Caso disney

Acquisition of ABC
In July 1995, Disney announced it was buying CapCities/ABC to own a programming distribution channel.44 Without the input of investment bankers, Disney bought ABC for $19 billion in the secondlargest acquisition in U.S. history. The acquisition made Disney the largest entertainment company in the U.S. and provided it with worldwide distribution outlets for its creativecontent. ABC included the ABC Television Network (distributing to 224 affiliated stations) and 10 television stations, the ABC Radio Networks (distributing to 3,400 radio outlets) and 21 radio stations, cable networks such as the sports channels ESPN and ESPN2, several newspapers, and over 100 periodicals.45 The deal also transformed Disney from a company with a 20% debt ratio to one with a 34% debtratio ($12.5 billion) after the takeover. The merger was likened to a marriage between King Kong and Godzilla. Barry Diller observed that while Disney and CapCities/ABC were ideal partners, “the only negative [was] size. It’s a big enterprise, and big enterprises are troublesome.” Michael Ovitz, then chairman of talent firm Creative Artists Agency, said the merger gave Disney global access. Butdespite “synergy euphoria” in Hollywood and on Wall Street, some observers were skeptical about the merger due to the maturity of the network television business, the purchase price (22 times its estimated 1995 earnings), and the difficulties of creating synergy through vertical integration. Some suggested that synergy would be better “accomplished through nonexclusive strategic alliances between thecompanies.”46 A year after the merger, there were press reports of a culture clash between executives at ABC and Disney. “Insiders say Disney’s micro-management has left many at ABC unhappy and anxious,” wrote one Wall Street Journal reporter. “The congenial atmosphere that once dominated the network’s top ranks is gone; in its place is the high-pressure culture of Disney, which often pitsexecutives against each other.”47 In addition, some ABC executives were uncomfortable with how ABC was being used to cross-promote Disney brands. ABC, for example, had aired a special on the making of the animated film, The Hunchback of Notre Dame, after the film opened to disappointing ticket sales.48 According to The Wall Street Journal, the initiative came from ABC executives.49 “The ABC people are apart of our team and they are interested in the well-being of the entire organization,” said a Disney spokesman. “I think we’d have been faulted for not using that kind of synergy.”50 ABC had also struck several deals with Disney rivals before the merger to develop programming. ABC and Dreamworks, for example, had agreed to finance jointly the cost of developing new TV shows. “We needed access toproduction talent,” said one ABC executive of the deal.51 Disney felt that such arrangements were no longer economical after the merger because Disney had its own production studio, and therefore terminated such agreements.52

Joe Roth, who replaced Katzenberg as head of Disney’s live-action movies in 1994, began putting out big-budget, star-driven “event” movies such as Con Air (1997) andArmageddon (1998). “This is not a commodity business,” said Roth. “The [movies] people will want to watch need to stand out.”56 He had also argued that the change was necessary because of the growing impact of international audiences, who were attracted to movies with big-name stars and with expensive special effects that transcended language barriers. In 1999, however, several costly box-office bombsled Roth to scale back budgets. When Roth had taken over in 1994, the average budget for a live-action Disney movie was $22 million (versus an industry average of $30 million).57 That figure had risen to $55 million by 1999 (and an industry average of $52 million).58 The cost of producing animated films had also risen rapidly in recent years.59 Tarzan (1999) cost an estimated $170 million. These...