DC Entertainment: Too Many Chefs in the Kitchen?

Last week we discussed DC Entertainment's decision to shutter WildStorm, and offered up some conjecture on why WildStorm was deemed dispensable while Vertigo survived as a standalone entity. Just seven days later, more details have come forth about the ongoing restructuring efforts.

  • After denying claims of 20% layoffs, DC quietly filed documents in New York detailing UP TO the loss of 80 NY-based jobs. Now to clarify, this includes any employees that have been asked to relocate to the West Coast, so we really have no reason to doubt the company's initial denial of the 20% number. Either way, transitioning 80 of approximately 250 employees is transformative by any measure.
  • Among those layoffs include a number of well regarded Vertigo editors
  • Bob Harras has been promoted to Editor-in-Chief, after serving as a Group Editor of Collected Editions for the last few years. 
Bob Harras older pic from Marvel daysThe Bob Harras news is interesting on a number of levels, not the least of which is the fact he served in the same role at Marvel during the most tumultuous period in the company's history. As far as I can tell, Harras now becomes the only person to serve as EIC at both comic behemoths. While the ink isn't yet dry on his new contract, it's safe to say that his responsibilities and mandate will be much different than they were as the House of Ideas' top dog. Harras will answer to Co-Publishers Jim Lee and Dan DiDio, and he'll also have to work collaboratively with Geoff Johns — the Chief Creative Officer for DC Entertainment (spanning not just comics but all creative media).
The Harras promotion brought up the issue of management structure. In my "day job" as a portfolio manager, I have to spend a lot of time getting to understand the strengths and weaknesses of the companies we're analyzing. When we're doing a deep dive, meaning rolling up our sleeves and really taking a hard look at a prospective investment, we spend a not insignificant amount of time assessing management and business process. 
What do I mean by management structure?
If you've ever worked for a company with more than a handful of employees, you understand that I'm talking about a corporate hierarchy. You've got the owner/CEO, who is typically flanked by a handful of senior officers (usually that will include a Chief Financial Officer/Controller, legal counsel, a head of sales, a head of marketing, and other company-specific roles). As the company grows in size and complexity, so too do the layers of management structure. This isn't always the case, but it frequently evolves that way.
Without boring you with the science of structure, there are lots of ways a company can be run. You can have a flat management structure, where the heads of the company effectively oversee all aspects of the business and there are few if any layers of management between employees and the owner/CEO. iFanboy (and many other small companies/startups) would fit into that model. You can have a hierarchical structure where each segment of the business is run in a siloed fashion with a formal reporting structure. For example, all the accountants answer to the controller who answers to the VP of Finance who answers to the CEO. You can then have divisional/departmental structure where different businesses are run quasi-holistically under a larger corporate umbrella. And finally you have what some call matrix structures, where companies have tried to combine the best practices of the other types.
Time Warner most closely resembles a divisional structure.  Time Warner is divided into five distinct businesses: Home Box Office, Turner Broadcasting System, Time Inc., Warner Brothers Entertainment, and the Global Media Group. Each of these divisions has its own senior management team that runs largely autonomous businesses. DC Entertainment is a subsidiary of Warner Brothers. 
Here's an org chart I mocked up to illustrate the layers of management that are now involved in DC Entertainment's fortunes:

DC Entertainment Org Chart

There's nothing inherently wrong with this kind of structure. You'll find a similar looking organization chart in tons of companies, large and small. But what does have me curious (if not concerned) is the ratio of senior managers (i.e., the chefs) to employees (i.e., the line cooks). DC Entertainment now has the attention of the very highest rungs of the Time Warner ladder. Time Warner (in total) is a $34 billion publicly traded company with tens of thousands of employees. You can understand the need for a lot of management layers in such a massive organization. But DC Entertainment had roughly 250 employees BEFORE the layoffs/relocations. And yet we've got all these people in the above org chart involved in shaping the direction of the company. This is to say nothing of people like Karen Berger (who now answers to Bob Harras) or her equivalents in the other parts of the DC Universe.

As a comic book reader, your hope is that this corporate restructuring has no discernible impact on the end product you enjoy each Wednesday. And that MAY be the case. We have to remember that DC Comics has been a subsidiary of Time Warner for a long time, so it's not necessarily a seismic change in the way things have been done. BUT, this feels like it is more than shuffling the deck chairs to me. When Barry Meyer is citing the importance of the DC characters in Time Warner's future, you know things aren't the way they used to be. Let's not forget Meyer's quote from two weeks ago:

Meyer said Warner Bros. has been looking after DC in a "custodial way," but it's now time to get "much more entrepreneurial."

