My Proposal: DIS selling TV networks?
(Warning: a rambling ramble will ramble rambly throughout this post.)
Latest quarters show profits (ESPN has nearly always shown a profit), especially in the top gun, ABC.
However (as I almost stated in DCA thread #469 or so), the TV networks, save maybe Disney Channel and possibly ABC Family Channel, are not in alignment with what most of America thinks of when they think, "Disney."
I believe people think "Disney = Family Entertainment." Although it's a niche market (and the kid population can rise and fall), it's generally considered a good thing when you are (were, some might say) the best in the market.
And while it's generally agreed that Eisner (and thus DIS) got taken for a runaway train ride in the Fox Family Channel deal, the CapCities deal, based solely on ESPN's stable, has been a modestly profitable venture.
Keeping them might make some money. However, every time Disney shows some unfamily-friendly crap (or even unfamily-friendly high-quality shows), the Disney image suffers. That tends to leak over to the movies and possibly theme parks.
Since the TV networks aren't extremely tied to the Disney name ("Disney's ABC network"? "Disney's ESPN"? No, that's not what anyone sees), not as, say, the parks or the movies are, it won't be a difficult physical sale. This is probably a good reason why the proposed sale to Comcast fell through: Comcast didn't want any of the "Disney" assets. It wanted the TV networks. (And maybe the film library for PPV revenues.) Eh, toss off the film studio and parks to whomever.
As I stated elsewhere (at MP long ago or here), the film studio and the theme parks are heavily synergistic. It's how Walt made DL and why it is successful. They will always carry the Disney name or at least the Disney legacy on them.
I can think of two suitors for the TV networks off the top of my head:
1. Time Warner (I've said this before), as they're the largest studio without a TV network, and no, the WB, with 10 shows in the bottom 10 of the ratings cannot be considered seriously.
2. Comcast, which has already disclosed its interest.
How to do:
DIS is split into two stock entities. Each share of DIS gets a share each of "Disney Studios and Parks" and "Disney TV," priced according to best estimates. Then, see what happens. Maybe someone puts in a takeover bid for DisTV.
What also should be noted is that one main reason for buying Cap Cities is so there would be a place for Disney movies to be shown without the hassle of bidding, especially for the sucky ones. And, the studio could then expand into making TV shows. A deal could be made between the two new companies that makes sure the movies and TV shows are seen on TV.
I invite any and all comments.
Re: My Proposal: DIS selling TV networks?
I think the splitting the pieces off is a little what Viacom is doing by splitting off the fast growing assets (cable) from the slower cash rich assets (broadcast TV). The TV business from ESPN to ABC Family (which was too expensive) do provide a steady stream of cash flow now which has been used to help balance a bad movie slate or a downturn in theme parks.
Time Warner would not buy the TV - especially now with Carl Icahn in their business - Icahn wants them to focus on current core assets, sell their cable group and maybe AOL. A larger acquisition of the size of the Disney TV business would be devasting to the TWX stock. Comcast is definitely a player - but they are now getting scrutiny over their size and I think that they may have a hard time getting FCC approval. Plus, they already got a deal as being part of the MGM acquisition - they have a better programming library than Disney has.
If you did split off TV from theme parks.studio - you may run into a Six Flags issue - a VC firm goes after the theme parks/studios and breaks them up. They could easily shutdown the studio, sell the programming library and slpit up the real estate (a replay of the 1980s issues and corporate raiders.)
Having TV/consumer Products/int'l helps to make Disney a large enough size that it would be difficult for any 3rd party to buy them... it is a protection...
Re: My Proposal: DIS selling TV networks?
I think that network and more Cable TV would be beneficial to Time Warner, as it is a content producer, and a content distributor (cable operations). Also, not having to pay Disney for ESPN's cable rights, as well as sticking it to the competition (Comcast, Adelphia) is a major bonus.
And, contrary to Disney, it doesn't have a niche image ("family entertainment") to protect and enhance.
That AOL deal was bigger than all of Disney's fiascos combined.