Entertainment Industry

Category: Bob Iger

Disney CEO Bob Iger realizes $26.6-million pre-tax gain from stock sale

Disney CEO Robert A. Iger
Walt Disney Co. Chairman and Chief Executive Robert A. Iger reaped a $26.6-million gain from the sale of company stock, before accounting for taxes.

The entertainment giant's stock rose after Iger announced Tuesday, during the company's quarterly earnings call with analysts, that Disney planned to make a sequel to Marvel Entertainment's "The Avengers." The superhero movie smashed domestic box-office records in its opening weekend and has grossed more than $800 million in worldwide ticket sales, according to BoxOfficeMojo.

Iger sold $81.6 million in stock, or 1.8 million shares at an average price of $45.36, on Thursday, according to a regulatory filing made with the Securities and Exchange Commission.

Other executives, including general counsel Alan Braverman and corporate strategist Kevin A. Mayer, also sold stock in the days after Disney's earnings report. 

Disney issued a statement noting that Iger owns 1.14 million Disney shares, with a value that exceeds the company's ownership requirement. The sale was "part of routine financial planning to meet his family's diversification goals."

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-- Dawn C. Chmielewski

Photo: Robert A. Iger, chairman and chief executive of Walt Disney Co., speaks during an interview at the company's studios in Burbank. Credit: Patrick Fallon / Bloomberg

Disney reports strong second quarter 2012 results

Disney group
The Walt Disney Co. reported a 21% jump in net income for the quarter, as the strong performance of the television business and at the theme parks more than offset losses at the film studio.

Revenues rose to $9.6 billion for the three months ending March 31, up 6% from the same time a year ago. Net income exceeded $1.1 billion, compared with $942 million a year earlier. Disney reported earnings per share of 58 cents, excluding one-time items, an increase of 18% from a year ago.

The film studio reported an operating loss of $84 million for the quarter, reflecting the write-down associated with the sci-fi adventure film "John Carter."  The big-budget film, released in early March, brought in just $70 million in domestic box-office receipts, well shy of breaking even.

Disney's box-office dud was followed, two months later, by the record-setting performance of "The Avengers." The superhero movie, released by Disney's Marvel Entertainment group, smashed the domestic record for best opening weekend. 

"The Avengers," a film packed with action and A-list performers, brought in more than $207 million in its first three days of release in the U.S., and grossed a total of $702 million worldwide in its first two weeks. The results will be reflected in Disney's third quarter.

“We’re incredibly optimistic about our future, given the strength of our core brands,
Disney, Pixar, Marvel, ESPN and ABC," Disney Chairman and Chief Executive Robert A. Iger said in a statement. "And our extraordinary ability to grow franchises across our businesses, such as 'The Avengers,' which shattered domestic box-office records."

Disney's Media Networks television group remains the company's cash cow, reporting operating income of $1.7 billion for the quarter -- up 13% from a year ago.

Parks and resorts showed the most substantial gains. Operating income rose 53% to $222 million in the quarter, reflecting increased attendance and spending at Disney's domestic parks, and improved results from the Tokyo Disney Resort, which was closed a year ago because of the March 2011 earthquake and tsunami in Japan.

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-- Dawn Chmielewski

Photo: Walt Disney Studios President of Production Sean Bailey; Walt Disney Studios President Alan Bergman, Chairman and Chief Executive of the Walt Disney Co. Bob Iger, then-President of Marketing Walt Disney Studios MT Carney and then-Chairman of the Walt Disney Studios Rich Ross attend "The Muppets" Los Angeles Premiere at the El Capitan Theatre on Nov. 12, 2011, in Hollywood. Credit: Todd Williamson / WireImage

 

 

David Zaslav is Discovery's $52-million man

OprahWinfreyandDavidZaslav

Discovery Communications Chief Executive David Zaslav might have had a rocky year in 2011 -- his joint ventures OWN: The Oprah Winfrey Network and the small kids' network HUB stumbled badly -- but the struggles didn't affect his compensation.

Zaslav's 2011 pay package, which included salary, stock, options and other perks, was valued at $52.4 million -- more than 20% over the 2010 level of $42.6 million. 

The large package propels Zaslav into the upper stratosphere of media compensation, and makes him among the highest paid executives in the nation.

In comparison, Robert Iger, chief executive of the much larger Walt Disney Co., collected a $31.4-million package last year. Viacom Inc.'s Philippe Dauman last year received $43 million (considerably less than Dauman's 2010 compensation of $84.5 million). Time Warner Inc. Chief Executive Jeff Bewkes took a slight pay cut last year, collecting $25.9 million.

