Disney announces corporate restructuring, combines parks with merchandising

March 14, 2018, 10:07 AM · The Walt Disney Company announced a corporate restructuring today that will give Parks and Resorts Chairman Bob Chapek control over more parts of the company.

Under the restructuring, which takes effect immediately, Disney now has four main units: the movie studio, the TV networks, parks (which now includes consumer products), and a new "Direct to Consumer and International Business" unit. That new unit will be in charge of all of Disney's over-the-top streaming services as well as advertising sales on all of the company's networks.

Consumer Products moves under Chapek in this reorganization, which returns that unit of the company to Chapek's control. He ran Consumer Products before taking over the parks in 2015. The new name of the Parks and Resorts unit is now "Parks, Experiences and Consumer Products." Chapek continues to report directly to Disney Chairman and CEO Bob Iger.

Why the change? Essentially, this now allows Iger to oversee directly the launch of Disney's new streaming services, without having to go through the intermediaries of Ben Sherwood at Media Networks or Alan Horn at Studio Entertainment. Putting Consumer Products under Chapek frees Iger to take on that new direct report while putting Disney's merchandise unit under someone who already knows that business. Disney's former Chief Strategy Officer, Kevin Mayer, will oversee the Direct to Consumer unit.

"I want to thank Bob for giving me the opportunity to lead the talented teams who, through the power of new technology and innovation, are creating the future of entertainment viewing," Mayer said in a statement released by the company. "Delivering our great stories and characters directly to consumers on all high-quality devices around the world will provide the Company with meaningful new revenue streams and opportunities for growth."

Beyond that, we're reading tea leaves here. How will this affect operations within the parks and resorts? (It probably won't, at least not for a while.) Does this increase Chapek's chances of succeeding Iger as head of Disney someday? (Giving him more responsibility is an obvious show of respect for Chapek, so it can't hurt.) Will this lead to another reorg in the future? (Almost certainly. Now that the Studios and TV have lost their sales arms to the streaming unit, they're both just production houses. And with the technology behind television and "film" production becoming indistinguishable, I wouldn't bet against those units being combined someday. But who knows?)

Replies (10)

March 14, 2018 at 10:41 AM ·

Likely unrelated, but Disney has indicated that they will start charging on-site WDW guests for parking at their resorts. The parking fees will vary depending upon the level of resort you're staying at, and will be added as a line item on your final invoice when checking out. However, the point remains that guests that considered the $20/day cost to park at the theme parks (resort guests park at the theme parks for free) in the value calculus as to whether to stay on-site or off-site at WDW will have to go back to the drawing board. I know this will be a HUGE deal-breaker for us as we almost always drive to WDW, and like having our car while vacationing in Orlando. The free parking that used to be offered brought on-site Value resort prices in line with nearby off-site hotels. Charging for parking (reportedly $13 for Value, $19 for mod, and $24 for deluxe) represents as much as a 15%/night increase for the value resorts.

March 14, 2018 at 10:32 AM ·

Is Chapek that good? My impression has been that his main accomplishment has been to cut costs at the parks. He may not have been as bad as Paul Pressler, but I would like to know if he is good for the company.

March 14, 2018 at 10:46 AM ·

On the reorganization topic, I don't understand why the movie and TV divisions are being kept separate. I know at its heart, Disney is an entertainment company, so dividing those different forms of entertainment into sleek-operating units is critical for success. However, there's an awful lot of crossover that is going to be further muddied by the launch of the streaming service. What would have made more sense would be for each individual operating unit (Marvel, Pixar, ESPN, ABC, Lucasfilm, etc...) to exist as separate entities or divide the visual entertainment arm into "production" and "distribution". As with most large companies, they exist to reorganize and give executives longer, fancier titles to tout their worth, so I expect another reorganization announcement before Disney Streaming even launches.

I don't know about Chapek either Disfan. I haven't necessarily seen/heard about a lot of cost cutting per se, but there certainly has been a lot more nickel and diming of guests under his watch. The proliferation of up-charge events, charging Club-level guests to get more FP+ reservations, and the new WDW resort parking fees are nuisances that have grown far too common under his leadership.

March 14, 2018 at 10:43 AM ·

Chapek has been very good for parks overall. Yes, he is running them on a very tight operational budget, and cost cuts are certainly part of his perceived "success" by the company. But remember, he has also been a driving force in pushing the agenda and overseeing the biggest and most expensive expansion to all Parks and Resorts business in Disney history. So I would say Bob has been quite good for parks and Disney in general.

March 14, 2018 at 11:06 AM ·

Placing retail under Chapek is consistent with the evolution of DSTP. What was once simply a retail operation is now a full on theme park. With Chapek's experience running both the parks and retail, it only makes sense that both be place under his umbrella of responsibilities.

March 14, 2018 at 11:13 AM ·

"What was once simply a retail operation is now a full on theme park."

I will put that one away for another day TH.

March 14, 2018 at 4:48 PM ·

The days of any original imagineering are over. This will kill any notion of building IP-Free attractions, parks, or lands. While I don’t mind IP content, especially if it’s done well, original content is what raised Themed Design to an art form. The original concept of imagineering was Created for that very reason. Seems like original theme park content will be relegated to obscure parks with an artistic end like Efteling

March 14, 2018 at 11:13 PM ·

My problem with this is that the same guy is now juggling more responsibilities, so it seems likely that the parks will now get less attention.

March 15, 2018 at 5:41 AM ·

You can't spell "Bob Chapel" without the letters CEO.

March 20, 2018 at 9:19 AM ·

I hope naming the new segment: Parks, EXPERIENCES and Consumer Products will give more emphasis to the other Experiential services such as Disney Store, Cruise Line and Adventures by Disney. Disney is still the strong leader in both parks and licensed merchandise, but is lagging behind in these growth industries.

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