest Disneyland did not offer enough attractions. Two themed areas — Grizzly Trail and Mystic Point — will be exclusive to Hong Kong, and a third, Toy Story Land, will be the only attraction of its kind in Asia for the first five years after its opening.

"This substantial investment represents our continued commitment to and confidence in Hong Kong Disneyland and solidifies our partnership with the Hong Kong government, helping assure the resort's long-term success," said Jay Rasulo, chairman of Walt Disney Parks and Resorts.

The announcement comes at a time when Hong Kong Disneyland could soon face a major competitor in Shanghai, which is still in negotiations with Burbank-based Disney to open a much larger $3.59-billion theme park as early as 2014.

— Dawn C. Chmielewski

Photo: Mickey Mouse wears a Chinese New Year costume and hits the drum during a parade at Hong Kong Disneyland. Credit: Ym Yik / EPA

Imagine if the New York Yankees were co-owned by the Boston Red Sox and Baltimore Orioles. Sounds crazy, right? But in the entertainment industry such partnerships among rivals are becoming more and more the norm. For example, Hulu, the red-hot online video site, is owned by News Corp., NBC Universal and the Walt Disney Co. The CW Network is owned by Time Warner and CBS.

Now Disney, NBC Universal and Hearst Corp. are near a deal to create a new joint venture that would house cable networks A&E, History Channel and Lifetime. The news was broken by Claire Atkinson at Broadcasting & Cable. Here's how it would work, per Atkinson. Hearst, Disney and NBC already are partners on A&E and History and a handful of spin-off channels (Hearst and Disney each owns 37.5% and NBC has a 25% stake). Disney and Hearst co-own Lifetime. The three companies would create a new company combining all the networks that would be majority owned by Hearst and Disney, with NBC getting a stake that would be less than 25%, according to a person briefed on the talks.

On the surface, the deal makes sense for everyone. NBC gets a chunk of Lifetime, a very successful cable network, while Disney and Hearst get a bigger piece of three powerful cable channels.

There are cost-savings (that is, layoffs). The new entity will probably combine a lot of backroom operations such as affiliate relations and maybe even sales and marketing.

But here's the rub. While the companies are partners on these channels, they have other interests that conflict. NBC owns Bravo, USA, SyFy and Oxygen, which compete with Lifetime and A&E. Disney and Hearst own ESPN, which competes with NBC on occasion for sports rights. These networks often find themselves bidding on the same content, and the channels that have multiple ownerships can find their needs taking a backseat.

Viacom used to be in the joint-ownership game but recognized the unintended consequences when it was partnered with Time Warner on Comedy Central and owned a stake in Lifetime. It ultimately bought out Time Warner and sold back its interest in Lifetime.

From a purely competitive standpoint, these partnerships are ultimately bad news to the creative community. It becomes tougher to create bidding wars for content if the channels you're pitching are all owned by the same companies.

There is some irony in all this if the deal goes through. NBC, which lost a nasty legal battle to stop "Project Runway" from leaving Bravo to Lifetime, would be able to profit from the show. 

-- Joe Flint

"Up," the latest from Disney/Pixar, sailed to $21.4 million at the box office on Friday. That's just under the $23.2 million that the last Pixar flick -- "Wall-E" -- took in on its opening day last year en route to a $63 million first weekend.

The strong Friday means "Up" will definitely finish its first weekend looking more like "Wall-E" than Pixar's "Ratatouille," which opened at $47 million. There were projections that "Up" could hit as high as $65 million this weekend, but those might be a tad too optimistic. A safer bet would be between $57 million to $60 million. Hardly numbers to sneeze at, however.

The other major movie opening of the weekend, director Sam Raimi's finance-themed horror film "Drag Me to Hell" posted $6.4 million on Friday, which puts it on pace for a respectable $17.5 million, but below industry estimates that pegged it generating $20 million. Last year's horror picture "The Strangers" opened at $21 million.

-- Joe Flint

Hey, Ithaca College, em, here's a tip: If you're going to mention one of your most famous and wealthiest alumni on your website and in your magazine you might want to spell his name correctly.

In researching our snark-filled take on the newly formed children's advocacy group TrueChild, which cited how its operations director Danny Baker was an award-winning graduate of Ithaca College, we decided to see if Disney Chief Executive Bob Iger, a slightly more well-known Ithaca alumnus had won any awards from his alma mater.

He hadn't, but a Bob Iget, who is apparently the chairman of Disney (Iger is only president and CEO, not chairman) received the "Edgar `Dusty' Bredbenner Jr. Distinguished Alumni Award." Way to go Mr. Iget. Actually, the chairman of Disney is John E. Pepper Jr. (Yale, '60).

In fairness to Ithaca, the `R' and the `T' are right next to each other on the keyboard.

-- Joe Flint

Photo: Bob Iger. Credit: Bob D'Amico / Disney

 

The Walt Disney Co. reported a decline in second-quarter profits, as the recession dragged down the company's theme park, movie and television businesses.

The company reported a 46% drop in net income to $613 million, on revenue of $8 billion. Diluted earnings per share for the quarter were 33 cents a share, including restructuring and impairment charges which had a 10 cent per share impact on earnings.

"This was a difficult second quarter due to the weak economy and other factors," Disney President and Chief Executive Robert A. Iger said in a statement.

Disney's theme parks are feeling the brunt of the slow economy and people's reluctance to take vacations because of job insecurity. Operating income was off 50% to $171 million, from $339 million a year earlier. The drop reflected reduced guest spending at Walt Disney World in Orlando, Fla., and the Disneyland Resort in Anaheim, reflecting the discounting in hotel rates and ticket promotions needed to keep visitors coming to the parks.

The movie studio's operating income fell 97% to $13 million because of weak box office sales for "Confessions of a Shopaholic" and "Jonas Brothers: The 3D Concert Experience." DVD sales were also lower.

Disney's television business, particularly its ABC network, was also down. The network reported a 4% drop in operating income to $1.3 billion. Operating income for the broadcast business was down 38% to $162 million for the quarter, because of  the weak economy eroding ad sales at the same time that production cost rose.

By contrast, Disney's cable networks -- ESPN, ABC Family and Disney Channel -- reported a gain of 5%.

--Dawn C. Chmielewski

Photo: Disney Chief Executive Robert Iger. Credit: Fred Prouser / Reuters

The Walt Disney Co. has agreed to join News Corp., NBC Universal and Providence Equity as a joint venture partner of online video site Hulu.

Disney will offer full-length episodes of its most popular prime-time shows from its ABC network, including "Lost," "Grey's Anatomy," and "Desperate Housewives," as well as such cable offerings such as ABC Family's "Secret Life of the American Teenager" and Disney Channel's "Wizards of Waverly Place." It will also provide older episodes from ABC's library, such as "Who Wants To Be A Millionaire" and "Dancing with the Stars."

"From our landmark iTunes deal to our pioneering decision to stream ad-supported shows on our ABC.com player, Disney has sought to meet the constantly evolving viewing habits of our consumers," Robert A. Iger, Disney's president and chief executive, said in a statement. "Today's Hulu announcement is the next extremely important step in that ongoing journey."

Disney views the move as a way to reach a new audience that isn't coming to the network's own website. While the ABC.com website has attracted regular viewers of its shows, Hulu offers the opportunity to tap into a new group of viewers.

Terms of the deal were not disclosed. Once a regulatory review is completed, Disney will gain three seats on the Hulu board, to be held by Iger; Anne Sweeney, president of Disney/ABC Television Group; and Kevin Mayer, executive vice president of corporate strategy and business development.

“At the end of the day, both Disney and Hulu needed each other,” said Tim Hanlon, managing director of
VivaKi Ventures, an investment arm of advertising giant Publicis.

“It’s very hard to be ubiquitous,” Hanlon said.  “Disney ‘s ABC and ESPN has been among the most conservative media companies but even they recognized that they needed alternative distribution methods. We are in a world of distribution neutrality.”

-- Dawn C. Chmielewski

 

For weeks, the major studios insisted they would never agree to a demand by Hollywood's biggest actors union to have its next contract expire at the same time as those of other talent guilds. 

Now, after back-channel talks between Screen Actors Guild leaders and top entertainment executives, the studios have conceded just that, lifting a stumbling block that broke off negotiations over a new contract in February.

Turns out, however, that the studios' offer comes with a big hitch that may not sit well with hundreds of actors who lost their jobs during the 100-day writers strike. In return for a two-year rather than a three-year contract term, the actors union would agree to settle so-called force majeure claims it filed last year seeking more than $10 million in pay.

After the writers strike ended in February 2008, SAG lodged claims against more than 80 shows on behalf of "series regulars" -- which encompass stars as well as those with a recurring role in a show -- who lost their jobs and wages during the writers walkout. The strike shut down popular series such as "Lost," "CSI" and "Ugly Betty."

SAG maintained that producers violated a force majeure clause in the union's contract that entitled actors to receive roughly 2-1/2 weeks' pay if they were suspended as a result of an "act of God," such as foul weather. The studios, however, balked at paying the claims and accused SAG of overreaching.

Studios want to impose a stricter interpretation of the force majeure clause and have offered to settle the outstanding claims for less than what the actors contend they are owed. How much less is unknown, however.

SAG interim Executive Director David White and Chief Negotiator John McGuire have indicated that they would accept the studios' demand as a necessary concession to preserve the larger goal of aligning the expiration of the actors contract with those of other guilds. They are especially keen to have SAG's contract expire at the same time as that of the smaller actors union, the American Federation of Television and Radio Artists, to gain maximum leverage at the bargaining table.

Expect fireworks from dissidents. The force majeure issue will almost certainly be seized on by White's opponents in the actors guild, who've vowed to campaign to defeat a contract they view as an inferior deal. The actors have been working without a contract for nine months. 

Nonetheless, the new SAG leaders, who were installed after the board fired former Chief Negotiator Doug Allen, retain the support of the board majority. And in the end, most members, weary of working without a contract and anxious about the deepening recession, are expected to support whatever contract their board recommends.

-- Richard Verrier

 

In a sign that the recession is cutting into the Walt Disney Co.'s park business even deeper than originally thought, Disney today said it eliminated about 1,900 jobs at its domestic theme parks through job cuts and attrition.

The entertainment giant in February announced a reorganization of its parks and resorts operation, which it acknowledged would set the stage for job cuts. But it didn't say at the time how many positions would be eliminated. The changes were announced amid falling attendance and expectations that the recession has many more months to run its course. But today's announcement signals that Disney is bracing for an extended downturn in its business as consumers continue to keep their wallets closed.

Disney said it would lay off about 1,200 people and leave about 700 positions unfilled. The bulk of the cuts will happen at Walt Disney World in Orlando, Fla., where about 1,400 jobs will be eliminated. About 300 jobs will be cut from the Disneyland Resort in Anaheim, with the remaining reductions coming from corporate headquarters in Burbank.

