With a strategy of getting rid of its assets not related to its core business, Disney (DIS) is reportedly selling its 50% stake in 'US Weekly.' The deal itself isn't bad as Disney bought in at $40 million in February of 2001 and is said to be selling for $300 million. The deal should be consummated this fall.
While the celebrity field is still growing, it's possible that Disney feels that the time is right to cash in on their investment while the property is still doing well.
Even amidst reports that the celebrity news area is dropping, US Weekly is still going strong with almost 1.8 million subscribers during the first six months of the year. Up by over 7 percent from the first six months of 2005.
Ad Age reported that "Ad pages at Us Weekly from January through July totaled 1052.5, up 2.2% over the same period last year, and grew 10% during all of 2005 to total 1802, according to the Publishers Information Bureau."
Disney looks like it is positioning itself to operate a lot leaner and meaner. If they stay focused on their current strategy of marketing to families, while running operations at this level, they could quite possibly return to a high-performing stock very soon.
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