Disney Sets Major Reorganization Around Disney+

Disney CEO Bob Chapek announced a major restructuring on Monday, which will put its streaming service Disney+ at the center of the company’s operations. The new structure will be geared towards a “focus on developing and producing original content for the Company’s streaming services,” Disney said in announcing its reorganization on Monday. The most prominent change is the combination of the distribution and ad sales teams, which will be led by Kareem Daniel, who served as president of consumer products, games and publishing. The Media and Entertainment Distribution group will be in charge of running Disney’s streaming services and TV networks, in addition to oversight of P&L management and all distribution, operations, sales, advertising, data and technology functions. Rebecca Campbell will still head up Disney’s direct-to-consumer operations but now report to Daniel. Disney is putting its content development into three groups — studios, general entertainment and sports — which is now separate from distribution. The three groups will be headed by their current leaders Alan Horn and Alan Bergman, Peter Rice, and James Pitaro. Disney Parks, Experiences and Products will continue to operate under its existing structure, led by Josh D’Amaro. Rebecca Campbell will serve as Chairman, International Operations and Direct-to-Consumer. Campbell was named to replace Kevin Mayer as head of Disney’s direct-to-consumer unit earlier this year. Her roles managing the international operations and the DTC unit will now be separate, where she’ll report to Chapek on international operations, while reporting to Daniel on direct-to-consumer matters. “I’m honored to be able to lead this new organization during such a pivotal and exciting time for our Company, and I’m grateful to Bob for giving me the opportunity,” Daniel said. “It’s a tremendous privilege to work with the talented and dedicated teams that will comprise this group, and I look forward to a close collaboration with the outstanding and incredibly successful team of creative content leaders at the Company, as together we build on the success we’ve already achieved in our DTC and legacy distribution business.” The prioritization of Disney+ comes as the company has been battered by the coronavirus pandemic, which has shut down its theme parks and halted its theatrical business. Last week, Disney moved its upcoming Pixar film, “Soul” to Disney+ and has pushed all other major releases into next year. Disney+ has surpassed early expectations by reaching 60 million subscribers, a mark it wasn’t expecting to hit until 2024. However, the DTC unit still remains a net negative on the company’s balance sheet. The new structure is effective immediately, and Disney expects to transition to financial reporting under this structure in the first quarter of fiscal 2021. On the content side, the new structure offers no meaningful changes. Horn and Bergman will continue to lead the major studios including Walt Disney Studios, Animation Studios, Pixar, Marvel Studios, LucasFilm, 20th Century Studios and Searchlight Pictures. Rice will lead the General Entertainment Group, which will house the TV studios including 20th Television, ABC Signature, Touchstone Television, and cable networks including Disney Channels, Freeform, FX and National Geographic. Pitaro will serve as chairman of ESPN and sports content, which includes ESPN+ and ABC. “Given the incredible success of Disney+ and our plans to accelerate our direct-to-consumer business, we are strategically positioning our Company to more effectively support our growth strategy and increase shareholder value,” Chapek said. “Managing content creation distinct from distribution will allow us to be more effective and nimble in making the content consumers want most, delivered in the way they prefer to consume it. Our creative teams will concentrate on what they do best–making world-class, franchise-based content–while our newly centralized global distribution team will focus on delivering and monetizing that content in the most optimal way across all platforms, including Disney+, Hulu, ESPN+ and the coming Star international streaming service.” Disney will hold a virtual investor day on Dec. 10.