MousePlanet Mailbag for March 18, 2004
The recent events at the Walt Disney Companythe Comcast bid,
the Shareholder Meeting, the Save Disney campaign, and the resignation
of Michael Eisner as Chairman of the Disney Boardhave led to a
deluge of reader feedback. It's obvious that our readers care deeply
and passionately about this topic, and our writers David Koenig and
Mark Goldhaber share some of the longer, more insightful comments from
Feedback for David Koenig
KC Conley from Reno, Nevada writes:
As well are all aware, the subject of Michael Eisner's reign
is the hot topic of conversation all over the Internet. In a lot
of these articles, there is mention of the last time that Roy
Disney waged a campaign to oust chairman Ron Miller. While we
know that this endeavor was successful, I often wonder: what is
the story behind it? Is there a place on the Internet that I can
go to read of it, or could you recommend any books on the subject?
I can only imagine that it was a sticky situation then, given
that Ron was a relative of Roy himself. How did this campaign
affect the family dynamics? And what was Diane Disney Miller's
feeling on the whole thing, watching as the wife but also as the
daughter of Walt?
Is there a good account of the story that I could find out there
Thanks in advance for your help. I really enjoy your Web site,
and find it to be the best source of Disney information on the
Internet. Keep up the good work!
KC All of your questions regarding the change in management
of 20 years ago can be found it the phenomenal book Storming
the Magic Kingdom (1987) by John Taylor. There's a brief
excerpt at Save Disney (link).
The family dynamics between the Walt side (Ron and Diane) and the
Roy side (Roy E.) had been awful for years, and the ouster of 1984
naturally finished things off. That, I suspect, is why it took so
long for Diane to speak up; she doesn't want to be on Roy's
side, yet obviously agrees with many of his positions. I can
think of few forces that would strengthen the save Disney
cause so greatly as Roy and Diane (and Ron, who really was beginning
to do good things at Disney when he was forced out) putting their
past behind them and uniting their efforts for the good of the Disney
Regarding David's article
about the last days of Michael Eisner, Leo Holzer writes:
but I am left wondering just how Eisner plans
to reach his 30 percent goal. Will it come through even more aggressive
cost-cutting and a continued reliance on cheap offerings (direct-to-video
off-the-shelf theme park attractions)? It's time
for him to resign or announce a quick retirement and transition
I actually read the board had to rework his contract
after he was removed as because he had the right to walk
Why bother? Why couldn't the board refuse to take any action on
that? Will his departure embolden Comcast or some other suitor?
I think most of us agree with Diane Disney Miller
the Walt Disney Company to remain independent, but we want Eisner
to leave. We need a course of action that will be successful on
Thanks, Leo N. Holzer (author of the current letter of the week
Leo Thanks for writing. I, too, suspect Eisner will have
to do some creative accounting to come up with 30 percent growth
in earnings. Note he did mention that this will come from existing
operations, so perhaps he will not take into account any less
profitable ventures that he can classify as new operations.
Much of the growth may be expected from reducing overhead by closing
three of its Feature Animation studios and severely cutting back
its fourth, in Burbank. Remember, he has eliminated the high cost
of having 2-D features in production. The cost of Home on the
Rangeestimated as high as $175 millionwill likely
to counted toward last year.
But while expenses will be way down for the next few years, so
should income because Disney will be lacking quality product to
sell. As far as Eisner's contract renegotiation, if the sole reason
it was reworked was to prevent him from quitting, the board is more
clueless and spineless than I could ever have imagined. My perception
was that it reflected the deal Eisner and the board struck behind
closed doors after the shareholders meeting: he steps down quietly
as chairman, but could continue as c.e.o. with all the same salary
and benefits. Replacing Eisner could energize Comcast and other
suitors IF his departure caused the stock price to go down (not
up, as some predict) and if his replacement is someone open to the
possibility of a merger. Someone like, say, Comcast's Steve Burke.
