CFO upbeat on studio, theme parks
Walt Disney chief financial officer Tom Staggs was upbeat on prospects for the Mouse’s studio and theme parks, which are seeing a burst of fresh cash to develop Pixar attractions.And videogames will be a priority, he told the CSFB media conference, with investment ramping up to about $350 million per year in an area where the company “sees strong returns.” Higher spending will squeeze results at consumer products. The movie studio will continue its strategy of focusing on Disney-branded pics, which Staggs said have the highest returns and the biggest potential for franchises. “It’s how we earn above-market returns in this business,” he said. Disney’s laid off hundreds of studio staffers this year, but Staggs stressed that “the reduction is not a reduction in overhead per project, because we have reduced the number of projects.” He said the feature animation unit, from which Disney just axed 150 staffers, will aim for two pics a year, dictated “by the creative process.” “Cars” has been out on DVD domestically for several weeks, and Staggs expects it to sell as many units as “The Incredibles,” which generated higher box office. And he sees the “Cars” disc selling well into next year. “Pirates of the Caribbean: At World’s End” hits Memorial Day weekend. Studio lineup also includes the animated “Ratatouille” and “Meet the Robinsons” and John Travolta starrer “Wild Hogs.” Parks are seeing tough comparisons with the much-ballyhooed and highly lucrative 50th anniversary last year, but that’s settling out, and the parks could get a boost from new attractions inspired by feature toons “Finding Nemo” and “Monsters, Inc.” “We are much better able to integrate the parks with Pixar involved, and I think it will be a better creative product that really differentiates our parks from the competition,” he said. Staggs urged perspective on the vigorous debate around windows, comparing the $25 million Disney anticipates from iTunes in its first year to the $3 billion it raked in from video sales last year. He said Disney is still in negotiations with Time Warner on a sweeping output deal similar to the one it announced with Comcast several weeks ago. Investors reacted to Staggs’ positive outlook for the coming year, sending Disney shares up 2.27% to close Tuesday at $34.20, a new 52-week high.