CNN: Disney Said to Cut Jobs

[Doopey1]

The Powers That Be can feel free to transfer this to the News section. It's a CNN story following up on the Variety story.

http://money.cnn.com/2006/07/12/news...s/disney.reut/

Disney said to cut jobs, plan less movies
Report says that movie giant will cut annual film production from 18 movies to eight.
July 12 2006: 4:42 PM EDT
LOS ANGELES (Reuters) -- Disney was tight-lipped Wednesday about a report that it plans to slash annual movie production by more than half and eliminate jobs to trim costs and improve shareholder returns.
The plan to sharply cut annual film production from 18 films to eight surfaced in an unsourced report in show business newspaper Variety late Tuesday.
A Disney spokeswoman said the company would not discuss the Variety article or comment on impending job cuts.
"We are constantly evaluating our business," Disney spokeswoman Heidi Trotta said Wednesday.
The move comes despite a record weekend box office run of $132 million for Disney's "Pirates of the Caribbean: Dead Man's Chest." Wall Street analysts this week had begun to review estimates for Disney earnings due to the blockbuster ticket sales.
Variety said all movies would be branded under the Disney logo, diminishing the role of its Touchstone and Miramax film divisions, which produce movies for older and art house audiences.
The studio also plans to "substantially" cut its workforce as part of an overhaul planned by Walt Disney Studios Chairman Dick Cook, the report said.
Cook has been working for several months on a plan to resurrect the studio division, whose year-over-year revenue comparisons have been down for the last four quarters. Variety said the new overhaul would involve deeper cuts than previously anticipated.
Sanders Morris Harris analyst David Miller said Disney could stand to cut expenses, despite the ticket sales seen from "Pirates" or the animated feature, "Cars."
"The internal rate of return (for the studio division) is not shareholder friendly," Miller said. "Obviously, even though 'Cars' or 'Pirates' were big successes, the internal rate of return was insufficient."
But whittling down its movie slate does not necessarily mean the company will change its overall spending on filmed entertainment, he said.
"It really comes down to how do you want to allocate your capital," Miller said. "Do you want to allocate that over 18 films, in which the films cost less, or eight films that cost more? It could be that Disney sees a higher rate of return from tent pole films than from smaller films."
Tom Sherak, a partner at Revolution Studios and former chairman of 20th Century Fox Domestic Film Group, said studios are moving to cut films with "mid-range" budgets.
"The pictures that studios really get hurt on are the middle of the road films, not the big budget pictures," Sherak told Reuters. "The $50 to $60 million pictures that go out and gross $20 million. A big action movie that doesn't ... live up to its potential here, goes out and doubles its take internationally."
Shares of Disney (Charts) fell 1 percent to $29.93 Wednesday on the New York Stock Exchange.
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Related: The extinction of mass culture

[FrumiousBoojum]

Good move, I say....

18 crappy films with crappy budgets vs. 8 films with very good budgets that are VERY good?

Could be a good move if they make the right choices in movies. It's just like the choice between 1 E-ticket and 10 carnival rides.

[Mr.DooDah]

Very Good! Lets see crap movies = Ice Pricesses anything with Lidsay Lohan and tween movies.

Good Movies = POTC Cars and anything with Lidsay Lohan (shes hot)

[Disney Wrassler]

Good move, I say....

18 crappy films with crappy budgets vs. 8 films with very good budgets that are VERY good?

Could be a good move if they make the right choices in movies. It's just like the choice between 1 E-ticket and 10 carnival rides.

It is unfortunate that people are losing jobs, but reducing it to 8 per year will allow people like Lassitter to focus more on a films detail rather than rushing it out the door.

[sediment]

Also, it allows them to release movies made by other (smaller) companies without all the hassle of actually making them.

[sparklefly]

I know I will probably be flamed, burned, hanged and lynched for this but.....

I don't get how Eisner was damned with hell's fury when he did the exact same thing, while when the "New" Disney does it everything's O.K., it's just good business sense.

[Morrigoon]

sparkle: Eisner's philosophy, at least for the last 10 years or so, was the "singles and doubles" approach to film production.

The new guard are focusing on home runs, which will help shore up the reputation of the Disney brand which Eisner had been undermining with such Disney "classics" as Cinderella 2

[cellarhound]

I know I will probably be flamed, burned, hanged and lynched for this but.....

