[opendtv] News: Disney Open to Basic-Cable-Network Buys
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Thu, 29 May 2008 09:19:30 -0400
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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