A reader writes:
The American public has voted in a form far stronger than any
shareholder votethey've voted with their feet and their
wallets. Whether by economic chance, by fortune, or responding
to all the publicity, attractions numbers are way, way up these
past few months. Barring another disaster (and there have been
disasters both created by management and accidental over the past
18 years) the Company should easily post strong revenue growth
for the next few quarters. And if Bust-a-Moo gets legs...
Strong Attractions numbers in a strengthening economy and normalization
of wartime is a sort of vindication of the Eisner Era
will be able to argue that it really was all about 9/11.
I don't believe it, but the institutions might.
Remaining unaddressed is the undermining of the Disney brand
foundation, which pairs highly aggressivebut opaqueHollywood
business practices with the familial, approachable Uncle
Walt American public image. Regrettably, Eisner will continue
to serve at his sole discretion.
You make good points, but I can only hope they prove wrong. The
one thing I don't see happening is Eisner getting strength from
strong box office by Home on the Range, since that would
indicate he erred by dismantling Feature Animation.
This is anybody's game.
Thoughts, questions, or comments? Contact David
Feedback for Mark Goldhaber
Mark received a deluge of feedback for his series of articles from
the Walt Disney Company's annual shareholder meeting last week,
including the Save Disney rally (link),
the shareholder meeting itself (link),
and an analysis of the events (link).
Alan Sadwin writes:
Very well-written article. Sorry this reply is not as well-written.
It is a little disjointed and emotional. The frustration of experiencing
Disney is getting to me. Time for a new vacation elsewhere.
Disney growth is limited by the very way that Eisner chooses
to meet growth predictions. Increasing fees and reducing costs
do work in the traditional business environment. They do not work
I don't see an improvement in the way the company grows until
there is a major turnover on the board and Mr. Eisner is no longer
there to run it.
Disney hides behind metrics that can be interpreted any way Mr.
Eisner likes. While theme-park attendance has been hurt by 9/11,
it certainly did well when package deals recently offered brought
people in. No fear of traveling then. Yet the company usually
cites 9/11 as the reason for attendance drops, and pooh-poohs
the price of admission. I was totally upset by Eisner's response
to the gentlemen who asked about reducing the cost of visiting
Disney at the shareholder's meeting. The board seems to feel that
if they go too far, people will stop coming, but they don't recognize
that people are not coming. I know many families who used to go
to the theme parks twice a year. Yes, they still come, but only
once every other year now. They may still go to Orlando, but they
go elsewhere. Bet you also know some people who have reduced the
frequency of their visits.
Eisner felt that people didn't want to see traditional animation,
so those efforts were reduced. Now Disney will try to out-Pixar
Pixar. Guess what? It won't happen unless they develop better
story lines and more enjoyable characters. But that takes effort
and rework, and costs more. Not likely to happen.
Same with over merchandising. If one pose for a sculpture works
in the Walt Disney Art Classics line, repeat it in all price ranges.
Screw the collector. That policy and the overwhelming number of
pieces each year almost killed Classics. It is a long road to
recovery, as people are still frustrated. Short-term profits grew
but the long-term effect was disastrous.
Take the old collector watches. For a small amount of money you
could get a themed watch. When they began selling well, the market
was flooded shortly after that. Now who collects watches?
Disney stores are another unit that was ruined by company policy.
Eisner blames it on a shift in the market. He drove the shift
by making it less attractive to go to a Disney Store than elsewhere.
How? By nickel-and-diming the customer to maximize profits. That's
why Disney Stores aren't profitable.
And since there are not profitable, why not reduce the available
product? Why be creative and try new things? If something sells,
then cookie cut versions of it and sell them.
ABC is a joke. I originally thought the merger had promise, but
the crap they put on is not to my liking. I am a big auto racing
fan, and I dread watching any race ABC covers. Too many commercials.
And then you see what shows Disney lost to other network. While
most are not my taste, they certainly do well wherever they are
picked up. Of course, having a weak ABC prime time lineup also
helps their ratings. Perhaps a megahit will help. But you have
to take a risk and pay the price up front. I don't see that happening.
