Disney executive sees turnaround since terror attacks

By Danny Pollock Associated Press Writer
Thursday October 04, 2001

LOS ANGELES — Walt Disney Co. took big financial hits at its theme parks and ABC television network after the Sept. 11 terrorist attacks but has seen steady recovery during the past two weeks, a company executive said Wednesday. 

Still, it’s too early to predict the prospects for fiscal 2002 in any detail, Disney president Bob Iger told Wall Street analysts during a teleconference. 

“Despite the current climate, the turnaround is a matter of when — not if — because of the brand strength of Disney,” he said. 

Burbank-based Disney was one of the hardest hit entertainment companies in the days after the terrorist attacks because of its extensive media and theme park holdings. Its stock price plummeted more than 20 percent to $16.98 on Sept. 20. Since then it has rebounded and closed Wednesday at $19.91. 

“Lots of things are slowly getting back to normal,” said Paul Kim, senior media analyst at New York-based Kaufman Brothers LP. ”(Iger) appeared to be realistic and sober in his assessment.” 

Disney generates 35 percent of its annual $1.2 billion in net income from its worldwide theme parks. Another 30 percent comes from its ABC broadcasting operation. 

Even before the attacks, Disney theme parks were plagued by lagging attendance as the sluggish economy kept travelers at home. 

Iger began his Wednesday presentation with a video clip from an address last week in which President Bush urged Americans to “go down to DisneyWorld in Florida, take your family and enjoy life the way you want to enjoy it.” 

“That surprised us, and we appreciate it enormously,” Iger said. 

Without providing specifics about attendance or revenue, Iger cited a “drop-off” at Disney theme parks in this country as leisure travel stalled immediately after the attacks. 

He said DisneyWorld was hit harder than Disneyland because 50 percent of visitors to the Florida resort arrive by plane. Only 25 percent of Disneyland guests travel to the California attraction by air. 

To compensate for the losses, employees’ hours have been cut and strategic marketing efforts are under way. 

“We’ve seen an uptick in attendance almost every day since Sept. 11,” Iger said. “Experience informs us that people keep taking vacations during difficult times. Those who don’t are only delaying them.” 

As proof, Iger noted that advance bookings at Disney resorts are now running ahead of cancellations. 

Concerning ABC, Iger said Disney expects to recoup more than 90 percent of the revenue from advertising it pre-empted while airing 91 consecutive hours of attack coverage. Other networks also offered nonstop news. 

Iger did not put a pricetag on that advertising but Kim said it could have exceeded $10 million a day. However, like vacation travel, that advertising was not lost but simply deferred, Kim said. 

Iger said additional financial promise is reflected in the upcoming theatrical release of the film “Monsters Inc.” and “Snow White” on DVD and VHS. 

“The last few weeks are no bellwether for what’s ahead,” he said.