Disney Q3 Revenues Up 4% Despite Higher Production Costs For ESPN
Revenue for Disney’s Q3 was up 4% to $11.09B, "held down because of a timing shift in the recognition of ESPN-related affiliate fees,” according to Brooks Barnes of the N.Y. TIMES. At Media Networks, the Disney unit that includes ESPN, ABC and cable channels such as ABC Family, “operating income climbed" 2% to $2.13B. ESPN did “suffer higher production costs” tied to a shift in timing for NBA games and higher rates for NBA and MLB programming (NYTIMES.com, 8/7). Disney CEO Bob Iger said, “Every one of our businesses contributed” to the company’s 31% increase in earnings per share. Iger: “We definitely had a relatively good quarter on the advertising, certainly at ESPN. But visibility is still somewhat lacking. There’s a strong upfront in broadcasting. ABC had relatively decent rates.” Iger said, “As we look into the future, we actually see a relatively strong environment in terms of driving increased sub fees for the channels that we have. Now we don’t have a huge number of channels. We focus a lot on programming those that we have very strongly and that’s served us very well and it’s served distributors well and that’s what enables us to drive the kind of fees that we get” (“Closing Bell With Maria Bartiromo,” CNBC, 8/7). Iger also noted that the company “was reassessing ESPN’s approach to international expansion." The FINANCIAL TIMES' Brooks Barnes notes ESPN "recently lost out in bidding" for U.K. EPL TV rights. Iger said, “ESPN’s track record internationally has not really delivered the bottom line results that we would have liked or expected.” Iger said the company made a “rational” bid for the EPL rights but “were outbid by a powerful local distributor." He added, "It made no sense to compete with them because it would not have benefited our bottom line” (FINANCIAL TIMES, 8/8). At presstime, shares of Disney were trading at $50.38, up from yesterday's close of $49.81 (THE DAILY).