Disney CEO reaches out to striking Hollywood creatives with 'deep respect'
Danielle Broadway and Dawn Chmielewski
Wed, August 9, 2023
Hollywood actors and writers on strike outside Disney studios in California
By Danielle Broadway and Dawn Chmielewski
LOS ANGELES (Reuters) - Walt Disney Chief Executive Bob Iger on Wednesday said he was committed to finding a solution to the Hollywood writer and actor strikes, citing his "deep respect" for creative professionals, as he signaled a turn from comments that inflamed tensions last month.
Iger last month told striking actors that their demands were "not realistic."
The Hollywood writers' strike entered its 100th day on Wednesday with contract talks stalled and people on the picket lines protesting what they say is a disregard for their demands. The actors strike started less than a month ago.
The growth of artificial intelligence has been a key issue for union members, who fear that it could replace their creative input.
"Nothing is more important to this company than its relationships with the creative," Iger said on a call discussing Disney's quarterly results on Wednesday.
"I have deep respect and appreciation for all those who are vital to the extraordinary creative engine that drives this company and our industry," he said.
Iger, who returned to Disney as CEO last year, did not say how he would help bring the strikes to an end.
In July, Iger angered members of both unions by saying that the demands of the SAG-AFTRA actors union for a labor contract with higher pay and limits on use of artificial intelligence were "not realistic."
Emmy-winning "Breaking Bad" actor Bryan Cranston about a week later took aim at Iger in remarks to striking actors, saying: "We don't expect you to understand who we are, but we ask you to hear us. And beyond that, to listen to us when we tell you, we will not be having our jobs taken away and given to robots."
Under Iger, Disney has created a task force to study artificial intelligence and how it can be applied across the company, Reuters reported on Tuesday.
(Reporting by Danielle Broadway and Dawn Chmielewski; Editing by Mary Milliken and Leslie Adler)
Thomas Buckley
Wed, August 9, 2023
(Bloomberg) -- Walt Disney Co. rose more than 6% in extended trading after management of the world’s largest entertainment company said capital spending and outlays for movies and TV shows are coming in lower than projected.
Disney expects content spending this year to total about $27 billion, Kevin Lansberry, acting chief financial officer, said Wednesday on a call with investors after the Burbank, California-based company posted third-quarter results. Disney typically spends about $30 billion.
The savings are partly as a result of production cuts tied to writer and actor strikes in Hollywood, he said. Disney also forecasts capital spending of $5 billion, lower than projected previously, as the company shifts the timing of some projects. He reiterated Disney’s ambition to pay a modest dividend this year.
The comments lifted shares of Disney to as high as $92.80 in extended trading, reversing an earlier decline.
Earlier Wednesday, Disney reported fiscal third-quarter profit of $1.03 a share, beating the 99-cent average of estimates compiled by Bloomberg. Sales grew 3.8% to $22.3 billion in the quarter ended July 1, missing analysts’ projections slightly.
During the period, Disney’s online video operation cut its loss to $512 million from more than $1 billion a year ago. Just three months ago, management predicted the direct-to-consumer business would lose more than $750 million in the quarter. Chief Executive Officer Bob Iger also told investors that the company will crack down on password sharing, echoing the recent effort from rival Netflix Inc. that has boosted subscriber numbers.
But subscribers to the Disney+ streaming service tumbled 7.4% to 146.1 million from the previous three months, missing the 154.8 million consensus analysts had expected. Nearly all of that shortfall was borne by the company’s Disney+ Hotstar in Asia. It lost almost 25% of its customers after Disney failed to renew streaming rights for popular cricket games in the Indian Premier League.
The company also announced it’s raising prices for some streaming subscriptions by as much as 27%.
The world’s largest entertainment company launched an extensive cost-cutting effort after Iger returned to run the company in November. That included 7,000 job cuts and other reductions in spending.
As part of that effort, Disney recorded $2.44 billion in costs in the third quarter to remove shows and movies from its online services and terminate deals with outside producers, greater than earlier projections. The company also recorded charges of $210 million due to severance costs. In a statement Wednesday, Iger said he expects to exceed the overall cost-cutting target of $5.5 billion.
Disney reported a 23% decline in profit, to $1.89 billion, in traditional TV — underscoring the troubles confronting that division. The business, which includes channels such as ABC and ESPN, has been buffeted by falling cable subscribers, lower broadcast advertising sales and higher programming costs for sports.
The company’s theme-park business, the world’s largest, earned $2.43 billion, an 11% increase from last year. Weakness at the Florida resorts was offset by a huge swing to profitability at the international theme parks.
Disney is in the throes of major upheaval: Iger signaled in a July interview with CNBC that TV networks including ABC, Freeform and FX, which contributed about half of Disney’s operating income before the pandemic, “may not be core” to the company any longer.
Speculation in Hollywood is also rampant with the notion that Iger is seeking to sell Disney to a larger tech company such as Apple Inc. Iger appeared to softly talk down that prospect on the call with investors Wednesday, saying that “anyone who wanted to speculate about such things would have to immediately consider the global regulatory environment. I’ll say no more than that.”
He’s also seeking to sell a stake in the ESPN sports business to a partner that can help accelerate the network’s transition to streaming. Iger recently hired former lieutenants Kevin Mayer and Tom Staggs as consultants to advise on that effort.
On Tuesday, ESPN announced a long-term agreement with casino operator Penn Entertainment Inc. to license its brand for sports betting. Penn will make cash payments totaling $1.5 billion over the 10-year term and grant ESPN $500 million of warrants to purchase Penn shares.
The company is also conducting a search for a new chief financial officer after longtime executive Christine McCarthy left that position in July.
Bloomberg Businessweek
No comments:
Post a Comment