Tom Staggs: Business shows mixed results
Disney is certainly feeling the financial squeeze, but its cutbacks during the downturn likely will be less dramatic than those at other media congloms, according to chief financial officer Tom Staggs.“I’m not going to make any sweeping announcements today” about layoffs, Staggs said at the UBS media confab in Gotham on Tuesday. “You’ll see us taking some of those steps in the ensuing weeks and months. But we also have the luxury of having management teams in our individual businesses that are very experienced with taking on that challenge. So I don’t think it makes a lot of sense for us from a corporate standpoint to set a potentially arbitrary bogey.” The Mouse House is seeing some erosion in attendance at theme parks — off about 4% for the current quarter, with only international visits holding steady. But discount offers have helped parks avoid serious slippage. Hotel bookings have dropped 6% over the first and second quarters, which is better than the 10% falloff management predicted in November. TV ad revenue, a sore spot for all media congloms, has also slumped at Disney. ESPN is seeing high-single-digit percentage drops in ad sales during the current quarter. “It’s not like the ad market has gone away,” Staggs said. “But the pace of sales has slowed.” Scatter sales at ABC are actually 10% ahead of upfront sales levels in the current quarter, Staggs noted, but volume is low. Local TV stations are pacing about 15% behind the prior year. “The softness at stations is more acute” than elsewhere in the TV biz, Staggs said. The homevid biz across all distribs is at risk during the all-important fourth-quarter holiday season due to confusion over Blu-ray and continuing consumer pullback. Staggs said “Wall-E” is selling well but may not equal the numbers of “Ratatouille,” a comparable Pixar release from 2007. “The DVD business is going to see some impact from the downturn, but how much remains to be seen,” he said. So far, the performance of Blu-ray has been “mixed,” though Disney research suggests owners of new Blu-ray players tend to buy Blu-ray discs despite their higher price point. On a down day for the Dow, Disney shares fell 5.6% to $25.53.