UT Prof: Disney’s Troubles Encouraged Buyout Talks

KNOXVILLE — A University of Tennessee journalism and electronic media professor said Monday it’s not surprising to see recent public discussion about the purchase of the Walt Disney Company.

Dr. Barbara Moore said Comcast Corporation’s $66 billion offer, which was rejected last week by Disney’s board of directors, reflects internal problems that may not be so easy to fix.

“They’ve made a tremendous profit in recent years by releasing VHS and DVD videos of their famous films,” Moore said, “but now Disney’s almost come to the point where they’ve released all their videos and the profits aren’t going to keep rolling in.”

Its board of directors has been fighting very publicly, Moore said, which adds to the problem.

“Disney also had a very successful partnership with Pixar to distribute computer-animated films, but was unable to renew the agreement. That failure sends signals of weakness on Disney’s part and generates buying interest from other media companies.”

Moore said the Disney board would likely listen to competing offers from other media groups such as Time Warner or Viacom, but one voice they may not hear from is that of Rupert Murdoch, whose News Corporation owns Fox Television.

“Murdoch has said he’s not going to do anything now,” Moore said. “As I understand FCC rules, it probably wouldn’t help him to buy Disney, which owns ABC, because he’d have to sell off a lot of profitable Fox properties to do that.”

But Moore said his presence alone might encourage Disney board members to approve a merger deal.

“I always picture Rupert Murdoch as a sort of shark in the ocean. He may not be attacking, but I’m sure he’s swimming around and looking.”

Moore said if Comcast succeeds in purchasing Disney, the biggest change would be seen by Comcast’s cable television subscribers.

“The Disney properties would probably stay pretty much as they are. You would still go to Disney World and watch Disney movies. The real change would come on your cable channel,” Moore said.

“Comcast owns a lot of cable systems across the country, and it would like to own programming on those channels. So what it would like to do is take Disney and have it produce more cable programming as well as network TV and films,” Moore said.