(Reprint From The Los Angeles Times)
August 9, 2002
By Bill Shaikin

It's a Tough time for Disney to Sell Team

CHICAGO -- With Disney stock falling to an eight-year low and Chairman Michael Eisner under renewed pressure to cut costs and boost profits, the time would appear to be ideal to sell the Angels and Mighty Ducks.

But, with the economy sluggish and the labor situations in both baseball and hockey uncertain, Disney apparently faces the unappealing choice of selling now at clearance-sale prices or holding onto the money-losing teams.

As the stock market has plummeted, so has the pool of interested buyers. And, with baseball facing a potential player strike this summer and an NHL lockout or strike increasingly likely in 2004, a would-be buyer could face a significant loss of revenue almost immediately upon assuming ownership.

With Disney under similar financial pressures in 1999, the company sold its Fairchild Publications unit for a reported $650 million and negotiated to sell the Angels and Ducks for $450 million. But the Angels' revenue of $100 million last year is almost insignificant compared to Disney's overall revenue of $25 billion, and so selling either or both teams would resolve a corporate headache but do little to boost the stock price.

"It depends how much pressure management feels to move some assets off the books," said John Moag, whose Baltimore investment banking firm specializes in sports finance. "Now may not be a good time to be selling, even though they may want the assets off the books. The wise thing to do may be to wait and see how the labor situation plays out and if the market improves."

Bob DuPuy, baseball's president and chief operating officer, suggested recently that Disney had dropped its asking price on the Angels by more than $100 million. Disney valued the Angels at $300 million during negotiations in 1999.

Alabama businessman Donald Watkins, who has discussed the purchase of the Angels for six months, is believed to have told Disney officials he believes the franchise is worth no more than $200 million, with a labor agreement in place. In the absence of such an agreement, he is believed to have offered about $150 million.