Think about what the latest promise of 30 percent growth will
do to your Disney experience. I don't see anything good coming
of it. It won't even calm the institutional investor. Why?
All of the efforts to win institutional support that come at
the expense of the Disney guest fail. Because sometimes, the institutional
investor will realize that Disney guests are not happy and are
taking their money elsewhere.
This company has to go back to working with guests to improve
their Disney experience in any area Disney is involved in. Once
they do that, the product will bring people back. But any growth
will be limited if Disney (Eisner) keeps the screws on to maximize
profits to meet predictions.
Hi Alan I think that you stated your points very well.
You raise a number of good points. One thing to remember is that
while Disney is a unique company requiring unique leadership, Michael
Eisner is playing toward Wall Streetthe institutional
investors and other serious market playersand not really caring
as much about what the average fan is interested in, except as it
affects the bottom line. While at first, thanks to the guidance
of Frank Wells, many good things happened at the beginning of his
reign at the Mouse House, he has forgotten many of the essentials
from those days.
Mark Lockhart writes:
Nice work on your article todayI wasn't in Philly but I
listened to about 60 percent of the shareholders meeting via the
Web (thankfully I heard the early part including Roy and Stanley's
remarks). I'm not a Disney shareholder, although I view myself
as a stakeholder. I've been a Walt fan since I was in the fourth
grade, my wife is a lifelong Mickey fan, we got married at Walt
Disney World, members of the Disney Vacation Club, house looks
like Disney Midwest, etc.so as you can see, I do have a
stake in the company, albeit informal.
I firmly believe that through their actions last week, Eisner
and the Board simply proved what Roy and Stanley have been saying
for the last several months. They just don't get ita 43
percent withholdor no-confidencevote is unmatched
in American business. And as you mentioned, even Senator Mitchell's
24 percent is higher than the vote that forced Steve Case out
[of AOL TimeWarner]and the Board's meager attempt at good
management did nothing more than solidly the case against
There is no doubt in my mind that Eisner has created his own
kingdom, and his minions are blindly loyal; not that blind loyalty
is not admirable, but in this case I believe the Board needs to
at least peek at reality. The shareholders have spoken very clearly
and the Board has turned a deaf ear to them. A side effect of
that is that the Board has clearly lost credibility with the shareholders
and Wall Street and folks like me who were hoping for some glimmer
of integrity from the Board. We got zilch.
My recommendation? Eisner and Mitchell need to resign now. Their
actions last week clearly demonstrate their arrogance and their
loss of touch with reality. Their egos got in the waythey
didn't want to appear weak in front of the shareholders by caving
into what they described as Roy and Stanley's campaign of misinformation.
The rest of the Board should move immediately to remove them if
they do not resign. Otherwise, it looks like King Michael is in
for the long haul and it will simply be a long excruciating trip
to hell until his contract is up.
No, I'm not going to boycott Disneyin fact, we have plans
for a family vacation in early June. I'll be the one wearing the
Save Disney T-shirt.
Keep up the good work!
Hi Mark I agree that it appears to be a travesty that George
Mitchell and Michael Eisner remain at the top of the Mouse House.
However, my concern is that if they immediately push them out the
door without a replacement ready in the wings, Comcast will seize
the opportunity to swoop in and try to take the company over before
there's anybody in place to stop them. And I'm not convinced that
Bob Iger is the guy for the job, especially after his performance
My preference would be that they either announce that they are
actively working on a succession plan, and that they actually implement
it by early fall, or they just do it without announcing it. I would
like to see a new chairman and a new CEO in place within six months,
but I don't want to company to have nobody in the big office in
the interim. Of course, we're just going to have to wait and see
Andy Schubert writes:
I enjoyed your article reflecting on the recent events at Disney.
One thing you mentioned caught my attention. Believe it or not,
it was the mention of the sparse offices.
Though not a practicing architect, my degree is in architecture,
and I retain a strong interest in the field. It occurred to me
that after a regime change at Disney (were that to
happen), a very symbolic move might be to raze the Team Disney
Administration building (yes, yes, I know that Frank Gehry is
a revered architect with a long-standing relationship with Disney
including the recently built symphony hall) as a symbolic gesture.