Zaslav's base salary was nearly $3 million.  His stock and option grants were valued at $44 million, according to the company's proxy filed late Friday.  Some of the options were allocated in 2008, when Discovery's stock was trading at below $20 a share.  On Monday, Discovery's shares traded around $51.

A Discovery spokesman said 90% of Zaslav's compensation was due to stock appreciation.

In the proxy filing, Discovery said it had a strong year financially, with revenue climbing 12% to $4.2 billion. Net income from continuing operations jumped 75% to $1.1 billion.

But there were setbacks. Wall Street analysts have been discounting the value of OWN. Some are questioning whether the company will write down the network's book value this year.

Discovery, which owns 50% of OWN, has invested more than $312 million in the channel. Winfrey owns the other 50%.

Winfrey on Monday conceded that OWN has been trickier than she had anticipated during an appearance on "CBS This Morning."

According to Discovery's filings, its other highly compensated executives included founder and Chairman John Hendricks, who received a package valued at $8.9 million; Chief Financial Officer Bradley E. Singer, whose compensation was valued at $4.2 million; and Mark G. Hollinger, president of Discovery Networks International, whose compensation topped $5.5 million.  Former Chief Operating Officer Peter Liguori, who left Discovery at the end of the  year, received $4.8 million.

Discovery declined further comment.

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-- Meg James  

 
Photo: Partners Oprah Winfrey and Discovery Communications Chief Executive David Zaslav toast their joint venture OWN: Oprah Winfrey Network.  Credit: Robin Layton / OWN

 

Proxy advisor criticizes Disney's decision to name Iger chairman

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An influential proxy advisor criticized the Walt Disney Co.'s board of directors for naming Chief Executive Robert A. Iger as the company's next chairman, a decision that it claims “reversed a commitment to independent board leadership.”

Disney disputed Institutional Shareholder Services' contention in a regulatory filing Thursday, calling it “false — no such commitment was made.”

The matter of an independent board chairman dates from a contentious period of the company's history, in early 2004, when 45% of Disney's shareholders heeded the late Roy E. Disney's call to cast a vote of no confidence in then-Chairman and Chief Executive Michael D. Eisner.

After the shareholder vote, the Disney board announced it would separate the positions of chairman and chief executive, and named an independent director, former Sen. George Mitchell, to serve as board chairman.

At the time, the Connecticut Retirement Plans and Trust filed a proposal to permanently separate the roles, according to ISS.

Disney changed its corporate governance guidelines to specify that the board chairman would be an independent director — unless recombining the posts would serve “the best interests of shareholders.” In that case, the board would explain its decision in a statement to shareholders and name a lead independent director.

The issue was reignited last fall, when Disney's board announced that Iger would assume the role of chairman upon the retirement later this month of the current chairman, John Pepper. Iger would then serve in a combined chairman and CEO role until he retired as chief executive in March 2015. He would remain chairman through June 30, 2016.

Disney's board said the decision was part of its succession plan to provide a smooth transition for the next chief executive.

“The board concluded that succession planning would be best served ... by naming a successor CEO during Mr. Iger's extended tenure in order to enable a healthy mentoring process during the remainder of his term as chairman,” Disney wrote Thursday in a letter sent to shareholders explaining the decision.

The company said the board had decided to appoint a lead independent director to address governance concerns, and argued that there was nothing out of the ordinary in combining the functions — noting that 68% of the top 100 S&P companies in the S&P 500 have combined chairman and chief executive positions.

ISS faulted Disney for failing to adequately reach out to shareholders before the announcement Oct. 6, 2011 — which came one week after the Sept. 30 deadline that would have allowed shareholders to include in the proxy statement any proposal to separate the chairman and CEO positions in time for the company's March 13, 2012, meeting in Kansas City, Mo.

“The board's reversal of its prior commitment to an independent chair, without suitable transparency and input from shareholders, constitutes a material failure of governance,” the ISS wrote in its Feb. 29 recommendations.

ISS recommended shareholders vote against four board members who serve on the Nominating and Governance Committee — including Facebook Chief Operating Officer Sheryl K. Sandberg.

ISS also took issue with Iger's compensation, which has risen to $31.4 million — up from $17.25 million when he became chief executive in October 2005. An investment of $100 made in the company five years ago would be worth only $105 at the end of fiscal 2011, it notes. “This level of return contrasts sharply with the CEO's increasing compensation,” the advisory service wrote.

