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Media Firms Piece Together New Strategies

"We looked at a lot of things; we looked at satellite," he said in an interview Friday. "But it seemed to me that the way digital platforms emerged and are emerging . . . I don't want to say distribution is a commodity, but it almost is a commodity. There are so many different ways to get content into your home, why would you want to make a bet on what is the right distribution system of the future?"

"Everyone needs content," he said.

Rupert Murdoch's News Corp. has massive holdings in the media. The company seems to have given up on building a Los Angeles Dodgers-based sports empire and is eyeing the Web and video games. (Martin Kaplan -- AP)

Sliding Stock
Shuffling Giants
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Viacom President Resigns (The Washington Post, Jun 2, 2004)

Disney has not made a major acquisition since its 1996 purchase of the ABC and ESPN networks. However, it did sell its Anaheim Angels baseball team in 2003 and agreed last month to sell its Anaheim Mighty Ducks National Hockey League franchise. Sleeker by two expensive-to-run teams and richer by more than $200 million, the company is focusing on keeping its remaining, core businesses -- theme parks, movies and television -- and expanding into Asia, which analysts see as sound strategy.

"Disney is driving synergies amongst divisions and should remain intact in our view," Deutsche Bank Securities analyst Doug Mitchelson wrote last week.

News Corp. -- which owns all or part of the Fox Entertainment Group, film operations such as Twentieth Century Fox, 35 television stations, DirecTV Group Inc., the New York Post and HarperCollins Publishers Inc. -- once thought that the Los Angeles Dodgers would be the foundation of a cable sports network to rival ESPN. But News Corp. found greater success with its regional sports networks and sold the Dodgers last year.

Now, News Corp., like its peers, is eyeing the video game sector, President Peter Chernin has said. Regarding the Internet, Lachlan K. Murdoch -- Rupert's son, the company's deputy chief operating officer -- told investors last month that the company wants to grow its Internet presence but not via major acquisition.

Sanford C. Bernstein & Co. analyst Tom Wolzien cautions that size sometimes has its advantage for media giants, providing bargaining heft and a big collective toolbox for business units to draw on.

"If the stock is languishing, [selling off pieces] might do something that has a short-term positive impact, but then down the line, will the operators be hamstrung because they don't have the tools they need?" Wolzien said in an interview Friday. "I think it is the responsibility of management to make the case to [Wall Street] about why the pieces that are being broken apart are not essential to working together."

Staff writers Annys Shin and David A. Vise contributed to this report.

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