Walt Disney chief MichaelEisner insists his entertainment empire continues to be 'contentobsessive', as opposed to newly fixated on distribution, despite yesterday's$5.3bn deal to acquire a collection of children's programming channelsfrom Rupert Murdoch and Haim Saban.
The purchase of Fox FamilyWorldwide gives Disney access to more than 115 million new viewers across theUS, Europe and Latin America via cable networks known as Fox Family Channel andFox Kids.
Eisner now plans to funnelhis own movies and TV shows through these networks, including second airings ofprogrammes that have shown earlier on his ABC network, thereby expanding theworldwide reach of his content factories. Fox Family will be renamed ABC Familyin the US.
'This acquisition,giving us several venues to distribute that content, means we can still makeexpensive Hollywood filmed entertainment, which is getting more and moredifficult to make economically when you only have one source ofdistribution,' Eisner told reporters at a press conference announcing themassive deal. 'So this is kind of a safety net. All the other reasons are strategic;all the other reasons are real. But if you believe in content, as we do, thisis a solidifying moment for us.'
While analysts welcomed thedeal in terms of increasing Disney's access to the airwaves, they wereconcerned at the high premium that it ended up paying, particularly since $3bnof it was in cash.
For Murdoch, this injectionof funds could not have come at a better time as he enters the final stages ofnegotiations to buy DirecTV, the satellite broadcaster currently owned by GeneralMotors' Hughes Electronics unit, thereby completely the elusive last piece inhis global distribution jigsaw. Disney shares fell 12 cents yesterday to closeat $26.88, while those of Murdoch's News Corp climbed 67 cents to finishat $36.17.