Iger Sees Double-Digit Expansion in Foreign Markets for Disney
Walt Disney Co. should be able to grow by double digits in foreign markets for the next 10 years, with expansions in India and China, including a possible theme park in Shanghai, President and Chief Operating Officer Bob Iger said Wednesday.
Disney has raised expectations for mainland China visits to its Hong Kong theme park, due to open Sept. 12, 2005, to more than 40% of visits from a third, Iger told a conference hosted by CSFB.
The company also is mulling a park in Shanghai, and its media division is looking to expand in China and India.
Iger told a separate UBS conference that Disney could sustain two China parks, in Hong Kong and Shanghai, although the one in Shanghai, if an agreement were reached, would not open before 2010.
“We will grow our international business nicely at double-digit rates over the next 10 years,” Iger said, not clarifying whether he was referring to profit, revenue, or both. International business accounted for 40% of combined operating income of Disney units in 2004, he said.
U.S. cable networks, especially sports channel ESPN, have boosted recent profits, and Iger said that broadcaster ABC was likely to turn a profit in fiscal 2005, which ends next September, on the backs of new hits.
“Desperate Housewives,” the prime time soap opera leading ABC’s prime time schedule, will be in about a third of the advertising packages sold for January to May next year, he added.
Disney has gone back and forth about whether ABC can crack a profit this year, which may play into Iger’s hopes to succeed Chief Executive Michael Eisner. The board aims to find a replacement by next year and Iger said “Housewives” was good news for him, although he was not referring to the CEO race.
“I certainly feel great. It’s had a halo effect on me,” he said.
One other major question hanging over Disney is whether it will renew or extend a distribution deal with Pixar Animation Studios scheduled to end after their next picture, “Cars.”
Pixar on Tuesday said it would delay the theatrical release of “Cars” until June 2006 from November 2005 and would aim for summer releases in the future. That would give Pixar more room to negotiate a post-”Cars” deal, although Pixar did not comment on it. Pixar called off talks with Disney on an extension early this year and despite analyst expectations that a deal might still be made, neither has said talks resumed.
“It doesn’t have an impact one way or another,” Iger told reporters, referring to the delay in the “Cars” debut.
He also reiterated that Disney aimed for a double-digit rise in overall company profit in fiscal 2005, which began in October, despite tough comparisons with the first quarter of fiscal 2004.
