Add ABC to the list of broadcasters looking to get their share of retransmission consent dollars, as Walt Disney Co. CEO Bob Iger told investors the network is “intent on getting paid...fair market prices” from cable and satellite TV carriers.
Speaking on Disney’s FY Q4 earnings call Thursday afternoon, Iger said that while ABC has enjoyed “a good relationship with multichannel providers [who’ve] paid us well,” he would continue to keep an ear cocked to the evolving retrans debate. “We’re keeping close watch and fully expect to participate in the trend however it goes,” he said.
Disney’s media networks showed improvement in the three-month period ended Sept. 30, as cable’s operating income grew 19 percent to $1.48 billion, on revenues of $3.34 billion, up 14 percent from a year ago.
The cable group was led by ESPN, which posted higher affiliate revenue. Programming costs and a drop in ad sales revenue partially offset the affiliate gains. While ESPN did command higher pricing in the quarter, overall volume was down as unit sales dropped. (Disney pegged ESPN’s ad dollars as being down 3 percent in the quarter, beating analysts’ projections of a 7 percent drop.)
That said, Iger assured investors that ESPN was starting to see an uptick in ad sales activity in the current quarter, as the automotive and financial services categories have begun bouncing back. Movies and retail also have been active.
For the full fiscal year, the cable nets saw operating income rise 3 percent to $4.26 billion, on a 5 percent increase in revenue ($10.6 billion).
Meanwhile, Disney’s broadcasting unit swung to a profit of $2 million on syndication of Grey’s Anatomy and According to Jim. A year ago, ABC took a loss of $71 million.
Broadcast revenue increased 14 percent to $1.39 billion. For the year, ABC’s operating income fell 40 percent to $505 million, on a decline in ad sales dollars and elevated programming costs.
All told, Disney’s TV business saw profit climb 26 percent in the quarter, to $1.49 billion, on a 14 percent revenue gain. On the year, TV profit fell 4 percent to $4.77 billion, on a 2 percent hike in revenue ($16.2 billion).
Disney did not offer guidance for the new fiscal year, but Iger told analysts the company’s prospects for growth in 2010 hinge on a recovery in the advertising marketplace. Iger cautioned that visibility remains limited, and while scatter pricing at the cable and broadcast nets is up 20 percent over upfront rates, this didn’t necessarily foretell a continued upswing next year.
“While there are some signs of recovery, the environment remains challenging,” Iger said. “We’re managing accordingly.”
Earlier today, Iger flipped the script, announcing that Tom Staggs and Jay Rasulo would swap job titles. Staggs, who had served as senior executive vp and chief financial officer, is now chairman of Disney’s parks and resorts unit, and Rasulo has assumed Staggs’ former duties.
In after-hours trading Thursday, shares of Disney were up 67 cents, or 2.31 percent, to $29.72. Over the last 12 months, the value of Disney stock has increased 47 percent, from a closing price of $20.16 on Nov. 12, 2008.