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ABC ratings lift gives Disney's Iger a boost

Disney President Robert Iger's star has been rising  amid speculation over who will succeed CEO Michael Eisner in 2006.  News that the company's ABC TV network plans to renew a costly deal with the NFL looks like it's going to push Iger's star even higher.
Disney executive Robert Iger at the premiere of the new film \"The Incredibles\" in Hollywood
Robert Iger, president of The Walt Disney Co., at the premiere of the Pixar Animation Studios film "The Incredibles" in Hollywood in October.Fred Prouser / Reuters file
/ Source: CNBC

Ever since Walt Disney CEO Michael Eisner announced his resignation from the post in 2006, speculation has been building over who will replace him. Industry analysts will get a chance to ask more about management succession plans at next week’s meeting with company executives in Orlando.

One name that continues to surface is company president Robert Iger, the man who may soon have the keys to the Magic Kingdom.

Iger's star has been rising at the Disney and news Monday that Disney's ABC television network plans to renew a costly deal with the National Football League looks like it's going to push his star even higher.

Even though ABC loses an estimated $150 million a year on the NFL, network executives say they plan to continue the relationship — and for good reason

“You’re looking at a huge ratings program, a big draw of young adults, particularly the male demographic,” said Richard Greenfield, an analyst who follows the company at Fulcrum Global Partners. “I think it would be very difficult to replace it quickly and smoothly."

Big audiences for “Monday Night Football” are critical to the continued turnaround at ABC, which is riding high on hits such as “Lost” and “Desperate Housewives.” The comeback is boosting Disney's stock — and Iger’s. He’s widely viewed as the likely successor to Eisner.

“The ABC turnaround has greatly accelerated or improved his chances of getting that position (as Disney CEO),” said Laura Martin, an analyst at Soleil Media Metrics. “I think the Disney culture is insular and unique. And I think the board probably feels that Bob Iger is well positioned to continue that kind of strong Disney identity and culture.”

As Disney prepares for an eventual changing of the guard in the executive suite, a Delaware court is deciding whether Eisner and former board members wasted company funds by hiring and later firing Hollywood superagent Michael Ovitz.

“This may very well be the case of the decade in terms of what it's going to tell us about director liability going forward,” said Prof. Lynn Stout at UCLA School of School.

In the future, Disney’s theme parks are set to benefit from a rebound in foreign visits and a weaker U.S. dollar. But the company's film division faces challenges, as Miramax founders Bob and Harvey Weinstein prepare to leave the company and a lucrative co-production deal with Pixar comes to and end.

“I think from the standpoint of animated content or live action content, that's going to be a big challenge going forward,” said Greenfield. “And the other piece is looking at the overall theme park business — ensuring that that business can sustain long term growth — is certainly a big issue because it's such a big part of the company."