Since last summer, media-giant Walt Disney (DIS 0.16%) has been looking for a chief legal officer (CLO). The House of Mouse had its choice of top legal minds to replace longtime CLO Alan Braverman, and the final choice speaks volumes about Disney's forward-looking business strategy. Disney's new CLO is coming from a five-year stint running the legal department of media-streaming specialist Spotify Technology.
Disney is leaning heavily into the digital-media space. Incoming CLO Horacio Gutierrez has decades of experience in the exact type of law duties that apply to an all-digital media future.
Image source: Getty Images.
Another big bet on digital media
Gutierrez "has an extensive understanding of the complex legal questions that come with technological disruption and rapid industry change," said Disney CEO Bob Chapek.
That's a great description of the entertainment industry in 2021. Longtime media giants are falling by the wayside as decades-old traditions and standard business practices run into a chainsaw of disruption. Streaming services are killing cable TV, movie theaters, and radio stations, just to name a few victims of this massive sea change.
Spotify has played a key part in the streaming revolution for many years. Gutierrez's experience overseeing its affairs in the realms of copyright, intellectual property, contract, and regulatory issues should provide invaluable experience as he navigates Disney through the same murky waters.
The entertainment industry, as a whole, is being dragged in this direction, kicking and screaming for the most part. But Disney's taking a proactive approach. It reorganized its business structure and budget flows amid the darkest days of the coronavirus crisis, taking resources away from its old-school movie and TV content arms in order to give its media-streaming channels an advantage.
The Disney+, Hulu, and ESPN+ services are clearly at the top of Disney's priority list these days. Mr. Braverman is a deeply experienced media lawyer in his own right, but Gutierrez is still an upgrade in the increasingly important field of digital-content rights.
Digital courtroom challenges
You might recall some of Disney's recent legal issues, often triggered by the industry's rotation into digital media.
- Avengers superstar Scarlett Johansson filed a lawsuit as the same-day Disney+ premiere of her Black Widow title allegedly undermined the contractual value of box-office receipts. The actress settled her legal differences with Disney out of court, but the headline-sparking battle may have changed how Disney crafts its talent contracts forever.
- The estates of many prominent comic-book artists are claiming that the rights to popular Marvel characters should revert to them, 60 years after their original creation. If successful, this suit could erase Disney's ownership of popular characters such as Spider-man, Hawkeye, and Iron Man.
- Disney and lots of other content creators recently agreed to stop their tracking of user data in mobile apps and games targeted at children. While not directly related to media-streaming technologies, this court order makes it more difficult to create targeted ad campaigns for kid-oriented products and services.
Having a top-shelf digital-media veteran on hand to tackle these issues should come in handy over the next couple of decades. Disney is transforming into a digital-media powerhouse before our eyes, and snagging Spotify's top lawyer is another meaningful step in that direction.
As a longtime Disney shareholder myself, I appreciate how this company is embracing the digital-media revolution. The stock also looks affordable after an earnings-related correction in November. This dip looks like a robust opportunity to buy Disney stock and grab a piece of Walt Disney's unbeatable branding power and long-term-minded business strategy.
