|
Disney taps new No. 2
|
 |
January 24, 2000: 7:09 p.m. ET
Iger of ABC named president; 1Q preliminary earnings beat estimates
|
NEW YORK (CNNfn) - Walt Disney Co. named ABC network chief Robert Iger to its No. 2 job Monday, tapping an heir apparent to CEO Michael Eisner and settling long-running succession questions at the entertainment conglomerate.
Iger, 48, was named president and chief operating officer, as well as a member of Disney's board of directors.
The position of president has been vacant since Michael Ovitz left the company under a storm of controversy in 1996, after working at Disney for roughly a year. Last week, Disney studio chief Joe Roth - who had been considered a leading candidate for the job - quit to start his own film company.
Also Monday, Disney reported preliminary first-quarter earnings that soared past Wall Street's estimates. The company credited a strong advertising market for its broadcast networks, the success of ABC's primetime game show "Who Wants to Be a Millionaire," improved ratings for "Good Morning America" and the film "Toy Story 2."
Burbank, Calif.-based Disney posted preliminary profit of $515 million, or 25 cents per diluted share, excluding losses related to Disney's Internet business, Go.com. The results beat the First Call consensus estimate by 5 cents per share.
Revenue rose 5 percent to $6.8 billion.
Official results, including results at Go.com, will be released in February. Disney is still completing the initial purchase accounting for its November 1999 acquisition of Internet search engine Infoseek.
The news was released after Monday's market close; in after-hours trading, Disney stock gained 9/16 to 33-5/16.
Management restructuring
As head of ABC, Iger oversees the company's broadcast operations. He was named president of Disney's international operations last year and charged with boosting profits overseas.
"Bob Iger is recognized as a leader in the communications and entertainment industries," Eisner said. "I believe his experience and expertise will prove instrumental in helping to guide our company to seize new opportunities."
Finding someone to fill the president's job has been an issue for Disney for years. In 1994, Eisner's longtime friend and second-in-command, Frank Wells, was killed in a helicopter accident. Wells was widely credited with handling the day-to-day operations of the company.
Eisner, 57, has been at the helm of Disney since 1984 and is under contract until 2006.
The appointment of Iger, which had been expected after published reports last week speculated on his possible promotion, was accompanied by the appointment of an executive management committee made up of Disney's top executives.
The management committee will be made up of Eisner, Iger, Vice Chairman Sanford Litvack, Chief Strategic Officer Peter Murphy and Thomas Staggs, Disney's chief financial officer and the heads of Disney's various business units.
Iger, who has worked for ABC since 1974, was named president and chief operating officer and a board member of Capital Cities/ABC in 1994. At the time of ABC's merger with Disney, he was designated the network's next CEO.
Iger is married to CNN "Moneyline" anchor Willow Bay.
Better-than-expected results
Disney cited growth at its broadcasting, cable and theme park assets for its better-than-expected first quarter. Operating income rose 8 percent to $1.1 billion.
The media networks unit posted a 19 percent increase in revenues, to $2.7 billion.
The results were largely powered by the strong advertising market, which "was far stronger than anyone -- including ourselves -- had anticipated." Staggs, the chief financial officer, told analysts during a conference call.
Theme park revenues rose 9 percent to $1.6 billion.
But studio entertainment revenues fell 10 percent to $1.6 billion, dragged down by weaker home video sales and box office disappointments "The Insider" and "Bicentennial Man."
Revenues from consumer products fell 6 percent to $903 million amid declines in merchandise licensing in the U.S. and abroad.
During the quarter, Disney closed the sale of the magazine unit Fairchild Publications, publisher of Women's Wear Daily and Jane to Advance Publications Inc., the parent of magazine publisher Conde Nast. The unit was acquired through the 1996 purchase of ABC.
Disney also announced Monday it would sell Los Angeles Magazine to EMMIS Communications Corp.
In the conference call with analysts, Eisner said the company had no plans to change its strategy in the wake of America Online's (AOL) $182 billion merger with rival Time Warner Inc. (TWX), the parent company of CNNfn.
"We don't feel the need for anything, but being
independent. We think the Disney brand demands independence," Eisner said. "We feel that we are big enough that we can be independent and can participate in the marketplace."
Eisner said he was "more concerned" about Monday's joint venture between Time Warner's music unit and Britain's EMI Group PLC, creating one of the world's leading recording companies.
If allowed to go through as planned, "the music publishing world would be completely dominated by one company," Eisner said.
Disney operates a relatively small music business of its own.
-- from staff and wire reports 
|
|
|
|
|
 |
|