In January, the company offered buyout packages to 600 executives at its domestic parks division, which in addition to the theme parks includes Disney cruise ships, and resorts and vacation spots.

Disney employs about 80,000 people in its parks and resorts unit.

"These decisions were not made lightly, but are essential to maintaining our leadership in family tourism and reflect today’s economic realities," the company said in a statement. "We continue to work through our reorganization and manage our business based on demand.”

-- Dawn C. Chmielewski

Photo credit: David McNews / Getty Images

 

UPDATE: Disney says the reorganization will also create one group to identify "development opportunities" for the parks, not "acquisitions." The previous information was based on a statement erroneously provided by the company.

The Walt Disney Co. has announced a broad restructuring of its parks and resorts operation -- a move that sets the stage for more job cuts in the coming weeks.

The large-scale reorganization, which encompasses Disneyland, Disney World, cruise ships and resorts that it runs in places like Hilton Head, S.C., comes on the heels of last month's buyout package offers to 600 parks executives.

"These changes are essential to maintaining our leadership position in family tourism and reflect today's economic realities," Jay Rasulo, Parks chairman, said a statement.

Under the new structure, facets of Disneyland and Walt Disney World will be consolidated into a single domestic operation, to be headed by Worldwide Operations President Al Weiss.

Rasulo said the company would streamline its operating structure to simplify the operations -- and in the process, reduce overhead. He said the reorganization was a further step in an operational review begun in 2005 at Walt Disney Parks and Resorts, although he acknowledged that the bleak economy has accelerated the pace of the changes.

Disneyland Resort President Ed Grier and Walt Disney World Resort President Meg Crofton will continue to oversee the ride operations and other facets of customer attendance. However, Weiss' group will take over functions that cut across parks, such as procurement, menu planning and ordering stuffed animals.

The operations of Walt Disney Imagineering group will also be simplified. Chief Creative Executive Bruce Vaughn and Chief Design and Project Delivery Executive Craig Russell will continue to oversee the development of attractions for all Disney parks and resorts. But the group will no longer have separate groups devoted to development for resorts, entertainment and attractions.

A new global business development team will combine real estate development and business development under Executive Vice President Nick Franklin.

The changes are intended to streamline the organization and create one group that identifies possible acquisitions and park expansions, another that implements it and a third that is in charge of operations, company officials said.

The restructuring probably will result in job cuts, on top of the buyouts offered in January. It's unclear how many positions will be lost.

"Organization changes require difficult decisions, including the elimination of some roles," Rasulo said. "These decisions were not made lightly and we know this will be a challenging transition. The people affected are our friends and colleagues"

--Dawn C. Chmielewski

Photo credit: Timothy O'Rourke / Bloomberg News

The Disney-ABC Television Group today laid off several hundred people, citing the weakening economy. Group President Anne Sweeney sent an e-mail to the approximately 7,000 television group employees, saying that after months of trying to adjust the business to the worsening economic climate, "we're now faced with the harsh reality of having to eliminate jobs in some areas."

"This was not an easy decision, nor one made lightly," Sweeney wrote. "The people affected today are our friends and colleagues, and we are doing all we can for them and their families."

The announcement comes a day after ESPN Chief Executive George Bodenheimer said he would cut 200 jobs within the year, mostly from unfilled positions. Sports broadcasters have been particularly vulnerable to decisions by struggling automakers to cut spending on advertising. It also comes a week after ABC's move to consolidate its network and television program production divisions into a single entity.

More layoffs are anticipated in the coming months, as ABC Entertainment Group President Stephen McPherson evaluates staffing at the newly consolidated studio and network operation.

"I realize this is an extremely difficult day for everyone in our group," Sweeney wrote. "But despite the challenges before us, I remain confident and optimistic about our future, because you really are the best in the business."

-- Dawn C. Chmielewski

Photo: ABC headquarters in Burbank. Credit: RMA Photography Inc.

Hearst, Disney and NBC are in talks for new cable venture. Why it makes sense and why it doesn't

Imagine if the New York Yankees were co-owned by the Boston Red Sox and Baltimore Orioles. Sounds crazy, right? But in the entertainment industry such partnerships among rivals are becoming more and more the norm. For example, Hulu, the red-hot online video site, is owned by News Corp., NBC Universal and the Walt Disney Co. The CW Network is owned by Time Warner and CBS.

Now Disney, NBC Universal and Hearst Corp. are near a deal to create a new joint venture that would house cable networks A&E, History Channel and Lifetime. The news was broken by Claire Atkinson at Broadcasting & Cable. Here's how it would work, per Atkinson. Hearst, Disney and NBC already are partners on A&E and History and a handful of spin-off channels (Hearst and Disney each owns 37.5% and NBC has a 25% stake). Disney and Hearst co-own Lifetime. The three companies would create a new company combining all the networks that would be majority owned by Hearst and Disney, with NBC getting a stake that would be less than 25%, according to a person briefed on the talks.

On the surface, the deal makes sense for everyone. NBC gets a chunk of Lifetime, a very successful cable network, while Disney and Hearst get a bigger piece of three powerful cable channels.

There are cost-savings (that is, layoffs). The new entity will probably combine a lot of backroom operations such as affiliate relations and maybe even sales and marketing.

But here's the rub. While the companies are partners on these channels, they have other interests that conflict. NBC owns Bravo, USA, SyFy and Oxygen, which compete with Lifetime and A&E. Disney and Hearst own ESPN, which competes with NBC on occasion for sports rights. These networks often find themselves bidding on the same content, and the channels that have multiple ownerships can find their needs taking a backseat.

Viacom used to be in the joint-ownership game but recognized the unintended consequences when it was partnered with Time Warner on Comedy Central and owned a stake in Lifetime. It ultimately bought out Time Warner and sold back its interest in Lifetime.

From a purely competitive standpoint, these partnerships are ultimately bad news to the creative community. It becomes tougher to create bidding wars for content if the channels you're pitching are all owned by the same companies.

There is some irony in all this if the deal goes through. NBC, which lost a nasty legal battle to stop "Project Runway" from leaving Bravo to Lifetime, would be able to profit from the show. 

-- Joe Flint

"Up," the latest from Disney/Pixar, sailed to $21.4 million at the box office on Friday. That's just under the $23.2 million that the last Pixar flick -- "Wall-E" -- took in on its opening day last year en route to a $63 million first weekend.

The strong Friday means "Up" will definitely finish its first weekend looking more like "Wall-E" than Pixar's "Ratatouille," which opened at $47 million. There were projections that "Up" could hit as high as $65 million this weekend, but those might be a tad too optimistic. A safer bet would be between $57 million to $60 million. Hardly numbers to sneeze at, however.

The other major movie opening of the weekend, director Sam Raimi's finance-themed horror film "Drag Me to Hell" posted $6.4 million on Friday, which puts it on pace for a respectable $17.5 million, but below industry estimates that pegged it generating $20 million. Last year's horror picture "The Strangers" opened at $21 million.

-- Joe Flint

Hey, Ithaca College, em, here's a tip: If you're going to mention one of your most famous and wealthiest alumni on your website and in your magazine you might want to spell his name correctly.

In researching our snark-filled take on the newly formed children's advocacy group TrueChild, which cited how its operations director Danny Baker was an award-winning graduate of Ithaca College, we decided to see if Disney Chief Executive Bob Iger, a slightly more well-known Ithaca alumnus had won any awards from his alma mater.

He hadn't, but a Bob Iget, who is apparently the chairman of Disney (Iger is only president and CEO, not chairman) received the "Edgar `Dusty' Bredbenner Jr. Distinguished Alumni Award." Way to go Mr. Iget. Actually, the chairman of Disney is John E. Pepper Jr. (Yale, '60).

In fairness to Ithaca, the `R' and the `T' are right next to each other on the keyboard.

-- Joe Flint

Photo: Bob Iger. Credit: Bob D'Amico / Disney

 

The Walt Disney Co. reported a decline in second-quarter profits, as the recession dragged down the company's theme park, movie and television businesses.

The company reported a 46% drop in net income to $613 million, on revenue of $8 billion. Diluted earnings per share for the quarter were 33 cents a share, including restructuring and impairment charges which had a 10 cent per share impact on earnings.

"This was a difficult second quarter due to the weak economy and other factors," Disney President and Chief Executive Robert A. Iger said in a statement.

Disney's theme parks are feeling the brunt of the slow economy and people's reluctance to take vacations because of job insecurity. Operating income was off 50% to $171 million, from $339 million a year earlier. The drop reflected reduced guest spending at Walt Disney World in Orlando, Fla., and the Disneyland Resort in Anaheim, reflecting the discounting in hotel rates and ticket promotions needed to keep visitors coming to the parks.

The movie studio's operating income fell 97% to $13 million because of weak box office sales for "Confessions of a Shopaholic" and "Jonas Brothers: The 3D Concert Experience." DVD sales were also lower.

Disney's television business, particularly its ABC network, was also down. The network reported a 4% drop in operating income to $1.3 billion. Operating income for the broadcast business was down 38% to $162 million for the quarter, because of  the weak economy eroding ad sales at the same time that production cost rose.

By contrast, Disney's cable networks -- ESPN, ABC Family and Disney Channel -- reported a gain of 5%.

--Dawn C. Chmielewski

Photo: Disney Chief Executive Robert Iger. Credit: Fred Prouser / Reuters

The Walt Disney Co. has agreed to join News Corp., NBC Universal and Providence Equity as a joint venture partner of online video site Hulu.

Disney will offer full-length episodes of its most popular prime-time shows from its ABC network, including "Lost," "Grey's Anatomy," and "Desperate Housewives," as well as such cable offerings such as ABC Family's "Secret Life of the American Teenager" and Disney Channel's "Wizards of Waverly Place." It will also provide older episodes from ABC's library, such as "Who Wants To Be A Millionaire" and "Dancing with the Stars."

"From our landmark iTunes deal to our pioneering decision to stream ad-supported shows on our ABC.com player, Disney has sought to meet the constantly evolving viewing habits of our consumers," Robert A. Iger, Disney's president and chief executive, said in a statement. "Today's Hulu announcement is the next extremely important step in that ongoing journey."

Disney views the move as a way to reach a new audience that isn't coming to the network's own website. While the ABC.com website has attracted regular viewers of its shows, Hulu offers the opportunity to tap into a new group of viewers.

Terms of the deal were not disclosed. Once a regulatory review is completed, Disney will gain three seats on the Hulu board, to be held by Iger; Anne Sweeney, president of Disney/ABC Television Group; and Kevin Mayer, executive vice president of corporate strategy and business development.