I don't get how Eisner was damned with hell's fury when he did the exact same thing, while when the "New" Disney does it everything's O.K., it's just good business sense.

Nah, you aren't going to get flaimed for this...

The first thing Eisner did was expand production, his goal was to double the amount of production the film studio put out...

The average number of films released from 1970 - 1983 was only 4 features a year...

So in 1984, he cut the level of production of Disney Films and increased the films for adults by establishing Touchstone. In 1985 the number grew to 6 films...

By 1987, Eisner increased out put to 10 feature films (9 under Touchstone and only 1 Disney film)

By 1992 that number grew to 21 films. (Which was about the peak number...)

It has been a slow decline in recent years... in 2005 there where only 14 films slated...

[Ghostbuster626]

I know I will probably be flamed, burned, hanged and lynched for this but.....

I don't get how Eisner was damned with hell's fury when he did the exact same thing, while when the "New" Disney does it everything's O.K., it's just good business sense.

Eisner is the one who grew Disney into this out of control giant pumping out a hundred crappy movies a year. This is an undoing of his legacy. Eisner fired hardworkers, now they are firing Eisner business cronies.

[Cmash95]

touchstone was established before eisner came on board. Dianne's husband did this in order to make films aimed at the older crowd as family movies were become passe in the 80's. Eisner and Wells built on that and were successful for awhile. I must say I don't really like focussing on big budgets all the time. but I guess lion's gate and a few others can pick up the small movies. also disney has the disney channel and abc family to promote the tween movies. Look at high school musical. it was a disney channel movie but it's merchandise is being marketed as if it was a general release movie. I wouldnt be surprised if some of those layed off at the studios moved to or created another division for disney channel.

[cellarhound]

touchstone was established before eisner came on board. Dianne's husband did this in order to make films aimed at the older crowd as family movies were become passe in the 80's. Eisner and Wells built on that and were successful for awhile.

I love how it is "Dianne's husband" and not Ron Miller.

Eisner came on board in 1984.... First Touchstone picture is Splash in 1984... He may not have established it, but he was responcible for it ultimately... The studeo didn't really gain traction untill 1989 and Down and Out in Beverly Hills... And with much controversy, I might add.

For the record, Disney was comming off a really bad year at the studio in 1993:

1983
Trenchcoat (4 mill gross)
Something Wicked this Way Comes (8 mill gross)
Never Cry Wolf (29 mill gross)

also disney has the disney channel and abc family to promote the tween movies. Look at high school musical. it was a disney channel movie but it's merchandise is being marketed as if it was a general release movie. I wouldnt be surprised if some of those layed off at the studios moved to or created another division for disney channel.

I think that is what they are counting on with the popularity of tv propertys being moved to DVD... It is actually does what Iger wants while takeing an end run around movie theatres... Releasing low budget films and being able to release the DVD in the same window.

Like I said, Iger is thinking TV, he isn't skilled managing film... So the studios are taking a back seat... This strategy may work in the short term, but I am un impressed with the track record of the studio... Mr. Cook is dodging the bullet while Eisner is taking the heat for the bad slate in the last couple of years... But if the best that Mr. Cook can do is Apocolipto... It may be the end of the world at the studio...

[merlinjones]

>>Eisner came on board in 1984.... First Touchstone picture is Splash in 1984... He may not have established it, but he was responcible for it ultimately... <<

This is absolutely untrue.

"Splash" was made and released without any input from Eisner at all, before they even entered the picture. Touchstone and the expansion into "PG, more adult" films was a program established by Ron Miller and Tom Wilhite, who initially were going to call the new division Hyperion.

Wilhite and Richard Berger, who ran the film division briefly after Wilhite's departure (along with the name Hyperion and the Brave Little Toaster), made a handful of "classy" Touchstone/Disney films (such as "Splash," "Country" "Never Cry Wolf" and "Tex" - - and Tim Burton's initial forays "Frankenweenie" etc.) before the arrival of Michael and Jeffrey and their noisy, lowball "Down and Out" agenda.

"Return to Oz" and "Black Cauldron" were inherited, re-edited and released by the new guys after being mostly produced by the previous regime - released in 85. "Basil of Baker Street" (later "Great Mouse Detective") was already in pre-production when they arrived, Jeffrey changed the name. "Who Framed Roger Rabbit" had also been initially developed prior to their arrival. ("Oliver" was the first animated film launched entirely by Jeffrey).

