Luv2Roam
DIS Veteran
- Joined
- Jun 3, 2000
Dwarfs take Disney on wild ride
By ROBERT TRIGAUX, Times Business Columnist
Sure seems that way. Almost everything Disney touches lately seems to suffer from, uh, diminished stature.
Grumpy is obviously in charge of Disney's stock. Company shares earlier this week hit a low -- $13.85, down 44 percent since May -- not seen since 1995. Even in the post-Sept. 11 trauma, when tourists did not travel to theme parks, Disney's stock never fell below $16.98.
Sleepy must head the programming of Disney-owned ABC. The TV network with dud ratings can't generate its own hits. It relied so desperately on its now-deflated Who Wants to Be a Millionaire? show that it ran it four nights a week in prime time. This week, Disney bit the ego bullet and said that cable giant HBO -- a unit of media rival AOL Time Warner -- will develop new shows for ABC over the next two years.
Sneezy rules Disney's creative team, historically one of the company's gems but now a group that's grown allergic to bringing new and exciting ideas to fruition. When was the last time you saw a crowd in one of Disney's retail stores?
Bashful chairs Disney's inbred, 16-member board of directors, long considered one of America's most conflicted, least independent and least assertive boardrooms of any major public company.
Happy heads Disney's struggling theme parks. He's happy only because Doc is administering calming medications.
Above them all, trying to revive this flagging entertainment enterprise, is Dopey.
It's been a long, lone time since we heard any of these Disney dwarfs whistling while they worked.
To be sure, Disney is hardly the only entertainment conglomerate struggling these days. And not all is down at Disney.
After little to brag about, the company's film studio just got a much-needed lift from the opening weekend of Signs, the new thriller that sold an estimated $60.3-million in tickets. Last Friday, Disney bowed to pressure and said it will cut the size of its board of directors and take other overdue steps to strengthen its corporate governance. And Disney is in early negotiations to build a theme park in Shanghai to reach the huge, relatively untapped Chinese market.
But are these events enough to slow Disney's downhill ride?
Even Disney chief Michael Eisner, the Teflon CEO since 1984, is losing his image of invulnerability.
"Eisner seems to have lost magic touch," says the headline of a column in Tuesday's Orlando Sentinel questioning whether the Disney CEO is still the right person for the top job. Other media are starting to pose the same question.
The company's challenges are growing:
Money: Long considered a corporate goose that lays golden eggs, Disney's name and rich assets may be starting to lose their star power. Last week, Disney said third-quarter net income fell by nearly one-third from a year ago to $364-million. Revenue slipped 3 percent to $5.8-billion. It also warned that fourth-quarter profit may drop because of falling tourism.
The result? Aside from a sharp decline in stock price, Disney now faces two additional threats. Standard & Poor's and Moody's, the two major credit rating agencies, say they may downgrade Disney's long-term rating. They cited Disney's level of debt, weak consumer confidence and the tepid economy, and even "geopolitical risks" -- meaning the threat of terrorism.
Theme parks: The threat of terrorism after Sept. 11 hurt attendance, but Disney indicated earlier this year that tourism seemed to be bouncing back. Not so. Last week, Disney said attendance at its theme parks, which provide about a quarter of the company's total income, was off by about 6 percent in the quarter. If terrorism scared people into staying home, the struggling economy -- and a theme park entrance fee topping $50 -- is keeping more of them away.
Competition is Disney's other theme park worry. In Orlando, rival Universal's more teen-oriented parks have seen attendance increase 11 percent in the past two years. Disney's has slipped 6 percent. An article in the new issue of Newsweek describes "The Battle for Orlando" this way: "Disney's theme-park empire is under attack from Universal, its crosstown rival. Teens are the target. Can Spider-Man topple Cinderella?" The magazine reveals Universal has even shot (but not yet had the nerve to use) a TV commercial with a fake Mickey walking up to Universal Studios and saying, "I want to see what I've been missing."
Television: Disney's ABC network this week agreed to pay $1.5-million for the rights to the stories of nine miners trapped 77 hours last month in a Pennsylvania coal mine. In contrast, cable channel E! Entertainment (partly owned by Disney) on Tuesday said the start of its "reality" show starring former Playboy Playmate and Texas oil tycoon widow Anna Nicole Smith ranked as its highest-rated program debut. The real Walt Disney would have liked the miners' tale. But it's a good thing he's not around to witness the sad trend in "reality" cable programming.
Can Disney be fixed? If so, how much will the repairs cost?
A lot. This year alone, the company has lost more than $25-billion in market value since its stock price fell from $27.40, a 52-week high, to Tuesday's close of $14.38.
