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News >  Business

Iger takes over the reins at Disney

Associated Press

LOS ANGELES — The Robert Iger era is beginning at Disney.

The incoming chief executive will inherit a mixed bag Saturday when he becomes only the sixth person to lead the Walt Disney Co., replacing longtime CEO Michael Eisner.

The 54-year-old Iger takes over a company whose ABC network is on the rebound, whose theme parks are recovering from the 9/11 tourism slowdown and whose film division has lined up a slate of potential blockbuster movies, including two sequels to “Pirates of the Caribbean.”

But he will face considerable challenges as he tries to execute his vision of expanding Disney internationally and leading the company into a digital future.

Perhaps his most important task involves animated films, a franchise lost in recent years to Pixar Animation Studios Inc. and DreamWorks Animation SKG Inc.

“Bob Iger’s highest priority in our view is to re-establish Disney and its affiliates as the pre-eminent source of animated film,” said Laura Martin, an analyst with Soleil-Media Metrics.

Disney stumbled in recent years with traditional hand-drawn feature films while competitors were finding great success with computer-generated movies. The company has since switched to computer animation.

While Disney continues to rebound and promise double-digit growth this year and next, Iger will face hurdles sustaining that growth long-term, analysts said.

In recent years, Disney has aided its bottom line by shedding underperforming assets, such as its chain of retail stores, and is now talking to potential suitors about its radio business. For the latest quarter, net income rose 41 percent to $851 million, compared to $604 million in the same period last year, thanks to higher ratings for ABC shows such as “Desperate Housewives,” and increased attendance at its theme parks.

Disney’s stock has rebounded from a low of less than $15 a share in 2002 and has traded between $22 and $29.99 per share for the last 52 weeks. The stock closed Wednesday at $23.37 per share on the New York Stock Exchange.

Iger does not have the luxury of raising already expensive theme park prices to boost growth. And his plans to expand the company’s television and movie businesses into China and Asia will be tempered by restrictions placed on American media by those countries.

He has told analysts he is happy with Disney’s current size and mix of businesses, a structure that has helped the company weather downturns in tourism and slumps in the television advertising market.

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