“At the end of the day, both Disney and Hulu needed each other,” said Tim Hanlon, managing director of
VivaKi Ventures, an investment arm of advertising giant Publicis.

“It’s very hard to be ubiquitous,” Hanlon said.  “Disney ‘s ABC and ESPN has been among the most conservative media companies but even they recognized that they needed alternative distribution methods. We are in a world of distribution neutrality.”

-- Dawn C. Chmielewski

 

For weeks, the major studios insisted they would never agree to a demand by Hollywood's biggest actors union to have its next contract expire at the same time as those of other talent guilds. 

Now, after back-channel talks between Screen Actors Guild leaders and top entertainment executives, the studios have conceded just that, lifting a stumbling block that broke off negotiations over a new contract in February.

Turns out, however, that the studios' offer comes with a big hitch that may not sit well with hundreds of actors who lost their jobs during the 100-day writers strike. In return for a two-year rather than a three-year contract term, the actors union would agree to settle so-called force majeure claims it filed last year seeking more than $10 million in pay.

After the writers strike ended in February 2008, SAG lodged claims against more than 80 shows on behalf of "series regulars" -- which encompass stars as well as those with a recurring role in a show -- who lost their jobs and wages during the writers walkout. The strike shut down popular series such as "Lost," "CSI" and "Ugly Betty."

SAG maintained that producers violated a force majeure clause in the union's contract that entitled actors to receive roughly 2-1/2 weeks' pay if they were suspended as a result of an "act of God," such as foul weather. The studios, however, balked at paying the claims and accused SAG of overreaching.

Studios want to impose a stricter interpretation of the force majeure clause and have offered to settle the outstanding claims for less than what the actors contend they are owed. How much less is unknown, however.

SAG interim Executive Director David White and Chief Negotiator John McGuire have indicated that they would accept the studios' demand as a necessary concession to preserve the larger goal of aligning the expiration of the actors contract with those of other guilds. They are especially keen to have SAG's contract expire at the same time as that of the smaller actors union, the American Federation of Television and Radio Artists, to gain maximum leverage at the bargaining table.

Expect fireworks from dissidents. The force majeure issue will almost certainly be seized on by White's opponents in the actors guild, who've vowed to campaign to defeat a contract they view as an inferior deal. The actors have been working without a contract for nine months. 

Nonetheless, the new SAG leaders, who were installed after the board fired former Chief Negotiator Doug Allen, retain the support of the board majority. And in the end, most members, weary of working without a contract and anxious about the deepening recession, are expected to support whatever contract their board recommends.

-- Richard Verrier

 

In a sign that the recession is cutting into the Walt Disney Co.'s park business even deeper than originally thought, Disney today said it eliminated about 1,900 jobs at its domestic theme parks through job cuts and attrition.

The entertainment giant in February announced a reorganization of its parks and resorts operation, which it acknowledged would set the stage for job cuts. But it didn't say at the time how many positions would be eliminated. The changes were announced amid falling attendance and expectations that the recession has many more months to run its course. But today's announcement signals that Disney is bracing for an extended downturn in its business as consumers continue to keep their wallets closed.

Disney said it would lay off about 1,200 people and leave about 700 positions unfilled. The bulk of the cuts will happen at Walt Disney World in Orlando, Fla., where about 1,400 jobs will be eliminated. About 300 jobs will be cut from the Disneyland Resort in Anaheim, with the remaining reductions coming from corporate headquarters in Burbank.

In January, the company offered buyout packages to 600 executives at its domestic parks division, which in addition to the theme parks includes Disney cruise ships, and resorts and vacation spots.

Disney employs about 80,000 people in its parks and resorts unit.

"These decisions were not made lightly, but are essential to maintaining our leadership in family tourism and reflect today’s economic realities," the company said in a statement. "We continue to work through our reorganization and manage our business based on demand.”

-- Dawn C. Chmielewski

Photo credit: David McNews / Getty Images

 

UPDATE: Disney says the reorganization will also create one group to identify "development opportunities" for the parks, not "acquisitions." The previous information was based on a statement erroneously provided by the company.

The Walt Disney Co. has announced a broad restructuring of its parks and resorts operation -- a move that sets the stage for more job cuts in the coming weeks.

The large-scale reorganization, which encompasses Disneyland, Disney World, cruise ships and resorts that it runs in places like Hilton Head, S.C., comes on the heels of last month's buyout package offers to 600 parks executives.

"These changes are essential to maintaining our leadership position in family tourism and reflect today's economic realities," Jay Rasulo, Parks chairman, said a statement.

Under the new structure, facets of Disneyland and Walt Disney World will be consolidated into a single domestic operation, to be headed by Worldwide Operations President Al Weiss.

Rasulo said the company would streamline its operating structure to simplify the operations -- and in the process, reduce overhead. He said the reorganization was a further step in an operational review begun in 2005 at Walt Disney Parks and Resorts, although he acknowledged that the bleak economy has accelerated the pace of the changes.

Disneyland Resort President Ed Grier and Walt Disney World Resort President Meg Crofton will continue to oversee the ride operations and other facets of customer attendance. However, Weiss' group will take over functions that cut across parks, such as procurement, menu planning and ordering stuffed animals.

The operations of Walt Disney Imagineering group will also be simplified. Chief Creative Executive Bruce Vaughn and Chief Design and Project Delivery Executive Craig Russell will continue to oversee the development of attractions for all Disney parks and resorts. But the group will no longer have separate groups devoted to development for resorts, entertainment and attractions.

A new global business development team will combine real estate development and business development under Executive Vice President Nick Franklin.

The changes are intended to streamline the organization and create one group that identifies possible acquisitions and park expansions, another that implements it and a third that is in charge of operations, company officials said.

The restructuring probably will result in job cuts, on top of the buyouts offered in January. It's unclear how many positions will be lost.

"Organization changes require difficult decisions, including the elimination of some roles," Rasulo said. "These decisions were not made lightly and we know this will be a challenging transition. The people affected are our friends and colleagues"

--Dawn C. Chmielewski

Photo credit: Timothy O'Rourke / Bloomberg News

The Disney-ABC Television Group today laid off several hundred people, citing the weakening economy. Group President Anne Sweeney sent an e-mail to the approximately 7,000 television group employees, saying that after months of trying to adjust the business to the worsening economic climate, "we're now faced with the harsh reality of having to eliminate jobs in some areas."

"This was not an easy decision, nor one made lightly," Sweeney wrote. "The people affected today are our friends and colleagues, and we are doing all we can for them and their families."

The announcement comes a day after ESPN Chief Executive George Bodenheimer said he would cut 200 jobs within the year, mostly from unfilled positions. Sports broadcasters have been particularly vulnerable to decisions by struggling automakers to cut spending on advertising. It also comes a week after ABC's move to consolidate its network and television program production divisions into a single entity.

More layoffs are anticipated in the coming months, as ABC Entertainment Group President Stephen McPherson evaluates staffing at the newly consolidated studio and network operation.

"I realize this is an extremely difficult day for everyone in our group," Sweeney wrote. "But despite the challenges before us, I remain confident and optimistic about our future, because you really are the best in the business."

-- Dawn C. Chmielewski

Photo: ABC headquarters in Burbank. Credit: RMA Photography Inc.

Opening Day: `Up' flies to $21.4 million, `Hell' digs in for $6.4 million

"Up," the latest from Disney/Pixar, sailed to $21.4 million at the box office on Friday. That's just under the $23.2 million that the last Pixar flick -- "Wall-E" -- took in on its opening day last year en route to a $63 million first weekend.

The strong Friday means "Up" will definitely finish its first weekend looking more like "Wall-E" than Pixar's "Ratatouille," which opened at $47 million. There were projections that "Up" could hit as high as $65 million this weekend, but those might be a tad too optimistic. A safer bet would be between $57 million to $60 million. Hardly numbers to sneeze at, however.

The other major movie opening of the weekend, director Sam Raimi's finance-themed horror film "Drag Me to Hell" posted $6.4 million on Friday, which puts it on pace for a respectable $17.5 million, but below industry estimates that pegged it generating $20 million. Last year's horror picture "The Strangers" opened at $21 million.

-- Joe Flint

Hey, Ithaca College, em, here's a tip: If you're going to mention one of your most famous and wealthiest alumni on your website and in your magazine you might want to spell his name correctly.

In researching our snark-filled take on the newly formed children's advocacy group TrueChild, which cited how its operations director Danny Baker was an award-winning graduate of Ithaca College, we decided to see if Disney Chief Executive Bob Iger, a slightly more well-known Ithaca alumnus had won any awards from his alma mater.

He hadn't, but a Bob Iget, who is apparently the chairman of Disney (Iger is only president and CEO, not chairman) received the "Edgar `Dusty' Bredbenner Jr. Distinguished Alumni Award." Way to go Mr. Iget. Actually, the chairman of Disney is John E. Pepper Jr. (Yale, '60).

In fairness to Ithaca, the `R' and the `T' are right next to each other on the keyboard.

-- Joe Flint

Photo: Bob Iger. Credit: Bob D'Amico / Disney

 

The Walt Disney Co. reported a decline in second-quarter profits, as the recession dragged down the company's theme park, movie and television businesses.

The company reported a 46% drop in net income to $613 million, on revenue of $8 billion. Diluted earnings per share for the quarter were 33 cents a share, including restructuring and impairment charges which had a 10 cent per share impact on earnings.

"This was a difficult second quarter due to the weak economy and other factors," Disney President and Chief Executive Robert A. Iger said in a statement.

Disney's theme parks are feeling the brunt of the slow economy and people's reluctance to take vacations because of job insecurity. Operating income was off 50% to $171 million, from $339 million a year earlier. The drop reflected reduced guest spending at Walt Disney World in Orlando, Fla., and the Disneyland Resort in Anaheim, reflecting the discounting in hotel rates and ticket promotions needed to keep visitors coming to the parks.

The movie studio's operating income fell 97% to $13 million because of weak box office sales for "Confessions of a Shopaholic" and "Jonas Brothers: The 3D Concert Experience." DVD sales were also lower.

Disney's television business, particularly its ABC network, was also down. The network reported a 4% drop in operating income to $1.3 billion. Operating income for the broadcast business was down 38% to $162 million for the quarter, because of  the weak economy eroding ad sales at the same time that production cost rose.

By contrast, Disney's cable networks -- ESPN, ABC Family and Disney Channel -- reported a gain of 5%.

--Dawn C. Chmielewski

Photo: Disney Chief Executive Robert Iger. Credit: Fred Prouser / Reuters

The Walt Disney Co. has agreed to join News Corp., NBC Universal and Providence Equity as a joint venture partner of online video site Hulu.

