Walt Disney Co (NYSE: DIS) worked with consulting firm McKinsey & Co in recent months to centralize control of major spending decisions, triggering an uproar from top creative executives at the entertainment giant.
The discussions regarding the plan were underway in the weeks leading up to November 20, when Disney fired Bob Chapek as CEO and replaced him with his predecessor, Robert Iger, the Wall Street Journal reports.
Disney’s CFO, Christine McCarthy, spearheaded the wide-ranging cost-cutting effort permitted by Disney’s board and given the go-ahead by Chapek.
Disney hired McKinsey in September to review its operations and identify redundancies and cost-saving opportunities.
The McKinsey team interviewed senior executives as part of its review, focusing on how Disney marketed its content.
McKinsey weighed taking decisions about spending on marketing and publicity for films and television programs out of the hands of studio executives and instead centralizing them in another part of the company.
Disney had already explored shifting oversight of marketing spending to Disney Media and Entertainment Distribution.
McKinsey also suggested consolidating hiring, communications, and legal services tasks.
The emerging plans angered some of the entertainment company’s top content executives, already reeling from losing power over spending decisions on content.
Iger, who led Disney from 2005 to 2020, announced that he would do away with the DMED structure and said he planned to empower Disney’s content creators.
After its most recent quarterly earnings, Disney warned of layoffs and spending cuts. Shortly before Chapek was fired, McCarthy told directors on Disney’s board that she had lost confidence in his leadership.
Iger named a committee of top Disney executives to work on “the design of a new structure that puts more decision-making back in the hands of our creative teams and rationalizes costs.”
Price Action: DIS shares traded lower by 1.43% at $97.18 on the last check Friday.
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Source: https://finance.yahoo.com/news/mckinsey-being-instrumental-disney-restructuring-145416155.html