Rasulo: Scale Not As Important As Impact

Disney CFO Says Consolidation Not a Priority

Walt Disney Co. senior executive vice president and chief financial officer Jay Rasulo put the kibosh on any speculation that the media conglomerate would participate in a near-term consolidation wave, telling an audience at an industry conference that scale for scale’s sake is not as important as impact.

Rasulo, speaking at the Goldman Sachs  Communacopia conference in New York, said that adding up Disney’s cable channels or other content properties is not a priority.

Disney already has iconic content brands, Rasulo said.

“[We] have scale in a way that is not simply related to size, but scale that is related to impact, related to consumer taste, consumer interest and consumer eyeballs, ” Rasulo said, referring to Disney’s robust film box office this year (with hits Frozen and Guardians of the Galaxy), its strong cable channels (ESPN, ABC Family and Disney Channel) and its ABC broadcast network. “We like our hand. I don’t think scale in the sense of size is really that important.”

Deal speculation on the content side heated up earlier this year after 21st Century Fox made an unsolicited $80 billion bid for Time Warner, which was rejected as too low. Although Fox ultimately said it would not pursue Time Warner and that it had no other content companies in its sites, many have anticipated that content providers will look to pair up to improve their positions in the wake of Comcast’s pending purchase of Time Warner Cable.  

Rasulo also touted the media giant’s recent purchase of Maker Studios, the Internet short-form video pioneer, for about $500 million earlier this year. Rasulo noted that Maker has about 450 million subscribers and 9 billion monthly page views to its You Tube channels and presented an opportunity to get into the short-form genre rapidly.

“Over time we believe that Maker will be a big studio just like the Marvel Studio, just like the Lucasfilm studio and just like Disney Animation, [and] will be a content creator for the company,” Rasulo said.

Rasulo added that Maker also could serve as a vehicle to further monetize Disney’s library content via short-form video.

“Short form is another way it could be monetized that we haven’t even scratched yet. We see Maker as being the fundamental driving force in the company for taking that lib content into the next step, whether that is EPSN content, Disney Channel content,  ABC local station content, ANBC network content. All of that stuff can be reformatted and reused in short form.”