Walt Disney Productions, reflecting new priorities under its recently named management team, yesterday announced a $166 million write-off of unsuccessful creative projects and a shift to a greater emphasis on movie and television production.
"We have concluded that efforts must immediately focus on the rejuvenation of our motion picture and television business," Chairman Michael D. Eisner and President Frank G. Wells said in a joint statement. Eisner and Wells, longtime entertainment industry executives, were named to run the company last month at the culmination of an eight-month battle for control of the entertainment empire.
The battle saw the ouster of Disney's longtime management team, which had long been criticized by industry analysts for not acting boldly enough to capitalize on changing tastes in entertainment.
In an interview last month, Eisner said the company would move strongly into film and television production, increasing its annual number of movie releases fivefold and producing television comedy series for prime-time and Saturday morning markets.
Yesterday, Eisner and Wells said the company would throttle back development of Disney's highly popular -- but very capital-intensive -- theme parks, including Disneyland, Disney World and EPCOT, in favor of concentration on movie and TV production. "Further expansion of existing theme parks will continue, but at pre-EPCOT Center levels," they said.
A company spokesman said the statement meant that major additions to the parks would be curtailed in coming years in favor of more modest projects to upgrade the attractions.
Disney said it was writing off $40 million worth of development costs, dating back years, on various theme park projects that have now been abandoned under Eisner and Wells.
The company also said it was taking a $112 million write-off on motion picture and television properties in production, under development, or in current release. The properties apparently include the recently released movie "Country," which has not been a major hit. Most of the other productions, the Disney spokesman said, were "started in a prior era" -- further indication that Eisner and Wells are moving quickly to put their stamp on the company.
The theme parks and movie and television write-offs, as well as another $14 million in general corporate write-offs, gave Disney a $64 million loss in the fourth quarter of its fiscal year ended Sept. 30, the company said. Revenue for the quarter was $463.2 million. The loss was partly balanced for the fiscal year by a change in accounting practices that shifted $76 million worth of previously deferred income tax credits into the company's first fiscal quarter, in accordance with typical entertainment industry practice.
The various financial machinations left the company with a $97.8 million ($2.73 a share) profit for the fiscal year, up from $91.2 million ($2.70) a year ago, on an increase in revenue to $1.6 billion,from $1.3 billion a year earlier.