Walt Disney Co. on Thursday announced it has acquired a stake in Starwave Corp., as expected. Disney will have operating control over the company, and founder Paul Allen will remain the largest shareholder. Terms of the deal weren't disclosed, but earlier reports indicated Disney was angling to pay $100 million for a one-third stake in the company.
Key Starwave management, including Chairman-CEO Mike Slade, will remain with the company. Rumors circulated last month that Mr. Slade would leave after the Disney investment.
Disney has an option to purchase Mr. Allen's remaining interest in Starwave, exercisable over the next five years. Mr. Allen in turn can sell his shares to Disney after the fifth year.
To mark their new partnership, Disney and Starwave on Thursday announced the launch of ABC News' major online operation in conjunction with Netscape Communications Corp. and America Online. ABCNews.com will be the main TV and radio news provider on AOL, where ABC and Starwave will offer daily multimedia news slide shows.
ABC News will also get premier positioning on the Netscape home page, offering headlines and a link to the ABC News site. In addition, ABC News will be a premier content provider for Netscape's upcoming Communicator component, Constellation.
Tom Phillips, formerly senior VP-products and services at Starwave, was named president of the ABC News/Starwave venture. ABC Senior VP Jeff Gralnick, who led the network's aborted attempt to launch a 24-hour news channel, is the ABC executive overseeing the venture.
Copyright April 1997, Crain Communications Inc.