Disney would consider consolidating its hold on basic-cable ventures Lifetime Networks and A&E Television Networks, but it would not seek more broadcast-TV stations, president and CEO Bob Iger told an investor conference Wednesday hosted by researcher Sanford C. Bernstein.
He indicated on-and-off discussions to increase Disney’s 50% stake in Lifetime and 37.5% stake in A&E, although nothing is imminent.
“We’ve talked about it over time and seeing whether there is a way to restructure in some fashion,” he said, “and we will continue to explore those discussions.” Minimizing taxes on any transaction would be difficult but can be structured, he added.
Disney would love to buy the remaining 20% of its profit-spinning ESPN juggernaut that is owned by Hearst, but Iger said that stake would be too expensive. Plus, Disney has “a great relationship” with Hearst that makes joint ownership easy from an operational viewpoint, he added.
He said Disney looks at every basic-cable network that is up for sale, “but if we were to step up [to buy], it would be with great caution. We are fairly rigorous.”
Any purchase price would have to meet Disney’s steep goals for return on invested capital and not strain its financial balance sheet. Also, Disney would have to see a clear path on how its skills would significantly grow the network, and Disney wants a focused cable brand, as opposed to a general-entertainment basic-cable network.
Those comments did not point to any great enthusiasm for The Weather Channel, which is currently up for auction with forecasts of a $3 billion-$5 billion purchase price. Its name did not come up.
There’s little Disney interest in buying more TV stations to augment ABC, given that broadcast-TV growth prospects are cloudy and its existing 10 owned-and-operated stations are “solid,” Iger said, adding that Disney won’t be a seller, either.
He said Disney is committed to broadcasting because it can generate decent profits from program creation -- the affiliated business of TV-program production that creates intellection property. “If we were not in the studio business in this day and age, it would be pretty challenging” being in the broadcast-network business, he added.