Disney keeps ABC options open, including spin-off
LOS ANGELES (Reuters) - Walt Disney Co's Chief Executive Bob Iger said on Wednesday that the top U.S. media company was keeping its options open for dealing with TV network ABC and its struggling news division, including a spin-off.
At Disney's shareholders' meeting, Iger noted that ABC News, which cut 300 to 400 jobs as part of a drive to refocus and recapture viewers lost to the Internet, is in a business undergoing significant challenges because of changes in the way people access and consume news.
Asked by a shareholder if Disney intended to spin off ABC, Iger said he was comfortable with the current mix of assets but added that the company was always reviewing the longer-term options for all its businesses.
"There are no guarantees in terms of what will remain part of our company and what will not," he said.
Speculation has surfaced from time to time in the media and among analysts that ABC might be split from Disney. But Alan Gould, an analyst with Soleil Research, does not believe Iger was signaling any developments in the works.
"Iger was just making sure he was not locking himself into a position by saying he'd never sell ABC News. He was keeping all of his options open," Gould said.
Sanford C Bernstein analyst Michael Nathanson said such speculation resurfaces periodically, on the argument that ABC does not fit in well with Disney's focus on exploiting its content and theme park properties across all divisions.
"ABC doesn't add a lot of value to Disney's other divisions," he said. But he did not expect Disney to spin off ABC, particularly in light of its recent squabble with Cablevision Systems Corp over fees to transmit its programing.
Media conglomerates have pressured cable distributors for fees for transmitting their content, a much-needed new source of revenue.
The ABC-Cablevision dispute followed a bitter battle last year over retransmission fees between Time Warner Cable Inc and News Corp. Time Warner Cable plans to renegotiate fees with Disney in August.
"I'd wait to see how all these retransmission negotiations would go to see if the value of these assets would improve. I would not exit (from ABC) right now," said Nathanson.
ONE PASS TO RULE THEM ALL
At its annual meeting in San Antonio, Texas, Disney also unveiled a $700 single annual pass to both Disneyland in Anaheim, California, and Walt Disney World Resort in Florida.
The pass was created as a special option for some of its most ardent fans who shuttle between the two resorts.
Disney generated $36 billion in revenue in its most recent fiscal year and owns media properties including the Walt Disney Pictures movie studio, ABC Television Networks and cable sports network ESPN, plus part of online video website Hulu.
Last month, Disney reported better-than-expected earnings on the back of a strong performance at its cable division and cost cuts at its film studio, but signaled that its theme parks division remained under pressure, with room reservations at its parks for the second quarter down 10 percent from a year before.
Noting that 2009 had been challenging, Iger said the company had put in place various strategic measures. He cited its newly restructured film division's success with the recently released "Alice in Wonderland" and drew applause when he unveiled previews of its upcoming "Toy Story 3" and "Tron Legacy."
Shareholders at the meeting elected Sheryl Sandberg, chief operating officer of Facebook, and reelected the 12 other nominees to its board, expanding its size to 13.
The move to tap Sandberg reflects Disney's aggressive push into the younger, popular world of online social networks, which was a key part of its successful marketing of "Alice."
Sandberg's experience at Facebook, which has more than tripled in size during the past 16 months to more than 350 million users, will provide Disney with helpful insight from one of the Internet's fastest-growing companies in a way that is more cost-efficient than acquiring a company.
Shareholders voted against a proposal on executive pay that had asked for a nonbinding, advisory vote on the pay packages of top Disney executives. The "say on pay" initiative was voted down in the previous year's annual meeting. Disney was one of many companies facing such a proposal.