Christine McCarthy, who has been a key executive at the entertainment colossus for more than two decades, is resigning as chief financial officer of Walt Disney Co.
Disney stated McCarthy is taking a hiatus for family medical reasons. McCarthy’s spouse has been residing in a healthcare facility since the beginning of the year.
McCarthy’s precipitous departure surprised some colleagues and associates. According to a source familiar with her situation, there have been no major changes in her life that would necessitate her to take a step back.
McCarthy has reportedly clashed with Disney CEO Robert Iger and other senior executives over strategy, including the amount of money Disney spends on content and a recent restructuring that she felt did not go far enough to streamline the company.
In February, Iger restructured the company and created three primary units: one for theme parks and consumer products, one for ESPN, and a Disney Entertainment unit that houses film and television operations, as well as streaming services Disney+ and Hulu.
McCarthy advocated for the Disney Entertainment unit to be further consolidated to improve profit margins and provide Disney with a leaner structure similar to Netflix, placing her at odds with the unit’s leadership, according to a source with knowledge of the situation.
McCarthy was not hesitant to confront her superiors if she believed they were making a mistake, according to her acquaintances. McCarthy delivered Disney’s financial results to Wall Street analysts for decades with a robotic voice that belied her sharp tongue, quick wit, and firm opinions.
Beginning July 1, Kevin Lansberry, the present executive vice president and chief financial officer of Disney Parks, Experiences, and Products, will assume the role of interim CFO. McCarthy will serve as a strategic advisor until June 2024, according to the company.
McCarthy’s impact on Disney, according to Iger, “cannot be overstated.” A spokesperson declined to comment further than his statement.
McCarthy stated that she will “always be rooting for the success of my extended Disney family.”
McCarthy’s departure occurs at a crucial moment for Disney, which, like its competitors in the entertainment industry, is attempting to transition to a streaming-first business model. While Disney’s theme parks are performing well, its other primary businesses—cable networks such as ESPN and ABC—are facing strong headwinds due to cable cord-cutting and a weak advertising market.
In response, Disney has laid off 7,000 employees over the past few months. This month, Disney announced that its next quarterly report would include a $1.5 billion impairment charge related to its removal of content from streaming services including Disney+ and Hulu.
The Wall Street Journal reported that McCarthy played a significant role in the removal of Bob Chapek as CEO of Disney last autumn. She informed the board that she had lost confidence in his leadership after the company endured a dismal quarter that revealed foundational cracks.
Chapek was terminated after less than two years in the position. McCarthy assisted Iger in his recruitment to return to Disney and succeed him.
Chapek was not the only executive that McCarthy helped to dismiss. She was also instrumental in Chapek’s decision to dismiss Peter Rice, chairman of Disney’s general entertainment unit, who supervised content strategy for the majority of the company’s television and streaming businesses.
The Journal reported that McCarthy questioned Rice’s management style and some of his financial decisions and persuaded Chapek to replace him.
McCarthy has long believed that Disney executives and directors should be required to own a substantial quantity of stock in order to make them more cognizant of shareholder concerns, according to a source with knowledge of the matter.
During Iger’s current tenure, a number of executive changes have occurred at Disney. The early reorganization of entertainment operations resulted in the departure of some top executives, including distribution chief Kareem Daniel and international head Rebecca Campbell, while the roles of other top lieutenants, such as longstanding entertainment executive Dana Walden, grew.
Iger is simultaneously seeking for a successor. When he returned to the company in November of last year, he stated he would remain until December 2024.
McCarthy, a native of Boston, joined Disney as treasurer in 2000 after years in finance, including as the chief financial officer of Imperial Bancorp. In 2015, she was appointed chief financial officer. McCarthy, renowned for her tireless work ethic, fought cancer twice. She would frequently abandon work for treatments at the hospital adjacent to Disney’s headquarters, St. Joseph, and return later in the day.
“Some doctors and nursing staff thought I was crazy, but those who knew me and my history were amused,” McCarthy, 67, told The Wall Street Journal in the past.
McCarthy was instrumental in expanding the parks business as well as the streaming platforms Disney+ and ESPN+, according to Jonathan Kees, a senior research analyst at a subsidiary of Japanese investment firm Daiwa Securities Group Inc. “Christine is well-respected and a prominent figure in the community,” he said.
Her successor in the interim will confront a steep learning curve. Lansberry’s experience at Disney has primarily been limited to theme parks, and he has not worked on the entertainment side of the business, which presents the greatest challenges.
As Disney continues its battle with Florida Governor Ron DeSantis, Kees stated that navigating legal and political disputes is also part of the job. Disney has filed a lawsuit against DeSantis, accusing him of a “targeted campaign of government retaliation” against the corporation for criticizing legislation he supported.
Under McCarthy’s successor, the company’s long-suspended dividend could also be reinstated. Disney is one of the few large corporations that ceased paying dividends in 2020 in order to conserve cash and has not yet resumed the practice.
The company stated it would consider reinstating its dividend after further reducing its debt, which increased in part due to its 2019 $71.3 billion acquisition of entertainment assets from 21st Century Fox.
McCarthy stated on May 17 at a press conference, “We’ve talked about resuming dividends in the near future.” We will not pick up where we left off, but we will return to the game.
