Disney to Overhaul Its Movie Division

LOS ANGELES -- Since last year, Hollywood has been expecting the Walt Disney Company to announce layoffs in its film division. But with two humbling years at the box office, the company is planning something bigger: an overhaul of its movie studio.

After a year-long review of its operations, Walt Disney Studios will soon announce a major reorganization of its live-action movie division, which will alter the way Disney movies are made and marketed, according to several people briefed on the plan.

As of last weekend, Disney was still assessing how many jobs would be eliminated as a result. International and domestic marketing, which have been handled separately, are expected to be combined under Mark Zoradi, president of Buena Vista International, the studio's overseas distribution arm, sources said. Another Disney veteran, Oren Aviv, who supervises Disney's domestic movie marketing, is to be promoted as well, although it is unclear what his responsibilities will be.

In elevating the two executives, both of whom are close to studio chairman Richard Cook, Disney is betting on a revolution from within, unlike Paramount Pictures, which quickly brought in outsiders to shake up a staid culture last year. Robert Iger, Disney's newly appointed chief executive, has said his priorities would be global expansion and promoting Disney products across all the company's divisions.

The last two years have been disappointing for the studio despite the success of "Pirates of the Caribbean: Dead Man's Chest" (which remained in top place at the box office over the weekend with another $62 million in sales) and "The Chronicles of Narnia" last December. The studio produced a series of flops, many from its adult-oriented division Touchstone Films, including "The Alamo," "The Ladykillers" and "The Life Aquatic With Steve Zissou." Last year, Disney fell to No. 5 in domestic box-office share, bringing in $962 million. In 2003 it was No. 1, with $1.5 billion in domestic ticket sales.

Cook, who has been mulling possible changes since last year, presented his plan to Disney's board at a recent executive retreat in Orlando, Florida, some of the people briefed on the meeting said. All of the people interviewed for this article declined to be named, citing the delicate nature of the reorganization. Disney executives declined to comment.

Zoradi has a reputation as a demanding executive, but one well versed in how to sell movies abroad, a matter of keen interest in Hollywood as movie attendance in the United States has flattened out in recent years and studios are looking overseas for growth.

Having Disney's worldwide marketing team under one umbrella would allow for cost efficiencies, with the elimination of overlapping jobs. Those and other budget cuts are likely to help Disney's earnings prospects in the future. Three research firms recently downgraded Disney's stock, partly because of fears that gasoline prices would deter some people from visiting the company's theme parks.

Other movie studios have considered but abandoned the concept of combining international and domestic marketing. That was the case last year at Warner Brothers, which scrapped the idea after executives there appealed to run their own businesses.

Aviv is highly regarded for his marketing acumen and was given the title of chief creative officer last year after Paramount tried to recruit him, said Hollywood executives apprised of those negotiations.

He joined Disney in 1991 and has sought to expand his duties, particularly in movie production. He was an executive producer for two Disney films, the blockbuster "National Treasure" in 2004, a story idea he generated, and "Rocket Man" in 1997.

As recently as last week, Cook was discussing with Aviv what his new responsibilities would be. Those could include overseeing the studio's franchise films or new marketing ventures, sources said.