In fact, specifically because it is a highly visible and symbolic
representation of the shift of focus from the Disneyland Park,
to the executives (who largely do not walk the park any longer),
the meaning would be all the more paramount. After some initial
disbelief that Disney would demolish such a great and significant
work, it would soon lend to the very necessary idea that real
changes are coming down the pike.
Radical enough for you? Of course, new offices would be built,
but nothing as incredible as the current structure.
I propose that newer, less ostentatious offices could be built
at a fraction of the cost, heralding a new era where the money
is put where it should be, on increasing the value of the
products that the public is exposed to, namely the parks.
Hi Andy That's a very interesting idea. While not cost-efficient
(replacing a perfectly functional already-existing structure with
another one), it would definitely be very symbolic. Will it happen?
Who knows? I do know that more people at the corporate Team Disney
Anaheim offices need to be walking the parks. It appears that Cast
Member Matt (as the new Disneyland president Matt Ouimet has
been called on several Web sites) has been actually doing that.
If he can effect a trickle-down change, that will be extremely beneficial
for Disneylandthe park, the cast, and the guests. I guess
we get to wait and see what happens.
Nice article. I think you have something about the planned ouster
of Eisner, before the resignations. The changing of the positions
is only a move that is part of the new Securities & Exchange
Commission (SEC) rules, stating publicly owned companies must
have a separate chairman and CEO. This move satisfied the SEC,
and gave the impression of listening to the no-confidence vote.
I believe that Disney will just concentrate on the 50th Anniversary
in Anaheim and then not renew with Eisner in 2006. I also believe
that the bid by Comcast was a staged event to give some punch
to the no-confidence vote. There are to many FCC conflicts to
make it a reality. Thanks again for keeping us informed.
Hi Dave I've wondered about whether the Comcast bid was
a staged event, too. At different points, it seemed as if it might
have been staged by either side. If staged by the Save Disney side,
it would seem to undermine confidence in Eisner and increase the
withhold vote. If staged by Eisner, it could be argued that getting
rid of him would make the company more vulnerable to a buyout. So
it works in favor of both sides. Save Disney did get their huge
anti-Eisner vote, but Eisner is still there. I think that it might
be good to keep him in place (with more check and balances on his
decisions) until a suitable substitute is found. We'll see how it
Hi,Mark! Love MousePlanet! In your March 10 column, you stated:
A few years back, Roy asked Michael whether he could
put his son Patrick on the board to ensure continuity of Disney
family involvement in the company.
This makes us wonder. We hear a lot about Roy Disney and his
involvement with the company. Diane Disney Miller is actively
involved with the Disney Museum. What about other
family members? Are Walt and Roy's grandchildren involved with
the company? If they are, do you know what their roles are?
Hi Carol Interesting that you should mention it, as the
story broke today that Diane has come out in favor of Michael Eisner
stepping down, but has also condemned the Save Disney effort for
putting the company in play and being a vicious and personal
attack. According to the Los Angeles Times article, Diane
(who is now 70) sold her personal stock in the late 1980s, but the
Miller side of the family owns about 2 million shares through her
children, grandchildren, trusts and a foundation named after Walt
and Lilly. As far as I know, none of them are involved with the
company other than those shares, the museum, and the recent Walt
TV movie/DVD, on which Diane's son Walter Elias Disney Miller served
as executive producer.
Vincent Randall writes:
Great insight on that article.
My observation has always been as a guest, as I am not a cast
member or a shareholder.
While there are always two sides to every story, the effects
of the last 10 years of Eisner are puzzling. While I was thrilled
that the Walt Disney Company was expanding and broadening its
brand recognition, I was less than thrilled at the output of recent
products. And what is really confusing is that along the way,
there have been some very nice products tossed in the heap. The
Grand Californian Hotel and the Animal Kingdom Lodge. Beautiful
hotels. Disney's California Adventure (do I really need to elaborate?).
