DISNEY SHAKE-UP UNLIKELY TO GIVE A BOOST TO STOCK INVESTORS WILL WAIT FOR RESULTS.

Byline: GREG HERNANDEZ Staff Writer

BURBANK -- Despite the announcement that its movie division is eliminating 650 jobs, shares of The Walt Disney Co. stock rose only slightly on the New York Stock Exchange on Wednesday.

Disney is preparing to begin speaking to individual employees about their future next week. Half of the across-the-board cuts are expected to come from international film operations, while the other half will affect U.S. employees.

Departments expected to be downsized include home entertainment, theatrical marketing and distribution.

But several Wall Street analysts said Wednesday that they don't expect the stock price to jump significantly until there are some results from the massive job cuts, as well as an executive shake-up that includes the ouster of Production President Nina Jacobson, who is being replaced by Oren Aviv, formerly head of marketing at the studio.

``I'm not sure it does anything else but cut costs,'' said entertainment analyst Dennis McAlpine of McAlpine and Associates. ``The real question is whether the new guy can make successful live-action movies. (Jacobson) obviously did well with `Pirates of the Caribbean' this year, but after that, you can drop your voice.''

In a note to investors, Prudential analyst Katherine Styponias wrote: ``We concede that investors are not likely to reward a new film strategy with a higher growth rate until there is some evidence that it has having a positive and significant impact on the results.''

Disney stock closed at $29.16 per share Wednesday, up 16 cents from the previous day. The studio has not seen much of a boost in recent weeks despite the box office success of ``Pirates of the Caribbean: Dead Man's Chest,'' which has grossed $273.8 million domestically in just its first 12 days in theaters and seems assured to reach the rarified air of $400 million-plus.

``They didn't get a whole lot from `Pirates' doing well,'' McAlpine said. ``They set a new record in the opening weekend and nobody cared on Wall Street. If it had done badly, the stock would have gone down, but it did super and nobody cared.''

In an interview Wednesday, Aviv described himself as ``incredibly flattered'' to be asked by Disney Studios head Dick Cook to take the job of president of production.

``I can't wait to get started,'' he said. ``I hope it's fun, I expect it to be. My last job was fun, too. The studio is all about ideas -- marketing and movie ideas.''

Under Jacobson's tenure as production head, she shepherded such live- action hits as the two ``Pirates'' movies, ``The Chronicles of Narnia: The Lion, The Witch and the Wardrobe,'' ``The Princess Diaries,'' ``Remember the Titans,'' ``The Sixth Sense,'' ``Signs,'' ``Sweet Home Alabama'' and ``Bringing Down the House.''

But the flops included such costly titles as ``The Alamo'' and ``King Arthur'' as well as ``Cassandra,'' ``Annapolis,'' ``Stick It'' and ``A Lot Like Love.'' This year's ``Eight Below'' was a solid hit, but ``Glory Road'' and the remake of ``The Shaggy Dog'' earned just middling numbers.

``The studio is undergoing a major reorganization, and there simply isn't room for everyone in the new structure,'' Jacobson said in a statement.

Cook announced this week that the studio's Touchstone Pictures arm, responsible for more of its edgier fare, will reduce its annual output to three films or so while Disney Pictures-branded films will be reduced to about 10 a year. The studio had been releasing a slate of about 18 films per year.

``We aren't really focusing on the number of movies,'' Aviv said Wednesday. ``We are focusing on the best movies with broad appeal.''

Box office analyst Brandon Gray, president of Box Office Mojo, said Disney remains a strong studio, despite its ups and downs after a ``smashing'' 2003. ``With the paring down to have a more efficient slate, they seem to be diminishing the role of Touchstone Pictures, where it seems that most of their mixed results are coming from,'' Gray said. ``It makes a lot of sense to focus on the core Disney brand.''

Jacobson, who has two years remaining on her current contract, was offered a production deal by Cook, but she declined. She learned she was losing her job the same day her partner gave birth to their third child, a son. Jacobson was one of the highest-level openly gay executives in the movie industry.

``The timing was not intentional and Dick did not want to tell her on the phone on that day,'' a source close to Jacobson said. ``She does not want him painted as a bad guy.''

``I love the company and it has been a great honor to be part of building the Walt Disney brand,'' Jacobson said in her statement.

``I've had the opportunity to work on films that I love, with filmmakers I admire and colleagues I adore. I'm sorry to go but I am proud of what I've left behind, a vibrant movie studio with major franchises and thriving relationships with some of the most talented filmmakers in the world.''

greg.hernandez(at)dailynews.com

[phone]

CAPTION(S):

photo

Photo:

(color) JACOBSON