* Disney open to options on ABC
* Disney elects Facebook COO Sheryl Sandberg to board
(Adds analyst's comment, details on TV dispute)
By Sue Zeidler
LOS ANGELES, March 10 Walt Disney Co's (DIS.N)
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
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 CVC.N over fees to transmit its
Media conglomerates have pressured cable distributors for
fees for transmitting their content, a much-needed new source
The ABC-Cablevision dispute followed a bitter battle last
year over retransmission fees between Time Warner Cable Inc
TWC.N and News Corp (NWSA.O). 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
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
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.
(Additional reporting by Alex Dobuzinskis, editing by Gerald
E. McCormick and Edwin Chan)