Disney will offer full-length episodes of its most popular prime-time shows from its ABC network, including "Lost," "Grey's Anatomy," and "Desperate Housewives," as well as such cable offerings such as ABC Family's "Secret Life of the American Teenager" and Disney Channel's "Wizards of Waverly Place." It will also provide older episodes from ABC's library, such as "Who Wants To Be A Millionaire" and "Dancing with the Stars."

"From our landmark iTunes deal to our pioneering decision to stream ad-supported shows on our ABC.com player, Disney has sought to meet the constantly evolving viewing habits of our consumers," Robert A. Iger, Disney's president and chief executive, said in a statement. "Today's Hulu announcement is the next extremely important step in that ongoing journey."

Disney views the move as a way to reach a new audience that isn't coming to the network's own website. While the ABC.com website has attracted regular viewers of its shows, Hulu offers the opportunity to tap into a new group of viewers.

Terms of the deal were not disclosed. Once a regulatory review is completed, Disney will gain three seats on the Hulu board, to be held by Iger; Anne Sweeney, president of Disney/ABC Television Group; and Kevin Mayer, executive vice president of corporate strategy and business development.

“At the end of the day, both Disney and Hulu needed each other,” said Tim Hanlon, managing director of
VivaKi Ventures, an investment arm of advertising giant Publicis.

“It’s very hard to be ubiquitous,” Hanlon said.  “Disney ‘s ABC and ESPN has been among the most conservative media companies but even they recognized that they needed alternative distribution methods. We are in a world of distribution neutrality.”

-- Dawn C. Chmielewski

 

For weeks, the major studios insisted they would never agree to a demand by Hollywood's biggest actors union to have its next contract expire at the same time as those of other talent guilds. 

Now, after back-channel talks between Screen Actors Guild leaders and top entertainment executives, the studios have conceded just that, lifting a stumbling block that broke off negotiations over a new contract in February.

Turns out, however, that the studios' offer comes with a big hitch that may not sit well with hundreds of actors who lost their jobs during the 100-day writers strike. In return for a two-year rather than a three-year contract term, the actors union would agree to settle so-called force majeure claims it filed last year seeking more than $10 million in pay.

After the writers strike ended in February 2008, SAG lodged claims against more than 80 shows on behalf of "series regulars" -- which encompass stars as well as those with a recurring role in a show -- who lost their jobs and wages during the writers walkout. The strike shut down popular series such as "Lost," "CSI" and "Ugly Betty."

SAG maintained that producers violated a force majeure clause in the union's contract that entitled actors to receive roughly 2-1/2 weeks' pay if they were suspended as a result of an "act of God," such as foul weather. The studios, however, balked at paying the claims and accused SAG of overreaching.

Studios want to impose a stricter interpretation of the force majeure clause and have offered to settle the outstanding claims for less than what the actors contend they are owed. How much less is unknown, however.

SAG interim Executive Director David White and Chief Negotiator John McGuire have indicated that they would accept the studios' demand as a necessary concession to preserve the larger goal of aligning the expiration of the actors contract with those of other guilds. They are especially keen to have SAG's contract expire at the same time as that of the smaller actors union, the American Federation of Television and Radio Artists, to gain maximum leverage at the bargaining table.

Expect fireworks from dissidents. The force majeure issue will almost certainly be seized on by White's opponents in the actors guild, who've vowed to campaign to defeat a contract they view as an inferior deal. The actors have been working without a contract for nine months. 

Nonetheless, the new SAG leaders, who were installed after the board fired former Chief Negotiator Doug Allen, retain the support of the board majority. And in the end, most members, weary of working without a contract and anxious about the deepening recession, are expected to support whatever contract their board recommends.

-- Richard Verrier

 

In a sign that the recession is cutting into the Walt Disney Co.'s park business even deeper than originally thought, Disney today said it eliminated about 1,900 jobs at its domestic theme parks through job cuts and attrition.

The entertainment giant in February announced a reorganization of its parks and resorts operation, which it acknowledged would set the stage for job cuts. But it didn't say at the time how many positions would be eliminated. The changes were announced amid falling attendance and expectations that the recession has many more months to run its course. But today's announcement signals that Disney is bracing for an extended downturn in its business as consumers continue to keep their wallets closed.

Disney said it would lay off about 1,200 people and leave about 700 positions unfilled. The bulk of the cuts will happen at Walt Disney World in Orlando, Fla., where about 1,400 jobs will be eliminated. About 300 jobs will be cut from the Disneyland Resort in Anaheim, with the remaining reductions coming from corporate headquarters in Burbank.

In January, the company offered buyout packages to 600 executives at its domestic parks division, which in addition to the theme parks includes Disney cruise ships, and resorts and vacation spots.

Disney employs about 80,000 people in its parks and resorts unit.

"These decisions were not made lightly, but are essential to maintaining our leadership in family tourism and reflect today’s economic realities," the company said in a statement. "We continue to work through our reorganization and manage our business based on demand.”

-- Dawn C. Chmielewski

Photo credit: David McNews / Getty Images

 

UPDATE: Disney says the reorganization will also create one group to identify "development opportunities" for the parks, not "acquisitions." The previous information was based on a statement erroneously provided by the company.

The Walt Disney Co. has announced a broad restructuring of its parks and resorts operation -- a move that sets the stage for more job cuts in the coming weeks.

The large-scale reorganization, which encompasses Disneyland, Disney World, cruise ships and resorts that it runs in places like Hilton Head, S.C., comes on the heels of last month's buyout package offers to 600 parks executives.

"These changes are essential to maintaining our leadership position in family tourism and reflect today's economic realities," Jay Rasulo, Parks chairman, said a statement.

Under the new structure, facets of Disneyland and Walt Disney World will be consolidated into a single domestic operation, to be headed by Worldwide Operations President Al Weiss.

Rasulo said the company would streamline its operating structure to simplify the operations -- and in the process, reduce overhead. He said the reorganization was a further step in an operational review begun in 2005 at Walt Disney Parks and Resorts, although he acknowledged that the bleak economy has accelerated the pace of the changes.

Disneyland Resort President Ed Grier and Walt Disney World Resort President Meg Crofton will continue to oversee the ride operations and other facets of customer attendance. However, Weiss' group will take over functions that cut across parks, such as procurement, menu planning and ordering stuffed animals.

The operations of Walt Disney Imagineering group will also be simplified. Chief Creative Executive Bruce Vaughn and Chief Design and Project Delivery Executive Craig Russell will continue to oversee the development of attractions for all Disney parks and resorts. But the group will no longer have separate groups devoted to development for resorts, entertainment and attractions.

A new global business development team will combine real estate development and business development under Executive Vice President Nick Franklin.

The changes are intended to streamline the organization and create one group that identifies possible acquisitions and park expansions, another that implements it and a third that is in charge of operations, company officials said.

The restructuring probably will result in job cuts, on top of the buyouts offered in January. It's unclear how many positions will be lost.

"Organization changes require difficult decisions, including the elimination of some roles," Rasulo said. "These decisions were not made lightly and we know this will be a challenging transition. The people affected are our friends and colleagues"

--Dawn C. Chmielewski

Photo credit: Timothy O'Rourke / Bloomberg News

The Disney-ABC Television Group today laid off several hundred people, citing the weakening economy. Group President Anne Sweeney sent an e-mail to the approximately 7,000 television group employees, saying that after months of trying to adjust the business to the worsening economic climate, "we're now faced with the harsh reality of having to eliminate jobs in some areas."

"This was not an easy decision, nor one made lightly," Sweeney wrote. "The people affected today are our friends and colleagues, and we are doing all we can for them and their families."

The announcement comes a day after ESPN Chief Executive George Bodenheimer said he would cut 200 jobs within the year, mostly from unfilled positions. Sports broadcasters have been particularly vulnerable to decisions by struggling automakers to cut spending on advertising. It also comes a week after ABC's move to consolidate its network and television program production divisions into a single entity.

More layoffs are anticipated in the coming months, as ABC Entertainment Group President Stephen McPherson evaluates staffing at the newly consolidated studio and network operation.

"I realize this is an extremely difficult day for everyone in our group," Sweeney wrote. "But despite the challenges before us, I remain confident and optimistic about our future, because you really are the best in the business."

-- Dawn C. Chmielewski

Photo: ABC headquarters in Burbank. Credit: RMA Photography Inc.

Iget, Iger, whatever. Just get that check in the mail, Bob

Hey, Ithaca College, em, here's a tip: If you're going to mention one of your most famous and wealthiest alumni on your website and in your magazine you might want to spell his name correctly.

In researching our snark-filled take on the newly formed children's advocacy group TrueChild, which cited how its operations director Danny Baker was an award-winning graduate of Ithaca College, we decided to see if Disney Chief Executive Bob Iger, a slightly more well-known Ithaca alumnus had won any awards from his alma mater.

He hadn't, but a Bob Iget, who is apparently the chairman of Disney (Iger is only president and CEO, not chairman) received the "Edgar `Dusty' Bredbenner Jr. Distinguished Alumni Award." Way to go Mr. Iget. Actually, the chairman of Disney is John E. Pepper Jr. (Yale, '60).

In fairness to Ithaca, the `R' and the `T' are right next to each other on the keyboard.

-- Joe Flint

Photo: Bob Iger. Credit: Bob D'Amico / Disney

 

The Walt Disney Co. reported a decline in second-quarter profits, as the recession dragged down the company's theme park, movie and television businesses.

The company reported a 46% drop in net income to $613 million, on revenue of $8 billion. Diluted earnings per share for the quarter were 33 cents a share, including restructuring and impairment charges which had a 10 cent per share impact on earnings.

"This was a difficult second quarter due to the weak economy and other factors," Disney President and Chief Executive Robert A. Iger said in a statement.

Disney's theme parks are feeling the brunt of the slow economy and people's reluctance to take vacations because of job insecurity. Operating income was off 50% to $171 million, from $339 million a year earlier. The drop reflected reduced guest spending at Walt Disney World in Orlando, Fla., and the Disneyland Resort in Anaheim, reflecting the discounting in hotel rates and ticket promotions needed to keep visitors coming to the parks.

The movie studio's operating income fell 97% to $13 million because of weak box office sales for "Confessions of a Shopaholic" and "Jonas Brothers: The 3D Concert Experience." DVD sales were also lower.

Disney's television business, particularly its ABC network, was also down. The network reported a 4% drop in operating income to $1.3 billion. Operating income for the broadcast business was down 38% to $162 million for the quarter, because of  the weak economy eroding ad sales at the same time that production cost rose.

By contrast, Disney's cable networks -- ESPN, ABC Family and Disney Channel -- reported a gain of 5%.

--Dawn C. Chmielewski

Photo: Disney Chief Executive Robert Iger. Credit: Fred Prouser / Reuters

The Walt Disney Co. has agreed to join News Corp., NBC Universal and Providence Equity as a joint venture partner of online video site Hulu.