The tacky carnival rides at Animal Kingdom. Aladdin's Carpetswhat
were they thinking? And the West Coast version of the Tower of
Terror. What should have been in that ride is what was supposed
to be scary, not what was left out of it.
And the overall morale has been going down the toilet. I actually
heard a cast member in the men's room at DCA use the F
word. I about fell over.
My thinking is this (again I'm not a business guru): What built
the Disney name is a tradition of high quality, unique and creative
entertainment experiences. Whether it be films, television shows
or theme parks. As a child, I begged my parents to take me to
see the latest Disney feature at the movie house. Not only as
a means of fun, but as a way to get my Disney fix when I was unable
to get to Disney World. I remember seeing The Little Mermaid
while in college, and thinking when that movie was over, I need
to get back to WDW.
My point is that when we wanted magic, we could find it. If not
at WDW, then at the movies. And those movies fed my desire to
get back to WDW each time. There was a familiarity, an honesty.
Now there are baseball teams, half-baked carnival rides, networks
that do not contribute to the Disney brand, and an array of poorly
performing businesses with a purpose to bleed profits from the
theme parks to balance the ledger. I say, stop it. Put the money
back where it belongs, and get rid of these nonsense branches
that have nothing to do with the Walt Disney Company.
Hi Vincent I think that what you've been seeing over the
last 10 years is the concentration on spending money on things that
bring a direct return to the bottom line. Unless the impact can
be quantified (and you can be sure that the theme parks folks are
pushing that incremental attendance figure for Mission:
Space), money is not spent in large quantities.
How do you show immediate returns? Build hotels and shops. If you
build a nice hotel, it directly drives revenue that is not attributable
to any other source. If you build a store, it will directly produce
revenue by virtue of sales. Why do you think that every new ride
constructed has a gift shop at the exit? Can you image if there
was a shop at the exit of every Fantasyland ride? Not a pretty
sight. That's why more money was reportedly spent per square foot
on the shops at DCA than on the attractions themselves.
When Frank Wells was alive, he could tell Michael, We can't
do that. We're Disney. With Frank gone, Michael had nobody
to serve as his conscience, and he seems to have gone out of his
way to keep that the status quo. And now it seems to have bitten
him in the butt. Interesting times, indeed.
A reader writes:
Reportedly in the Los Angeles Times, Diane Disney Miller
has urged that Eisner leave soon, that someone be groomed to replace
him within six months. Here's a wild oneto replace the Eisner-Wells
duo that worked well before, how about a John Lasseter-Stephen
Burke combo (or similar if they won't leave their present jobs)?
Since you didn't include your name or a return e-mail address,
I'm just going to respond to this through the mailbag.
That sounds like an intriguing possibility, as does Jobs/Lasseter
and many of the other combinations that have been put out there.
We'll just have to wait and see how this plays out.
Thanks for writing! (But next time, include your name and e-mail
address so that I can respond directly, too.)
Brian Seed writes:
I think your article about Michael Eisner and Roy Disney was
right on. What we are seeing is arrogance run amok Amok,
amok, amok, amok, amok!
Michael Eisner really doesn't get it and has absolutely no clue
about what the patrons of the Disney company want or like. We
are heading into an era where we will go to a park and hear, Welcome
to Disneyland. Ride on this because Michael likes it. Eat this
because Michael likes it. Buy this because Michael says you have
to if you want to be here. The truth is, it is not Disneyland
or Disney World anymore, it is Eisnerland
and Eisner World. It has been this way for some time,
much to our chagrin.
Think of Mickey's so called Birthday Party in Toontown
at Disneyland last year. Let's all wish Mickey a Happy Birthday!
Now, leave the park and go buy more stuff to celebrate.
Like the old Life Cereal commercial, we Disney fans must now
only ride, watch, buy and eat only what Mikey Likes.
Let's hope Roy is able to put the Disney back in
the Disney Company.
Hi Brian Well, remember that in the old days, we rode, watched,
bought, and ate what Walt liked. The big difference is that Walt
liked things that would provide a quality experience for people.
