Big changes in the cast at Disney
The media giant swaps roles for two top executives, setting up more players as potential CEO candidates.
(Fortune) -- If you work at Walt Disney, you are not just an employee, you are a "castmember"-- and Thursday, the company boldly swapped the roles of two of its most senior executives.
Jay Rasulo, who has run Disney's (DIS, Fortune 500) vast theme-park business for seven years, will become Disney's chief financial officer, while Thomas Staggs, who has held that post for the past 11 years, will take Rasulo's spot. It's kind of like asking the guys who play Pluto and Donald Duck to change costumes.
The unusual move by CEO Bob Iger comes after another one made last month: appointing Rich Ross, who had overseen the Disney Channel globally, as the new chief of Disney's movie business. Iger pointed out on a conference call that this was not the first time that Disney has made these sorts of changes, and that he himself had benefited from reassignments over the course of his career. However, he added, "This is a unique move in many respects given the importance of these jobs."
The moves came as Disney announced its fourth-quarter results, which underscored the challenges the company has faced in the economic downturn but also the broader operational issues that have hampered its film division. For the year ended Oct. 3, the company reported that operating income was down 21%, to $6.67 billion, on revenue of $36.1 billion, down 4%.
The fourth quarter showed signs of a turnaround and the effects of cost-cutting at the company, with operating income up 4%, to $1.85 billion, and revenue up 14%. Net income was up 18% in the fourth quarter, but down 25% on the year.
The hardest-hit group, studio entertainment, saw its operating income decline 84% for the year, to $175 million, and swung to a fourth-quarter operating loss of $13 million from a year-earlier operating profit of $111 million. Ross earlier this week made a series of executive changes within the studio group, which coincided with a weaker-than-expected debut for the Disney 3-D film A Christmas Carol, starring Jim Carrey.
Rasulo's group, theme parks, has had the extra-onerous task of responding to the economic downturn with a combination of cost-cutting and promotions to keep people coming to the parks and leaving satisfied, while being in the midst of a major expansion program in everything from its California Adventure theme park next to Disneyland to adding new cruise ships to announcing a new Disney park in China.
On the conference call, Staggs said bookings were running around 5% behind last year at the theme parks during the first quarter so far, but that it's difficult to predict trends because consumers are waiting longer to book holidays. For the year, the parks and resorts division saw operating income decrease 25%, to $1.4 billion, and revenues decrease 7%, to $10.4 billion.
Analyst Doug Mitchelson of Deutsche Bank noted that the new duties for Rasulo and Staggs positions both of them as potential candidates to someday succeed Iger. But the rotation philosophy is likely to bring other surprises as well. Iger noted that Anne Sweeney, who runs Disney's media networks division, was several years ago also given responsibility for the ABC broadcasting business, despite a background in cable. "It's not the first time that we've done this and it won't be the last time we do it," he said.