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 somewhere?

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 legacy.

Regarding David's article about the last days of Michael Eisner, Leo Holzer writes:

Great article… 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 sequels… off-the-shelf theme park attractions)? It's time for him to resign or announce a quick retirement and transition plan… 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… we want the Walt Disney Company to remain independent, but we want Eisner to leave. We need a course of action that will be successful on both fronts.

Thanks, Leo N. Holzer (author of the current letter of the week at savedisney.com)

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 Range—estimated as high as $175 million—will 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 vote—they'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… Michael 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 aggressive—but opaque—Hollywood 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 here.

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 at Disney.

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 Street”—the institutional investors and other serious market players—and 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 today—I 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 it—a 43 percent withhold—or no-confidence—vote 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 them.

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 way—they 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 Disney—in 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 in Philadelphia.

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 on that.

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 Disneyland—the park, the cast, and the guests. I guess we get to wait and see what happens.

Dave writes:

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 turns out.

Carol writes:

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 Carpets—what 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 one—to 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.

Eric writes:

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 there.

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 original“Walt” 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 over.

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 over—it 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 right—although at this point I don't see Eisner as doing anything for the good of the company. His job—like so many other bonus-centric executives at the House of Mouse—is 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 here.