Anaheim Sports

Lore & Background

Disney Sports Enterprises, Inc. was incorporated in California on December 12, 1986. In December 1992, Disney purchased an NHL expansion franchise for Anaheim, naming the team the Mighty Ducks after a Disney movie. The team's creation was driven by Disney CEO Michael Eisner's interest in hockey, stemming from his sons playing the game. NHL executives considered it a 'coup,' and ESPN gave the NHL its best TV rights deal to date, $600 million for five years. As a Disney conglomerate unit, the company's president reported to Disney vice chairman Sandy Litvack, while its finances were counted as part of the parks and resorts segment. Following the record sales of Mighty Ducks licensed merchandise, the Los Angeles Dodgers turned to Disney in March 1995 to handle its merchandising operation.

In May 1995, Disney Sports Enterprises agreed to purchase 25% of the California Angels from Gene Autry with an option to buy the remaining ownership. The company then agreed to a new lease with the city of Anaheim, adding the city's name to the baseball club in return for full management of Anaheim Stadium and an increased share of stadium revenues. DSE took operational control of the Angels in May 1996, and the team was renamed the Anaheim Angels. In December 1996, the company was renamed Anaheim Sports, Inc. for tax purposes and to align with the teams' names. The teams were seen as an additional draw for Disneyland Resort and a key to a potential regional sports channel, ESPN West.

By 1998, both teams were losing money, and the ESPN West channel never launched. The teams were put up for sale in 1999. From 1995 to 1998, the Angels lost on average $16.6 million annually. The Ducks, initially a money maker, were expected to lose money for their third season. Broadcom Corporation approached Disney about interactive broadcasting rights, but Disney instead offered to sell the teams to Broadcom partners Henry Samueli and Henry Nicholas for $450 million. President Tony Tavares signed a three-year contract extension in 2000. After vice chairman Litvack retired on December 31, 2000, Anaheim Sports began reporting to Walt Disney Parks and Resorts chairman Paul Pressler. Lehman Bros. was hired to sell the teams in 2002. In May 2003, the Angels were sold to Arte Moreno. In February 2005, the Mighty Ducks and their training facility, Disney Ice, were sold to Broadcom co-founder Henry Samueli and his wife. The company was later merged out.

Reader's Guide

Anaheim Sports, Inc. represents a notable experiment in corporate synergy, where The Walt Disney Company leveraged its entertainment properties to own and operate professional sports teams. The company's significance lies in its role in bringing both an NHL expansion franchise and an MLB team under Disney's umbrella, using the teams to promote Disneyland Resort and explore a regional sports network, ESPN West. The Mighty Ducks, named after a Disney film, demonstrated the power of cross-promotion, generating record licensed merchandise sales and even leading the Los Angeles Dodgers to hire Disney for merchandising. However, the financial losses of both teams—the Angels losing an average of $16.6 million annually from 1995 to 1998, and the Ducks expected to lose money by their third season—ultimately undermined the strategy. The failure of the ESPN West channel removed the primary justification for retaining the teams. The sale of the Angels in 2003 and the Ducks in 2005 marked the end of Disney's direct involvement in professional sports ownership. The company's legacy is a case study in the challenges of integrating sports franchises into a larger media and entertainment conglomerate, highlighting both the potential for brand extension and the risks of financial underperformance.

Did You Know?

• The Mighty Ducks were named after a Disney movie, and the team's creation was due to CEO Michael Eisner's interest in hockey from his sons playing.
• In March 1995, the Los Angeles Dodgers turned to Disney to handle its merchandising operation after the record sales of Mighty Ducks licensed merchandise.
• Broadcom Corporation approached Disney about interactive broadcasting rights that would allow viewers to purchase Anaheim tickets and merchandise via remote controls.