Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, August 1, 1995 TAG: 9508010081
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: Knight-Ridder Newspapers NOTE: Lede
DATELINE: LENGTH: Medium
The $19 billion Walt Disney-ABC merger announced Monday would bring together the world's foremost producer of family entertainment with the nation's No. 1 television network.
It would also become the second-largest merger in American history, after the $25 billion acquisition of RJR Nabisco Inc. by the Kohlberg Kravis Roberts & Co. investment firm in 1989.
``These two companies are the premier family entertainment and communication companies in this country,'' Michael Eisner, chairman and CEO of the Walt Disney Co., said at a news conference Monday in New York. ``I am totally optimistic that one and one will add up to four here.''
The combined enterprise, to be called the Walt Disney Co. and headed by Eisner, will be the world's largest entertainment and information company. Capital Cities will become a wholly owned subsidiary, and Thomas Murphy, its chairman, will be on the Disney board of directors.
The new company will bring together ``the global reach and incredible brand identity of Disney ... with ABC's powerful distribution system in radio and television and an enormous ability to generate advertising revenues,'' said Joseph Turow, a media scholar at the Annenberg School for Communication at the University of Pennsylvania.
The two companies, as big as they are, overlap in very few areas, meshing almost as neatly as Carnegie and Mellon.
The merger first became alluring when networks were freed from restrictions on how much programming they could produce on their own.
It became irresistible with the scheduled demise, in November, of regulations prohibiting networks from syndicating their own shows and reaping the harvest generated when they are shown over and over again on small, independent broadcast and cable stations.
And it could become even more satisfying and lucrative if, as expected, networks soon are permitted to increase substantially the number of stations they are allowed to own and operate.
The Federal Communications Commission and shareholders are expected to approve the deal.
Disney, built on the mighty shoulders of Mickey Mouse, who debuted in 1928, is essentially a producer of entertainment: movies, television shows and theme parks. Among its television shows are two of ABC's most-watched comedies: ``Home Improvement'' and ``Ellen,'' and the syndicated chat show, ``Live with Regis and Kathie Lee.''
It also owns a broadcast television station in Los Angeles; the cable Disney Network; the major-league hockey team in Anaheim, called the Mighty Ducks; and a string of retail stores selling trinkets from Donald Duck to Pocahontas.
Capital Cities/ABC owns the ABC network, which encompasses eight television stations. In addition, ABC has major shares of ESPN, ESPN2 and owns 20 radio stations, newspapers in Kansas City and Fort Worth and several magazines.
``The two things that travel worldwide are sports and animated entertainment,'' a senior ABC executive said Monday. ``Look at this in an international context. When you go around the world and your calling card is ESPN and Disney, it gives you a lot of leverage.''
by CNB