Disney’s ABC TV Group to Lay Off About 175 People; “As technological advances continue to alter the competitive landscape and viewer habits, it’s incumbent upon us to stay ahead of the curve”

Updated August 21, 2013, 3:10 p.m. ET

Disney’s ABC TV Group to Lay Off About 175 People

Many of the Cuts Will Come From Operations Staff


Walt Disney Co. DIS -1.20% is planning to lay off about 175 people from its Disney/ABC Television Group, which includes the ABC network, local ABC stations and cable networks Disney Channel and ABC Family, according to a person familiar with the matter. Most of the cuts to Disney’s total staff of 7,600 will come from the company’s operations staff as well as the eight TV stations it owns, the person said. The stations, located primarily in major markets like New York, Los Angeles and Chicago, saw a 7% decrease in advertising revenue in the second quarter, Disney Chief Financial Officer Jay Rasulo told analysts on a conference call earlier this month.“As technological advances continue to alter the competitive landscape and viewer habits, it’s incumbent upon us to stay ahead of the curve,” said a Disney/ABC Television Group spokesman. “To that end, we’ve undergone a review of our organizational structures to gain efficiencies and better position us for future growth.”

The cuts come as the Disney’s broadcasting division continues to be a drag on its financial performance. Operating income in the division decreased $55 million to $213 million in the second quarter due to higher programming costs and lower advertising sales, the company said earlier this month. It blamed the sales slump on declining network ratings and a decrease in ad prices and political advertising at the local stations.

The ABC network finished fourth in the key 18-49 demographic for the 2012-13 season, down 8% from the previous season, according to Nielsen. While last season saw declines at most of the big broadcast networks, ABC’s ratings were dragged down by audience declines at its highest-rated show, “Dancing with the Stars.” The reality show saw ratings decline 26% in the 18-49 demographic on its Monday night show and 23% in its Tuesday night show.

The planned layoffs are the latest in a series of job cuts made by Disney divisions in recent months. In May ESPN, which Disney majority owns, started laying off a few hundred employees, while Disney’s film studio laid off about 150 workers in April. The company also shut down the videogame unit of Lucasfilm, which Disney acquired last year, resulting in the loss of about 200 jobs.

In a recent earnings call with analysts, Disney CEO Bob Iger struck a hopeful tone about ABC’s next season, touting the television spinoff from its hit movie, “The Avengers,” “Marvel’s Agents of S.H.I.E.L.D.”

“We are hopeful that the new schedule will deliver what ABC needs, not only in terms of downstream revenue through owning the programs, but also from the ratings perspective and ultimately an advertising perspective,” he said.

But in previous calls he had sounded notes of frustration. “We could use a few more hits and hits that we own,” Mr. Iger told analysts during an earnings call in May.

News of the layoffs was earlier reported by the Los Angeles Times.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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