ABC's Iger Named No. 2 at Disney
Jan. 25, 2000
BURBANK, Calif. (AP) _ ABC network chief Robert Iger was named second in command at The Walt Disney Co. Monday as Michael Eisner reorganized the company's top management.
Iger, 48, was promoted to president and chief operating officer, filling a position left vacant since Hollywood dealmaker Michael Ovitz left in 1996 after a futile attempt to share power with Eisner, Disney's chairman and chief executive officer.
The changes beef up Disney's top management after more than a year of slumping share prices and executive defections.
Eisner also announced the promotion of chief strategic officer Peter Murphy and chief financial officer Thomas O. Staggs to senior executive vice presidents.
They will become members of a new executive management committee that will include Eisner, Iger, Disney vice chairman Sanford M. Litvack and heads of individual business units.
Disney also released a preview of first quarter results that showed net income rose 7 percent to $515 million, or 25 cents per share, excluding its Go.com Internet business. Official results will be released in February.
Analysts applauded Iger's appointment and the other changes.
``He's an extremely talented manager, very well rounded, very well liked and respected,'' said Jessica Reif Cohen, an analyst with Merrill Lynch. ``They're putting a structure in place that should be viewed positively.''
The management changes should reassure investors and analysts who worried by recent departures, said Doug Christopher, an analyst with Crowell Weedon.
``I think it adds some depth and experience to the management team, and credibility,'' he said. ``I think the company is turning around. This is a company that's got a lot of the right things happening.''
Disney announced in November that it planned to issue a separate stock for Go.com, which is expected to yield a ``substantial loss'' in the first quarter due to the cost of acquiring the Internet company Infoseek.
The earnings increase exceeded Wall Street expectations and reflected the strong performance of ABC, which benefited from better ad sales and the popularity of the thrice-weekly game show ``Who Wants to be a Millionaire.'' Ad sales rose to a record $1 billion during the first quarter.
``That's like having three half-hour hits,'' Eisner said in a conference call with industry analysts.
Shares of Disney rose 31 1/4 cents to $33.12 1/2 in trading on the New York Stock Exchange before the news.
Iger previously was chairman of Disney's ABC Group, which included ABC, ESPN and other properties, and president of Walt Disney International.
He joined Disney when the company acquired Capital Cities/ABC in 1996. He went to work for ABC in 1974 and spent 12 years with ABC sports. Iger had been named to become Capital Cities/ABC's chief executive officer when Disney purchased the company.
``He has overseen the ABC Television Network's turnaround,'' Eisner said. ``At the same time, Bob has spearheaded the reorganization of our company's international efforts. ... As a result, our entire company is now poised for growth in the opportunity-laden overseas markets.''
The announcement follows the departure last week of Disney studio chief Joe Roth, who quit to start his own film company.
Roth was the latest in a string of top executives to leave the company. Others to leave in recent years include chief financial officers Steve Bollenbach and Richard Nanula, ABC TV and radio station chief Steve Burke, and cable programming boss Geraldine Laybourne.
Finding someone to fill the president's job has been an issue since the 1994 death of Eisner's longtime friend and trusted second-in-command, Frank Wells. Wells, who died in a helicopter accident, was widely credited with handling the day-to-day details of running Disney, freeing Eisner to focus on creative development and long-range plans.
Disney's share price has lagged recently, reaching a 52-week high of $36.93 3/4 a few weeks ago, but trading generally below $30 during the second half of 1999. Board members reportedly have pressed Eisner to get help.
``Disney for some time has needed a strong No. 2 person to make sure the trains are running on time,'' said Tom Wolzien, analyst for Sanford C. Bernstein & Co. in New York.
``They have great conceptual management at the top, but a company as vast as Disney needs somebody to make sure everybody's talking on a day-to-day basis,'' he said.