SBD/November 8, 2013/Finance

Disney Reports Higher Q4 Earnings Despite ESPN's Deferral Of Affiliate Fee Revenues

Iger is confident in ESPN's value and the net's standing as the leader in the sports
Disney for its Q4 "reported higher earnings despite declines at its media network group," according to Jon Lafayette of BROADCASTING & CABLE. The company's net income rose 12% to $1.4B, or $0.77 a share, from $1.2B, or $0.68 a share, a year ago. Disney saw "big gains" from its Parks & Resorts, Studio Entertainment and Consumer Products units, while its interactive unit "turned around from a loss to a gain." ESPN had $172M less "in deferred affiliate fee revenues," which were "recognized earlier in the year." The company said that without the change in deferred affiliate revenue at ESPN, operating income "would have increased" $77M with "affiliate fee increases at both ESPN and Disney Channel and higher ad revenue at ESPN." Those gains "were offset by an increase in programming and production costs because of new rights deals and rate increases" for the NFL, college football and MLB. Disney Chair & CEO Bob Iger said, "We remained confident in ESPN's value and continued rein as the leader in the sports." Disney CFO Jay Rasulo added that excluding the impact of the deferred revenue, ESPN's operating income "would have been up in the quarter." He said, "Ad revenue at ESPN was up a solid 9% in the quarter due to an increase in units sold and higher rates. ESPN's ratings were up year-over-year driven by college football, Major League Baseball and the NFL. So far this quarter ESPN's cash ad sales are pacing up nicely" (, 11/7). At presstime, shares of Disney were trading at $68.96, up 2.7% from the close of business on Thursday (THE DAILY).
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