Disney/ABC TV Group reportedly eyes cost cuts of up to 10%

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ABC News is among the divisions under the microscope as Disney reportedly looks to trim 10% of its TV expenses.

In the latest round of traditional-media belt-tightening, Disney’s ABC Television Group is looking to trim up to 10% of its expenses and eliminate as many as 300 positions, according to multiple reports.

An unnamed executive told the Wall Street Journal the cuts are designed to help the TV unit “transform into a 21st-century broadcaster.” The newspaper, citing “people familiar with the matter,” said most of the cuts will affect ABC, plus its studio and news divisions as well as owned and operated local stations. Disney Channel and Freeform will also be in the crosshairs. ESPN, which sits in a different Walt Disney Co. silo, has already reduced its staff in recent months as it confronts significant subscriber losses and linear ratings erosion.

The specifics cuts, which will be a combination of layoffs and attrition, are expected to be finalized by the end of September, which is also the end of the company’s fiscal year. Variety noted the recent departure of several high-level executives who have not been replaced, including former distribution chief Ben Pyne and former business affairs chief Jana Winograde.

Ben Sherwood, president of the Disney/ABC TV Group, has promised Disney CEO Bob Iger that he can trim up to $300 million in annual costs, the Journal said. The group currently employs about 10,000 people.

Times have been turbulent for the TV unit. Like many legacy peers, it has struggled to manage through a period of dramatic transformation in the way programming is created and consumed. Hits have been scarce on ABC, which has lagged behind CBS and NBC in the ratings in recent years. Ratings at the Disney Channel and Freeform have also plunged by more than 20% in their key demos.

Disney’s broadcast TV division, which includes ABC, ABC Studios and the local stations, is off 22% for the nine months ending in June, compared with the same period in 2016.

The downdrafts in the TV group contrast sharply with Disney’s might in motion pictures and theme parks. As investors and analysts continued to press the company about how it would respond to disruptions to its TV business, Disney finally this month announced it plans to launch standalone subscription streaming services, one bolstered by family programming and the other showcasing sports. Along with that move, it bought the remainder of OTT specialist BAMTech that it did not already own and said it would begin removing titles from Netflix over the next couple of years.