Rich Ross has left the building

For those of you familiar with the history of the Save Disney Shows movement (yes, all three of you),  you will no doubt remember that Rich Ross was the executive in charge of the Disney Channel when my beloved Kim Possible was cancelled. Not to mention Phil of the Future and American Dragon Jake Long. Of course, like a broken clock, he did get a few things right such as High School Musical. And because of this, he was promoted to head of the Walt Disney studios in 2009 replacing Dick Cook. Well, last week in the wake of the John Carter debacle (and more importantly Ross’s mishandling of the spin) he was fired. Good riddance.

If you care to know anything more about the topic than what I just told you, here are two useful and informative articles.

Walt Disney Studios film chief Rich Ross’ abrupt departure Friday comes at a difficult time for one of the largest, oldest and most successful of Hollywood’s historic entertainment companies.

It has also called into question Walt Disney Co. Chairman and Chief Executive Robert A. Iger’s ambitious attempt to modernize the 89-year-old studio by placing a TV executive in charge of his film division and accelerates uncertainty at a time when all entertainment companies are struggling to come to terms with a dying DVD business and long-term declines in movie ticket sales.

Dismissed after less than three years in the top movie job, Ross leaves a legacy of costly box-office flops, including last year’s “Mars Needs Moms” and the recent Martian adventure film “John Carter,” for which Disney plans to take a $200-million write-down — one of the largest losses in movie history.

Iger’s loss of confidence in his handpicked film chairman suggests that he may have overreached in his attempt to set a new course for Disney’s movie division and miscalculated Ross’ ability to make the transition from television to film.

Industry observers said that Ross, a former Disney Channel executive, never effectively adapted to the world of film. He all but conceded as much in his resignation email to staff Friday, acknowledging that the chairman’s job was not “the right professional fit.”

“It’s hard to make that transition — there’s a steep learning curve,” said veteran film and television producer Jerry Bruckheimer, who is responsible for Disney’s very successful “Pirates of the Caribbean” franchise and the upcoming Johnny Depp Western “Lone Ranger.”

To run a film division, he said, “You have to get people off their couches and go spend 12 bucks to go to a movie. With the Disney Cable Channel it is easy to do — people just turn on their TVs.”

When Iger picked him to run the film studio in October 2009, Ross was charged with remaking it for the 21st century realities of an industry challenged to adapt to new forms of digital distribution that deliver lower profit margins.

Ross set about eliminating jobs, cutting overhead and reducing the number of films Disney releases each year. He placed increased emphasis on established entertainment brands Marvel and Pixar, which the company had paid billions to bring into the Disney family. The Iger-Ross game plan was to make big, ambitious films with the potential to create a cultural tsunami that would spawn sequels, theme park rides, merchandise sales and spinoff television shows.

But in shaking up the studio, Ross removed seasoned film executives — who could have helped him learn the intricacies of the industry — and brought in outsiders, such as New York ad agency executive MT Carney, as head of marketing, ostensibly to inject the venerable Burbank studio with new ideas and approaches.
As a result, Ross put few films into production. There are just three Disney live-action movies this year that did not come from Pixar, Marvel and DreamWorks Studios, whose films the studio distributes.

This failure to surround himself with strong people who knew the business contributed to Ross’ undoing, say people in the industry with knowledge of the situation. Agents, managers and filmmakers perceived him as lacking a fundamental understanding of the film business.

That inexperience was reflected at the box office. Although the company continued to make money with “Pirates of the Caribbean: On Stranger Tides” and “Alice in Wonderland,” both of which grossed more than $1 billion worldwide, Ross presided over two terribly costly flops. The $150-million 3-D animated 2011 release “Mars Needs Moms” grossed just $39 million worldwide and ended with a $100-million write-down for Disney; “John Carter,” a live-action adventure tale which cost at least $350 million to make and market, has grossed $269 million worldwide.

“There are real problems in Disney’s core content business — Disney studios and ABC — that are still both troubled, and Iger hasn’t fixed them,” said Laura Martin, senior media analyst at Needham & Co. “You can’t let an executive lose $200 million or $300 million on his watch and not fire him. If Iger loses another $200 million, his job could be on the line.”

The Carter debacle was damaging beyond its financial toll on the company, say people with knowledge of the situation.

Ross spoke negatively about the film, according to people familiar with the situation but not authorized to discuss it publicly. Ross sought to blame Pixar Animation Studios for the “John Carter” debacle, they said. That prompted key Pixar executives to turn against Ross, whose abundance of self-confidence and abrasive style had alienated many within the studio. It set the stage for Iger to remove the studio chief from his post, say people familiar with the matter.

Iger sought to take the high road Friday, lauding Ross for his contributions to the company.

“For more than a decade, Rich Ross’ creative instincts, business acumen and personal integrity have driven results in key businesses for Disney, redefining success in kids and family entertainment and launching franchises that generate value across our entire company,” Iger said in a statement. “His vision and leadership opened doors for Disney around the world, making our brand part of daily life for millions of people.”

Ross’ exit came without a clear successor in place, signaling a highly unusual era of instability at the studio.

Iger has told certain individuals who do business with the company that he has not made a decision about Ross’ replacement, and did not indicate an urgency about doing so. In the meantime, Iger will rely on his production head, Sean Bailey, and president, Alan Bergman, to oversee the studio.

Investors are unlikely to be concerned with the latest executive shake-up at the movie studio, which is a relatively small contributor to Disney’s bottom line. But the misstep is a mark against Iger, who is expected to report the company’s second-quarter earnings results May 8.

“As CEO, Iger makes a lot of decisions and most have been successful and he’s guided the company very well over the years,” said veteran media analyst Hal Vogel.