Disney uses a different set of numbers to characterize the company's performance under Iger, which yielded returns four times greater to shareholders than that of the Standard & Poor’s 500. It notes that the same $100 invested at the start of Iger's tenure as CEO would be worth $171 as of Dec. 30.

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 -- Dawn C. Chmielewski

Photo: Walt Disney Co. Chief Executive Robert A. Iger. Credit: Barry Sweet / Bloomberg News 

ABC sells all of its Oscar broadcast commercial spots

NataliePortmanWinsOscar

Commercial time in this month's Academy Awards broadcast is a hot ticket.

Walt Disney Co. Chief Executive Bob Iger said Tuesday that the ABC network last week sold the remainder of its available advertising time — several weeks earlier than usual. 

"There was demand for even more spots than allowed in [our] contract," Iger said in an earnings conference call with Wall Street analysts. Iger said the network squeezed in a few additional spots before it hit the contractual cap.

ABC fetched an average of $1.7 million per 30-second spot for the 84th annual Academy Awards broadcast on Feb. 26, a slight uptick from last year's rate.

The strong demand by advertisers bodes well for the Academy of Motion Picture Arts and Sciences, which relies on television revenue to stage its annual Oscar festivities as well as finance its operations.  Some observers have fretted that the field of nominees, led by "The Artist" and "Hugo," lacks a mainstream blockbuster film that would help lure mass numbers of viewers to the awards telecast. The biggest box-office draw of the major nominated films was "The Help," which had four nominations.  

Billy Crystal will host this year's awards ceremony.

The Academy Awards historically is one of the top television events of the year — often second only to the Super Bowl — and has become advertisers' favorite vehicle to reach women. The show is typically the second most-expensive network TV buy, too, after the Super Bowl. In the advertising world, the event is known as the "Super Bowl for women."

The Oscar audience is also typically upscale, representing viewers with plenty of disposable income, making it all that more attractive to advertisers.

The Oscars ceremony also has drawn high advertiser interest because — like the Super Bowl or the "American Idol" finale — it is broadcast live and viewers watch the commercials rather than speeding through them with their digital video recorders. That makes the ad time more valuable to companies.

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Photo:  Natalie Portman accepts her Academy Award for lead actress for her performance in "Black Swan" at last year's Oscar ceremony.  Credit:  Al Seib / Los Angeles Times

Viacom executives again among America's highest paid

ViacomPhilippeDaumanSumnerRedstone

Billionaire Sumner Redstone got a 39% boost in compensation last year in his role as executive chairman of Viacom Inc. The 88-year-old media mogul and his top two lieutenants together collected compensation packages in 2011 totaling nearly $100 million.

Viacom Chief Executive Philippe Dauman was awarded $43 million in salary, stock and other benefits, according to the company's proxy filed late Friday with the Securities & Exchange Commission. While still sizable, Dauman's compensation was considerably less (a 49% decrease) than in the previous year when he earned the distinction of being the highest-paid executive in corporate America with a package totaling $84.5 million.

Viacom's second in command, Chief Operating Officer Thomas Dooley, collected $34 million -- an amount that exceeds the pay package of Robert Iger, chief executive of the much larger Walt Disney Co. Iger received a total package of $33.4 million in 2011.

Executives of Viacom, which owns MTV, Nickelodeon, Comedy Central and Paramount Pictures, have long been among the highest paid in the media industry. The compensation awarded to Dauman and Dooley spiked in 2010 when the two executives signed new employment agreements and received generous one-time stock awards. Dooley's 2010 package was $64.7 million.

Redstone was awarded $21 million in 2011. That was nearly $6 million more than in the previous year when his Viacom compensation was $15 million. Viacom included 12 months in the compensation calculation last year, whereas 2010 was based on a nine-month period.

"Those are big numbers," said corporate governance expert Charles Elson. "Viacom seems to be paying their executives entrepreneurial returns rather than managerial wages to run an established company with long-term assets. There seems to be a disconnect there."

Viacom defended the compensation.

"Almost 90% of our senior executive compensation is performance or equity based, which aligns their interests with those of our stockholders," Viacom said in a statement. "Their 2011 compensation reflects achievement in outstanding operational results, including double-digit growth in operating income and adjusted net earnings and a significant outperformance of the S&P 500."

Viacom's common stock increased nearly 9% last year.

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-- Meg James

Photo: Viacom Chief Executive Philippe Dauman and Chairman Sumner Redstone in Beverly Hills in 2007.  Credit: Mel Melcon / Los Angeles Times

 

Disney CEO Bob Iger's compensation totals nearly $31.4 million

This post has been corrected. See the note at the bottom for details.

