With 2 Promotions, Iger Steps Closer to Becoming Next Disney President

Continuing its reshaping of the company’s top management, Walt Disney Co. on Thursday promoted Robert Iger to two new positions that analysts say may put him in line to become the next president of the entertainment giant. Iger was named chairman of ABC Group and president of newly minted Walt Disney International.

Steven Bornstein will succeed Iger as president of ABC, a position he has held since February 1996, when Disney bought the company. Bornstein has been chairman of ESPN and president of ABC Sports, building the sports cable empire into one of the most profitable entertainment franchises in the world.

Although Iger will keep a hand in the management of ABC, which includes television and radio stations, cable interests such as the Disney Channel, and the ABC broadcast network, he will have additional responsibilities for international operations, which Wall Street expects will fuel the company’s growth.

Michael Ovitz, who abruptly left Disney as president two years ago, after less than a year in the job, had been working on developing the company’s international operations.

Analysts saw the promotion as a signal that ABC veteran Iger, 48, is being groomed to become the next president of Disney, under Chairman Michael Eisner. “International is key to the future growth of Disney,” said Christopher Dixon, an analyst at PaineWebber Inc. “This gives Iger experience in Disney’s other core businesses and provides Eisner with an opportunity to see how he does outside his primary areas of expertise.”

He said Bornstein’s rise is indicative of the growing importance of cable in the television landscape. Bornstein, 46, started at ESPN in 1980 in the programming department and rose to president. He has expanded its channels and taken the division into publishing, retailing and cyberspace. Last year, ESPN accounted for roughly half of ABC’s profit, with the radio and television stations contributing most of the rest.

Disney did not name a replacement for Bornstein at ESPN and ABC Sports, but is expected to give some or all of those responsibilities to ESPN President George Bodenheimer as early as next week.

Eisner refuted the idea that Iger is being groomed for the presidency or that he is coming under pressure from the board to delineate a succession plan. “Is it an indication of something for the future? No,” Eisner said. “I have demonstrated that the company has excellent management depth.”

He noted the recent consolidation of operations in theme parks and movies, including the promotion of Peter Schneider from the head of animation to oversee all family movies in an effort to strengthen the studio under chief Joe Roth.

A host of top executives have left in recent years, including Chief Financial Officer Richard Nanula, cable executive Geraldine Laybourne and television station head Steve Burke, who is now president of Comcast’s cable operations.

Hollywood sources have speculated that Disney studio chief Roth could be the next top executive to leave. Wall Street has been concerned that an exodus of top executive talent from Disney reflects on Eisner’s ability to retain and groom top management.

Eisner said he expects Iger to develop Disney’s international organization by getting the various divisions to work together more closely. “Just as I am the country manager here, determining how we promote the Go Network on the Disney Channel and on the ABC network, we need that attention to detail outside the U.S.,” Eisner said. He added that Iger will design his own structure, appointing country managers he will work with to determine how movie releases are buttressed abroad by Disney’s channels, videos, digital videodisc sales and other company operations.

Although ABC’s cable and station groups are growing strongly, its broadcast network, under Iger, has failed to make much improvement, lagging NBC and Fox in the most lucrative demographic segments during prime-time. But Eisner downplayed the network problems. “Bob is a superb executive,” said Eisner, praising him as steady, committed and hard-working. “With this array of assets, no executive will ever have every division working perfectly.” Eisner said ABC has made moderate improvements in prime-time and pointed to its success with Saturday morning, daytime and news.