How Disney COO Tom Staggs Sees the Company’s Present—and Future

Tom Staggs faces the unique challenge of filling a role that the world’s biggest media company has done quite well without for a decade.

When he was named chief operating officer of Walt Disney Co. a year ago, he took on a job that was last held in 2005 by Robert Iger, before he was promoted to chief executive. Now Mr. Staggs is the leading internal candidate to succeed Mr. Iger, who has said he will retire in 2018.

A 26-year Disney veteran who before becoming COO most recently served as chairman of the company’s parks and resorts business, Mr. Staggs has remained quite involved with the $5.5 billion Shanghai Disney Resort, which opens June 16.

He is also significantly involved in planning for the future of television at Disney, a key question for the company since its stock began tumbling last August when Disney said that profit growth for its cable business, led by sports juggernaut ESPN, would be lower than expected.

The Wall Street Journal spoke with Mr. Staggs at his office, across a lobby from Mr. Iger’s, at Disney headquarters in Burbank, Calif. Edited excerpts follow.

The long view in Shanghai

WSJ: Are there specific tasks you have taken on as COO? How have you and Bob Iger divided responsibilities?

MR. STAGGS: It’s basically a dual-report system across all the businesses. Our approach has been somewhat fluid, making sure that separately or together we’re focusing on businesses and projects as need be and to be the most effective we can be.

WSJ: How will you measure success in Shanghai?

MR. STAGGS: We’ll really be looking forward to the initial reception, but at the same time we build these parks for generations. We won’t judge where we are a week out, a month out, or even a year or two out.

Clearly we are planting an important flag for the Disney brand in China. We want to make sure people recognize the quality of what we provide. And hopefully it will be an aspirational kind of experience for people in China the same way it has been aspirational for people here. And therefore it represents the brand in a way that is broader than just that individual park.

WSJ: To what extent are you concerned about the state of the economy in China?

MR. STAGGS: This is a very long-term proposition, so what’s going on in the economy at any given moment is not a big concern for us. We look at the trends over the long term and continue to be as bullish as we’ve ever been in terms of the number of income-qualified people, the prospect for continued growth of the middle class in China, etc.

Focus on television

WSJ: What has been taking a lot of your time outside of the parks business?

MR. STAGGS: I have spent a great deal of time on media networks recently, focusing on the future of television.

WSJ: Is TV moving toward a more direct relationship with consumers? Does that require a change of thinking?

MR. STAGGS: It’s not so much a change of thinking. For the past few years, our business has been leaning toward the brands and products consumers seek a relationship with. There is an increasing opportunity to take advantage of the strength of those brands and to reach consumers more directly.

We just mentioned on our last earnings call, however, that we think for the foreseeable future the bundle of programming is going to be the predominant way people get their television. Some people might view that as a contradiction. It’s not. That bundle can be strong even as we’re taking advantage of opportunities to have direct relationships with consumers.

WSJ: Clearly there are benefits across Disney from owning Marvel or “Star Wars” that few other companies can match. And that may be only more true in the digital world. Is the same true of ESPN, or is that more of a stand-alone business?

MR. STAGGS: One of the things this company does well is nurture and manage high-quality branded franchises. The nice thing is, quite a lot of them are highly interconnected in terms of cycling through many of our businesses.

But as a high-quality branded entertainment franchise, ESPN has real synergies with the rest of what we do and our expertise as a company.

WSJ: What are the most important synergies?

MR. STAGGS: Understanding how to manage a brand is not simple. There’s ESPN The Magazine, on television, radio and digital. Managing all of those touch points is not a simple construct, and it’s something we happen to do well.

By having that scale, we have been able to invest in a technology platform that allows us to publish across all those areas seamlessly. Also, I believe if you look forward as we increasingly establish those direct-to-consumer relationships, that expertise in consumer engagement will be a skill set that’s transferrable around our business, even if you’re not handing off an ESPN consumer to other Disney businesses.

WSJ: As you package Disney content in different ways online, do you see it all going together, or is the Marvel consumer different from the animation consumer and so on?

MR. STAGGS: We find it’s not sliced as finely as your question might imply. People tend to like Disney. They have their favorites, to be sure. Generally, if you’re a big fan of “Frozen,” that leads to a desire to engage the characters, the music and the franchise in other ways.

We want to make sure there are as few barriers to that deeper engagement as possible. That’s one of the tricks in designing the notion of what’s direct-to-consumer, what’s in movie theaters, what’s in [cable] bundles, etc.

SOURCE