S&P; Downgrades Disney’s Ratings to A-

Walt Disney Co.’s credit ratings were cut by Standard & Poor’s, which cited the media company’s $5.3-billion purchase of Fox Family Worldwide as a reason for the downgrade.

The outlook for the company’s corporate credit rating, which was reduced from “A” to “A-,” is negative, S&P; said. Disney’s commercial paper rating was lowered to “A2” from “A1.”

S&P;’s action follows a similar rating reduction by Moody’s Investors Service on Sept. 27. Both ratings companies said the acquisition of Fox Family, a plan to buy back 50 million Disney shares and a slide in business at Disney theme parks led to the lowered ratings. Business at Disney resorts dropped after fewer people decided to travel after the Sept. 11 terrorist attacks.

“Disney’s businesses already were under pressure prior to Sept. 11,” S&P; analyst Heather M. Goodchild said in a report. She said the slowing economy and a decline in audience ratings at Disney’s ABC Television Network had reduced revenue.