All I know is that Harry Potter, a multi-BILLION profit engine for Warner Brothers over the last decade, is waning as the final film sets for release. Diane Nelson was the star executive who oversaw that relationship and she's now been given the keys to the DC kingdom in an effort to generate a new profit engine for the media empire. This is now a MUCH bigger business than the weekly issues and collected editions we buy each week at our local comic shops. Maybe, just maybe, this will mean bigger and better things for the publishing business. But either way, changes are most definitely afoot and the natural push/pull of so many decision makers has me cautious about what's ahead. 

Disclosure: I have no position (long or short) in Time Warner stock or any derivative investment (in case anyone cared to ask).

Jason is a mutant with the ability to squeeze 36 hours into every 24-hour day, which is why he was able to convince his wife he had time to join the iFanboy team on top of running his business, raising his three sons, and most importantly, co-hosting the 11 O'Clock Comics podcast with his buddies Vince B, Chris Neseman and David Price. If you are one of the twelve people on Earth who want to read about comics, the stock market and football in rapid fire succession, you can follow him on Twitter.


  1. I hadn’t imagined Johns being an equal to DiDio and Lee.  I had somehow pictured him below them in the corporate structure.  All in all this seems to me for Time Warner to leverage their relatively dormant licenses against what Marvel/Disney have been doing, primarily in movies and the subsequent licensing.  This is very reactionary.  Seems almost typical of Time-Warner.

  2. I am not a business expert.  But if we look at a low-profit company like Vertigo is it conceivable that DC, which presumably controls the rights to all Vertigo characters, would simply dissolve the entity (or sell it) and then license the characters to either other companies or a new independent Vertigo entity? This way, they have absolutely no up-front costs for editing, writing, art, etc.  All they do is sit back and watch the profits roll in from every character they lease out.  Of course this would effectively end the creative side of things – but they could allay that by simply buying up profitable books/characters from smaller publishers.  I guess what I’m trying to say (quite inarticulately) is can you conceive of a future where DC just becomes a clearing house for traded comic properties instead of a publisher?  Because (as a layman) I’m starting to feel like this is the direction they’re starting to move in.  Please dispel/destroy my fears.  And sorry for the negativity.  I have been in Egypt for 4 months without comics.  Its starting to wear on me.

  3. I used the "Too many cooks in the kitchen" idiom in class today.  Sounds like the Law of Diminishing Marginal Returns is rearing its ugly head again.

    I’m going to be (very) optimistic and hope this will strengthen the publishing business. 

  4. In case anyone’s wondering, Alan Horn is off and to the right because it’s been announced (last week) that he will be retiring and moving to a consulting role in short order.

  5. I just hope the need to stripmine existing properties for both companies (Marvel & DC) doesn’t result in a drop-off in quality of the books and thier focus. It’s a business and it makes sense to exploit those characters, but it could also alienate the crowd that the Big Two think they’re catering to.

  6. For their financial sake, that Green Lantern film better be great. But hiring the writer of the superlame No Ordinary Family TV show is not a good sign.

  7. But I don’t see Roger Sterling’s name anywhere on there.

  8. Interesting Jason, But I’m not sure this is much different than what the corporate structure is at Marvel. 


  9. Well, for one thing, Marvel has only one publisher (Dan Buckley) and Joe Quesada is both EIC and Cheif Creative Officer.

  10. Out of curiosity… are there any other aspects of the Warner Brothers entity that have had any form of downsizing?  I know we keep focusing on our beloved comics, but is there any other layoffs in different WBs divisions?


     the Tiki 

  11. Thanks John.

    Re: whether it’s different at Marvel, structurally it actually is quite different although Marvel is in and of itself not without a hierarchy. What’s interesting from that perspective though is that Marvel was acquired by Disney BECAUSE of their process expertise, they bought Marvel and Disney’s CEO said that Marvel had a lot they could teach Disney. I certainly wouldn’t have been shocked had Disney gotten itchy to make major changes at the House of Ideas, but in their case…so far, so good. It’s the whole "if it aint broke don’t fix it thing."

