Rick refers to the recent earnings report as "blowout" and "stunning" on the basis that -- excluding the losses at GO.com -- the numbers beat analyst projections. Well, all I can say to that is, "So what?" The earnings were still well below the previous year's first-quarter earnings -- or the first-quarter earnings for either of the two years before that. Look it up. That's a blowout? Hey, I wish Rick the best of luck in wishing upon all the falling stars he wants, but he's going to need more than prayers here.
You really need to take a look again at the earnings for Disney over the last couple of years, and realize that these occurred during a time of extraordinary strength for the economy. I don't want to raise a recession-scare argument in which I don't believe, but just exactly how much better is the economy supposed to get so that Disney can start growing earnings and sales again? Rick champions the theme park results, but having read the draft of his Motley Fool Research report on Disney, I found that the theme parks are largely saturated already. The growth certainly isn't going to be in the double digits there, so why the excitement?
Rick attempts to parlay the Who Wants to Be a Millionaire? fad into indefinite ratings gold. I could counter that Millionaire has already been one-upped by Fox's Who Wants to Marry a Multimillionaire? in the exploration of how fascinated people are in super-easy money (Disney's insurer is balking at paying out the insurance on the jackpots for Millionaire because the questions weren't supposed to be so easy), but that isn't ultimately the point. The whole ABC operation is one that has probably peaked as a value driver. The other day I saw a headline -- that I thought was really delightful -- about how a study showed that Internet users were now experiencing less "real life" because of their surfing. This included less time shopping, interacting with family and, as the article pointed out, "even television watching."
As somebody who has spent entirely too much of his life in front of the tube, I'm delighted in the fact that all those squandered hours have now been upgraded to "real life," but the article at least captures the truth of the matter -- the Internet is taking away from television viewing. Having enormous assets invested into television networks simply isn't exactly a promising predicament to find yourself in now that we've crossed the bridge to the 21st century. Now that dotcoms are beginning to realize (as we at Fool.com have) that wasting money on buying television commercials is a loser's game, the momentary blip up on network ad revenues should surely be taken with a grain of salt. If you really want to be a millionaire, don't bet on ABC to ultimately be a great investment for Disney. It surely hasn't been as of yet.
And, yes -- that is my final answer.
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