Disney Bullish On ESPN, Kids Biz
Walt Disney's cable networks continue to find growth and challenges.
Some in the investment community are concerned about continued growth for ESPN, which already gets the highest rates among all cable networks from it distributors -- around $5 per subscriber per month. Jay Rasulo, senior EVP and CFO of Walt Disney Company, says company executives believe the big sports network has a lot more room for expansion.
"We see ESPN as a business that is a growth vehicle; nothing has changed our opinion," said Rasulo, speaking at a Goldman Sachs conference. "No. 1 reason -- ESPN is never complacent."
In reference to the TV sports network, which continues to show wholesale and retail price hikes, given the high price of sports rights fees -- a concern for
some cable system executives -- he says the network has recently inked two major long-term affiliate deals.
"The sports business has always been competitive," he says. "We don't go out and buy everything."
Disney Channel keeps growing to the point that Rasulo says its worldwide channels carry much of the marketing for its kids franchises. These efforts used to come primarily from its theatrical films and extensions.
Even with rise of digital platforms for its targeted children viewers, Rasulo is not worried about the impact on its traditional TV networks. "We have not seen this affect the linear networks," he says. "We only see greater involvement. It builds their adhesion [to the brand].
Disney's big theatrical movie of the past year, "The Avengers," from its Marvel unit, will continue to surge in the coming months. Rasulo says "Avenger"-related consumers products will blanket stores this holiday season and into next summer. The movie pulled in a massive $1.5 billion in worldwide box office receipts.