Either media companies live in a world all their own or a recession is not just around the corner.
Results from Disney (NYSE: DIS) were especially good. Disney is a good indicator of the board economy because it has a theme park and consumer retail goods operation. The theme parks serve tens of millions of people. The firm also has a broad spectrum of pure play media assets.
Except for the company’s film studio, where revenue was flat, the rest of the company did remarkably well. Theme park revenue rose 11% and operating income was up 25%. The firm’s consumer products and media business, which includes ABC and ESPN also posted strong numbers. Just as astonishing, the company said the upcoming quarters looked fine.
Over at the Murdoch empire (NYSE: NWS), cable network operating profit was up 26% to $337 million. Television results also rose. Perhaps most amazing, operating income was up at the newspaper division. Most newspaper companies are having difficult years.
Big media companies touch an extremely broad spectrum of the population. Film studios, theme parks, TV networks, cable channels, and newspapers. The number of customers in the US alone must be well over half of the population.
What does that say? Either the broad economy is doing better than expected or Mr. Murdoch and his friends have a genie in their pockets.
Douglas A. McIntyre
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