The stock market currently values Disney at less than $30-billion, a number diminished enough to make us all Grumpy.
By ROBERT TRIGAUX, Times Business Columnist
Sure seems that way. Almost everything Disney touches lately seems to suffer from, uh, diminished stature.
Grumpy is obviously in charge of Disney's stock. Company shares earlier this week hit a low -- $13.85, down 44 percent since May -- not seen since 1995. Even in the post-Sept. 11 trauma, when tourists did not travel to theme parks, Disney's stock never fell below $16.98.
Sleepy must head the programming of Disney-owned ABC. The TV network with dud ratings can't generate its own hits. It relied so desperately on its now-deflated Who Wants to Be a Millionaire? show that it ran it four nights a week in prime time. This week, Disney bit the ego bullet and said that cable giant HBO -- a unit of media rival AOL Time Warner -- will develop new shows for ABC over the next two years.
Sneezy rules Disney's creative team, historically one of the company's gems but now a group that's grown allergic to bringing new and exciting ideas to fruition. When was the last time you saw a crowd in one of Disney's retail stores?
Bashful chairs Disney's inbred, 16-member board of directors, long considered one of America's most conflicted, least independent and least assertive boardrooms of any major public company.
Happy heads Disney's struggling theme parks. He's happy only because Doc is administering calming medications.
Above them all, trying to revive this flagging entertainment enterprise, is Dopey.
It's been a long, lone time since we heard any of these Disney dwarfs whistling while they worked.
To be sure, Disney is hardly the only entertainment conglomerate struggling these days. And not all is down at Disney.
After little to brag about, the company's film studio just got a much-needed lift from the opening weekend of Signs, the new thriller that sold an estimated $60.3-million in tickets. Last Friday, Disney bowed to pressure and said it will cut the size of its board of directors and take other overdue steps to strengthen its corporate governance. And Disney is in early negotiations to build a theme park in Shanghai to reach the huge, relatively untapped Chinese market.
But are these events enough to slow Disney's downhill ride?
Even Disney chief Michael Eisner, the Teflon CEO since 1984, is losing his image of invulnerability.
"Eisner seems to have lost magic touch," says the headline of a column in Tuesday's Orlando Sentinel questioning whether the Disney CEO is still the right person for the top job. Other media are starting to pose the same question.
The company's challenges are growing:
Money: Long considered a corporate goose that lays golden eggs, Disney's name and rich assets may be starting to lose their star power. Last week, Disney said third-quarter net income fell by nearly one-third from a year ago to $364-million. Revenue slipped 3 percent to $5.8-billion. It also warned that fourth-quarter profit may drop because of falling tourism.
The result? Aside from a sharp decline in stock price, Disney now faces two additional threats. Standard & Poor's and Moody's, the two major credit rating agencies, say they may downgrade Disney's long-term rating. They cited Disney's level of debt, weak consumer confidence and the tepid economy, and even "geopolitical risks" -- meaning the threat of terrorism.
Theme parks: The threat of terrorism after Sept. 11 hurt attendance, but Disney indicated earlier this year that tourism seemed to be bouncing back. Not so. Last week, Disney said attendance at its theme parks, which provide about a quarter of the company's total income, was off by about 6 percent in the quarter. If terrorism scared people into staying home, the struggling economy -- and a theme park entrance fee topping $50 -- is keeping more of them away.
Competition is Disney's other theme park worry. In Orlando, rival Universal's more teen-oriented parks have seen attendance increase 11 percent in the past two years. Disney's has slipped 6 percent. An article in the new issue of Newsweek describes "The Battle for Orlando" this way: "Disney's theme-park empire is under attack from Universal, its crosstown rival. Teens are the target. Can Spider-Man topple Cinderella?" The magazine reveals Universal has even shot (but not yet had the nerve to use) a TV commercial with a fake Mickey walking up to Universal Studios and saying, "I want to see what I've been missing."
Television: Disney's ABC network this week agreed to pay $1.5-million for the rights to the stories of nine miners trapped 77 hours last month in a Pennsylvania coal mine. In contrast, cable channel E! Entertainment (partly owned by Disney) on Tuesday said the start of its "reality" show starring former Playboy Playmate and Texas oil tycoon widow Anna Nicole Smith ranked as its highest-rated program debut. The real Walt Disney would have liked the miners' tale. But it's a good thing he's not around to witness the sad trend in "reality" cable programming.
Can Disney be fixed? If so, how much will the repairs cost?
A lot. This year alone, the company has lost more than $25-billion in market value since its stock price fell from $27.40, a 52-week high, to Tuesday's close of $14.38.
The stock market currently values Disney at less than $30-billion, a number diminished enough to make us all Grumpy.
!