Walt Disney Co. Chief Executive Bob Iger received nearly $31.4 million in total compensation last year, an 11.9% increase from 2010, according to a filing with the Securities and Exchange Commission. Walt Disney Co. CEO Bob Iger

The board's compensation committee laid out the case for Iger's package, noting that 90% is tied to Disney's performance. It said the Burbank entertainment giant achieved record net income, revenue and earnings per share in fiscal 2011, and initiated a number of projects that would contribute to the company's future growth -- including expanding attractions at Disney theme parks in Florida, California and Hong Kong, and the joint venture to create a new park in Shanghai.

Media executives' salaries have come under scrutiny in recent years, with media mogul Sumner Redstone and his top lieutenants at Viacom Inc. drawing especially lucrative salaries and compensation packages in 2010.  Viacom CEO Philippe Dauman earned the distinction of drawing the largest one in corporate America that year: $84.5 million.

At Disney, the board said it wanted to make sure it retained Iger's expertise through the end of his employment contract, in June 2016, to assist with the transition to a new chief executive. Iger will also assume the title of chairman in March with John Pepper's retirement from the board.

According to a summary of his compensation, Iger collected a base salary of $2 million and stock awards worth $8 million. He received $4.8 million worth of stock options and $15.5 million in bonuses. His corporate perquisites -- personal travel, security and other items, such as vehicle expenses, a health club membership or exercise equipment -- amounted to $962,932. The value of Iger's pension also grew by more than $2 million in the year.

Alan Braverman, Disney's general counsel, collected total compensation of $6.9 million last year, an increase of 3% over 2010.  Kevin Mayer, the head of strategic planning, saw a 15% cut in his total compensation, which dropped to $3.6 million for the year.

The company's chief financial officer, Jay Rasulo, received $9.9 million for the year, a gain of 2.5%.

In a note to shareholders, Iger wrote that 10 board members would stand for reelection, signaling that Disney would not replace the late Apple Inc. co-founder Steve Jobs, who died in October.

For the record: 7:17 p.m. Jan. 20: A previous version of this post said Iger received a 13.6% increase in total compensation from 2010.

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Walt Disney Co. Chief Executive Bob Iger arrives at the Directors Guild of America Awards. Credit: Dan Steinberg / Associated Press

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Disney announces ESPN succession, elevating Skipper, Bodenheimer

ESPNGeorgeJohn
George Bodenheimer, who has been running Walt Disney Co.'s lucrative ESPN networks for more than a decade, is stepping back from day-to-day management but plans to remain with the company in the newly created role of ESPN executive chairman.  

John Skipper, 55, is being elevated to ESPN president and co-chairman of Disney Media Networks. For the last six years, Skipper has been executive vice president of ESPN content, overseeing programming and production of ESPN content across all media platforms, including TV, radio and the Internet.  Skipper joined ESPN 14 years ago as general manager of ESPN the Magazine. 

The shift is significant because it marks the first management change at the top of the remarkably stable and profitable network group in 13 years.

Disney Chief Executive Bob Iger announced the moves, which take effect Jan. 1.

"I am humbled and excited to be given the opportunity by Bob and George to lead this terrific company," Skipper said in a statement.  "I will dedicate all of my energy to follow George's lead in both empowering and supporting my 7,000 ESPN colleagues who do such great work every day."

Bodenheimer, 53, will continue as chairman of the ESPN board. He will provide "strategic direction and support a seamless transition to Skipper," Disney said in its statement.

Bodenheimer wanted to take a less demanding role. 

"We have been focused on succession at all levels of Disney for some time now, and consistent with that approach, George initiated conversations last spring that led to today's announcement," Iger said in statement.

Bodenheimer will continue to report to Iger, while Skipper will answer both to Iger and Bodenheimer. The promotion for Skipper is also notable because it puts him on the same management footing as Anne Sweeney, the other co-chair of Disney Media Networks.  Based in Burbank, Sweeney runs Disney's entertainment channels, including the ABC broadcast network, the Disney Channel and ABC Family.

ESPN has cemented itself as a television juggernaut under Bodenheimer’s 13-year run as its president. Today, the network boasts eight US television networks, five HD services, a 3-D TV network, 48 international networks, 13 international editions of SportsCenter and 750 radio affiliates. ESPN’s Bristol, Conn., headquarters has mushroomed into 116 acres, featuring a sophisticated digital production operation.

