In addition, Walt Disney took major restructuring charges, all of which put pressure on its profits sinking to $613 million -- slightly lower than analysts' estimates. Overall revenue also was tagged, off 7% to $8.1 billion.
Company executives said advertising sales during the period at the ABC Network were strong -- although ratings were down -- and noted that pricing in the scatter selling period was modestly ahead of the upfront market.
Revenues at its broadcasting operations were down 2% to $1.4 billion on operating income of $162 million -- a 38% drop. Cable networks offered some good news. Led by ESPN, operating income rose 5% to $1.1 billion on a 4% rise in revenue to $2.2 billion.
Still, company officials were cautious regarding lower budgets of major advertisers' groups for ESPN: automotive, financial and consumer electronics. That said, Disney notes that men's grooming and insurance are two categories that are growing on the network.
Commenting on the company's recent Hulu programming and partnership deal, Bob Iger, president/CEO of Walt Disney, said the business is expected to be incremental to the company. "It's a different demographic, lower than the average age on the ABC Television Network..." he said. "We felt we could expand the audience."
Iger said the company believes there would be little audience overlap with other digital Disney sites, such as abc.com.
Disney is looking to make some major cost-cutting, including the marketing of its theatrical films. In regard to film advertising, Iger said in an earnings call: "We have some real opportunities to reduce expenses."
Its studio operations, which include theatrical and DVD sales, have been hurt -- with operating income losing almost half its second-quarter 2008 numbers, down 97% to $13 million with revenues off 21% to $1.4 billion.
In regard to DVD business, the company notes that lower domestic home entertainment revenues came from fewer unit sales of current-quarter titles, including "High School Musical 3: Senior Year," "Beverly Hills Chihuahua" and "Bolt," as compared to "Enchanted," "Game Plan" and "No Country for Old Men" in the prior-year quarter.
Disney's Parks and Resorts business dropped 50% in operating income to $171 million, with revenue sinking 12% to $2.4 billion -- all from less business among Walt Disney World Resort, Disney Vacation Club, Disneyland Resort and Disneyland Resort Paris.
Disney's consumer products group witnessed an 9% increased in revenue to $496 million, while operating income declined 24% to $97 million.
Disney took a $305 million charge during the period, including $108 million related to radio FCC licenses.