Thursday, July 31, 2008

Mouse Knows It's A-B-C's...


Thirteen years ago today, the Walt Disney Company bought Capital Cities/ABC(the parent company of the ABC Network).

Eisner had been trying to buy a network for years, even flirting with the idea of CBS which thankfully didn't happen as ABC Network was more of a fit for the Mouse.

Funny, I don't remember near as many people critical of the $19 billion dollar purchase as they were of the Pixar acquisition. Today, it really is a very faint afterthought.

Perhaps after "Bolt", "Princess and the Frog" and "Rapunzel", the deal for the Lamp will be as well...

11 comments:

Corruption said...

That's because media mergers (and mergers in general) were all the rage back then.

As I recall, Disney needed a "pipe" (ABC) for its "content."

And this is a decision that fundamentally changed Disney (in my opinion) for the worse. Even Eisner himself said that he regretted the purchase after it happened (referenced from DisneyWar and A Work in Progress). The only good things to come from it are that Iger is better than Eisner. And LOST. ;)

Justin said...

Corruption, would you please explain why you think it changed for the worse? From an economic standpoint the media networks make up almost 30% of Disney's revenue and have been the one of the consistent strong performers over the past couple of years. I'm not arguing with you, I'm just curious what your take on the acquisition is.

Corruption said...

I'm going to be as brief as possible.

Disney before ABC was a relatively small (yet disproportionately influential -- think Apple today), independent company that just happened to have some great assets (films, theme parks, etc). After the purchase, a balancing act and identity crisis started.

ABC has always felt that they didn't want to be a part of a "Mickey Mouse" operation, and that has resulted in an internal schism at Disney.

In addition, focus shifted away from Disney's core businesses (theme parks especially) for many years while ABC was being "fixed." Remember how they fell from first to third (and sometimes even fourth place) from 1996 until 2004 (with the exception being the time that "Millionaire" was milked to death and before LOST and Desperate Housewives "saved" the network)?

One person -- be it Eisner, Iger, Lasseter, or Walt himself, simply cannot juggle this behemoth and keep the momentum up. Disney's stock has been in the toilet for 11 years (since the stock split that put it at about $40 or so, to which it still hasn't recovered).

If Disney was just an animation, feature film, theme park, and cruise line with the Disney Channel and its consumer products divisions (and music/publishing) that would be a plenty big company, but still limber enough to adapt. And focus would remain on the core company -- Disney. Not ABC, not ESPN. Just Disney.

I'll end this rant by saying look at what happened to AOL-Time Warner and Viacom. Disney's held it together better than them, but sheesh, it's not great. I like Iger and I'm glad he's there instead of Eisner, but what a roundabout way of going about all of this.

I could go on and on and on, but that's the gist of it.

Todd said...

corruption--

ESPN has been saving Disney's bacon for years now. It makes money hand over fist. With out the ABC merger, I don't know that Disney would have survived the merger mania without getting gobbled up by someone else. I'm not crazy about some of the brand dilution/confusion that has resulted, but ESPN is an incredible asset and that cannot be overstated. I'd rather have the ABC/Cap Cities deal than the FoxFamily Channel deal. That's the one I'd take back.

And regarding the stock, I think it is undervalued, but it is generally regarded as the best of the entertainment/media stocks.

Corruption said...

@todd

You're right, ESPN makes tons of money. But because of that acquisition, focus has been lost.

And Disney may have been swallowed up during that, but I guess we'll never know.

The Fox Family acquisition was one of the dumbest moves ever. And honestly, part of why Disney got so much flack over Pixar. But that's neither here nor there, as I don't think that Fox Family and Pixar can even be compared to one another.

My dream scenario, would be Disney spinning off ABC (and yes, even ESPN) and getting back to being Disney. Maybe Catmull and Lasseter could run that org ;) I'm sure that Iger would be just fine running CapCities/ABC/ESPN without having to be all "Disney."

zach said...

Best. Scenario. Ever.

I've often hoped that they would split as well. I don't know whether it would be good or bad financially for the entities as a whole, but from a focus stand point, like Corruption says, this would be great.

zach said...

Ok, I maybe be a little over dramatic with that opening line...

Ghosthost2 said...

I agree with corruption. When Disney bought ABC and ESPN, they lost focus on what really mattered: Disney. ABC and ESPN may make lots of money, but what is important to Disney fans is that the Disney part of the company is regarded with the highest importance by executives, not as just another branch to milk money out of.

Anonymous said...

Eisner made stupider purchases. Like those moth-eaten hasbeen handpuppets from JimHenson. Or those crappy Power Rangers. I heard he was even thinking about buying the Smurfs. Thank god he's gone.

Honor Hunter said...

I'll agree with you on the Power Rangers, anonymous...

But I totally disagree about the Muppets. They have huge potential if handled correctly. We'll see when the new movie comes out if they got it right...

ERA INSIDER said...

I don't know about you guys, but I think Power Rangers is still a powerful asset for the Disney; Power Rangers has obtained what the other Disney franchises can't, a very loyal boy demographic, the male counterpart of Disney Princess, Disney Heroes flopped;(although very recently Cars and Pirates seem to be breaking into the mold, and I bet Toy Story will be back in action quite soon); Growing up in the 90s, I was part of PR mania. I was quite excited with the first few Disney produced seasons, I was really surprised about the quality of it, they had rejuvenated and handled the franchise quite well; I believe the hired the writing team of Disney Channel's 'The Famous Jet Jackson' as well as moving the set to beautiful New Zealand. But I must say the last few seasons of Power Rangers has gone down the tubes, I watched an episode of the newsest season on Disney XD, cause my ABC affiliate doesn't air Power Rangers and Toon Disney is a Premium Channel in my region, you can really tell Disney cheapened the quality of the program, no more lyrics to the intro songs, and the writing has gotten to the level of bad. It doesn't seem like the boy-centered Jetix action block is a priority for the company right now, but with a partner like Stan Lee, they should totally take advantage of that talent and produce some new action-centered franchises. Disney has had successfully done action animated programs, first two seasons of 'Gargoyles' come into mind, it would be cool if they can return to that reality. Hopefully TR2N, Prince of Persia, and Time Jumper can jumpstart the realm of action franchises.