Iger Discusses Disney Outlook, Plans

Apr 6, 2005  •  Post A Comment

Bob Iger, who will become CEO of The Walt Disney Co. in October, met the press Tuesday at the National Cable & Telecommunications Association Convention in San Francisco and discussed some of his thinking as he moves into his new job.

One of the first moves after Mr. Iger was tapped was the elimination of Disney’s strategic planning group, a group that some staffers saw as stifling their ability to do their jobs.

Mr. Iger said eliminating the group was a way of “empowering our business unit executives, Anne Sweeney and George Bodenheimer [co-chairmen of Disney Media Networks] among them, to create strategies for their own businesses and be accountable for the strategic direction of their units.

“I firmly believe that the company needs to set goals and creative direction, and obviously, accountability, but I think it’s incumbent on the very talented and experienced people we have running our businesses to basically be the chief strategists for their individual businesses.”

Mr. Iger said he wouldn’t rule out hiring a chief operating officer to fill the post he will be vacating. “I’m going to spend time during this transition process really determining in consultation with the board what the most effective structure of the company would be,” he said. “I had a good partnership with Michael [Eisner] as CEO and COO.”

With Viacom studying splitting up, Wall Street and other observers have been questioning whether bigger is better for media companies. But Mr. Iger said, “We believe we’ve done a very effective job at managing all of our businesses in a very integrated fashion on a lot of levels, so we don’t have any intention really of splitting the company in a manner that would be similar to what they’ve done.”

He added, “We’ve always looked at our asset base to determine whether we’re continuing to deliver value for our shareholders. That will be an ongoing process, so I don’t rule out the possibility of divesting an asset. But we do not have any plans, nor do we think it would make sense for our company to split the company in two.”

Last month Disney took a stance on the television decency issue that diverged from the rest of the industry by apparently being willing to accept regulation of content on cable.

Mr. Iger took the opportunity to clarify the company’s position.

“We don’t really believe there should be regulation. We believe market conditions should really dictate,” he said. “However, we believe if there is to be legislation, we believe some form of logic should prevail. In reality, people watch television today. They don’t really make distinctions as to whether they’re watching broadcast or cable or satellite. They watch TV, particularly younger generations. And because of the ubiquity of the multichannel service, we really believe it should be subject to the same regulations on indecency, if there are to be [any], as broadcast.”

He said that stance was not driven by Disney’s ownership of family-oriented cable networks and programming. “We simply believe that since we run very important broadcast businesses we don’t feel that broadcast businesses should be subject to a different standard than cable program services,” he said. “It’s just that simple.”

He added that the a la carte solution being offered as a way to enable families to exclude channels with content they object to would be a worse solution. “That would be very anti-consumer. And while it appears it would empower the consumer, the result would be the consumer would have to pay dearly for that empowerment,” he said. “A la carte would basically create a situation where the consumer would have to pay a lot more to have the access to these programs that they have today. And I think in the end the consumer would vote to essentially maintain some control or regulate themselves in terms of access rather than paying more, in effect, for protection of sorts against what they may deem to be offensive programming.”

Mr. Iger, a former ABC programming chief, said he will be looking at the network’s pilots but intends to leave the schedule in the hands of ABC executives.

“We have in place at ABC some very talented executives: Anne Sweeney, whom the network reports to; Steve McPherson, who’s running prime time with a high degree of authority and empowerment,’ he said. “I’m sure as I’ve done for many years I’ll screen pilots, but the schedule and the decisions in terms of what goes on that schedule and where the shows go is Steve’s completely, working with Anne Sweeney.”

Mr. Iger was bullish about ABC’s prospects for the upfront ad market. “ABC will go into the upfront with a fair amount of momentum, with some great new products, new programs and a new schedule, and the Super Bowl and the NBA Championship and a great news division, so I think ABC is very well positioned,” he said.

“I can’t say today how strong the upfront will be, because it’s still a little early. But I certainly feel good about the way ABC is positioned going into the upfront,” he said.