Last night’s BCS National Championship Game gave Disney-owned sports network ESPN its best TV ratings in two years. After a record profitable year in 2012, this early ratings win helps put the Walt Disney Company (DIS) in a position to grow even more in 2013.
Despite the BCS National Championship game between Notre Dame and Alabama ending up as a blowout from the very beginning, ESPN was able to hold viewers to see a +14% increase in viewership compared to last year’s championship game. This Monday night matchup was not only ESPN’s highest rated program in two years, but the highest rated program on all of cable over that time frame.
While part of the success of last nights ratings was due to Notre Dame’s huge national fan base, it still gives Disney something to cheer about from one of its most successful brands.Key Acquisitions Fueling Growth
In 2012 Disney saw its share price increase +27.62% and the company boosted its dividend by 25% in November, from 60 cents per share to 75 cents per share. These returns just underscore the positive growth that the company experienced last year.
Some of the recent success of the parent of ABC and ESPN is due to 2009′s acquisition of Marvel Entertainment. This property has given Disney a catalog characters and entertainment properties with a built-in fan base. Because of this acquisition, Disney was able to capitalize on the release of the superhero film The Avengers which ended up being the highest grossing film of 2012.
Moreover, in December of 2012 a deal was finalized that saw the merger of Disney and Lucasfilm. This means that Disney now has the control of George Lucas’ technology and effects division as well as the Star Wars franchise. These assets could be big profit drivers in the future.Roadblocks Still Remain
However, not everything has been positive for Disney. In 2012 the Walt Disney Pictures released John Carter which ended up being one of the biggest bombs of the year. Meanwhile, recent reports have suggested that Disney may cut jobs to curb costs. Many of the potential jobs that are being cut due to technology changes and recent acquisitions. There has not been any definite plans to go through with the cuts; the company is discussing other alternatives to reduce costs such as a change in travel policy and going through with a hiring freeze rather than layoffs.The Bottom Line
After a very successful 2012, Monday night’s ratings success sets the stage for Walt Disney and its properties to continue to see growth going forward. For investors, this shows that a position in Disney could continue to result in positive returns. Also, as the company has shown a recent willingness to increase its dividend, more of the same could continue going forward. While there has been some success and even some failures, Disney and its executives seem to be willing to do whatever possible to continue growth in 2013 and beyond.
The Walt Disney Company (DIS) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.