Now that we got yesterday's fun technical article out of the way *sigh*, we'll make a quick turn to a couple of other articles from the last couple of days on the business front.
The first has to do with what was called the Disney Internet Group, some of which I blogged about 'Musings on VMK and Disney's Online Presence', which is now the Disney Interactive Media Group.
Anyhow, in my article I noted several of the online properties that DIG 'owned' and maintained and one of those was the site movies.com. But no longer. DIMG has sold off movies.com to Comcast, the current owner of the popular movie ticket site Fandango according to a CNNMoney.com story.
Only thing that strikes me as odd is that Comcast is quoted as saying 'the purchase price was minimal'. So if that's the case, then it no longer fit into a profile of Disney's long term online portfolio and profile. So we'll have to keep an eye out and see if that focus changes from what it is now.
In other news, Reuters has an interesting article as I noted yesterday about Mssrs. Iger and Staggs (CEO and CFO respectively) working the Wall Street front to paraphrase the article loosely
'to raise the valuation of the Disney Company . . . by convincing Wall Street . . . that it should be viewed as a stable, global brand, vice a cyclical, hit driven media business'
If you read the rest of the article though, you'll see that the Street is still a bit skeptical. I think Disney has to prove through the current market trend that they can still make money and increase revenue without deeply discounting or hurting the brand. Obviously Mr. Iger's push into online media and overseas expansion are meant to bring some additional stability for the long run.
Of course, this focus on increasing the company's value and stock price shouldn't come as a surprise for a number of reasons. Some obvious and maybe a few that aren't.
- The Walt Disney Company is a business to it's investor's first and foremost, so while they like Mickey like you and me, they like him better when he is adding money to the vault like ole' Scrooge McDuck even better.
- Increased valuation allows the company increased flexibility for borrowing money on favorable terms using the company's capital and cash flow as collateral.
- Mr. Iger and Mr. Stagg's yearly bonus (along with a few other key individuals) is tied to an array of financial indicators, which include EPS, cash flow, etc. which you can read about as nauseam in last year's Proxy statement here.
- Mr. Iger's vestment of his stock options is tied to the Company's stock performance in comparison to the S&P 500 total return as defined in his contract here (see Section 4).
Those aren't bad things. It falls into that category of 'what's good for the goose is good for the gander'. But with the DIS ticker symbol trading in a very narrow range for the last several months, that $27 million of compensation last year might NOT be as high this year.
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BTW, we are off this weekend for an out of town wedding, so no new posts until next week. Have a good weekend!
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