By Erich Schwartzel and Joe Flint
Burbank, Calif.
On the Walt Disney Co. campus, longtime executive Kevin Mayer
has a nickname: Buzz Lightyear.
Mr. Mayer, 57 years old, has the self-confidence, swagger and
jawline of the "Toy Story" character -- as well as the astronaut
figurine's relentlessly hard-driving style and bravado.
Now he is getting a very public test. After more than two
decades as one of Disney Chief Executive Robert Iger's top
lieutenants, Mr. Mayer is launching Disney's bet-the-farm streaming
service, Disney+, which will debut Nov. 12.
Success is critical for Disney. Rather than continuing to sell
its movies and television shows to Netflix Inc., Disney is trying
to become the Netflix alternative. The company has already spent
billions of dollars producing programs for the service and
constructing its technical underpinnings. Mr. Iger has told Wall
Street he stakes the future of the company on it.
As Disney's longtime deals maven, Mr. Mayer has been an
important architect of the company's recent success. He helped
orchestrate the four acquisitions that expanded Disney into its
modern incarnation as an industry colossus: Pixar Entertainment,
Marvel Studios, Lucasfilm Ltd. and 21st Century Fox.
Not everything in Mr. Mayer's acquisition history has gone well.
As he's been charged with finding -- or hedging against -- the next
big thing in entertainment, Disney has made questionable
investments in virtual reality, digital media, online video
platforms and even 3-D printing.
Mr. Mayer has virtually no operational experience at Disney: He
has never run a division such as the film studio or the theme
parks. Now, as head of Disney's streaming strategy -- an effort
that also includes Hulu and an ESPN service -- he directs a team of
producers creating hundreds of hours of programming and dozens of
engineers building a technical infrastructure that must handle
millions of subscribers at once. He also oversees Disney's
international operations, including broadcast holdings in dozens of
countries.
The move has introduced Mr. Mayer to the entertainment side of
the world's largest entertainment company. Unlike Mr. Iger, who
rose to the top after several roles in programming, Mr. Mayer, an
engineer by training, has had little interaction with the creative
aspect of the company until now.
Then there's the question of Mr. Mayer's management style.
Current and former colleagues say he confronts disagreements
head-on, a departure from Disney's cautious company culture. When
Mr. Mayer oversaw Disney's strategic planning unit, his employees
would tell new hires which nearby convenience stores sold Red Bull
and caffeine pills; long hours under him are a given. Disney
declined to make Mr. Mayer available for an interview.
In recent years, Mr. Mayer has softened some of his rough edges,
people who have worked with him said. And colleagues attribute some
of his sharp-elbowed style to the job he held as head of strategic
planning, which has little room for error or niceties.
"He has a relentless pursuit of excellence which can be
stressful and exhausting at times," said Nick van Dyk, a former
Disney executive who worked for Mr. Mayer for many years. "It is
also the way his people get their best work done. And he generally
uses that style to get results from a particular type of person --
he has more managerial versatility than people give him credit
for."
Wall Street has responded favorably to Disney's streaming
strategy so far, recovering losses generated when the company
acknowledged long-term subscriber declines due to cable
cord-cutting. Disney is pricing the service with an initial cost of
$6.99 a month -- about half the cost of Netflix's most popular
plan. The price is designed to bring on a large number of
subscribers at once. Disney expects the service to have between 60
million and 90 million subscribers by the end of fiscal year
2024.
Mini-McKinsey
A native of Bethesda, Md., Mr Mayer worked as a movie-theater
usher in high school and took to sales early in life. As a
teenager, he sold his services as a window-washer to neighbors. A
football career at MIT and a business degree from Harvard Business
School followed before he joined Disney's strategic planning
division in 1993.
The division, founded in the late 1980s to stress-test the
business plans of Disney divisions, became Mr. Mayer's home at
Disney. It was staffed by a small number of recent business-school
graduates who were given carte blanche to weigh in on business
plans from divisions across the company. Colleagues described it as
a mini-McKinsey -- a place where future executives like eBay Inc.
CEO Meg Whitman cut their teeth.
Mr. Mayer ascended quickly and was named senior vice president
of strategic planning in 1998 at age 36. Mr. Mayer specialized in
finding ways to connect Disney with new digital tools. One of his
initiatives: an attempt to convince TV viewers watching the
Tostitos Fiesta Bowl to go online and simultaneously follow the
game with trivia and games on their personal computers.
"I don't think he had a particular fascination with Disney,"
said Jake Winebaum, the chair of Disney's internet division in the
late 1990s. "He had a real fascination with the power of its brand
and its various distribution channels."
Mr. Mayer started overseeing Disney's internet ventures before
leaving in early 2000 for a very different company: Playboy
Enterprises Inc.
Mr. Mayer was hired to broaden the Playboy website's audience
and turn it into a destination for more than just pictures of naked
women. The partnership didn't last.
