Media News

Disney says business resilient despite economy

LONDON (Reuters) - Walt Disney Co’s business is proving resilient in the face of tough economic conditions although the crisis is not over yet, Chief Executive Robert Iger said on Wednesday.

Passers-by walk in front of the World of Disney store in New York January 19, 2006. REUTERS/Keith Bedford

“Our business has been quite resilient,” Iger told journalists at a meeting ahead of the London premiere of the film “Camp Rock”. “Global theme parks have held up extremely well.”

Iger said the media conglomerate had been helped “immeasurably” by its businesses outside the United States, and also by the relative weakness of the U.S. dollar, which had attracted international visitors to its U.S. theme parks.

Disney, whose businesses span movies, theme parks and resorts, merchandise and broadcast networks, made almost a quarter of its $35.5 billion revenues outside north America last fiscal year.

Iger said Walt Disney World Resort in Florida had been particularly popular. Disney World helped Disney’s theme parks division achieve a 5 percent increase in revenue and 3 percent increase in operating profit last quarter.

But he cautioned: “As we go into ‘09 we believe that the challenges we faced in ‘08 will still exist, and as we manage the company we’re managing it with that in mind.”

Iger said Disney’s international expansion strategy would be rooted in fostering creative talent in foreign markets and allowing local executives to develop the company’s brand and products in ways suited to their own particular market.

“From a cultural perspective, we don’t believe that the world is flat,” he said. “Disney executives on the ground are creative, not just distribution executives.”

He declined to comment on particular countries that might be attractive new markets for Disney, which is active around the world including India, China and Russia.

“The best way for us to grow in these markets ... is for those markets to have a sense of ownership,” he said.

Asked whether Disney would consider buying struggling British commercial broadcaster ITV, Iger said he did not want to comment on specific companies but said Disney continued to look at opportunities in Britain.

“We like companies that fit well within the ESPN and the Disney brands, companies with a foot in new technology, companies that are likely to grow because they are part of the Disney company,” he said.

ESPN is Disney’s global network of sports broadcasters.

“That’s not to suggest that everything we kiss becomes a prince,” he said, adding that Disney preferred companies with “solid management, a solid growth profile of their own.”

In terms of organic growth, Iger said video games were Disney’s top investment priority. “We continue to invest pretty mightily in games,” he said, adding that investment for the fiscal year to end-September would be $250-$300 million.

Sales and profits for Disney’s self-published video games fell last quarter, partly due to difficult comparisons with a strong quarter a year earlier.

Reporting by Georgina Prodhan; Editing by Paul Bolding