DreamWorks Hires 2 Senior Disney Execs : Entertainment: Move signals studio’s entry into lucrative TV animation business and adds to upheaval in Burbank.

Signaling its entry into the lucrative television animation business, DreamWorks SKG has hired two senior executives from Walt Disney Co., adding to the management turmoil that has shaken the house of Mickey over the past year.

Gary Krisel, the president of Walt Disney Television Animation, and Bruce Cranston, the group’s vice president of development, will join DreamWorks when their contracts expire at the end of the year, according to Jeffrey Katzenberg, a partner in the new studio and former head of Disney’s film studio.

As they did at Burbank-based Disney, the two executives will produce direct-to-video animated features and television shows for the broadcast and cable networks, the syndication market and for emerging outlets such as direct-broadcast satellite.

The two men may also be the backbone of DreamWorks’ plan to enter Saturday morning cartoons. Although prime-time shows have been the focus of its production joint venture with Capital Cities/ABC Inc., DreamWorks said in June it was interested in pursuing children’s programming.

In fact, Hollywood executives say ABC is considering turning over its entire Saturday morning schedule to DreamWorks, marking the first time a studio would control network programming decisions.

ABC has denied that such an arrangement is in the works, and DreamWorks would not comment.

But industry executives expect that by 1997, DreamWorks could be filling a five-hour Saturday morning block on ABC with live-action and animated shows of its own and from outside suppliers.

“This would be unprecedented and a huge shift in the paradigm,” one television executive said.

Turning over programming to DreamWorks could help ABC secure a position in an increasingly competitive market that has largely slipped from the grasp of the traditional networks. NBC stopped airing cartoons on Saturday morning several years ago, putting news and live-action programs there instead after the entry of the Fox Children’s Television Network, which now dominates the ratings.

ABC and CBS take second and third place, respectively, although they earn half the advertising revenues they did five years ago.

A DreamWorks-ABC pairing on Saturday morning could also have harsh consequences for Fox and Warner Bros., which rely heavily on shows from Steven Spielberg, a DreamWorks partner. Spielberg is at the tail end of an agreement with Warner under which he created “Animaniacs,” the No. 2 Fox Children’s program that will move to the struggling Warner Bros. network this fall. The switch is part of the nascent network’s new emphasis: Of its 12 hours of programming this fall, eight will be children’s shows and just four will be prime-time series. Spielberg will supply about half of the children’s programs.

Krisel said he decided to move to DreamWorks after learning that his colleague Cranston had already signed with the new studio. Krisel, who had been grooming Cranston as his successor at Disney, praised his protege for an unusual blend of business and creative talents. Cranston--a Montana native, Harvard literature graduate and former singer-dancer-actor--left a job as an investment banker in 1988 to join Disney.

At Disney, the team pioneered the direct-to-video genre with “The Return of Jafar,” a sequel to “Aladdin” that earned profits of more than $150 million--more than many feature films. They also developed a novel two-hour daily syndicated program called “The Disney Afternoon,” whose future is now uncertain because many of the stations that carried it have commitments to the new WB and UPN networks.

Still, the animation division has not fulfilled its potential to be Disney Television’s biggest money maker, company executives say. It has had few direct-to-video projects since “Jafar,” and one competitor says the “Disney Afternoon” has lost its edge. A rival children’s programming executive pronounces the division “a mess.”

The television operation is still trying to regain its balance after the sudden departure last March of Richard Frank, the chairman of Walt Disney Television and Telecommunications.

Disney has suffered a series of management changes since the death in April, 1994, of the company’s president, Frank Wells, Katzenberg’s resignation last summer among them.

Sources say Krisel had a continuing and bitter rivalry with the feature film group. Having headed Disney’s network television unit before launching the animation group, he was also unhappy at having been passed over by Disney Chairman Michael Eisner for Frank’s job, which went to Dennis Hightower, an executive in the company’s consumer products division.

“Gary and Bruce are terrific executives,” said Dean Valentine, the president of network television at Disney who, in anticipation of Krisel’s widely rumored departure, assumed responsibilities last month for the animation group. “But this gives us an opportunity to create a new direction for our animation division at a time when there are critical issues to address.”

Among them: securing a new home for the “Disney Afternoon” for 1997 and beyond, and accelerating production of direct-to-video releases.

* IN LINE FOR A PROFIT?: Analysts say the quarter that ended June 30 could be the first Euro Disney makes a profit. D3