Mic Drop #4: Revisiting Post-Kevin Mayer Disney Prediction from May

How this week's Disney restructuring solves for two pain points I identified back in May

I connect the dots across the OTT streaming marketplace for your competitive edge at PARQOR.com. Here, I will be highlighting and celebrating “mic drops” on my predictions from past PARQOR Member mailings.

This week, seismic changes in management were announced at Disney. Let’s revisit my Member Mailing from May when Kevin Mayer departed (yes, that’s a lot of Ms, and no, the alliteration wasn’t intentional).

If you are an existing PARQOR Member, you can download the PDF of my predictions for free, or if not, at the same link with the coupon code SUBSTACK (automatically appended to this link).

First, The Curse of the Mogul Framework

The Curse of the Mogul framework has been one of the key themes of PARQOR Member Mailings since March (download for free with the coupon SUBSTACK). It was originally laid out in a book of the same name by Jonathan Knee, Bruce Greenwald, and Ava Seave.

The Curse of the Mogul framework reflects how "CEOs believe the media industry involves managing creative talent and artistic product”, and therefore the media industry “is not subject to appraisal using traditional strategic, financial or management metrics.” For this reason, the “curse” ends up being for shareholders, who often see content creators reap greater returns than they do. You can read past posts on the PARQOR blog that use the framework.

As legacy media companies making progress in streaming, the framework has less value because the streaming business is direct-to-consumer, and therefore it can only be evaluated through the metrics of a direct-to-consumer business like growth and churn.

So, when Curse of the Mogul “symptoms” emerge at a legacy media company in the DTC streaming era, those are reliable signals that something is amiss at that company (NOTE: a perfect example of this point is Quibi, which has missed its projected download targets after having sold itself on the intangibles of both big-name Hollywood talent and Jeffrey Katzenberg’s extraordinary track record).

Second, Revisiting Kevin Mayer’s May 2020 Departure

I wrote back in May about Kevin Mayer and his replacement as Chairman of Disney’s Direct To Consumer - International division, Rebecca Campbell:

I think Mayer leaving hurts Disney in that it loses a voice who was trained to be a potential Disney CEO who understands the DTC marketplace unusually well. His replacement, Rebecca Campbell, is a Disney veteran who most recently served as president of Disneyland Resort, was part of the team who wrote the launch plan for Disney+. She is very much a fiduciary executive, too, having been at the company for 23 years. She has schooled in more traditional ways of running the business, and may have some DTC in her background (resorts share inventory with DTC travel booking sites), but there is nothing to suggest she shares much else in common with Kevin Mayer.

So, to the extent the Curse of the Mogul does apply to Mayer's departure and Campbell's hiring, I would imagine it raises questions about her understanding of the core strategic, financial or management metrics of Disney's DTC businesses, and how they deliver value to shareholders.

The Curse of the Mogul framework flagged a signal: the impressive intangibles of Rebecca Campbell’s background were being played up to inspire confidence in investors, but there was a lack of (1) content- and IP-related experience and (2) of DTC-related business experience in Campbell’s bio.

Mic Drop

After Disney’s announced restructuring on Monday, Rebecca Campbell has a different purview:

With the reorganization, the Direct-to-Consumer and International business will no longer be managed on a combined basis. In Ms. Campbell’s role leading international operations, she will be responsible for coordinating and integrating activities across the various business units in each market to best represent the Company’s overall interests, and will report to Mr. Chapek. In her role leading direct-to-consumer operations for Disney+, Hulu and ESPN+, she will report to Mr. Daniel.

In short, Campbell’s responsibilities have been split, and she no longer only reports to the CEO. [NOTE: It is not unreasonable to imagine Campbell will move into overseeing International operations, only, in the next six months to a year. That role would still report into the CEO, only]

What makes this move more notable is Kareem Daniel’s background at Disney and how it solves for the lack of (1) content- and IP-related experience and (2) of DTC-related business experience in Campbell’s bio:

A 14-year Disney veteran, Mr. Daniel has held leadership positions across a variety of businesses, including consumer products, games and interactive experiences, publishing, studio distribution, and Walt Disney Imagineering. He has a deep understanding of the Company’s brands and franchises and vast experience extending original IP into experiential storytelling across business segments.

Consumer products and games and interactive experiences are DTC businesses, with Daniel’s background solving for Campbell’s lack of experience in DTC.

A “deep understanding of the Company’s brands and franchises and vast experience extending original IP into experiential storytelling across business segments” in Daniel’s background solves for the lack of content- and IP-related experience in Campbell’s background.

Last, it is important to note that Disney is playing up these two aspects of Daniel’s background specifically in this press release after leaving out these two key skillsets in its May press release about Campbell.

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(If this email was forwarded to you, I am a former Viacom executive who connects the dots across the OTT streaming marketplace for your competitive edge at PARQOR.com. You can follow me on Twitter, where I often have fun exchanges with other folks interested in the streaming business, or on LinkedIn, which seems to be a fantastic channel for sharing positivity, but less optimal channel for sharing content).