Disney will offer full-length episodes of its most popular prime-time shows from its ABC network, including "Lost," "Grey's Anatomy," and "Desperate Housewives," as well as such cable offerings such as ABC Family's "Secret Life of the American Teenager" and Disney Channel's "Wizards of Waverly Place." It will also provide older episodes from ABC's library, such as "Who Wants To Be A Millionaire" and "Dancing with the Stars."

"From our landmark iTunes deal to our pioneering decision to stream ad-supported shows on our ABC.com player, Disney has sought to meet the constantly evolving viewing habits of our consumers," Robert A. Iger, Disney's president and chief executive, said in a statement. "Today's Hulu announcement is the next extremely important step in that ongoing journey."

Disney views the move as a way to reach a new audience that isn't coming to the network's own website. While the ABC.com website has attracted regular viewers of its shows, Hulu offers the opportunity to tap into a new group of viewers.

Terms of the deal were not disclosed. Once a regulatory review is completed, Disney will gain three seats on the Hulu board, to be held by Iger; Anne Sweeney, president of Disney/ABC Television Group; and Kevin Mayer, executive vice president of corporate strategy and business development.

“At the end of the day, both Disney and Hulu needed each other,” said Tim Hanlon, managing director of
VivaKi Ventures, an investment arm of advertising giant Publicis.

“It’s very hard to be ubiquitous,” Hanlon said.  “Disney ‘s ABC and ESPN has been among the most conservative media companies but even they recognized that they needed alternative distribution methods. We are in a world of distribution neutrality.”

-- Dawn C. Chmielewski

 

For weeks, the major studios insisted they would never agree to a demand by Hollywood's biggest actors union to have its next contract expire at the same time as those of other talent guilds. 

Now, after back-channel talks between Screen Actors Guild leaders and top entertainment executives, the studios have conceded just that, lifting a stumbling block that broke off negotiations over a new contract in February.

Turns out, however, that the studios' offer comes with a big hitch that may not sit well with hundreds of actors who lost their jobs during the 100-day writers strike. In return for a two-year rather than a three-year contract term, the actors union would agree to settle so-called force majeure claims it filed last year seeking more than $10 million in pay.

After the writers strike ended in February 2008, SAG lodged claims against more than 80 shows on behalf of "series regulars" -- which encompass stars as well as those with a recurring role in a show -- who lost their jobs and wages during the writers walkout. The strike shut down popular series such as "Lost," "CSI" and "Ugly Betty."

SAG maintained that producers violated a force majeure clause in the union's contract that entitled actors to receive roughly 2-1/2 weeks' pay if they were suspended as a result of an "act of God," such as foul weather. The studios, however, balked at paying the claims and accused SAG of overreaching.

Studios want to impose a stricter interpretation of the force majeure clause and have offered to settle the outstanding claims for less than what the actors contend they are owed. How much less is unknown, however.

SAG interim Executive Director David White and Chief Negotiator John McGuire have indicated that they would accept the studios' demand as a necessary concession to preserve the larger goal of aligning the expiration of the actors contract with those of other guilds. They are especially keen to have SAG's contract expire at the same time as that of the smaller actors union, the American Federation of Television and Radio Artists, to gain maximum leverage at the bargaining table.

Expect fireworks from dissidents. The force majeure issue will almost certainly be seized on by White's opponents in the actors guild, who've vowed to campaign to defeat a contract they view as an inferior deal. The actors have been working without a contract for nine months. 

Nonetheless, the new SAG leaders, who were installed after the board fired former Chief Negotiator Doug Allen, retain the support of the board majority. And in the end, most members, weary of working without a contract and anxious about the deepening recession, are expected to support whatever contract their board recommends.

-- Richard Verrier

 

In a sign that the recession is cutting into the Walt Disney Co.'s park business even deeper than originally thought, Disney today said it eliminated about 1,900 jobs at its domestic theme parks through job cuts and attrition.

The entertainment giant in February announced a reorganization of its parks and resorts operation, which it acknowledged would set the stage for job cuts. But it didn't say at the time how many positions would be eliminated. The changes were announced amid falling attendance and expectations that the recession has many more months to run its course. But today's announcement signals that Disney is bracing for an extended downturn in its business as consumers continue to keep their wallets closed.

Disney said it would lay off about 1,200 people and leave about 700 positions unfilled. The bulk of the cuts will happen at Walt Disney World in Orlando, Fla., where about 1,400 jobs will be eliminated. About 300 jobs will be cut from the Disneyland Resort in Anaheim, with the remaining reductions coming from corporate headquarters in Burbank.

In January, the company offered buyout packages to 600 executives at its domestic parks division, which in addition to the theme parks includes Disney cruise ships, and resorts and vacation spots.

Disney employs about 80,000 people in its parks and resorts unit.

"These decisions were not made lightly, but are essential to maintaining our leadership in family tourism and reflect today’s economic realities," the company said in a statement. "We continue to work through our reorganization and manage our business based on demand.”

-- Dawn C. Chmielewski

Photo credit: David McNews / Getty Images

 

UPDATE: Disney says the reorganization will also create one group to identify "development opportunities" for the parks, not "acquisitions." The previous information was based on a statement erroneously provided by the company.

The Walt Disney Co. has announced a broad restructuring of its parks and resorts operation -- a move that sets the stage for more job cuts in the coming weeks.

The large-scale reorganization, which encompasses Disneyland, Disney World, cruise ships and resorts that it runs in places like Hilton Head, S.C., comes on the heels of last month's buyout package offers to 600 parks executives.

"These changes are essential to maintaining our leadership position in family tourism and reflect today's economic realities," Jay Rasulo, Parks chairman, said a statement.

Under the new structure, facets of Disneyland and Walt Disney World will be consolidated into a single domestic operation, to be headed by Worldwide Operations President Al Weiss.

Rasulo said the company would streamline its operating structure to simplify the operations -- and in the process, reduce overhead. He said the reorganization was a further step in an operational review begun in 2005 at Walt Disney Parks and Resorts, although he acknowledged that the bleak economy has accelerated the pace of the changes.

Disneyland Resort President Ed Grier and Walt Disney World Resort President Meg Crofton will continue to oversee the ride operations and other facets of customer attendance. However, Weiss' group will take over functions that cut across parks, such as procurement, menu planning and ordering stuffed animals.

The operations of Walt Disney Imagineering group will also be simplified. Chief Creative Executive Bruce Vaughn and Chief Design and Project Delivery Executive Craig Russell will continue to oversee the development of attractions for all Disney parks and resorts. But the group will no longer have separate groups devoted to development for resorts, entertainment and attractions.

A new global business development team will combine real estate development and business development under Executive Vice President Nick Franklin.

The changes are intended to streamline the organization and create one group that identifies possible acquisitions and park expansions, another that implements it and a third that is in charge of operations, company officials said.

The restructuring probably will result in job cuts, on top of the buyouts offered in January. It's unclear how many positions will be lost.

"Organization changes require difficult decisions, including the elimination of some roles," Rasulo said. "These decisions were not made lightly and we know this will be a challenging transition. The people affected are our friends and colleagues"

--Dawn C. Chmielewski

Photo credit: Timothy O'Rourke / Bloomberg News

The Disney-ABC Television Group today laid off several hundred people, citing the weakening economy. Group President Anne Sweeney sent an e-mail to the approximately 7,000 television group employees, saying that after months of trying to adjust the business to the worsening economic climate, "we're now faced with the harsh reality of having to eliminate jobs in some areas."

"This was not an easy decision, nor one made lightly," Sweeney wrote. "The people affected today are our friends and colleagues, and we are doing all we can for them and their families."

The announcement comes a day after ESPN Chief Executive George Bodenheimer said he would cut 200 jobs within the year, mostly from unfilled positions. Sports broadcasters have been particularly vulnerable to decisions by struggling automakers to cut spending on advertising. It also comes a week after ABC's move to consolidate its network and television program production divisions into a single entity.

More layoffs are anticipated in the coming months, as ABC Entertainment Group President Stephen McPherson evaluates staffing at the newly consolidated studio and network operation.

"I realize this is an extremely difficult day for everyone in our group," Sweeney wrote. "But despite the challenges before us, I remain confident and optimistic about our future, because you really are the best in the business."

-- Dawn C. Chmielewski

Photo: ABC headquarters in Burbank. Credit: RMA Photography Inc.

Recession smacks Disney profits; movie division results off 97%

 

The Walt Disney Co. reported a decline in second-quarter profits, as the recession dragged down the company's theme park, movie and television businesses.

The company reported a 46% drop in net income to $613 million, on revenue of $8 billion. Diluted earnings per share for the quarter were 33 cents a share, including restructuring and impairment charges which had a 10 cent per share impact on earnings.

"This was a difficult second quarter due to the weak economy and other factors," Disney President and Chief Executive Robert A. Iger said in a statement.

Disney's theme parks are feeling the brunt of the slow economy and people's reluctance to take vacations because of job insecurity. Operating income was off 50% to $171 million, from $339 million a year earlier. The drop reflected reduced guest spending at Walt Disney World in Orlando, Fla., and the Disneyland Resort in Anaheim, reflecting the discounting in hotel rates and ticket promotions needed to keep visitors coming to the parks.

The movie studio's operating income fell 97% to $13 million because of weak box office sales for "Confessions of a Shopaholic" and "Jonas Brothers: The 3D Concert Experience." DVD sales were also lower.

Disney's television business, particularly its ABC network, was also down. The network reported a 4% drop in operating income to $1.3 billion. Operating income for the broadcast business was down 38% to $162 million for the quarter, because of  the weak economy eroding ad sales at the same time that production cost rose.

By contrast, Disney's cable networks -- ESPN, ABC Family and Disney Channel -- reported a gain of 5%.

--Dawn C. Chmielewski

Photo: Disney Chief Executive Robert Iger. Credit: Fred Prouser / Reuters

The Walt Disney Co. has agreed to join News Corp., NBC Universal and Providence Equity as a joint venture partner of online video site Hulu.

Disney will offer full-length episodes of its most popular prime-time shows from its ABC network, including "Lost," "Grey's Anatomy," and "Desperate Housewives," as well as such cable offerings such as ABC Family's "Secret Life of the American Teenager" and Disney Channel's "Wizards of Waverly Place." It will also provide older episodes from ABC's library, such as "Who Wants To Be A Millionaire" and "Dancing with the Stars."

"From our landmark iTunes deal to our pioneering decision to stream ad-supported shows on our ABC.com player, Disney has sought to meet the constantly evolving viewing habits of our consumers," Robert A. Iger, Disney's president and chief executive, said in a statement. "Today's Hulu announcement is the next extremely important step in that ongoing journey."