“But this is one unpleasant mistake. When the failure comes it’s spectacular — it feeds back on his decision to change the leadership of the company. I can’t object to shaking things up and taking risks. But not all risks work out.”

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Once considered one of the most powerful and sought-after positions in Hollywood, running Walt Disney Studios — the 89-year-old Burbank institution behind “Snow White,” “Mary Poppins” and “Pirates of the Caribbean” — now seems about as desirable as playing Goofy on a hot day at Disneyland.

But since Walt Disney Co. Chief Executive Bob Iger fired his studio head Rich Ross last week, the buzz in Hollywood has been less about who’s angling for the studio chairman job and more about who would want it.

The reason: Iger’s strategy of turning Disney into a collection of brands means that most of the films it releases are not overseen or greenlighted by the movie studio chief, as they are at rival companies. Next year, for example, Disney will release five movies, including two 3-D re-releases, from its Pixar and Disney animation units, both headed by John Lasseter and Ed Catmull; two superhero films from Marvel, a subsidiary run by Chief Executive Ike Perlmutter and President Kevin Feige; and at least one from DreamWorks, the independent studio run by Steven Spielberg and Stacey Snider that has a distribution deal with Disney.

Ross’ successor must be someone all of those partners trust and with whom they are willing to work. And a big part of the job will be managing their egos.

Only two films on Disney’s 2013 slate were approved and overseen by Ross: “Oz: The Great and Powerful,” based on the classic book series and movie, and a new version of “The Lone Ranger” starring Johnny Depp. And both have powerful producers who are themselves forces to be reckoned with: Jerry Bruckheimer on “The Lone Ranger” and former Disney studio Chairman Joe Roth on “Oz.”

The studio is responsible, however, for advertising and releasing the movies from all of its brands and partners, meaning Ross’ successor would be an easy target for blame if those pictures didn’t work. People close to Disney but not authorized to speak publicly say Lasseter, Feige and Snider are all intimately involved in marketing plans and were bitter about having their films promoted by inexperienced outsider M.T. Carney, whom Ross hired in 2010 and dismissed early this year.

Though Ross’ departure came soon after the failure of “John Carter,” for which Disney is taking a $200-million write-down, people close to the studio said it had more to do with his inability to win the support of allies inside and outside Disney. Lasseter, Perlmutter, Snider and Spielberg were said to have been unhappy with his leadership, and numerous lower-level employees at the studio, plus agents and producers around Hollywood, complained that Ross did not clearly articulate the types of projects he wanted or his vision to transform
the studio.

In addition, Ross replaced nearly all of the seasoned movie executives at Disney with less experienced hands. Some newcomers, such as production president Sean Bailey, are well liked, but others, such as Carney, were spectacular failures. (So far, Carney’s successor, Ricky Strauss, is winning higher marks.)

Thus, less than three years after Iger stunned Hollywood by replacing veteran Dick Cook with Ross, who had a successful tenure running Disney Channels Worldwide but had never worked in the movie business, the Disney CEO must go back to the drawing board — again.

He is faced with the humbling task of finding a chairman capable of endearing himself or herself to colleagues and Hollywood’s creative community and who also possesses the skills to update the studio for the digital age — one of the ostensible reasons Cook was fired.

“All of this drama shows the changes at the studio are very much a work in progress,” said Tony Wible, a media analyst at Janney Montgomery Scott. “But it’s important they figure it out because the studio is a launching pad for the brands that make money in theme parks, in consumer products and on television.”

Walt Disney Studios is now being run by several executives previously under Ross who now report directly to Iger, including Bailey and President Alan Bergman, who oversees distribution and business operations. It’s an unusual situation in Hollywood, where top executives usually aren’t fired without a replacement lined up to prevent the kind of instability and uncertainty now present on the Disney lot.

Already, many of the names that first popped up as potential successors for Ross have quietly made clear that they’re not interested or are unavailable.

Feige, who has produced Marvel’s string of hits including two “Iron Man” films, “Thor” and “Captain America: The First Avenger,” along with next week’s hugely anticipated “The Avengers,” is telling associates that he’d prefer to stay in his current job, according to two people familiar with the executive’s thinking.

Lasseter, who lives near the headquarters of Pixar Animation Studios in Northern California’s Emeryville, is said to be happy staying in charge of Disney’s fabled animation operation. Snider, who ran Universal Pictures before moving to DreamWorks, is obliged to sign a multi-year contract extension as part of a $200-million refinancing with backer Reliance Entertainment, making her unavailable even if she wanted the job.

Roth, who ran Disney Studios from 1994 to 2000 and has headed 20th Century Fox and Revolution Studios, is not interested in the position as he is busy producing three coming movies for Disney: “Oz,” a sequel to the 2010 blockbuster “Alice in Wonderland” and the “Sleeping Beauty” spinoff “Maleficent,” as well as the FX/Lionsgate television show “Anger Management” starring Charlie Sheen. He also owns Major League Soccer’s Seattle Sounders.

At a presentation of Disney’s coming movies at the CinemaCon gathering of theater owners in Las Vegas this week, things appeared to go smoothly despite the instability in Burbank. The studio brought out stars including Depp, James Franco and Mila Kunis and had executives including Bailey, Feige and Lasseter discuss the slate, along with Bruckheimer and Roth.

On the press line beforehand, however, the tension was evident.

Asked whether she was worried Ross’ exit might affect the marketing of her Pixar animated film “Brave,” producer Katherine Sarafian quickly changed the subject.

“We feel like we’re in good hands and here to talk about ‘Brave.’ I think we’re doing all right,” she said.

Almost immediately after Sarafian had uttered the words, a Disney publicist rushed over and implored a reporter to stop asking filmmakers questions about Ross because it was making them “uncomfortable.”