"Kevin is a square-jawed, corporate executive soldier, and
Playboy had a cast of characters," said Allen Blankenship, a Los
Angeles real-estate agent who sold a men's entertainment site to
Playboy soon after Mr. Mayer took over. "It was not as polished a
crew as I'm sure he was used to."
Mr. Mayer's strategy failed to catch on, and he left the job
less than a year after he started. After a few years working in
media at Clear Channel Communications and LEK Consulting, he
returned to the G-rated fold of Disney in 2005, when Mr. Iger took
the top job. Mr. Mayer's Playboy tenure does not appear in his
Disney company bio.
The Deal Maker
After returning to Disney, Mr. Mayer began working on a series
of big-ticket mergers that remade the company over a decade of
growth. While Mr. Iger remained the public face of the strategy,
Mr. Mayer was often in charge of the nuts-and-bolts of each
deal.
Pixar Entertainment came first -- a $7.4 billion deal for the
studio behind "Toy Story." Mr. Iger won over Pixar founder Steve
Jobs, and Mr. Mayer befriended Ed Catmull, a company executive who
specialized in the technical details as president of Pixar and
co-head of Walt Disney Animation Studios after the sale.
He was an early champion of the plan to buy Marvel Studios at a
time when only a handful of superhero films had hit at the box
office. Mr. Mayer led negotiations for the 2009 sale.
"Kevin got it when most everyone still didn't," said David
Maisel, then Marvel Studios' chairman.
Marvel would go on to produce a string of hits unprecedented in
recent Hollywood history, including this year's record-setting
"Avengers: Endgame."
Disney bought Lucasfilm for $4 billion in 2012, acquiring the
"Star Wars" franchise in the process and capping a trifecta of
deals costing about $16 billion that had transformed the company
into a stable of Hollywood's most valuable brands.
A less heralded but crucial deal Mr. Mayer made was getting
control of BAMTech LLC, a technology company known for creating the
well-regarded architecture of Major League Baseball's streaming
service as well as HBO Now.
"That is probably the best acquisition by any traditional media
company ever," said Marty Yudkovitz, who worked alongside Mr. Mayer
in the strategic planning unit for years. "It was not at all sexy.
But it was the critical factor of making this whole over-the-top
plan work."
All of Mr. Mayer's previous acquisition campaigns were puny
compared to the value and industry-shaking impact of Disney's Fox
deal. Mr. Mayer presented the case for buying Fox to the Disney
board, traveling to Mr. Murdoch's Moraga winery in Los Angeles to
hash out terms. He was at Mr. Iger's side through a bidding war for
the Fox assets launched by Comcast Corp., eventually helping to
close the deal for $71.3 billion.
Fox Corp. Chief Executive Lachlan Murdoch said he was struck by
the ambition of Mr. Mayer's strategy, saying he was the "problem
solver" during Fox negotiations who helped resolve both minor
roadblocks and complex issues.
Fox Corp. and Wall Street Journal parent News Corp share common
ownership.
Winning the deal proved critical to the job Mr. Mayer now holds,
since the Fox library of films and television shows, including "The
Simpsons" and "Avatar," is bolstering its streaming service's
offerings.
"This deal wouldn't be possible without Kevin's unbelievably
hard work," said Mr. Iger on a call announcing the Disney-Fox
tie-up. "He's probably the only one in the company who's had less
sleep than I have."
Succession Planning
In March 2018, about a year before the Disney-Fox deal closed,
Mr. Iger reconfigured his company and placed two longtime
lieutenants at the top. Mr. Mayer would be in charge of
direct-to-consumer and international operations; Bob Chapek, who
ran Disney's theme parks, would take over licensing and consumer
products such as Disney toys, apparel and stores.
Many in the industry see the promotions as a bake-off to be Mr.
Iger's successor as CEO.
Mr. Iger is scheduled to retire in 2021, though he has already
delayed his retirement several times. In 2016, his longtime heir
apparent, Chief Operating Officer Tom Staggs, stepped down after
Mr. Iger and Disney's board declined to give him assurance that he
was in line for the top job.
In August, Mr. Mayer got a taste of the public-facing aspect of
his new role when he appeared alongside a crew of "High School
Musical" dancers at the annual D23 fan convention to hawk Disney+
subscriptions ahead of the service's launch.
He was part of a presentation to cheering fans that included
Ewan McGregor confirming news he would return to the screen as
Obi-Wan Kenobi. The canine stars of a live-action retelling of "The
Lady and the Tramp" made an appearance. Mr. Mayer was there as the
suit in the mix, sounding more like he was speaking at a board
meeting than a fan club event.
"Never before has our content been as broadly, conveniently or
permanently available as it will be on Disney+," he said.
Disney+ is appropriate for "consumers of all ages," Mr. Mayer
added. "We have the brands that matter most."
(END) Dow Jones Newswires
November 09, 2019 07:36 ET (12:36 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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