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Iger Blasts Disney/Gold Lawsuit

May 11, 2005  •  Post A Comment

Walt Disney Co. Chief Operating Officer Robert Iger on Wednesday blasted the lawsuit filed against the company this week by former board members Roy Disney and Stanley Gold that challenges Mr. Iger’s appointment as the media giant’s next CEO.

“We believe that the complaint is completely without any bias,” Mr. Iger said during a discussion of the company’s fiscal second-quarter conference call, adding, “I will not allow myself to be distracted” from achieving the company’s goals.

Mr. Iger said that in his role as CEO-elect he has spent a lot of time with Disney employees, and added, “they are plain fed up with all of this. They want the rhetoric to end so they can concentrate on what they do best.”

Disney, Mr. Iger and the rest of the Disney board were named in a lawsuit filed Monday by Mr. Disney and Mr. Gold, who are claiming investors were misled about how the company would search for a replacement for CEO Michael Eisner, who is expected to step down at the end of September. The two men are asking that the Disney board’s election earlier this year be nullified and that a Delaware court order the company to disclose how the board arrived at the decision to name Mr. Iger as Mr. Eisner’s replacement.

Meanwhile, the company also said that ABC is on track to be profitable in the fiscal year ending Sept. 30, driven by improved ratings and higher advertising revenue driven by hit series such as “Desperate Housewives” and “Lost.”

The company reported a surge in fiscal second-quarter profit, driven by across-the-board gains at the media giant’s businesses, particularly parks and resorts and the film studio.

The results came after Disney shares briefly stopped trading Wednesday on the anticipation of some kind of announcement. Rumors swirled Wednesday that Disney would announce that it had decided to sell its radio station assets.

Disney’s profit jumped 30 percent for the three-month period ended March 31 to $698 million, compared with a year-ago figure of $537 million. Revenue climbed 9 percent to $7.8 billion, with all divisions reporting revenue growth during the quarter.

The company’s media networks division, which includes cable channels ESPN and Disney Channel as well as broadcast network ABC, reported a 6 percent rise in revenue to $3 billion, while operating income rose 3 percent to $725 million.

The cable operation reported higher advertising and affiliate revenue, but those gains were offset by the absence this year of a $41 million settlement related to a bankrupt cable operator in Latin America.

At ABC, segment operating income nearly doubled to $54 million as a result of higher ratings and higher advertising rates, along with lower programming costs.