“With George’s continued presence, John’s experience and vision and an executive management team and workforce that are unparalleled in the sports media business, ESPN is extremely well positioned for continued success,” Iger said.

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 Photo: George Bodenheimer, left, and John Skipper. Credit: Steve Fenn, left, and John Atashian

Broadcast version of Disney Channel to launch in Russia

Phineas and Ferb

The Walt Disney Co. says it plans to launch a free, broadcast version of its popular Disney Channel in Russia next year, enabling the entertainment giant to deliver its family programming to about 40 million households in the increasingly important market.

Disney will acquire a 49% stake in the Seven TV network, enabling it to air Disney Channel programming on broadcast stations in 54 urban markets, including Moscow and St. Petersburg, as well as in rural areas.

"International expansion is a key strategic priority for our company and Disney Channel has proven to be invaluable in building the Disney brand around the world,” Disney Chief Executive Robert Iger said Thursday in a statement.

Disney has been active in Russia since 2006, when the studio formed a joint venture with Sony Pictures Releasing International to distribute films in Russia. In 2008, the company announced a joint venture with Media-One Holdings to start a Russian version of the Disney Channel on 30 stations throughout the country, bringing "Hannah Montana" and "Wizards of Waverly Place" -- dubbed in Russian -- to the market.

Russia is an increasingly important market for entertainment companies, especially for film. It crossed the $1-billion box-office mark for the first time in 2010, a more than 15-fold increase since 2001. Indeed, as a sign of the country's significance, Walt Disney Studios last summer held a premiere of its biggest summer release, "Pirates of the Caribbean: On Stranger Tides," in Moscow.

It's also a market where animated films, such as Pixar Animation Studio's "Cars 2," tend to perform well -- when audiences are exposed to the characters. Lack of familiarity with Pixar's animated pals Buzz and Woody was believed to be one factor in the surprisingly weak theatrical performance of "Toy Story 3" in Russia, when the 2010 summer blockbuster otherwise reaped more than $1 billion in gloal ticket sales.

Disney Channel would serve as the Burbank-based entertainment giant's ambassador in Russia, introducing young audiences to Disney's characters.

The partnership with UTH Russia, a media company that operates the Seven TV and MUZ channels, is a departure in how Disney Channel is traditionally distributed. The new over-the-air channel will combine Disney shows with Russian TV programming, according to Alisher Usmanov, a major Internet and media investor in Russia.

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Photo of Disney Channel's Phineas and Ferb animated series, from the "Wizard of Odd" episode. Credit: Disney

-- Dawn C. Chmielewski

 

Hulu rehearses its sales pitch: more video; more subscribers

BOBIGERsunvalley

Now that Hulu is on the auction block, its media company owners are making sure the popular online video website gets plenty of exposure.

On Wednesday, at investment bank Allen & Co.'s annual gathering of media and tech moguls in Sun Valley, Idaho, Disney Chief Executive Bob Iger told reporters that Hulu's owners, which includes Disney, were "committed to selling" the 3-year-old venture.

"There is a lot of interest," Iger said, according to Bloomberg News.

Bankers representing Hulu in the last few weeks have had discussions with more than a half-dozen major media and technology companies, including Google Inc., Microsoft Corp. and Yahoo Inc., according to people close to the process.

Hulu's owners, which also include Fox parent News Corp., Comcast Corp.'s NBCUniversal and private equity firm Providence Equity Partners, have concluded that the venture's complicated governance structure is unwieldy, making it difficult for the three media companies and the minority owners to reach consensus. 

In addition, this seems to be a particularly advantageous time to sell because of Wall Street's increasing appetite for shares of technology firms that are now going public.

Also on Wednesday, Hulu Chief Executive Jason Kilar (who has a small ownership stake in Hulu) posted a blog trumpeting Hulu's second-quarter business highlights.

The Hulu Plus subscription service is on track to exceed 1 million subscribers by the end of the summer -- a few months ahead of schedule, Kilar said.

"We just closed our biggest month in Hulu Plus paid subscriber net additions by a healthy margin; we added more paying subscribers in June than we did in April and May combined," Kilar wrote. "We are extremely encouraged by the ramp of this business."

Hulu anticipates taking in $500 million in revenue this year.

The service, Kilar pointed out, also is a good citizen.  Hulu paid media companies that provide content to Hulu Plus "approximately $8 per subscriber per month" for programming found on Hulu Plus.  That represents a combination of income from the $7.99 a month subscription fee as well as advertising revenue to the site.

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