    At Time Warner, there are things that need fixing. Namely fighting a changing media market, and a lagging advertising opportunity at the same time their major money maker on the entertainment side (Harry Potter) going by the wayside.

    The analogy would be Disney wanted to marry Marvel for who they were, whereas I fear the Time Warner higher ups are looking at DC for what they might be able to turn them into. It could TOTALLY work out for the best, and I hope it does considering how much I enjoy DC comics. But I would be remiss to not point out what I think, at least on the surface, looks like a very top heavy org chart right now. 

  12. True Josh, but until we know what Harras is doing beyond keeping the trains running on time, I don’t see this as being that different.

    I think a guy like Alan Fine is = to Diane Nelson, and  while I don’t have their names handy I know Marvel’s financial guy and New media Veep are equal to Rood and Caldon. 

    I think DC has been pretty specific in saying how Jim Lee’s publisher role is different than DiDio’s, and I know that despite Joe’s EIC title,  guys like Alonso and Breevort have tight reigns on their lines of books. I know that some creators report to specific editors, without any direct involvement from JQ. 


  13. "The analogy would be Disney wanted to marry Marvel for who they were, whereas I fear the Time Warner higher ups are looking at DC for what they might be able to turn them into. It could TOTALLY work out for the best, and I hope it does considering how much I enjoy DC comics. But I would be remiss to not point out what I think, at least on the surface, looks like a very top heavy org chart right now."

    I agree with the difference of expectation  you point out Jason, but I just think it seems more top heavy at DC, because these names have all been spelled out for us, while I am reasonbly certain that marvel has about the same amount of mgrs, when you include the film , digital , toy, TV, and Marketing concerns along with the books themselves.  


  14. @tiki

    Most media companies have effected layoffs and restructuring over the last 24 months, and Time Warner has been VERY busy in that department including spinning out AOL and also spinning off Time Warner Cable into a separate entity.  

  15. @john…there’s no question that the Marvel org chart is also structural. But there are substantive differences between developing that way organically and reshaping it to look like the way you think it should look, particularly when the CEO comes right out and says the DC has been left to its own devices for a long time and that’s not going to be the case anymore. The GREAT news is that by all accounts Diane Nelson is a KICK ASS mover and shaker and they rolled her off their last big moneymaker into this business. 

  16. Thanks Wood.  I just did some homework on the subject and I’ve seen how busy Time Warner has been in "restructuring" all aspects of their empire.


    the Tiki 

  17. Sooooo who do I send hatemal to about Magog?

  18. Hopefully the editoral lay-offs at Veritgo are not a picture of other potential things to come, I’ve really grown fond of the Vertigo line

  19.  I think there is so much that is wrong at DC anyway. And seriously I am not a hater, i’ve jsut been disappointed by DC so many times over the last 5 years that my interest in their titles has dwindled to: Batman becasue of Morrison and Action Comics because of Cornell and god help me but I’ll give Earth One a try.

    The problem with Harras, and admittedly it may just be a question of optics, is that it is so backwards looking and on top of Lee, DiDio and Johns there is no  fresh blood.

    And don’t get me started ontrying to understand why they promoted Lee and DiDio in the first place.

    Ok, I will start

    DiDio’s failures – Flash relaunch post infinite Crisis, Black Canary/Green Arrow, JLA relaunch, Titans, teen Titans, Outsiders to Batman and the Outsiders back to Outsiders, Wonder Woman relaunch, World of New Krypton (started off so promising), Countdown, Rise of Arsenal.

    I’ll give him propos for Jonah Hex, Blue Beetle, 52, and to a lesser extent Wednesday Comics




  20. @Bluestreak:

    Party of DC’s plans moving forward may be to reduce how much they cater to fans like you (and me for that matter, I love Morrison on Batman and im eagerly awaiting a trade of Cornell’s Action Comics work).

    Although I think I’m going to have to agree with you about Outsiders being a failure, not only is it not a very good book but its also completely unlike the Outsiders who appear in the popular Batman: the Brave and the Bold cartoon. I thought DC’s was trying to make its properties inline across all their different media

  21. I love Wood. 🙂

  22. squeeze them funny little books for every-penny and yes destroy them in the process. For all of us how have worked in large corpor-ass situations and have watched the army of executives monitoring their portfolios day-in-day-out and when approached providing the same answers as their boss gave them so many years ago…don’t rock the boat and get bob back in here….and yes i will go postal if those fuckwits mess with Vertigo.