Disney views the move as a way to reach a new audience that isn't coming to the network's own website. While the ABC.com website has attracted regular viewers of its shows, Hulu offers the opportunity to tap into a new group of viewers.

Terms of the deal were not disclosed. Once a regulatory review is completed, Disney will gain three seats on the Hulu board, to be held by Iger; Anne Sweeney, president of Disney/ABC Television Group; and Kevin Mayer, executive vice president of corporate strategy and business development.

“At the end of the day, both Disney and Hulu needed each other,” said Tim Hanlon, managing director of
VivaKi Ventures, an investment arm of advertising giant Publicis.

“It’s very hard to be ubiquitous,” Hanlon said.  “Disney ‘s ABC and ESPN has been among the most conservative media companies but even they recognized that they needed alternative distribution methods. We are in a world of distribution neutrality.”

-- Dawn C. Chmielewski

 

For weeks, the major studios insisted they would never agree to a demand by Hollywood's biggest actors union to have its next contract expire at the same time as those of other talent guilds. 

Now, after back-channel talks between Screen Actors Guild leaders and top entertainment executives, the studios have conceded just that, lifting a stumbling block that broke off negotiations over a new contract in February.

Turns out, however, that the studios' offer comes with a big hitch that may not sit well with hundreds of actors who lost their jobs during the 100-day writers strike. In return for a two-year rather than a three-year contract term, the actors union would agree to settle so-called force majeure claims it filed last year seeking more than $10 million in pay.

After the writers strike ended in February 2008, SAG lodged claims against more than 80 shows on behalf of "series regulars" -- which encompass stars as well as those with a recurring role in a show -- who lost their jobs and wages during the writers walkout. The strike shut down popular series such as "Lost," "CSI" and "Ugly Betty."

SAG maintained that producers violated a force majeure clause in the union's contract that entitled actors to receive roughly 2-1/2 weeks' pay if they were suspended as a result of an "act of God," such as foul weather. The studios, however, balked at paying the claims and accused SAG of overreaching.

Studios want to impose a stricter interpretation of the force majeure clause and have offered to settle the outstanding claims for less than what the actors contend they are owed. How much less is unknown, however.

SAG interim Executive Director David White and Chief Negotiator John McGuire have indicated that they would accept the studios' demand as a necessary concession to preserve the larger goal of aligning the expiration of the actors contract with those of other guilds. They are especially keen to have SAG's contract expire at the same time as that of the smaller actors union, the American Federation of Television and Radio Artists, to gain maximum leverage at the bargaining table.

Expect fireworks from dissidents. The force majeure issue will almost certainly be seized on by White's opponents in the actors guild, who've vowed to campaign to defeat a contract they view as an inferior deal. The actors have been working without a contract for nine months. 

Nonetheless, the new SAG leaders, who were installed after the board fired former Chief Negotiator Doug Allen, retain the support of the board majority. And in the end, most members, weary of working without a contract and anxious about the deepening recession, are expected to support whatever contract their board recommends.

-- Richard Verrier

 

In a sign that the recession is cutting into the Walt Disney Co.'s park business even deeper than originally thought, Disney today said it eliminated about 1,900 jobs at its domestic theme parks through job cuts and attrition.

The entertainment giant in February announced a reorganization of its parks and resorts operation, which it acknowledged would set the stage for job cuts. But it didn't say at the time how many positions would be eliminated. The changes were announced amid falling attendance and expectations that the recession has many more months to run its course. But today's announcement signals that Disney is bracing for an extended downturn in its business as consumers continue to keep their wallets closed.

Disney said it would lay off about 1,200 people and leave about 700 positions unfilled. The bulk of the cuts will happen at Walt Disney World in Orlando, Fla., where about 1,400 jobs will be eliminated. About 300 jobs will be cut from the Disneyland Resort in Anaheim, with the remaining reductions coming from corporate headquarters in Burbank.

In January, the company offered buyout packages to 600 executives at its domestic parks division, which in addition to the theme parks includes Disney cruise ships, and resorts and vacation spots.

Disney employs about 80,000 people in its parks and resorts unit.

"These decisions were not made lightly, but are essential to maintaining our leadership in family tourism and reflect today’s economic realities," the company said in a statement. "We continue to work through our reorganization and manage our business based on demand.”

-- Dawn C. Chmielewski

Photo credit: David McNews / Getty Images

 

UPDATE: Disney says the reorganization will also create one group to identify "development opportunities" for the parks, not "acquisitions." The previous information was based on a statement erroneously provided by the company.

The Walt Disney Co. has announced a broad restructuring of its parks and resorts operation -- a move that sets the stage for more job cuts in the coming weeks.

The large-scale reorganization, which encompasses Disneyland, Disney World, cruise ships and resorts that it runs in places like Hilton Head, S.C., comes on the heels of last month's buyout package offers to 600 parks executives.

"These changes are essential to maintaining our leadership position in family tourism and reflect today's economic realities," Jay Rasulo, Parks chairman, said a statement.

Under the new structure, facets of Disneyland and Walt Disney World will be consolidated into a single domestic operation, to be headed by Worldwide Operations President Al Weiss.

Rasulo said the company would streamline its operating structure to simplify the operations -- and in the process, reduce overhead. He said the reorganization was a further step in an operational review begun in 2005 at Walt Disney Parks and Resorts, although he acknowledged that the bleak economy has accelerated the pace of the changes.

Disneyland Resort President Ed Grier and Walt Disney World Resort President Meg Crofton will continue to oversee the ride operations and other facets of customer attendance. However, Weiss' group will take over functions that cut across parks, such as procurement, menu planning and ordering stuffed animals.

The operations of Walt Disney Imagineering group will also be simplified. Chief Creative Executive Bruce Vaughn and Chief Design and Project Delivery Executive Craig Russell will continue to oversee the development of attractions for all Disney parks and resorts. But the group will no longer have separate groups devoted to development for resorts, entertainment and attractions.

A new global business development team will combine real estate development and business development under Executive Vice President Nick Franklin.

The changes are intended to streamline the organization and create one group that identifies possible acquisitions and park expansions, another that implements it and a third that is in charge of operations, company officials said.

The restructuring probably will result in job cuts, on top of the buyouts offered in January. It's unclear how many positions will be lost.

"Organization changes require difficult decisions, including the elimination of some roles," Rasulo said. "These decisions were not made lightly and we know this will be a challenging transition. The people affected are our friends and colleagues"

--Dawn C. Chmielewski

Photo credit: Timothy O'Rourke / Bloomberg News

The Disney-ABC Television Group today laid off several hundred people, citing the weakening economy. Group President Anne Sweeney sent an e-mail to the approximately 7,000 television group employees, saying that after months of trying to adjust the business to the worsening economic climate, "we're now faced with the harsh reality of having to eliminate jobs in some areas."

"This was not an easy decision, nor one made lightly," Sweeney wrote. "The people affected today are our friends and colleagues, and we are doing all we can for them and their families."

The announcement comes a day after ESPN Chief Executive George Bodenheimer said he would cut 200 jobs within the year, mostly from unfilled positions. Sports broadcasters have been particularly vulnerable to decisions by struggling automakers to cut spending on advertising. It also comes a week after ABC's move to consolidate its network and television program production divisions into a single entity.

More layoffs are anticipated in the coming months, as ABC Entertainment Group President Stephen McPherson evaluates staffing at the newly consolidated studio and network operation.

"I realize this is an extremely difficult day for everyone in our group," Sweeney wrote. "But despite the challenges before us, I remain confident and optimistic about our future, because you really are the best in the business."

-- Dawn C. Chmielewski

Photo: ABC headquarters in Burbank. Credit: RMA Photography Inc.

Disney joins Hulu

The Walt Disney Co. has agreed to join News Corp., NBC Universal and Providence Equity as a joint venture partner of online video site Hulu.

Disney will offer full-length episodes of its most popular prime-time shows from its ABC network, including "Lost," "Grey's Anatomy," and "Desperate Housewives," as well as such cable offerings such as ABC Family's "Secret Life of the American Teenager" and Disney Channel's "Wizards of Waverly Place." It will also provide older episodes from ABC's library, such as "Who Wants To Be A Millionaire" and "Dancing with the Stars."

"From our landmark iTunes deal to our pioneering decision to stream ad-supported shows on our ABC.com player, Disney has sought to meet the constantly evolving viewing habits of our consumers," Robert A. Iger, Disney's president and chief executive, said in a statement. "Today's Hulu announcement is the next extremely important step in that ongoing journey."

Disney views the move as a way to reach a new audience that isn't coming to the network's own website. While the ABC.com website has attracted regular viewers of its shows, Hulu offers the opportunity to tap into a new group of viewers.

Terms of the deal were not disclosed. Once a regulatory review is completed, Disney will gain three seats on the Hulu board, to be held by Iger; Anne Sweeney, president of Disney/ABC Television Group; and Kevin Mayer, executive vice president of corporate strategy and business development.

“At the end of the day, both Disney and Hulu needed each other,” said Tim Hanlon, managing director of
VivaKi Ventures, an investment arm of advertising giant Publicis.

“It’s very hard to be ubiquitous,” Hanlon said.  “Disney ‘s ABC and ESPN has been among the most conservative media companies but even they recognized that they needed alternative distribution methods. We are in a world of distribution neutrality.”

-- Dawn C. Chmielewski

 

For weeks, the major studios insisted they would never agree to a demand by Hollywood's biggest actors union to have its next contract expire at the same time as those of other talent guilds. 

Now, after back-channel talks between Screen Actors Guild leaders and top entertainment executives, the studios have conceded just that, lifting a stumbling block that broke off negotiations over a new contract in February.

Turns out, however, that the studios' offer comes with a big hitch that may not sit well with hundreds of actors who lost their jobs during the 100-day writers strike. In return for a two-year rather than a three-year contract term, the actors union would agree to settle so-called force majeure claims it filed last year seeking more than $10 million in pay.

After the writers strike ended in February 2008, SAG lodged claims against more than 80 shows on behalf of "series regulars" -- which encompass stars as well as those with a recurring role in a show -- who lost their jobs and wages during the writers walkout. The strike shut down popular series such as "Lost," "CSI" and "Ugly Betty."

SAG maintained that producers violated a force majeure clause in the union's contract that entitled actors to receive roughly 2-1/2 weeks' pay if they were suspended as a result of an "act of God," such as foul weather. The studios, however, balked at paying the claims and accused SAG of overreaching.

Studios want to impose a stricter interpretation of the force majeure clause and have offered to settle the outstanding claims for less than what the actors contend they are owed. How much less is unknown, however.

SAG interim Executive Director David White and Chief Negotiator John McGuire have indicated that they would accept the studios' demand as a necessary concession to preserve the larger goal of aligning the expiration of the actors contract with those of other guilds. They are especially keen to have SAG's contract expire at the same time as that of the smaller actors union, the American Federation of Television and Radio Artists, to gain maximum leverage at the bargaining table.

