Biz Briefs: Roy Disney Pushes Ouster Campaign

Mar 29, 2004  •  Post A Comment

The battle over who will lead The Walt Disney Co. continued last week as large institutional investors pushed the media giant to discuss the future of the company and as disgruntled former board member Roy Disney demanded that the company turn over the results of shareholder votes cast by employees at Disney’s annual meeting earlier this month.
Disney Chairman George Mitchell agreed to meet with the investors after the group, which represents pension funds from California, Connecticut, New York and North Carolina and has combined assets worth more than $500 billion, submitted a letter requesting a sit-down discussion.
Meanwhile, Mr. Disney continued to press the company to turn over voter tally information for Disney employees who voted at the March 3 annual shareholders meeting that led to CEO Michael Eisner’s being stripped of his chairman’s title. In a letter submitted to Disney’s legal department, Mr. Disney’s lawyer David Robbins said there are rumors the anti-Eisner vote was as high as 70 percent among Disney employees with 401(k) plans that have stakes in Disney. If such a large number of employees want Mr. Eisner removed, it would bolster already strong support for Mr. Disney’s campaign to oust the executive.
Rumors of Cox Interest Buoy Adelphia
Shares in Adelphia Communications rose only slightly last week following a report speculating that Cox Communications is a likely buyer of the troubled cable operator once it emerges from bankruptcy next month.
That speculation hardly came as a surprise to many Wall Street analysts, who pointed out that Cox was one of a handful of multiple system operators in a position to make a play for Adelphia, which has just over 5 million subscribers. Others that are likely to be interested in Adelphia include Time Warner and Comcast, though the latter might see less upside in bidding for Adelphia given that it’s already the far-and-away cable leader.
Shares in Adelphia moved up 2 cents to 60 cents a share in the three days following the report. However, Adelphia shares shot up nearly 6 percent in midday trading last Thursday after the company reached an agreement with a consortium of banks that will lend the cable operator $8.8 billion as part of its emergence from bankruptcy.
Laura Martin, a media analyst at Soleil Securities Group, said Time Warner is likely to make a play for Adelphia, given the systems Adelphia owns abut several Time Warner systems.
At the same time, Cox has a strong footprint in Southern California and would likely be interested in Adelphia’s systems in Los Angeles, noted David Joyce, an analyst at Guzman & Co. in Miami.
However, given the cable industry’s penchant for clustering, analysts believe a likely scenario is that a single buyer will swoop in and acquire Adelphia, then sell off the systems it deems non-core, perhaps engaging in asset swaps with cable operators that own systems near Adelphia’s markets.
Roberts, Burke Get Raises
Securities and Exchange Commission filing shows that top executives at cable giant Comcast were rewarded handsomely in 2003 for their work integrating the cable systems formerly owned by AT&T Broadband and successfully creating the 21 million-subscriber cable titan. According to a proxy statement filed Wednesday, Comcast President and CEO Brian Roberts saw his total remuneration rise 12 percent to a total of more than $8.6 million from a 2002 figure of nearly $7.7 million, thanks in large part to a boost in his base salary to just over $2 million from a year-earlier level of $1.2 million. Mr. Roberts’ bonus of $6 million remained unchanged between 2002 and 2003, while compensation related to things such as life insurance, interest on deferred compensation and payments to cover tax liabilities grew somewhat in 2003. Stephen Burke, Comcast executive VP and president of Comcast Cable, received the financial equivalent of a hearty pat on the back for his work in successfully merging the AT&T systems with Comcast’s legacy systems ahead of schedule. Mr. Burke’s total remuneration soared more than 373 percent to $6.8 million from a year-earlier level of $1.4 million. Fueling that surge were a boost in his base salary to nearly $1.7 million from $991,105 a year earlier, and a significant increase in his bonus to nearly $5.2 million from $1.2 million a year ago.
Nexstar Widens Q4 Losses
Nexstar Broadcasting, the Irving, Texas-based station group that went public late last year, Thursday reported a widened fourth-quarter loss of $24.4 million, or $1.29 a share, compared with year-earlier red ink of $15.1 million. Revenue fell 6 percent to $59 million. For the year, Nexstar posted a narrower loss of $87.1 million, or $5.59 a share, compared with a loss of $116.6 million a year ago. Revenue slipped 4 percent to $214.3 million.