Eisner Could Live with Merged AOL
By TED HEARN MIKE FARRELL -- Multichannel News, 8/7/2000
Washington-The Walt Disney Co. chairman Michael Eisner said last week that he would not be troubled if federal regulators allowed America Online Inc. and Time Warner Inc. to complete their merger without any major conditions.
Speaking to Wall Street analysts on a conference call about financial results, Eisner said Disney got its message heard about possible anti-competitive damage, even if the Federal Trade Commission and Federal Communications Commission do not act on those concerns.
"If nothing happens with the FTC or the FCC, that's also fine, because the conversation has taken place and everybody is going to be careful what they are doing going forward as far as keeping the consumer away from having choice," Eisner said.
"Our goal, frankly, has been to get the dialogue in the marketplace, to make everyone conscious, whether it is you all [Wall Street analysts], or whether it is the Congress, or local franchises, or whomever, to be aware that this is a problem," he added.
Eisner said he did not think Disney had anything to fear from taking such bold steps against the merger. Recently, Disney called on the FCC to force AOL-Time Warner to divide its empire between content and distribution facilities.
"I don't think we will be hurt by this outspoken support of consumers, let's call it, and therefore, we have pursued this with NBC and a few others. [USA Networks Inc. chairman] Barry Diller has come out and expressed his opinion, and others have, too," Eisner said.
He added that Disney's financial results underscored the company's ability to provide top-notch entertainment content. "We plan to employ the same vigor that we bring to the development of content to the delivery of that content," he said. Later, Eisner added that this could mean acquiring more distribution, but he stressed that no deals were imminent.
Disney's broadcast and cable divisions fueled most growth in the company's fiscal third quarter. Disney's net income rose 20 percent to $440 million, or 21 cents per share, beating estimates of 14 cents. Revenue rose 8.7 percent to $5.96 billion.
Media networks-which includes broadcast and cable networks-had a 20 percent revenue rise to $2.3 billion. Operating income of $1.8 billion at the division rose 51 percent.
Broadcast, including ABC Inc., reported revenue gains of 24 percent to $1.5 billion. Operating income rose to $421 million from $209 million.
Cable networks-including Disney Channel, ESPN and investments in A & E Network, The History Channel, E! Entertainment Television and Lifetime Television-generated a 13 percent revenue gain to $761 million, while operating income rose 28 percent to $379 million.
Excluding the cable investments, cable operating income declined 13 percent to $241 million because of increased sports-programming costs at ESPN and start-up costs associated with SoapNet and international channels.