Expect fireworks from dissidents. The force majeure issue will almost certainly be seized on by White's opponents in the actors guild, who've vowed to campaign to defeat a contract they view as an inferior deal. The actors have been working without a contract for nine months. 

Nonetheless, the new SAG leaders, who were installed after the board fired former Chief Negotiator Doug Allen, retain the support of the board majority. And in the end, most members, weary of working without a contract and anxious about the deepening recession, are expected to support whatever contract their board recommends.

-- Richard Verrier

 

In a sign that the recession is cutting into the Walt Disney Co.'s park business even deeper than originally thought, Disney today said it eliminated about 1,900 jobs at its domestic theme parks through job cuts and attrition.

The entertainment giant in February announced a reorganization of its parks and resorts operation, which it acknowledged would set the stage for job cuts. But it didn't say at the time how many positions would be eliminated. The changes were announced amid falling attendance and expectations that the recession has many more months to run its course. But today's announcement signals that Disney is bracing for an extended downturn in its business as consumers continue to keep their wallets closed.

Disney said it would lay off about 1,200 people and leave about 700 positions unfilled. The bulk of the cuts will happen at Walt Disney World in Orlando, Fla., where about 1,400 jobs will be eliminated. About 300 jobs will be cut from the Disneyland Resort in Anaheim, with the remaining reductions coming from corporate headquarters in Burbank.

In January, the company offered buyout packages to 600 executives at its domestic parks division, which in addition to the theme parks includes Disney cruise ships, and resorts and vacation spots.

Disney employs about 80,000 people in its parks and resorts unit.

"These decisions were not made lightly, but are essential to maintaining our leadership in family tourism and reflect today’s economic realities," the company said in a statement. "We continue to work through our reorganization and manage our business based on demand.”

-- Dawn C. Chmielewski

Photo credit: David McNews / Getty Images

 

UPDATE: Disney says the reorganization will also create one group to identify "development opportunities" for the parks, not "acquisitions." The previous information was based on a statement erroneously provided by the company.

The Walt Disney Co. has announced a broad restructuring of its parks and resorts operation -- a move that sets the stage for more job cuts in the coming weeks.

The large-scale reorganization, which encompasses Disneyland, Disney World, cruise ships and resorts that it runs in places like Hilton Head, S.C., comes on the heels of last month's buyout package offers to 600 parks executives.

"These changes are essential to maintaining our leadership position in family tourism and reflect today's economic realities," Jay Rasulo, Parks chairman, said a statement.

Under the new structure, facets of Disneyland and Walt Disney World will be consolidated into a single domestic operation, to be headed by Worldwide Operations President Al Weiss.

Rasulo said the company would streamline its operating structure to simplify the operations -- and in the process, reduce overhead. He said the reorganization was a further step in an operational review begun in 2005 at Walt Disney Parks and Resorts, although he acknowledged that the bleak economy has accelerated the pace of the changes.

Disneyland Resort President Ed Grier and Walt Disney World Resort President Meg Crofton will continue to oversee the ride operations and other facets of customer attendance. However, Weiss' group will take over functions that cut across parks, such as procurement, menu planning and ordering stuffed animals.

The operations of Walt Disney Imagineering group will also be simplified. Chief Creative Executive Bruce Vaughn and Chief Design and Project Delivery Executive Craig Russell will continue to oversee the development of attractions for all Disney parks and resorts. But the group will no longer have separate groups devoted to development for resorts, entertainment and attractions.

A new global business development team will combine real estate development and business development under Executive Vice President Nick Franklin.

The changes are intended to streamline the organization and create one group that identifies possible acquisitions and park expansions, another that implements it and a third that is in charge of operations, company officials said.

The restructuring probably will result in job cuts, on top of the buyouts offered in January. It's unclear how many positions will be lost.

"Organization changes require difficult decisions, including the elimination of some roles," Rasulo said. "These decisions were not made lightly and we know this will be a challenging transition. The people affected are our friends and colleagues"

--Dawn C. Chmielewski

Photo credit: Timothy O'Rourke / Bloomberg News

The Disney-ABC Television Group today laid off several hundred people, citing the weakening economy. Group President Anne Sweeney sent an e-mail to the approximately 7,000 television group employees, saying that after months of trying to adjust the business to the worsening economic climate, "we're now faced with the harsh reality of having to eliminate jobs in some areas."

"This was not an easy decision, nor one made lightly," Sweeney wrote. "The people affected today are our friends and colleagues, and we are doing all we can for them and their families."

The announcement comes a day after ESPN Chief Executive George Bodenheimer said he would cut 200 jobs within the year, mostly from unfilled positions. Sports broadcasters have been particularly vulnerable to decisions by struggling automakers to cut spending on advertising. It also comes a week after ABC's move to consolidate its network and television program production divisions into a single entity.

More layoffs are anticipated in the coming months, as ABC Entertainment Group President Stephen McPherson evaluates staffing at the newly consolidated studio and network operation.

"I realize this is an extremely difficult day for everyone in our group," Sweeney wrote. "But despite the challenges before us, I remain confident and optimistic about our future, because you really are the best in the business."

-- Dawn C. Chmielewski

Photo: ABC headquarters in Burbank. Credit: RMA Photography Inc.

Studio concession to SAG comes with a hitch: Less back pay

For weeks, the major studios insisted they would never agree to a demand by Hollywood's biggest actors union to have its next contract expire at the same time as those of other talent guilds. 

Now, after back-channel talks between Screen Actors Guild leaders and top entertainment executives, the studios have conceded just that, lifting a stumbling block that broke off negotiations over a new contract in February.

Turns out, however, that the studios' offer comes with a big hitch that may not sit well with hundreds of actors who lost their jobs during the 100-day writers strike. In return for a two-year rather than a three-year contract term, the actors union would agree to settle so-called force majeure claims it filed last year seeking more than $10 million in pay.

After the writers strike ended in February 2008, SAG lodged claims against more than 80 shows on behalf of "series regulars" -- which encompass stars as well as those with a recurring role in a show -- who lost their jobs and wages during the writers walkout. The strike shut down popular series such as "Lost," "CSI" and "Ugly Betty."

SAG maintained that producers violated a force majeure clause in the union's contract that entitled actors to receive roughly 2-1/2 weeks' pay if they were suspended as a result of an "act of God," such as foul weather. The studios, however, balked at paying the claims and accused SAG of overreaching.

Studios want to impose a stricter interpretation of the force majeure clause and have offered to settle the outstanding claims for less than what the actors contend they are owed. How much less is unknown, however.

SAG interim Executive Director David White and Chief Negotiator John McGuire have indicated that they would accept the studios' demand as a necessary concession to preserve the larger goal of aligning the expiration of the actors contract with those of other guilds. They are especially keen to have SAG's contract expire at the same time as that of the smaller actors union, the American Federation of Television and Radio Artists, to gain maximum leverage at the bargaining table.

Expect fireworks from dissidents. The force majeure issue will almost certainly be seized on by White's opponents in the actors guild, who've vowed to campaign to defeat a contract they view as an inferior deal. The actors have been working without a contract for nine months. 

Nonetheless, the new SAG leaders, who were installed after the board fired former Chief Negotiator Doug Allen, retain the support of the board majority. And in the end, most members, weary of working without a contract and anxious about the deepening recession, are expected to support whatever contract their board recommends.

-- Richard Verrier

 

In a sign that the recession is cutting into the Walt Disney Co.'s park business even deeper than originally thought, Disney today said it eliminated about 1,900 jobs at its domestic theme parks through job cuts and attrition.

The entertainment giant in February announced a reorganization of its parks and resorts operation, which it acknowledged would set the stage for job cuts. But it didn't say at the time how many positions would be eliminated. The changes were announced amid falling attendance and expectations that the recession has many more months to run its course. But today's announcement signals that Disney is bracing for an extended downturn in its business as consumers continue to keep their wallets closed.

Disney said it would lay off about 1,200 people and leave about 700 positions unfilled. The bulk of the cuts will happen at Walt Disney World in Orlando, Fla., where about 1,400 jobs will be eliminated. About 300 jobs will be cut from the Disneyland Resort in Anaheim, with the remaining reductions coming from corporate headquarters in Burbank.

In January, the company offered buyout packages to 600 executives at its domestic parks division, which in addition to the theme parks includes Disney cruise ships, and resorts and vacation spots.

Disney employs about 80,000 people in its parks and resorts unit.

"These decisions were not made lightly, but are essential to maintaining our leadership in family tourism and reflect today’s economic realities," the company said in a statement. "We continue to work through our reorganization and manage our business based on demand.”

-- Dawn C. Chmielewski

Photo credit: David McNews / Getty Images

 

UPDATE: Disney says the reorganization will also create one group to identify "development opportunities" for the parks, not "acquisitions." The previous information was based on a statement erroneously provided by the company.

The Walt Disney Co. has announced a broad restructuring of its parks and resorts operation -- a move that sets the stage for more job cuts in the coming weeks.

The large-scale reorganization, which encompasses Disneyland, Disney World, cruise ships and resorts that it runs in places like Hilton Head, S.C., comes on the heels of last month's buyout package offers to 600 parks executives.

"These changes are essential to maintaining our leadership position in family tourism and reflect today's economic realities," Jay Rasulo, Parks chairman, said a statement.

Under the new structure, facets of Disneyland and Walt Disney World will be consolidated into a single domestic operation, to be headed by Worldwide Operations President Al Weiss.

Rasulo said the company would streamline its operating structure to simplify the operations -- and in the process, reduce overhead. He said the reorganization was a further step in an operational review begun in 2005 at Walt Disney Parks and Resorts, although he acknowledged that the bleak economy has accelerated the pace of the changes.

Disneyland Resort President Ed Grier and Walt Disney World Resort President Meg Crofton will continue to oversee the ride operations and other facets of customer attendance. However, Weiss' group will take over functions that cut across parks, such as procurement, menu planning and ordering stuffed animals.

The operations of Walt Disney Imagineering group will also be simplified. Chief Creative Executive Bruce Vaughn and Chief Design and Project Delivery Executive Craig Russell will continue to oversee the development of attractions for all Disney parks and resorts. But the group will no longer have separate groups devoted to development for resorts, entertainment and attractions.

A new global business development team will combine real estate development and business development under Executive Vice President Nick Franklin.

The changes are intended to streamline the organization and create one group that identifies possible acquisitions and park expansions, another that implements it and a third that is in charge of operations, company officials said.

The restructuring probably will result in job cuts, on top of the buyouts offered in January. It's unclear how many positions will be lost.

