Fairchild Publications for sale
NEW YORK — The Walt Disney Co. saw the writing on the wall and decided to sell it.
Under heavy fire from Wall Street because of drooping earnings, the Mouse House has apparently put Fairchild Publications on the block and has media giants Hearst Corp. and Conde Nast duking it out to become owner of Women’s Wear Daily and city mag Los Angeles.
Reports of a possible sale go hand in hand with speculation that Disney may also unload its two Anaheim sports teams, the Angels and the Mighty Ducks. The divestitures would come as Disney reported a steep 26% drop in net profit for the latest quarter and its stock languishes. The company is cutting costs by $400 million across its empire and trimming an additional $500 million or so from the studio by making fewer pictures and production deals.
Not strategic business
Fairchild isn’t really a strategic business for Disney, and selling it would show that management is serious about turning the company around, say industry players and Wall Streeters. Fairchild was up for sale once before, albeit briefly, after Disney inherited it along with other publishing assets in its $19 billion purchase of Capital Cities/ABC in 1995.
At that time, Disney chairman Michael Eisner was reportedly reluctant to part with Fairchild, which also publishes Jane and the hot glossy W. But Mike Ovitz, who joined Disney as president in 1995, pushed for a sale. Ovitz, of course, was soon history, and Fairchild stayed. Certainly, Fairchild proved a better fit for Disney than, say, Cap Cities’ farming journals.
Disney and Conde Nast declined to comment and a Hearst spokesman wasn’t immediately available.
Rumors of the publishing sale pushed Disney shares higher Friday by about a dollar to $27.18. A hefty block of 538,000 shares changed hands, indicating perhaps a heightened interest in Disney stock, which some on the Street consider wildly undervalued.
(Oliver Jones contributed to this report.)