Disney's film studio dominated the summer box office, ABC and ESPN boast splashy TV hits, the theme parks weathered the gas pinch pretty well and the consumer products unit is riding a high-tech wave.

Under new President and Chief Executive Robert Iger, Walt Disney Co. shares have climbed steadily over the past year and hovered just above $31 last week, a 52-week high. With everything going so well in the House of Mouse, doesn't a discouraging word seem just a little, well, Goofy?

Not necessarily, according to David Miller, managing director at Sanders Morris Harris. His firm last week downgraded the stock from "buy" to "hold" and said in its analysis: "We have trouble at this point citing material studio catalysts in the near term." The translation: Disney is going to have a tough time following its 2006 act.

"The stock has done what we wanted it to do it's up 30 percent for the year, and all four businesses are doing very well," said Miller, who believes the shares have likely neared their 2006 peak. He noted since 1984, (the start of former Chief Executive Michael Eisner's tenure), the stock has a tendency to surge and top out when Wall Street has the impression that all four businesses are running at full speed.

"That's exactly what's happening now; all four business units are firing on all cylinders," Miller said.

Part of the stock's rise can be attributed to Disney's embracing of new media distribution platforms. The primary example of that is Disney's ABC network, which has made much of its primetime content including "Desperate Housewives" accessible via streaming Internet video, new partner Apple Inc.'s iTunes and over cell phones with Verizon Wireless.

There's also last week's launch of Disney's Max Mix digital media player for music, video and photo content. It's intended to complement Apple's iPod, not compete against it. At $99 it's way cheaper, and the design and capabilities are more suited to youngsters.

ABC's early season reviews have been positive and cable network ESPN is scoring early ratings touchdowns with its $8 billion purchase of the "Monday Night Football" franchise.

One of the reasons for the downgrade, Miller said, is that it's hard to imagine the film studio pulling off another box office year like this one, in which "Pirates of the Caribbean 2" (more than $1 billion worldwide) and "Cars" ($436 million) were monster hits.

Next year's release slate is back-loaded, with the next Pixar film, "Ratatouille," and the third "Pirates" installment scheduled for third quarter release. The first "Narnia Chronicles" sequel is due in summer 2008.

Broadening the Base
Pasadena-based MultiCultural Broadcasting Inc. has agreed to pay $170 million to the E.W. Scripps Co. for five TV stations affiliated with the Shop at Home network.

Multicultural will get WMFP-TV in Boston; WOAC-TV in Cleveland; WRAY-TV in Raleigh-Durham, N.C.; WSAH-TV in Bridgeport, Conn.; and KCNS-TV in San Francisco. The transaction is expected to be completed over the next nine months, pending license transfers and other approvals by the Federal Communications Commission.

Multicultural Radio Broadcasting is a multiethnic media company with radio stations, cable holdings and satellite television operations. The company also owns print publications serving consumers in more than 22 languages.

MultiCultural has grown from a handful of low-power stations in the 1970s to become the nation's 18th largest radio broadcaster today, transmitting in Spanish, Chinese, Korean and 19 other languages.

Most of the broadcaster's programming now originates from its studios just south of Old Town Pasadena. The West Coast editorial and sales offices of M-Weekly, a Chinese-language weekly magazine, and Networks Asia, an advertising agency, are in the same building, and both are also owned by MultiCultural.

Radio entrepreneur Arthur Liu founded the firm that became MultiCultural in 1976 and cobbled together a multilingual network of 47 AM and FM radio stations nationwide.

On the Bubble
Now, coming to you direct from his pineapple under the sea, it's SpongeBob Squarepants.

L.A.-based Imperial Toy LLC is developing a new line of toys and novelties through a multiyear agreement with Viacom Inc.'s Nickelodeon TV channel and Viacom Consumer Products to produce products based on some of the network's most popular properties. In addition to SpongeBob, toys based on "Dora the Explorer," "Avatar: The Last Airbender," "The Backyardigans" and "Go, Diego, Go!" are also in the works.

Imperial is the largest manufacturer of bubble toys in the world, so SpongeBob is a natural fit. Imperial will design and develop water-themed games, large outdoor water play environments, nine sprinklers and inflatable toys with SpongeBob motifs.

Imperial products are distributed through retailers including Target, Wal-Mart, Walgreens, K-Mart, and Toys 'R' Us. The company is SpongeBob Squarepants is one of Viacom's most lucrative properties, and the spongy yellow character even starred in a movie of his own in 2004, which grossed $85 million domestically.

"Each of the Viacom properties has different demographic and consumer appeal, so that gives us a broad reach," said Tim Thompson, a spokesman for Imperial. "So far the initial response from retailers has been outstanding."

Staff reporter Anne Riley-Katz can be reached at ariley-katz@labusinessjournal.com or at (323) 549-5225, ext. 225.

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