Industry reaction: Wall St., ABC Affiliates Reserving Judgment

Apr 26, 2004  •  Post A Comment

As Wall Street analysts and ABC affiliates spent last week digesting the news that The Walt Disney Co. was again shaking up the management at its struggling broadcast network, the two different constituencies seemed to reach the same conclusion: It was too early to react, but there’s hope the changes will bear fruit this time.
Shares in Disney were largely unchanged in the trading sessions that followed Tuesday’s announcement that ABC Cable Networks Group President Anne Sweeney will oversee ABC as part of her new position as co-chair of Disney’s newly created Media Networks unit, and that Touchstone Television President Stephen McPherson will become president of ABC Primetime Entertainment, reporting to Ms. Sweeney. (ESPN President George Bodenheimer will share the chairman title with Ms. Sweeney while continuing to manage ESPN and ABC Sports.)
The stock price hovered at just under $25 a share for most of the week, signaling that most of Wall Street had been anticipating changes at ABC for some time and had already pricedthe stock accordingly.
“The market has accepted that ABC is in the cellar and has been down so long that any change they make can’t be worse,” said Christopher Dixon, managing director at Gabelli Group Global Partners.
Meanwhile, long-suffering ABC affiliates are banking on Ms. Sweeney and Mr. McPherson being able to live up to their shiny reputations. (They expect Mr. Bodenheimer to be no more a factor in network operations than he was before the promotion.)
“I hope Anne Sweeney is the dynamite executive she is supposed to be,” said one station group executive, who wasn’t bothered by her cable background. “If someone is a good executive, they should be able to get the job done.”
Still, some question if the time has come to go outside the Disney family in search of desperately needed solutions for the network. And others, who wonder if Disney is too enchanted with cable properties and less interested in the broadcast network, wish that Ms. Sweeney’s resume revealed significant experience with or affection for the broadcast network-the affiliate model particularly since many of the network’s major affiliation agreements expire over the next year.