"Organization changes require difficult decisions, including the elimination of some roles," Rasulo said. "These decisions were not made lightly and we know this will be a challenging transition. The people affected are our friends and colleagues"

--Dawn C. Chmielewski

Photo credit: Timothy O'Rourke / Bloomberg News

The Disney-ABC Television Group today laid off several hundred people, citing the weakening economy. Group President Anne Sweeney sent an e-mail to the approximately 7,000 television group employees, saying that after months of trying to adjust the business to the worsening economic climate, "we're now faced with the harsh reality of having to eliminate jobs in some areas."

"This was not an easy decision, nor one made lightly," Sweeney wrote. "The people affected today are our friends and colleagues, and we are doing all we can for them and their families."

The announcement comes a day after ESPN Chief Executive George Bodenheimer said he would cut 200 jobs within the year, mostly from unfilled positions. Sports broadcasters have been particularly vulnerable to decisions by struggling automakers to cut spending on advertising. It also comes a week after ABC's move to consolidate its network and television program production divisions into a single entity.

More layoffs are anticipated in the coming months, as ABC Entertainment Group President Stephen McPherson evaluates staffing at the newly consolidated studio and network operation.

"I realize this is an extremely difficult day for everyone in our group," Sweeney wrote. "But despite the challenges before us, I remain confident and optimistic about our future, because you really are the best in the business."

-- Dawn C. Chmielewski

Photo: ABC headquarters in Burbank. Credit: RMA Photography Inc.

Disney slashes 1,900 jobs at domestic parks

 

In a sign that the recession is cutting into the Walt Disney Co.'s park business even deeper than originally thought, Disney today said it eliminated about 1,900 jobs at its domestic theme parks through job cuts and attrition.

The entertainment giant in February announced a reorganization of its parks and resorts operation, which it acknowledged would set the stage for job cuts. But it didn't say at the time how many positions would be eliminated. The changes were announced amid falling attendance and expectations that the recession has many more months to run its course. But today's announcement signals that Disney is bracing for an extended downturn in its business as consumers continue to keep their wallets closed.

Disney said it would lay off about 1,200 people and leave about 700 positions unfilled. The bulk of the cuts will happen at Walt Disney World in Orlando, Fla., where about 1,400 jobs will be eliminated. About 300 jobs will be cut from the Disneyland Resort in Anaheim, with the remaining reductions coming from corporate headquarters in Burbank.

In January, the company offered buyout packages to 600 executives at its domestic parks division, which in addition to the theme parks includes Disney cruise ships, and resorts and vacation spots.

Disney employs about 80,000 people in its parks and resorts unit.

"These decisions were not made lightly, but are essential to maintaining our leadership in family tourism and reflect today’s economic realities," the company said in a statement. "We continue to work through our reorganization and manage our business based on demand.”

-- Dawn C. Chmielewski

Photo credit: David McNews / Getty Images

 

UPDATE: Disney says the reorganization will also create one group to identify "development opportunities" for the parks, not "acquisitions." The previous information was based on a statement erroneously provided by the company.

The Walt Disney Co. has announced a broad restructuring of its parks and resorts operation -- a move that sets the stage for more job cuts in the coming weeks.

The large-scale reorganization, which encompasses Disneyland, Disney World, cruise ships and resorts that it runs in places like Hilton Head, S.C., comes on the heels of last month's buyout package offers to 600 parks executives.

"These changes are essential to maintaining our leadership position in family tourism and reflect today's economic realities," Jay Rasulo, Parks chairman, said a statement.

Under the new structure, facets of Disneyland and Walt Disney World will be consolidated into a single domestic operation, to be headed by Worldwide Operations President Al Weiss.

Rasulo said the company would streamline its operating structure to simplify the operations -- and in the process, reduce overhead. He said the reorganization was a further step in an operational review begun in 2005 at Walt Disney Parks and Resorts, although he acknowledged that the bleak economy has accelerated the pace of the changes.

Disneyland Resort President Ed Grier and Walt Disney World Resort President Meg Crofton will continue to oversee the ride operations and other facets of customer attendance. However, Weiss' group will take over functions that cut across parks, such as procurement, menu planning and ordering stuffed animals.

The operations of Walt Disney Imagineering group will also be simplified. Chief Creative Executive Bruce Vaughn and Chief Design and Project Delivery Executive Craig Russell will continue to oversee the development of attractions for all Disney parks and resorts. But the group will no longer have separate groups devoted to development for resorts, entertainment and attractions.

A new global business development team will combine real estate development and business development under Executive Vice President Nick Franklin.

The changes are intended to streamline the organization and create one group that identifies possible acquisitions and park expansions, another that implements it and a third that is in charge of operations, company officials said.

The restructuring probably will result in job cuts, on top of the buyouts offered in January. It's unclear how many positions will be lost.

"Organization changes require difficult decisions, including the elimination of some roles," Rasulo said. "These decisions were not made lightly and we know this will be a challenging transition. The people affected are our friends and colleagues"

--Dawn C. Chmielewski

Photo credit: Timothy O'Rourke / Bloomberg News

The Disney-ABC Television Group today laid off several hundred people, citing the weakening economy. Group President Anne Sweeney sent an e-mail to the approximately 7,000 television group employees, saying that after months of trying to adjust the business to the worsening economic climate, "we're now faced with the harsh reality of having to eliminate jobs in some areas."

"This was not an easy decision, nor one made lightly," Sweeney wrote. "The people affected today are our friends and colleagues, and we are doing all we can for them and their families."

The announcement comes a day after ESPN Chief Executive George Bodenheimer said he would cut 200 jobs within the year, mostly from unfilled positions. Sports broadcasters have been particularly vulnerable to decisions by struggling automakers to cut spending on advertising. It also comes a week after ABC's move to consolidate its network and television program production divisions into a single entity.

More layoffs are anticipated in the coming months, as ABC Entertainment Group President Stephen McPherson evaluates staffing at the newly consolidated studio and network operation.

"I realize this is an extremely difficult day for everyone in our group," Sweeney wrote. "But despite the challenges before us, I remain confident and optimistic about our future, because you really are the best in the business."

-- Dawn C. Chmielewski

Photo: ABC headquarters in Burbank. Credit: RMA Photography Inc.

Disney parks to reorganize, more positions to be eliminated

 

UPDATE: Disney says the reorganization will also create one group to identify "development opportunities" for the parks, not "acquisitions." The previous information was based on a statement erroneously provided by the company.

The Walt Disney Co. has announced a broad restructuring of its parks and resorts operation -- a move that sets the stage for more job cuts in the coming weeks.

The large-scale reorganization, which encompasses Disneyland, Disney World, cruise ships and resorts that it runs in places like Hilton Head, S.C., comes on the heels of last month's buyout package offers to 600 parks executives.

"These changes are essential to maintaining our leadership position in family tourism and reflect today's economic realities," Jay Rasulo, Parks chairman, said a statement.

Under the new structure, facets of Disneyland and Walt Disney World will be consolidated into a single domestic operation, to be headed by Worldwide Operations President Al Weiss.

Rasulo said the company would streamline its operating structure to simplify the operations -- and in the process, reduce overhead. He said the reorganization was a further step in an operational review begun in 2005 at Walt Disney Parks and Resorts, although he acknowledged that the bleak economy has accelerated the pace of the changes.

Disneyland Resort President Ed Grier and Walt Disney World Resort President Meg Crofton will continue to oversee the ride operations and other facets of customer attendance. However, Weiss' group will take over functions that cut across parks, such as procurement, menu planning and ordering stuffed animals.

The operations of Walt Disney Imagineering group will also be simplified. Chief Creative Executive Bruce Vaughn and Chief Design and Project Delivery Executive Craig Russell will continue to oversee the development of attractions for all Disney parks and resorts. But the group will no longer have separate groups devoted to development for resorts, entertainment and attractions.

A new global business development team will combine real estate development and business development under Executive Vice President Nick Franklin.

The changes are intended to streamline the organization and create one group that identifies possible acquisitions and park expansions, another that implements it and a third that is in charge of operations, company officials said.

The restructuring probably will result in job cuts, on top of the buyouts offered in January. It's unclear how many positions will be lost.

"Organization changes require difficult decisions, including the elimination of some roles," Rasulo said. "These decisions were not made lightly and we know this will be a challenging transition. The people affected are our friends and colleagues"

--Dawn C. Chmielewski

Photo credit: Timothy O'Rourke / Bloomberg News

The Disney-ABC Television Group today laid off several hundred people, citing the weakening economy. Group President Anne Sweeney sent an e-mail to the approximately 7,000 television group employees, saying that after months of trying to adjust the business to the worsening economic climate, "we're now faced with the harsh reality of having to eliminate jobs in some areas."

"This was not an easy decision, nor one made lightly," Sweeney wrote. "The people affected today are our friends and colleagues, and we are doing all we can for them and their families."

The announcement comes a day after ESPN Chief Executive George Bodenheimer said he would cut 200 jobs within the year, mostly from unfilled positions. Sports broadcasters have been particularly vulnerable to decisions by struggling automakers to cut spending on advertising. It also comes a week after ABC's move to consolidate its network and television program production divisions into a single entity.

More layoffs are anticipated in the coming months, as ABC Entertainment Group President Stephen McPherson evaluates staffing at the newly consolidated studio and network operation.

"I realize this is an extremely difficult day for everyone in our group," Sweeney wrote. "But despite the challenges before us, I remain confident and optimistic about our future, because you really are the best in the business."

-- Dawn C. Chmielewski

Photo: ABC headquarters in Burbank. Credit: RMA Photography Inc.

Disney-ABC Television Group lays off hundreds

The Disney-ABC Television Group today laid off several hundred people, citing the weakening economy. Group President Anne Sweeney sent an e-mail to the approximately 7,000 television group employees, saying that after months of trying to adjust the business to the worsening economic climate, "we're now faced with the harsh reality of having to eliminate jobs in some areas."

"This was not an easy decision, nor one made lightly," Sweeney wrote. "The people affected today are our friends and colleagues, and we are doing all we can for them and their families."

The announcement comes a day after ESPN Chief Executive George Bodenheimer said he would cut 200 jobs within the year, mostly from unfilled positions. Sports broadcasters have been particularly vulnerable to decisions by struggling automakers to cut spending on advertising. It also comes a week after ABC's move to consolidate its network and television program production divisions into a single entity.

More layoffs are anticipated in the coming months, as ABC Entertainment Group President Stephen McPherson evaluates staffing at the newly consolidated studio and network operation.

"I realize this is an extremely difficult day for everyone in our group," Sweeney wrote. "But despite the challenges before us, I remain confident and optimistic about our future, because you really are the best in the business."

-- Dawn C. Chmielewski

Photo: ABC headquarters in Burbank. Credit: RMA Photography Inc.