Michael likes things that will directly increase the bottom line.
I'm going to stay on this story, and we'll see what happens.
Aloha Mark. I have been reading your Web site for quite some
time now. I have been intimately involved with the Disney Company
since my birth (literally). My mother worked for Buena Vista in
Denver when I was born. I have very vague remembrances of going
to see special screenings of Winnie the Pooh and the Blustery
Day. I Have some cherished mementos from when my mother worked
I followed the company as a child with dogged determination.
I eventually worked for Disneyland myself, from 1990 to 1992.
I was there when some of the originalWalt bosses were
still there. I have seen the slow dismal decline of the quality
of the Disney Parks. The saddest things is walking around the
parks today and seeing the faces of all those cast member trying
with all their heart to keep it the way Walt liked it. They are
the true magic of Disney.
I agree with everything you've always said about the Disney organization.
You're pretty dead-on with what's going on and who's goofing it
up. I would like to point out that in your assessment of Eisner
being creative, I must disagree with you. He got to where he is
because he's screwed and has very little morals. He's constantly
paranoid of being removed from his position of leadership. Remember,
the movies Splash, Down and out in Beverly Hills,
Ruthless People, and many others were movies that were
already in various phases of production when Eisner had taken
Ron Miller, (Walt's son-in-law) had created the Touchstone label
and given the green light on all of those projects. However, Eisner
was the one who got the credit for turning the company around.
Michael Eisner exploited the talent that was in the Disney organization
to his benefit. When the talent pool dried up he start reaching".
If one takes a close look at most of the movies being produced
by the Disney organization these days they are basically one of
two formula films: Sports related (Eisner's kids are sports fanatics)
and remakes of earlier Disney screwball comedies. Disney's California
Adventure is only a pale copy of Magic Mountain. Eisner looks
at what other people are doing and slaps a Disney label on it
and things that is being creative.
So I must disagree with you that Michael Eisner is a creative
person and would not have gotten to be where he is without being
creative. Michael Eisner looks where he can exploit a situation
and make as much money on it as possible.
I would love to hear your take on this and look forward to more
articles from you.
Aloha Erik Thanks for reading our site and for your insights.
I think that Michael has enough creativity to recognize good products
and capitalize on them. It served him well at ABC, at Paramount,
and in his early years at Disney. He greenlit a number of good projects
back then, though he would have cleared even more that were not
necessarily a good fit were it not for Frank Wells reining him in.
Once Frank was killed in that helicopter accident, not only did
Michael not have anyone to rein him in, he also tried to handle
creative and business at the same time, and allowed business to
dictate to creative, which is what is killing this company. We'll
just have to wait and see what the resolution is.
Susan Main writes:
I can only hope that he steps down and does the right thing for
the company, but after years of only thinking of himself and his
bonuses and cutting benefits from cast members (of which I used
to be one of) and not putting the money that he took from this
company back into it as research and development, I am saddened
to think he will go on anyway with his lackeys in power on the
Board. The only way things are going to change is if the Board
members change and we get people in there who want to actually
do what is best for Walt's legacy, which would ultimately be good
for the shareholders. I cringe at the thought of Comcast
or anyone else taking Disney overit will lose all its charm
and devotion to the man who built the dream. I just love
Disney and all it stands for and this whole thing almost has me
sick to my stomach. I just hope he has a change of mind
to step down and the right person is chosen to succeed him! Just
my thoughts! a rabid Disney fan!
Susan You are absolutely rightalthough at this point
I don't see Eisner as doing anything for the good of the company.
His joblike so many other bonus-centric executives at the
House of Mouseis doing what's best for him.
I, too, am afraid of what would happen if the Disney Company were
acquired by Comcast or another faceless, monolithic conglomerate.
Any stockholders who willingly tender their shares to Comcast after
pillorying Disney for its lack of corporate governance should be
ashamed. DIS owners who feel it's difficult to affect change now
will find themselves completely powerless under the limitations
of Comcast's bylaws.
Thoughts, questions, or comments? Contact Mark
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