Disney's lost opportunity with Moore film seen minor
Friday June 25, 7:52 pm ET
By Peter Henderson
LOS ANGELES, June 25 (Reuters) - Michael Moore's gain will be Walt Disney Co.'s lost opportunity when anti-Bush film "Fahrenheit 9/11" opens this weekend, distributed by rivals after Disney shunned the controversial movie.
But many Disney investors said that from a financial perspective they were not concerned by the company's decision.
Showings of the film, which mocks President George W. Bush and criticizes his policy in Iraq, have sold out in New York theaters and the movie is set to open on 868 screens on Friday, a record for a documentary.
Lions Gate Entertainment Corp. (Toronto:LGF.TO - News), which is distributing the movie with IFC Films, saw its stock climb about 3.5 percent on Friday. IFC is co-owned by a division of media major Viacom Inc. (NYSE:VIAb - News).
Investors in Disney, which dwarfs Lions Gate, generally were not worried about Chief Executive Michael Eisner's decision to avoid the political movie, which filmmaker Moore hopes will help unseat Bush in the November election.
"Certainly as a shareholder I'd like Disney to make more money than less, but I think Disney and Eisner made the correct decision," said Jack Liebau, whose Liebau Asset Management owns Disney stock.
Liberal activists, however, said they hoped to make such investors -- and Disney management -- sorry for shunning Moore's film.
"I think they are going to regret it, and it is sort of satisfying to see corporate cowardice come with a price tag," said Eli Pariser, campaign organizer of Moveon.org, which has 115,000 members pledged to see the film.
"Bowling for Columbine," Moore's previous film, won a best documentary Oscar last year and took in more than $130 million in box office, DVD and television rights revenue, including $58 million in worldwide theater ticket sales.
James McGlynn, a portfolio manager of the Summit Everest fund who has been building a small stake of Disney shares in the last few months, said that represented a great return on investment in percentage terms but a small profit for a company like Disney.
"It is not as if they are giving away 'Harry Potter'," he said.
Family-oriented Disney ran the risk of a financial backfire if it annoyed customers or the government officials who set the rules that the media conglomerate plays, said investor Hal Vogel, who does not own Disney shares.
"The mandate of any large company, especially those with sensitive regulatory issues before the government, is to make sure they are an entertainment company and not a political propaganda company, and this is propaganda," he said.
Disney allowed Bob and Harvey Weinstein, the brothers who head its Miramax unit, to distribute the $6 million film on their own under a complicated deal which required them to give a cut equivalent to Disney's share, had it distributed the film, to a charity.
Disney on Friday did not say what that charity was.
Disney, which absorbed $100 million box office bomb "The Alamo" and still pleasantly surprised Wall Street earlier this year, is too big to see much effect from a documentary hit, analysts said. It would need to take in $20 million in net profit to add a penny per share to earnings.
Analyst Paul Kim of Tradition Asiel said a box office showing on the lines of Columbine would add only $10 million to $30 million to Disney.
Further, he saw Eisner's decision as just one move in his contentious contract negotiations with the Weinsteins, who funded "Fahrenheit" to Disney's unpleasant surprise.
Disney's strained relations with the Weinsteins has added momentum to criticism from dissident shareholders that its management, and Eisner in particular, have bungled ties with important creative talent, including its failure to renew a lucrative deal with Pixar Animation Studios Inc. (NasdaqNM
IXR - News)
"There is a mix of Hollywood vanity, there is a mix of politics, and there is a mix of egos. From a financial standpoint, it is relatively meaningless," said Kim.
Friday June 25, 7:52 pm ET
By Peter Henderson
LOS ANGELES, June 25 (Reuters) - Michael Moore's gain will be Walt Disney Co.'s lost opportunity when anti-Bush film "Fahrenheit 9/11" opens this weekend, distributed by rivals after Disney shunned the controversial movie.
But many Disney investors said that from a financial perspective they were not concerned by the company's decision.
Showings of the film, which mocks President George W. Bush and criticizes his policy in Iraq, have sold out in New York theaters and the movie is set to open on 868 screens on Friday, a record for a documentary.
Lions Gate Entertainment Corp. (Toronto:LGF.TO - News), which is distributing the movie with IFC Films, saw its stock climb about 3.5 percent on Friday. IFC is co-owned by a division of media major Viacom Inc. (NYSE:VIAb - News).
Investors in Disney, which dwarfs Lions Gate, generally were not worried about Chief Executive Michael Eisner's decision to avoid the political movie, which filmmaker Moore hopes will help unseat Bush in the November election.
"Certainly as a shareholder I'd like Disney to make more money than less, but I think Disney and Eisner made the correct decision," said Jack Liebau, whose Liebau Asset Management owns Disney stock.
Liberal activists, however, said they hoped to make such investors -- and Disney management -- sorry for shunning Moore's film.
"I think they are going to regret it, and it is sort of satisfying to see corporate cowardice come with a price tag," said Eli Pariser, campaign organizer of Moveon.org, which has 115,000 members pledged to see the film.
"Bowling for Columbine," Moore's previous film, won a best documentary Oscar last year and took in more than $130 million in box office, DVD and television rights revenue, including $58 million in worldwide theater ticket sales.
James McGlynn, a portfolio manager of the Summit Everest fund who has been building a small stake of Disney shares in the last few months, said that represented a great return on investment in percentage terms but a small profit for a company like Disney.
"It is not as if they are giving away 'Harry Potter'," he said.
Family-oriented Disney ran the risk of a financial backfire if it annoyed customers or the government officials who set the rules that the media conglomerate plays, said investor Hal Vogel, who does not own Disney shares.
"The mandate of any large company, especially those with sensitive regulatory issues before the government, is to make sure they are an entertainment company and not a political propaganda company, and this is propaganda," he said.
Disney allowed Bob and Harvey Weinstein, the brothers who head its Miramax unit, to distribute the $6 million film on their own under a complicated deal which required them to give a cut equivalent to Disney's share, had it distributed the film, to a charity.
Disney on Friday did not say what that charity was.
Disney, which absorbed $100 million box office bomb "The Alamo" and still pleasantly surprised Wall Street earlier this year, is too big to see much effect from a documentary hit, analysts said. It would need to take in $20 million in net profit to add a penny per share to earnings.
Analyst Paul Kim of Tradition Asiel said a box office showing on the lines of Columbine would add only $10 million to $30 million to Disney.
Further, he saw Eisner's decision as just one move in his contentious contract negotiations with the Weinsteins, who funded "Fahrenheit" to Disney's unpleasant surprise.
Disney's strained relations with the Weinsteins has added momentum to criticism from dissident shareholders that its management, and Eisner in particular, have bungled ties with important creative talent, including its failure to renew a lucrative deal with Pixar Animation Studios Inc. (NasdaqNM
IXR - News)"There is a mix of Hollywood vanity, there is a mix of politics, and there is a mix of egos. From a financial standpoint, it is relatively meaningless," said Kim.
