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    Disney 4Q results allay concerns about cord-cutting

    By SHOOTUpdated:No Comments967 Views
    In this Jan. 9, 2015 file photo, Bob Iger arrives at the AFI Awards at The Four Seasons Hotel in Los Angeles. (Photo by Jordan Strauss/Invision/AP, File)

    By Ryan Nakashima, Business Writer

    LOS ANGELES (AP) --

    Disney is allaying concerns about cord-cutting after reporting better-than-expected revenue in the cable-network division that houses ESPN.

    CEO Bob Iger told CNBC that he remains "bullish" about the TV business. Three months earlier, Disney set off a wave of selling in media stocks after trimming its future guidance due to a modest decrease in ESPN subscribers. Last month, Disney cut about 300 jobs at ESPN and shuttered its popular Grantland website.

    "The fact remains that the industry did lose some (subscribers) last year," he told CNBC. "Now is that a reason to panic? Absolutely not. People still love television, the still love ESPN and they love live sports."

    Thursday's comments come the same day Disney announced it is licensing ESPN and other channels to Sony's PlayStation Vue online TV service, a bundle of over 50 channels that is still smaller than most traditional pay TV packages and costs $50 a month.

    Iger told analysts on a conference call that Disney would continue to license its top networks to new entrants with slimmer bundles of channels that are more attractively priced to young people. He also said ESPN remains a key driver of the popularity of new offerings, including Vue.

    "They came to us to negotiate a deal because it was clear the product that they had launched was not penetrating the market as much as I think they were expecting," he said.

    Disney said Thursday that revenue at its leading business, cable networks, rose 12 percent to $4.25 billion in the fiscal fourth quarter, beating the $4.22 billion expected by analysts polled by FactSet. An increase in subscribers at its newly launched SEC Network partially offset a decline "at certain of our networks," the company said, without specifying.

    Overall, revenue rose 9 percent to $13.51 billion, shy of the $13.55 billion expected. But adjusted earnings grew to $1.20 per share from 89 cents a year ago, beating the $1.15 expected.

    Shares of Walt Disney Co., which is based in Burbank, California, were down 10 cents at $112.90 in after-hours trading. That's still about 7 percent below the close immediately before last quarter's earnings call set off a pullback in media sector stocks.

    Tags:Disney



    DirecTV calls off acquisition of rival Dish, possibly ending a yearslong pursuit

    Friday, November 22, 2024
    Dish Network satellite dishes are shown at an apartment complex in Palo Alto, Calif., Feb. 23, 2011. (AP Photo/Paul Sakuma, File)

    DirecTV is calling off its planned acquisition of rival Dish after the offer was rejected by bond holders at that company.

    The deal was reliant on Dish bond holders agreeing to trade in the debt they held for debt in the new company, a swap that would have cost them about $1.6 billion, collectively.

    The retreat by DirecTV this week may end a years-long effort by the company to acquire both Dish and Sling after it announced the bid in September.

    DirecTV was looking to acquire Dish TV and Sling TV from its owner EchoStar in a debt exchange transaction that included a payment of $1, plus the assumption of approximately $9.8 billion in debt. The deal was contingent on several factors, including regulatory approvals and bondholders writing off debt related to Dish.

    "While we believed a combination of DirecTV and Dish would have benefited all stakeholders, we have terminated the transaction because the proposed exchange terms were necessary to protect DirecTV's balance sheet and our operational flexibility," DirecTV CEO Bill Morrow said in a statement.

    The prospect of a DirecTV-Dish combo has long been rumored, and reported talks resurfaced over the years. And the two almost merged more than two decades ago — but the Federal Communications Commission blocked the deal valued at the time at $18.5 billion deal, citing antitrust concerns.

    The pay-for-TV market has shifted significantly since. As more and more consumers tune into online streaming platforms, demand for more traditional satellite entertainment continues to shrink.

    DirecTV says that it will continue to invest in next-generation streaming platforms and offer new packaging options while integrating content from live TV alongside direct-to-consumer... Read More

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