Could Disney have been using some “creative accounting” to make its content spend on Disney+ a little easier for shareholders to stomach? And could that have been what ultimately lead to Disney CFO Christine McCarthy staging a coup and reinstating former Disney CEO Bob Iger?
A recent article in The Wall Street Journal indicates that Disney wasn’t completely upfront with its total content spend on Disney+. In fact, Bob Chapek apparently would push to air Disney+ “exclusives” on television to split the production costs between divisions.
Per The Wall Street Journal, “people familiar with the matter” shared that shows intended to be (and billed as) Disney+ originals, including The Mysterious Benedict Society and Doogie Kameāloha, M.D., were aired first on other networks, such as the Disney Channel, so their production and marketing budgets wouldn’t be counted against Disney+. In this way, the streaming service was seen as losing less money on original content. Chief Financial Officer Christine McCarthy, who was reportedly one of the voices behind Chapek’s removal, was “concerned about this strategy.”
During its last earnings call, the company reported that it lost $1.5 billion on streaming content production. However, if Chapek was indeed “borrowing” from the television budget to lessen the impact on streaming, how much have they really lost in the arms race with Netflix?
This is hardly the first time that Disney has been accusing of “creative accounting.” A former Disney accounting employee accused Disney of overinflating its theme park revenue for years.
[Source: The Wall Street Journal, Hat Tip: CBR]
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