The Week

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Walt Disney Co. is on a wild ride, with some of its business units on an upswing and others not. During its annual meeting in Denver last week, Disney reported advance reservations at its Walt Disney World resort were down compared with 2002. But its Southern California park, Disneyland, witnessed a rise in reservations. Disney products and merchandise sales are up as the company reported growth in its consumer-product group, but Disney witnessed slower sales at its Disney Stores. "At the beginning of the year we set earnings targets predicated on a continued improvement in the economy and the travel industry, but that improvement has stalled, which will likely result in more moderate growth for this year," said Disney Chief Financial Officer Tom Staggs in prepared remarks. Analysts expect profits will rise 22% for the fiscal year ending Sept. 30, to 67¢ from 55¢ in 2002.

Diller resigns at Vivendi, for now

Barry diller resigned last week as co-CEO of Vivendi Universal's Vivendi Universal Entertainment as the financially troubled French company looks to sell some of its major assets. Still, Mr. Diller may not just walk away. Industry chatter is that he may be interested in making a bid for one or more of the entertainment unit's assets, possibly the film studio. Vivendi Universal wants to sell Universal Studios, Universal theme parks and its TV production company. One interested bidder is former oilman Marvin Davis, who has offered $20 billion for Vivendi Universal Entertainment and the Universal Music Group. Vivendi also wants to sell some of its cable networks, and possible suitors include Viacom and MGM. Mr. Diller was appointed interim CEO of the U.S.-based entertainment units last year while Vivendi Universal concentrated on repaying debt. "My executive role was never intended to be permanent," Mr. Diller said in a statement. He remains CEO of USA Interactive-which operates the Home Shopping Network, Ticketmaster, and Expedia-and retains a 5.4% stake in Vivendi Universal Entertainment. QwikFIND aao53a

Karmazin says he will stay at Viacom

After much speculation about Mel Karmazin's future, last week he said he will remain as Viacom's president and chief operating officer. Mr. Karmazin and Chairman-CEO Sumner Redstone signed new employment contracts effective May 5. Both executives' contracts run for three years. Many investors view Mr. Karmazin as a key to the success of the 2000 merger of Viacom and CBS, where he was president-CEO of CBS prior to the merger. In recent meetings with investors, Mr. Redstone downplayed reports of friction between the two. After Mr. Redstone failed in a bid to unseat Mr. Karmazin in early 2002, the two settled into a boardroom detente that fed speculation that Mr. Karmazin's contract would not be renewed. The tension escalated after Mr. Karmazin decided to withhold a portion of CBS inventory in a weak spring 2001 network upfront market, betting on an ad rebound. Although the strategy cost the network some $250 million in sales, it eventually paid off in higher scatter prices. Mr. Karmazin will continue to report to Mr. Redstone. On the day of the announcement, its stock closed up 3› to $38.90. QwikFIND aao53d

Microsoft workers upset with Savage

Microsoft corp. sought to allay employee concerns over sibling unit MSNBC's hiring of controversial talk show host Michael Savage. An internal memo obtained by Advertising Age last week addressed to members of Microsoft's Diversity Advisory Council urged them to contact MSNBC to register their concerns. The memo, written by Claudette Whiting, Microsoft's director of diversity, stated: "Under the terms of the joint venture agreement with NBC, Microsoft does not make the programming and hiring decisions of the MSNBC cable channel. ... I want to assure you that while we strongly support the editorial independence of MSNBC and we respect Mr. Savage's right to express his views, we do not agree with Mr. Savage's views, and they do not reflect our corporate values." Microsoft spokeswoman Stacy Drake confirmed the memo's authenticity and said: "We have been in dialogue with our employees ... to assure them that Microsoft remains committed to fostering diversity at the company." MSNBC did not return calls seeking comment.

Hachette owner Lagardere, 75, dies

Jean-luc lagardere, who built and ran the French corporation that owns Hachette Filipacchi Medias, died March 14 in Paris. He was 75. A spokesman for Lagardere Group said Mr. Lagardere died from a "rare auto-immune illness" following complications from a hip operation in late February. A customs inspector's son by birth and an engineer by training, he built one of France's largest industrial conglomerates. His concerns that the `80s socialist leadership of France might mean a nationalized defense industry led him to acquire Hachette. Despite this expansion, he was more closely identified with Lagardere's defense businesses. Mr. Lagardere turned over control of the company to his son, Arnaud, in 2001. In 2002, Lagardere Group's total revenues were $14.3 billion. QwikFIND aao52t


The two creatives whose 1993 "Harry and Louise" ads against the Clinton health-care proposal kicked off the boom in lobbying advertising, Ben Goddard and Rick Claussen, are venturing off on their own again. Five years after selling Goddard Claussen to Omnicom's Porter Novelli, Mr. Goddard will move from California to Washington, D.C., to head the East Coast office of the new GC Strategic Advocacy, bringing along four of his former clients.

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