Disney is reorganizing its massive business into three main segments — entertainment, ESPN and parks, experiences and products — as CEO Bob Iger intends to restructure the company.
The move follows the demise of DMED, or Disney Media & Entertainment Distribution, which was founded by former CEO Bob Chapek, who took over content management from the company's creative executives. Now we know what the new structure will look like. His goal is to restore the creative credibility of Disney's "world-class creative team" and its "unmatched brands and franchises," he said in a conference call following the company's recent quarterly results.
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The restructuring is an important part of the transformation, which he believes will also help streamline the transmission business to achieve sustained growth and profitability and lower costs in a world of increased competition and global economic challenges.
DTC events, with the exception of ESPN+, are in the entertainment section.
Dana Walden and Alan Bergman co-chairmen of Disney Entertainment; Jimmy Pitara remains at the helm of ESPN and Josh D'Amara remains at the helm of Parks.
Iger said the moves announced today collectively represent a new era in the company's transformation over the past two decades. The first was a period of rapid intellectual property growth when Disney acquired Pixar, Marvel, and LucasFilm. The second, which began in 2016, was before Disney's acquisition of 20th Century Fox and its subsequent foray into streaming with the launch of ESPN+ and Disney+.
The growing Parks and Resorts business, which includes cruise lines and consumer products, remains unchanged.
With linear networks dwindling and sports rights costs rising, ESPN has been targeted by Disney investors such as Third Point's Daniel Loeb, who said it should be broken up but later backed down, citing its "potential as a separate company and another branch. In order for Disney to reach a global audience with advertising and subscription revenue, Iger said today that turning ESPN into a separate business entity is in no way a step prior to selling the business.
Another activist, Nelson Peltz, is currently running for a seat on the Disney board of directors.
At the end of last year, ESPN+ had 24.9 million paying subscribers, up 2% from 24.3 million a year earlier. It is available individually or as a bundle with Disney+ and Hulu.