Touchstone, EPCOT, The Disney Channel, Disney Home Video, Tokyo Disneyland and the initial concepts for EuroDisney were all created and launched under Miller's regime and inherited by Eisner.

Eisner, however, can be credited with launching or aquiring Disney Television Animation (Disney Afternoon/Disney Video Premieres/DisneyToonStudios), Disney/MGM Studios (violating a gentelman's agreement between Disney and Universal not to invade each other's turf), The Walt Disney Company, Hollywood Pictures, Hollywood Records, Disney Development Company, The Disney Stores, Disney Catalog, Miramax, Dimension, ABC/ESPN, The Family Channel, DreamQuest/The Secret Lab, DisneyQuest, Disney Cruise Line, Disney Vacation Club, Infoseek/Go.com/Disney.com, Disney's California Adventure, Disney Studios Paris, Hong Kong Disneyland and other such additions to the "brand".

[cellarhound]

>>Eisner came on board in 1984.... First Touchstone picture is Splash in 1984... He may not have established it, but he was responcible for it ultimately... <<

This is absolutely untrue.

"Splash" was made and released without any input from Eisner at all, before they even entered the picture. Touchstone and the expansion into "PG, more adult" films was a program established by Ron Miller and Tom Wilhite, who initially were going to call the new division Hyperion.

Eisner still holds the responcibilty for Touchstone...

Why do I say this? lets look at the first few films:

Touchstone 1984-1986

84 Splash (PG) - $ 69 mill
84 Country (PG) - $ 9.6 mill
85 My Science Project (PG) $ 4.1 mill
85 Baby - Secrite of the Lost Legend (PG) $14 mill
86 Down and Out in Beverly Hills (R) - $ 63 mill
86 Off Beat (R) - $4.8 mill
86 Ruthless People (R) - $ 71 mill
86 Tough Guys (PG) - $ 21 mill
86 The Color of Money (PG) - $ 52 mill

Disney 1984 - 1986

84 Tiger Town (G) - not available
85 Return to OZ (PG) - $ 14 mill
85 The Black Cauldron (PG) - $ 21 mill
85 Journey of Natty Gann (PG) - $ 9.7 mill
85 One Magic Christams (G) - $ 13 mill
86 The Great Mouse Detective (G) - $ 25 mill
86 Flight of the Navagator (PG) $ 18 mill

For the record Splash, Country, My Science Project, and Baby are still very mild films... Down and Out in Beverly Hills lies in stark contrast.

Eisners first real public appearance as CEO was in 1986 when he was host of "Disneyland."

You begin to see the issue... He was ultimately held responcible... Because it was seen as an appearance to take credit...

Touchstone saved Disney's bacon... Eisner could produce three hits a year to Miller's one... Miller's philosophy was to move toward PG fair anyway in both family films and mature audiance films...

He could have chosen to end the unit and revamp family films... But he chose to expand the project... And he extended Touchstone into R rated films... Cutting the production of Disney G rating films to a trickle...

The movement to R rated films was this was something Eisner and Katz where experianced at doing, and they where comfortable... And the move was seen as a positive move for the studio... It made the Disney family incredibly weathy (including the Millers who went on to buy a napa valley winery) who for the most part looked the other way...

It was so successful that Eisner started another disney brand Hollywood Pictures... (Thus the Hollywood Pictures Backlot - which is a tribute to Eisner and Katz.)

So it isn't absolutely untrue... Eisner was ultimately responcible for expanding the Disney studio into films with for mature audiances... And for success at Touchstone...

[Cmash95]

the audiences in the learly 80's and late 90's were moving toward pg rated films as a whole. and disney wasn't recognised at a "PG" studio. at the time if a movie no matter what it was held the disney brand it was considered goody goody. thus the birth of touchstone. frankly there are only about three or four touchstone films that I hold with any regard. most of the films that won awards in the last few years with the exception of songs, were miramax films. and again films are already in the pipeline that are so far along it makes more sensse to finish them than to can them. also i don't believe that they said they were cutting the budgets they were cutting the number of films being produced. thus putting more money into the movies they do release hopefully they will put out quality stuff again. and the idea of family entertainment is cool again. the theatre was filled with parents and kids when we went to see pirates and cars this summer.