Statement by Roy E. Disney About Earnings Release

[cherrynegra]

Statement by Roy E. Disney and Stanley P. Gold Concerning Disney's Earnings Release Today
Tuesday August 10, 6:37 pm ET

BURBANK, Calif., Aug. 10 /PRNewswire/ -- The Disney earnings conference call boiled down to one fact concerning the Company's future performance: Trust us.

Michael Eisner, Bob Iger, and Tom Staggs discussed "financial metrics," "growth targets," "ROIC," and other business-sounding terms, but buried in this jargon was one piece of real news: The rate of growth is over at the Company. The studio's miserable box office performance and ABC's ongoing ratings nightmare, and the slowdown at the Parks should make all shareholders wonder, "Where's the growth?"

The Company is still riding the wave of DVD sales from last year's theatrical film successes (Pirates of the Caribbean, Finding Nemo), but considering the dismal box office performance this year and the lack of obvious growth throughout the Company, 2005 will not be a growth year and, in fact, the party may be over. But, apparently, the response of management is "Trust us." Never mind management's failures over the last 8 to 10 years, stockholders are being assured that there is a plan and we should just trust the Eisner team.

We ask management: "Why?"

The passive Mitchell Board of Directors has turned a blind eye to the dismal performance of management -- including the failures this year alone at Euro Disney, the ABC Network, the ABC Family Channel, the Disney Stores, and the Film Division. This Board has failed shareholders and continues to be the enabler of a flawed management team.

We ask the Board: "Why?"

 

[HauntedPirate]

Management has/had it easy this year - cut back dollars going into the parks, people won't notice for a year or two, revenue goes up! DVD sales for *last year's* movies are great, so it's easy to top 2003's numbers. Charge more for ESPN, revenue goes up, without any investment.

Now for a prediction:

"The Incredibles" will be out on DVD by the end of April, 2005. They have to have *something* that people will buy on DVD next year, I just don't foresee scores of people lining up to pick up "The Alamo" or "Raising Helen".

One funny thing: While reading Roy's commentary on www.savedisney.com, I thought of one thing: "There's a great big beautiful tomorrow, shining at the end of every day!"

 

[cherrynegra]

Yeah, this year looks good because of last year's movies. But Lord knows what the books will look like next year. Especially in the DVD department since 2004 films have been flat this year. Even "The Village" which Disney was hoping would be a blockbuster has seen it's ticket revenues drop dramatically with each week. The word of mouth isn't there to help give it staying power.

 

[HauntedPirate]

2004 is a lot of smoke and mirrors for management - it's cutbacks have improved over a horrible 2003, and it's cashing in on 2003's successes to conjure up this rosy picture. *I* could've done almost as good a job as they have in that regard.

They have taken a company that was fueled by imagination and turned it into a company nearly devoid of it. All in the span of 8 years. Congratulations certainly are NOT in order. One does have to wonder about the upcoming CG films, and how well they will do. But the stories about animators being told what to animate now, and the spreadsheet/bottom line mentality up the chain of management don't bode well for the future, IMHO.