Disney Studios Chairman Dick Cook said Monday that the recession has forced the studio to dramatically cut its spending on films and talent.
In an interview on KCRW’s “The Business," Cook said that the studio is cinching its purse strings -- even for projects like the fourth installment of the “Pirates of the Caribbean” franchise.
“The discipline on all of us has changed dramatically in just the last few months. I don’t see that changing quickly at all,” Cook said. “People are looking at every single project with the idea of, 'How can we make it? Can we make it so that it’s economically viable? What are the constraints that we’re going to have to put on it? Or not doing it.'”
Asked if marquee actors are cutting their fees, with some signing on for half of their usual pay rates, the studio chief said, "Oh yeah."
“There are some that haven’t quite gotten it yet," he said. "It maybe hasn’t hit them. But … no one gets by this downturn.”
Disney had avoided some of the more serious cutbacks announced by other studios in recent months, but now seems to be succumbing to the wave washing over other entertainment and media companies. The company offered hundreds of buyouts [4] to executives at its theme park in Orlando, and has gone through a round of layoffs at Disney Interactive. [5]
Meanwhile, the company's latest earnings reports have been worrisome. Earnings fell [6] 32 percent in the last quarter, with overall revenue falling eight percent, largely due to a severe drop in home video sales. The stock [7](NYSE: DIS) closed Monday at $17.21.
Cook noted that the studio known for its lavish spending has tightened the “Pirates 4” budget significantly. The chairman confirmed that Disney can no longer spend hundreds of millions of dollars on blockbusters and hope the director stays on budget. The last film in the franchise, “Pirates of the Caribbean: At World's End,” was made for $300 million.
Cook confirmed that the studio will continue to produce and distribute two animated movies per year -- one from Disney and one from Pixar -- and release 8 to 10 family-friendly, live-action movies. In 2006, Disney decided to produce fewer films for adults distributed through its subsidiaries Touchstone and Hollywood Pictures.
“Every part of the business is going to change and is in the process of changing. This economic downturn has just made it come along faster. The way we make movies, they’re marketed, distributed -- all of it. It won’t even look like this in years to come.”
Listen to Kim Masters’ interview with Cook: