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Abigail Disney: Disney’s Focus on Shareholder Profits Left it Unprepared for Pandemic

Power Women Summit 2020: ”Grasping after profits has left the structure of our society hollowed out and weakened,“ Disney says

Few companies have been hit as hard by the COVID-19 pandemic as Disney, which has reorganized, restructured and suffered massive revenue and job losses. But Abigail Disney, the granddaughter of Disney co-founder Roy O. Disney and daughter of longtime Disney executive Roy E. Disney, argues it didn’t have to be this way.

“If they had been less motivated by simply pushing profits to shareholders, but rather to stakeholders, their employees wouldn’t have had to run to food banks quite as quickly,” Disney, a filmmaker and social activist who co-founded production companies Level Forward and Fork Films, told TheWrap’s founder and editor-in-chief, Sharon Waxman, during TheWrap’s Power Women Summit on Wednesday.

“They might have had the savings to support themselves on and Disney might have had some cash on hand, instead of having to borrow immediately for their needs,” she continued. “So it’s the grasping after profits has left the structures of our society hollowed out.”

Abigail hasn’t hidden her criticism of how money is spread around at her family’s company. Last year, shortly after the company closed its $71.3 billion purchase of 21st Century Fox, she described former CEO Bob Iger’s compensation as “insane.”

In her conversation today, Abigail expanded on how the company’s prioritizing of its shareholders above all else has left it in its current weakened state.

“So Disney was, before the pandemic, historically profitable, amazingly profitable, extraordinary. And Bob Iger had been an extraordinary manager. He managed the company brilliantly through kind of a transition into the 21st century. So I have no beef with him on the way he’s run the company for profit,” she said. “But I do know that he ran the company with an eye toward share price, and maybe not a lot other than that. He ran the company, making tons and tons and tons of share buybacks, paying out a lot of dividends, when there was an opportunity when they were that profitable to really think about, like, maybe the money should be flooding more widely out across the employment structure.”

Since the pandemic began in March, Disney has hemorrhaged profits, particularly from its theme parks and movie business, as parks have been closed or opened in reduced capacity and its films have been sitting on the shelf. Right before Thanksgiving, Disney said it would lay off 32,000 employees in the first half of next year — including a previously announced 28,000 cuts at its theme parks. Disney has also confirmed that approximately 37,000 employees were furloughed as of Oct. 3.

Disney has also undergone multiple restructurings to prioritize its new Disney+ streaming service, which has been among the company’s few bright spots this year. However, the multiple reorganizations have included heavy layoffs, including some as recently as last week.

Abigail Disney argued that the company was “not in a position to handle the emergency well.” She added: “You keep cash on hand for an emergency; that’s what is for. You can’t predict a pandemic, but you can predict an emergency will happen.” (It should be noted that Abigail Disney does not have a role at the company, and thus doesn’t have direct insight into its business).

Check out excerpts from Abigail Disney’s Power Women Summit interview above.

The Power Women Summit, presented by the WrapWomen Foundation, is the largest annual gathering of the most influential women in entertainment, media and technology. The Summit aims to inspire and empower women across the landscape of their professional careers and personal lives. This year’s all-virtual PWS provides three days of education, mentorship, workshops and networking around the globe to promote “Inclusion 360,” this year’s theme.