[opendtv] Re: News: Disney Open to Basic-Cable-Network Buys
- From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
- To: <opendtv@xxxxxxxxxxxxx>
- Date: Thu, 29 May 2008 18:06:13 -0400
I'm trying to parse this. The article seems to mix two different topics.
It looks like Disney is going after ownership of as many "content
streams" that have national coverage as it can afford. Such as ESPN,
A&E, Lifetime, and so on. And it already owns the ABC content that has
national coverage, within the limits imposed on hours of the day by the
FCC.
This quote also refers to buying up content streams with national
coverage:
"He said Disney looks at every basic-cable network that is up for sale,
'but if we were to step up [to buy], it would be with great caution. We
are fairly rigorous.'"
So much for content.
Then comes the subject of distribution media. It looks like Disney is
not trying hard to buy into that:
"There's little Disney interest in buying more TV stations to augment
ABC, given that broadcast-TV growth prospects are cloudy and its
existing 10 owned-and-operated stations are "solid," Iger said, adding
that Disney won't be a seller, either."
The question I have is, how would the picture change if (a) Disney did
not have to see the 39 percent national cap to limit their growth, and
(b) they considered clever *nationwide* use of their new OTA multicast
capacity? Wouldn't that change rather dramatically the "growth prospects
are cloudy" concern they have?
This sounds similar to the NBC "rebranding" stuff we saw recently. What
these two conglomerates are after is 24/7 content streams that achieve
national coverage. My guess is that if they could also acquire a
distrbution medium with 24/7 national coverage for some of this content,
they might show more interest.
Disney only has 10 O&Os? Wow. If they aren't interested in owning a
potential nationwide distribution OTA plant, I'll bet someone else would
be.
Bert
--------------------------------------
Craig Birkmaier posted:
Disney Open to Basic-Cable-Network Buys
Media Giant Not Interested in Seeking More Broadcast Stations for ABC
By Robert Marich -- Broadcasting & Cable, 5/28/2008 2:08:00 PM
Disney would consider consolidating its hold on basic-cable ventures
Lifetime Networks and A&E Television Networks, but it would not seek
more broadcast-TV stations, president and CEO Bob Iger told an investor
conference Wednesday hosted by researcher Sanford C. Bernstein.
He indicated on-and-off discussions to increase Disney's 50% stake in
Lifetime and 37.5% stake in A&E, although nothing is imminent.
"We've talked about it over time and seeing whether there is a way to
restructure in some fashion," he said, "and we will continue to explore
those discussions." Minimizing taxes on any transaction would be
difficult but can be structured, he added.
Disney would love to buy the remaining 20% of its profit-spinning ESPN
juggernaut that is owned by Hearst, but Iger said that stake would be
too expensive. Plus, Disney has "a great relationship" with Hearst that
makes joint ownership easy from an operational viewpoint, he added.
He said Disney looks at every basic-cable network that is up for sale,
"but if we were to step up [to buy], it would be with great caution. We
are fairly rigorous."
Any purchase price would have to meet Disney's steep goals for return on
invested capital and not strain its financial balance sheet. Also,
Disney would have to see a clear path on how its skills would
significantly grow the network, and Disney wants a focused cable brand,
as opposed to a general-entertainment basic-cable network.
Those comments did not point to any great enthusiasm for The Weather
Channel, which is currently up for auction with forecasts of a $3
billion-$5 billion purchase price. Its name did not come up.
There's little Disney interest in buying more TV stations to augment
ABC, given that broadcast-TV growth prospects are cloudy and its
existing 10 owned-and-operated stations are "solid," Iger said, adding
that Disney won't be a seller, either.
He said Disney is committed to broadcasting because it can generate
decent profits from program creation -- the affiliated business of
TV-program production that creates intellection property. "If we were
not in the studio business in this day and age, it would be pretty
challenging" being in the broadcast-network business, he added.
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