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War takes toll on ABC bottom line

Surging expenses overwhelmed strong sales growth, depressing earnings at
The Walt Disney Co.'s TV operations for the first quarter.

Part of that stemmed from the war.

ABC's continuing coverage of the Iraqi war, plus the loss of advertising in
its initial days, will cost ABC between $65 million and $70 million,
parent Disney said Thursday in releasing first-quarter earnings.

About one-half of that total -- $32 million -- fell in the first quarter and
contributed to Disney's 8 percent drop in operating income (from $702 million to
$646 million) in the quarter, even though revenue rose 8 percent (from $5.9
billion to $6.3 billion).

Also depressing operating income were a steep drop in revenue at Disney's
theme parks and higher TV-programming costs.

Revenue for broadcasting (ABC TV, ABC Radio and their broadcast stations)
increased a strong 13 percent to $1.4 billion, but operating losses ballooned
from $13 million to $105 million.

Disney blamed "higher NFL [National Football League] costs for the Super Bowl broadcast ... higher prime-time-series costs" and the losses associated with the war.

Revenue from cable (principally ESPN and ABC Family) was also up 13 percent
to $1.1 billion, but operating income rose just 5 percent to $337