New Disney CEO Josh D’Amaro’s first week on the job has been anything but smooth-sailing as two separate billion-dollar tech deals abruptly crumbled and ABC cancelled reality star Taylor Frankie Paul’s season of “The Bachelorette” amid domestic violence allegations.
Shares in Disney dipped 0.7% Wednesday morning on news a three-year partnership with OpenAI – including a $1 billion investment from Disney – was dissolving after the tech firm announced it was shuttering its Sora video generator just months after its launch.
Disney’s $1.5 billion investment in Epic Games – which was led by D’Amaro, who previously ran the Mouse House’s theme parks, consumer products and games – faced uncertainty as the video game maker axed 1,000 jobs this week after its new Fortnite games flopped with fans.
“Josh got picked [as CEO] on Epic Games and on AI and technology and ‘risk taking’ — which is pretty funny since he has never taken a career risk in his life after 23 years working his way up step by step in parks and resorts,” a former Disney exec told The Post on Wednesday.
“OpenAI and Epic Games are supposedly key to Disney’s future — unless they aren’t — so what is the future?” the source added.
As for what D’Amaro can do to right the ship, the ex-exec said he could “shape and articulate an actual plan besides vague platitudes.”
Disney did not immediately answer a request for comment.
D’Amaro had looked to tech and gaming to bolster Disney, which is facing hurdles such as declining cable viewership. His mandate includes reviving lackluster Marvel and “Star Wars” movie franchises and growing the company’s parks and cruise offerings without pricing out customers.
Adding to D’Amaro’s woes is a financial and PR black eye over the Disney-owned ABC reality show “The Bachelorette.” The network last week pulled the plug on “The Bachelorette” after video surfaced of Paul, known for “The Secret Lives of Mormon Wives,” hurling chairs at her partner Dakota Mortensen – one of which appeared to hit her 5-year-old daughter, according to a clip obtained by TMZ.
ABC licenses the show from producer Warner Bros. and could owe the studio anywhere between $50 and 70 million if the program doesn’t air, according to experts.
All in all, it has been a rough transition for D’Amaro, who took over from longtime chief Bob Iger last Wednesday with a vision to create a Disney that’s more connected with fans through emerging technologies.
D’Amaro laid out a plan to take Disney+ beyond just fan-favorite films and TV shows, adding games and experiences to the streaming service.
The Sora partnership – which was the first between a Hollywood studio and an AI firm – was one step in that direction, with plans to add user-generated AI videos of Disney characters from beloved franchises like “Star Wars” and Marvel directly into Disney+.
“Disney will likely be hurt the most by OpenAI’s shuttering of Sora,” Bloomberg Intelligence analyst Geetha Ranganathan wrote in a note this week.
“We expect Disney to find a new partner as it looks for ways to boost franchise monetization among younger audiences while also creating a pipeline for future franchise development.”
Google and smaller AI companies like Runway AI and Pika AI are working on similar products to Sora – an app with a TikTok-style feed that launched last September and allowed users to share AI-generated videos.
Disney said in a statement the AI sector is constantly changing, but pledged to “continue to engage with AI platforms to find new ways to meet fans.”
OpenAI’s move to scrap Sora comes as the company is trying to streamline its offerings ahead of a potential IPO later this year, as CEO Sam Altman urges a focus on business and coding functions.
The Epic Games partnership was a similar push from D’Amaro – who joined Epic’s board as part of the deal – to move the Disney brand into a new era.
It included the creation of a brand-new Disney universe with original characters and storylines for the video game maker’s use – as well as illustrations of an online Fortnite game world that looked like a Disney theme park.
Epic founder and CEO Tim Sweeney said in a memo Tuesday that declining Fortnite engagement forced the company to spend more than it was bringing in – adding that $500 million in cost cuts should set up the firm for “huge launch plans toward the end of the year.”
He did not address whether the layoffs and cost-cutting plans would impact the Disney partnership.
And the fate of two of the most-popular reality franchises on Disney’s ABC and Hulu – “The Bachelorette” and “The Secret Lives of Mormon Wives” – appears unclear after the network abruptly scrapped its new season with Paul over an alleged domestic violence incident.
Paul pleaded guilty to felony aggravated assault in connection to the incident, which took place in 2023. The first episode of Hulu’s “The Secret Lives of Mormon Wives” opened with her getting arrested via police bodycam footage.
The incident became harder for ABC to ignore after TMZ obtained footage of Paul hurling chairs at Mortensen, in which Paul’s daughter can be heard crying and Mortensen says, “Your daughter just got hit in the head with a metal chair.”
A separate open domestic violence investigation into Paul and Mortensen, with allegations on both sites, was called in last month, and officials are reportedly investigating allegations of a third domestic violence incident involving the on-again, off-again couple.
