• by Wayne Friedman , August 10, 2005

The ABC Television Network is finally kicking into Walt Disney Co.'s financial results, as its third fiscal quarter profit popped 41% over the same period of a year ago. Disney also credits positive results from its parks and resorts.

Disney also got good news from a Delaware court, which said it did not have to repay shareholders for Michael Ovitz's severance package--which was then a $140 million deal back in 1994--but could have paid out as much as $262 million, with interest. Soon after his hiring in 1994 by Chairman Michael Eisner, Ovitz was terminated--supposedly because of failed deals and his inability to work with Disney staffers. The other side of the story was that Ovitz was given little or no real power over Disney staffers.

ESPN networks' higher affiliate revenue and higher ratings and ad rates at ABC Television Network helped Disney's financial results. Parks and resorts witnessed higher guest spending and ticket-price increases. For the third fiscal quarter ending July 2, the Disney broadcast network and stations increased revenues 11% to $1.4 billion, while the cable networks division increased sales by 19% to $1.9 billion.

On the other end of things, Disney's film unit didn't see such good results, with revenues dropping 15% to $1.5 billion. DVD sales dropped 5%, and total home video sales slid a sharp 15%.

In a conference call with analysts, Disney Chairman Robert Iger said he continues to work on a long-term deal to retain distribution rights to films made by Pixar Animation Studios, Disney's partner on such films as "The Incredibles," "Finding Nemo," "Monsters Inc.," and "Toy Story."

Pixar said it was interested in a deal that would be more beneficial to Pixar, instead of the 50-50 split it currently gets Disney. Pixar was seeking a distribution-only deal, which typically gives a studio only a 15% to 20% distribution fee.