The recent fall in its stock price says less about the company's prospects than about bull market jitters.
Ultimately, what's most important about Disney's struggle to turn ABC around is how impressive it makes the company's management of its own franchise look. After 15 years of almost uninterrupted superlative performance--which not even the Katzenberg and Ovitz contretemps could seriously slow down--it's almost impossible to remember how close Disney was to being dismantled in the early 1980s. The brand that we now think of as irresistible seemed tired and used up, and this now seamlessly efficient company lacked even a formal business model before 1983. A lot of what has happened at Disney--better advertising, smarter merchandising, revitalizing the animation department--looks obvious in retrospect. But it was only Eisner's recognition that a brand has to be updated and nurtured if it's to flourish that made those decisions so obvious.
ABC's problems, one suspects, will be much harder to solve, if only because they have much to do with network television as a whole and not just ABC in particular. But Disney's long-term future seems about as guaranteed as that of Coke or General Electric. Investors' recent flight from quality, as you might call it, was not completely irrational. But it tells us more about this edgy and anxious market than it does about Disney. In a market where tomorrow seems like the long term, the fact that 10 years from now the mouse will still be roaring somehow just doesn't really matter.
James Surowiecki writes the financial column at The New Yorker.