Thursday, July 31, 2008

ESPN helps Disney Defy Ecomomic Odds

Mickey still has some magic in his kingdom,but he's pulling rabbits out of a different hat.

This week, Disney surprised everyone with positive third quarter results, despite a weak dollar and rising travel costs. How did the mouse do it? The main factor is the four letters that annoy housewives across the world: ESPN- its sports network which enjoyed 9% profit due to increased advertising revenue from cable.

CNN reported:

Media networks revenues grew 8 percent to $4.12 billion, as ad revenue at ESPN grew more than 10 percent, the company said....

Ironically, the media giant that made its name through major hits such as Aladdin, and the Lion King posted losses in its movie production numbers, as the New York Times article explained:

 

A weak spot was the film studio, which had a hard time living up to the stellar third quarter it had in 2007 when it released “Pirates of the Caribbean: At World’s End.” “The Chronicles of Narnia: Prince Caspian,” released in May, did not meet expectations at the domestic box office. As a result, revenue at the studio sank 19 percent. Operating profit fell 49 percent.

ESPN's expansion during the past few years has led to the formation of several new stations, including ESPNU,a channel soley dedicated to collegiate athletics. August 1, marks the beginning of ESPN Rise- which will feature live coverage of high schoolsports, a social networking site and segments in ESPN magazine.

The new channel should be a major boost to Disney's strength in the teenage market, where they can now target the high school jocks, as well as the extreme sports fanatics who may have ditched afternoon cartoons on the Disney Channel.

ESPN has already experimented with high school programming, with several primetime broadcast of major high school basketball and football matchups. As the demand for sports coverage continues to expand at the amatuer level, expect ESPN's coverage to ride the growing wave of momentum.

Posted By Matt O'Hern at 08:28 AM
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