LOS ANGELES (Reuters) - The Walt Disney Co and Universal studios unveiled changes at the top on Monday, as Hollywood’s worst-performing major houses try to turn things around in a potentially record year at the box office.
Disney on Monday said it had replaced popular studio chairman Dick Cook, who shocked the industry with his departure about two weeks ago, with Rich Ross: a newcomer to film who as Disney Channels Worldwide chairman steered powerhouse franchises like “Hannah Montana” and “High School Musical.”
Universal Pictures replaced Chairmen Marc Shmuger and David Linde with its film marketing and production chiefs, after a string of box office flops including Will Ferrell’s big-budget comedy “Land of the Lost”.
The move at Universal comes as ultimate parent General Electric prepares to try and sell entertainment giant NBC Universal. According to sources, GE is in talks to buy out partner Vivendi and sell a majority slice of NBC Universal to Comcast.
Universal and Disney have posted the poorest performances this year among major U.S. studios, outshone by the likes of Sony Pictures and Time Warner Inc’s Warner Bros. That’s despite analysts’ predictions that 2009 would be a third straight record year for the domestic box office.
Effective immediately, Ross -- who experts say shares Cook’s flair for personal dealings, but is a stranger to the hyper-competitive movie business -- will manage all film labels including Walt Disney, Touchstone, Miramax and Disney/Pixar.
He also will take on the integration of superhero franchise juggernaut Marvel Entertainment, which Disney in August said it would buy for $4 billion.
Larry Gerbrandt, principal at Media Valuation Partners, said appointing Ross to head its movie studio signaled a need for someone who can coordinate between different divisions.
While Ross has little experience making movies, he turned the Disney Channel into the top-rated kids’ cable network with successful franchises like “Hannah Montana” and “High School Musical” that morphed into consumer products, movies and theme park attractions, spurring billions in worldwide sales.
“This strikes me as more of a corporate job than necessarily a creative or green-lighting job,” Gerbrandt said. “I don’t necessarily see him green-lighting (approving) Pixar or Marvel movies, at least not initially.”
“You’re going to see Pixar and Marvel being the primary drivers of production.”
TROUBLE IN THE MOUSE HOUSE?
Box office revenue in the United States and Canada hit highs in 2007 and 2008, according to the National Association of Theater Owners, and appear headed for a third record.
But Disney counts just Disney-Pixar’s “Up” and Touchstone’s “The Proposal” as bona fide hits this year. It now commands just 11.7 percent of box office market share and Universal 8.6 percent, according to industry tracker Box Office Mojo.
Cook, who steered hits like “Pirates of the Caribbean” and “Chronicles of Narnia”, told staff at his abrupt September 18 departure that he felt “like a square peg in a round hole”.
The studio division suffered in recent quarters from rising costs, a downturn in DVD sales and a slate of poor performers like “Bolt” and “Bedtime Stories”. Cook’s reluctance to embrace Chief Executive Officer Bob Iger’s call for more cross-pollination to work across business units also was reportedly a factor.
Disney got about 19 percent of revenues from its movie studios in fiscal 2008. But Cowen and Co analyst Doug Creutz estimated the studio division would account for about 16 percent of revenue in the September quarter.
Universal performed even worse at the box office.
In recent months, it has churned out box office disappointments “Funny People,” “Love Happens” and “Land of the Lost,” a big-budget comedy that made only $62 million at worldwide box offices. Its sole, bona fide smash hit was the fourth installment of the “Fast and Furious” franchise.
Universal’s marketing head Adam Fogelson will now serve as chairman of the movie studio, and film production president Donna Langley will be co-chairman, reporting to Fogelson, Universal said in a statement.
Fogelson, who has been with the company since 1998, has served as president of marketing and distribution at Universal since October 2007.
Langley has served as president of production at the company since 2005, and Universal said that during that time she has been responsible for 14 films that have each made more than $100 million in the United States and Canada.
Shares of Disney closed up 1.7 percent at $27.67, and shares of GE closed up 3 percent at $15.83 on Monday.
Editing by Edwin Chan and Carol Bishopric
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