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Possible Disney cuts drastic vs. rivals - Marketwatch 7/15/06


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  • Possible Disney cuts drastic vs. rivals - Marketwatch 7/15/06

    Possible Disney cuts drastic vs. rivals
    Marketwatch 7/15/06

    Possible Disney cuts drastic vs. rivals
    LOS ANGELES (MarketWatch) -- If Walt Disney Co. decides to go ahead with reported plans to slash its studio operations in coming days, it could be one of the most drastic moves in the industry.

    While rival studios have examined their bottom lines of late and made some reductions in personnel, none are contemplating the steps that Disney is considering.

    Time Warner Inc.'s Warner Bros. Studios was included in an overall reduction to the Warner Entertainment group last year in which 400 jobs were cut. But divisions other than just film were part of those reductions, including the television and consumer products divisions, said spokeswoman Sue Fleishman.

    She added the studio didn't reduce its film output of 18 to 22 movies a year, and has no plans to cut that slate.

    "We have no plans for further cuts," she said.

    This week, two separate news accounts reported Disney will announce plans for reductions at its Buena Vista studio operations. The trade publication Variety was first on Wednesday, saying the studio would reduce its annual film output to eight from 18.

    Then on Thursday, the Los Angeles Times followed up by saying hundreds of jobs would be lost in a mass layoff throughout Buena Vista, and its film output would be cut to 10 from a range of 14 to 21.

    Most films would come under the Walt Disney Pictures banner, which produced the company's latest hit, "Pirates of the Caribbean: Dead Man's Chest," as well as the June animated release, "Cars," the Times said. Disney's animation operations and the newly acquired Pixar film group are likely to remain untouched.

    Disney spokeswoman Heidi Trotta would only say the company constantly re-evaluates its businesses.

    But a source close to Disney said new Chief Executive Robert Iger is taking a hard look at all the Burbank, Calif.-based entertainment giant's operations, and film making is getting most of the attention now.

    Much of the impetus behind the company's possible cuts is studio chairman Dick Cook's contention that there are too many films in theaters made at ever-higher prices vying for smaller audiences, the source said. "Superman Returns" recently set a record for film costs at $260 million and "Pirates cost an estimated $200 million.

    Calling it a re-evaluation, the source said Disney's review doesn't put an exact number on future output.

    But Disney is looking at sharply reducing the live-action films released by its Touchstone division, in years past the company's primary source of such material and the group that catapulted Disney into adult-oriented films during the tenure of previous CEO Michael Eisner.
    Full Story - Possible Disney cuts drastic vs. rivals
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