FINANCIAL ANALYSIS OF WALT DISNEY CORP.



Financial Analysis of Walt Disney Corp.



Financial Analysis of Walt Disney Corp.

Introduction

Walt Disney is a global entertainment company. Co.'s Media Networks operates the ABC Television Network and ten owned television stations, the ESPN Radio Network, the Radio Disney Network as well as 46 owned radio stations. Co.'s Parks and Resorts segment owns and operates the Walt Disney Resort in Florida and the Disneyland Resort in California. Co.'s Studio Entertainment segment produces and acquires live-action and animated motion pictures for global distribution. Co.'s Consumer Products segment licenses the name Walt Disney, as well as its characters and visual and literary properties, to various manufacturers, retailers, show promoters, and publishers.

Walt Disney, together with its subsidiaries, is a diversified entertainment company. The company's key products and services include the following:

Media networks

Domestic broadcast television network

Domestic television stations

Cable networks and international broadcast operations

Television production and distribution

Domestic broadcast radio networks and stations

Internet and mobile operations

Parks and resorts

Walt Disney

World Resort

Disneyland Resort

Disney Vacation Club

Disney Cruise Line

ESPN Zone

Walt Disney Imagineering

Adventures by Disney

Studio entertainment

Theatrical distribution

Home entertainment distribution

Television distribution

Audio products and music publishing

Consumer products

Character merchandise and publications licensing

Books and magazines

Disney interactive studios

The Disney store

DisneyShopping.com

Corporate Governance

On February 8, 1996, the five-member panel of the Federal Communication Commission (FCC) unanimously approved the $19 billion merger of Walt Disney Company and Capital Cities/ABC, Inc, which created the world's largest entertainment company. The FCC refused to grant Disney a waiver from its cross-ownership ban on owning a newspaper and radio station in the same city. The FCC required Disney to sell either a newspaper or a radio station in Detroit and Fort Worth. Disney must also sell its Los Angeles television station, KCAL, as part of the Department of Justice's (DOJ) earlier approval of this merger.

The FCC also required the sale of KCAL for its approval.

On January 4, 1996, the shareholders of Disney and capital Cities had agreed to the merger. Each shareholder could exchange each Capital Cities share for one Disney share plus $65 in cash or opt for all stock or all cash.

A few weeks later, Major League Baseball Owners approved Disney's 25% acquisition of the California Angles American League team with the option to purchase the reminder of the stock at later time. Disney receives approval to manage the team franchise. Gene Autry, legendary cowboy movie and radio star of the 1930s, 1940s, and 1950s, was the founder and owner of the California Angles. Disney already owned the National Hockey League's Mighty Ducks of Anaheim.

After the merger, the board of Directors consisted of 17 members, of whom seven were internal members. Thomas S. Murphy, former Chairman and CEO of Capital Cities/ABC, joined the Disney board, and Michael Ovitz, President of Disney since October 1, 1995, became a board member. Roy Disney, Vice-Chairman, was the nephew of Walt Disney. He also served as the head of Disney's Animation ...