A Mouse divided as theme parks drag Boffo B.O. frame can't halt stock slide By CARL DIORIO There were more dark clouds over the Magic Kingdom on Monday. Disney stock slumped yet again -- to a new eight-year low -- after the Mouse House was put on alert by Moody's Investor Service that its debt rating was being eyed for possible downgrade. The announcement, which follows a similar warning Friday by Standard & Poor's, potentially affects $15 billion in Mouse debt. Moves reflect spiking concerns over sluggish attendance at the Disneyland and Disney World theme parks, especially by international visitors wary about post-Sept. 11 security concerns. And, coinciding with a boffo weekend for "Signs" from Disney's Touchstone movie division, they also indicate the diminished impact of rosy theatrical results on the Mouse's bottom line. "Signs" generated Touchstone's biggest three-day box office ever with its $60.1 million bow. 'Ongoing concerns' "The review is prompted by Moody's ongoing concerns about the outlook for the company's theme park operations, uncertainty about viewer and advertiser share momentum at its ABC networks, and the company's high debt burden vs. operating and free cash flow," Moody's said. Action affects Burbank conglom's current long-term debt rating -- an investment-grade A3 -- as well as A2 ratings at subsids Disney Enterprises and ABC. "Moody's believes that the external environment, which includes waning consumer confidence and ongoing geopolitical uncertainty, will continue to challenge (Disney)," the ratings service said. Slow to shed debt Meanwhile, Mouse has moved slower than expected to reduce debt accumulated through its acquisition of cabler Fox Family earlier this year, Moody's said. "In addition, Moody's remains concerned that given ABC's lagging audience share, it may experience greater negative volatility should a 'double-dip' advertising recession take hold," the ratings service added. A ratings downgrade could increase Disney's future borrowing costs through higher interest expenses. "It's just yet another piece of negative news," Sanders Morris Harris analyst David Miller said. Stock continues slide On Thursday, Disney posted a 31% profit decline in its June quarter amid downturns in theme park, TV and film operations. A related forecast of lower profit in the current quarter helped send Disney shares 11% lower Friday. The stock shed another 6% Monday, closing down $1.04 at $14.27 amid active turnover. Mouse shares have tumbled 31% this year. S&P placed Disney on CreditWatch for possible downgrade to a single-A corporate credit rating, saying conditions make it unlikely the conglom can dramatically reduce its high debt by the end of the fiscal year. "Operations remain under pressure from the weak U.S. economy, and parks and resorts are affected by the global economy," S&P said. "In addition, the broadcasting and theme park businesses, which are key incremental cash-flow generators, also are suffering from non-economic pressures. Travel-related businesses will need increased confidence in security, and the ABC television network faces a major task to rebuild its primetime ratings."