The target of a hostile takeover bid by Comcast, Walt Disney Co. Michael Eisner will face hostility at the 2004 annual shareholders meeting on March 3 in Philadelphia. On its eve, Roy Disney and Stanley Gold plan an anti-Eisner rally to set the stage for a Disney vs. Disney confrontation.
The duo say Comcast's offer does "not adequately reflect the true potential value of Disney's assets," though they would look at a better offer. But what the Magic Kingdom really needs, they say, is not a new owner. It's new management.
The company sent a letter to shareholders last week attacking the two men's "propaganda" campaign, saying that as board members the two approved many decisions they now criticize. And it was Roy Disney and Gold who recruited Eisner as chairman and CEO to help save the mouse house from corporate raiders in 1984.
They discussed their campaign with USA TODAY media reporter Michael McCarthy last week at Gold's New York apartment overlooking Central Park.
Click Read more for that discussion.
Q: So who do you think should succeed Michael Eisner?
Disney: There have been a lot of names out there. Certainly, some of those names would be on a list we might make. We've been very steadfast about not naming names. We know the company will go out and trash them tomorrow morning. That story would run right alongside this one. All we're going to do is harm them.
Gold: Let me say, we think there are five to 10 people in this industry and adjacent industries that could run this company better than Michael Eisner. ... This is not about Michael Eisner, the person. I'm sure he's a good husband and a good father. This is about Michael Eisner, the manager. There he falls woefully short of what we think a good manager of the Walt Disney Co. ought to be.
Q: Should Disney accept Comcast's offer?
Disney: Clearly, at the stage of the game we are right now, the price is not probably as high as it needs to be. But beyond that, it's way premature. We have not talked to Comcast. Nor they to us.
Q: What would be a fair share price for Disney — mid-$30s?
Gold: Our position in this is that this management has not gotten maximum efficiency out of the assets. A good management team could improve the earnings. That would take the stock price up. Whether it takes it up $5 to $6 or $10, we're not to be the judge of that. Whatever that amount is, that modicum of increase in value in the company ought to go to the Disney shareholders, not the Comcast shareholders. The first job here is to get a management team that can perform, work the assets in an efficient manner and get the Disney shareholders whatever that amount is. And thereafter, maybe in several years we ought to talk about whether someone should pay a premium for the assets. Right now, it would be, I think, premature and leaving money on the table for the Disney shareholders.
Q: Given what you know of Comcast, do they have the management to run Disney?
Disney: I have personally never met Brian Roberts, although he certainly has a reputation of being a good manager. We all know Steve (former Disney executive Steve Burke, who is president of Comcast Cable) because he spent 12 years at Disney. We worked not with him but near him and around him and felt he was a good friend. I like Steve a lot. He appears to have a management style that sounds to me like a better one than other people.
Q: Would Steve Burke be on a short list of candidates to run Disney?
Gold: I don't know what Steve's arrangements are for Comcast and what he plans for his future. But if you're asking me do I think Steve Burke is qualified to run the Walt Disney Co., the answer is yes. He'd be on a short list.
Q: Should the Walt Disney Co. be restructured? Should ABC be sold?
Disney: I think all the parts of the company need to be run better. That's the first thing. You can't even talk about selling until after that happens. So it really isn't a real discussion you can have.
Q: Why did Disney's 12-year relationship with Steve Jobs' Pixar go bust?
Disney: It was actually close to a 20-year relationship. I started it with John Lasseter, (the Oscar-winning creative chief at Pixar) when Pixar still belonged to George Lucas in 1984. Michael Eisner does not like creative people robbing him of the spotlight. He will tend to badmouth them or in some way put them down. ... The only way you can answer that question is to talk about how long it took for this relationship to go that sour. It took years. The more success Pixar had, the more annoyed Michael seemed to be by it. With Finding Nemo, we had a screening a year and a half ago of the unfinished film. ... Michael told the board that it was "OK." That it would probably open, but it's not as good as they think. I really think he wanted it not to do well because he'd have greater negotiating power.
Gold: Roy especially has been saying there's been a creative exodus from this company for the better part of five to six years. Jobs is just the latest of a long line of hundreds of people.
Q: You've criticized management of Disney's theme parks. Why?
Disney: The parks are giving away tickets. They will tell you they have record attendance, which may well be true, but unfortunately, half the rides are closed, and they're giving away tickets. So I think this is a net loss. They've cut back on employee base level so that the service is not as good. Everywhere throughout the whole park system is way, way down. They're cutting people back. ... They're doing a lot of very hard things on the employees who in turn are not as nice to the guests these days.
Q: Is Eisner really the micromanager you make him out to be?
Disney: The head of feature animation, Tom Schumacher, was told to report every conversation he had with me back to Michael. Tom, God love him, came and told me that immediately. ... That was mean. There are plenty of other people I'm sure the same thing happened to. How does a creative person operate under that kind of a structure? It's like Big Brother.
Q: How do you respond to Disney's letter to shareholders?
Disney: They were questioning our motives as if we have some motive in this that's different from the rest of the shareholders. I find that rather insulting.
Q: What percentage of shareholders do you hope vote "no" against Eisner and three directors at Disney's annual meeting?
Gold: We're looking for 15% to 20%. If we hit 20%, it would be a big-time message.
Disney: That was what was voted against Steve Case (former chairman of AOL Time Warner) a few years ago. And you saw what happened there.
Q: What do you say to the criticism that you are doing this for revenge or your own self-interest and that, as board members, you signed off on many of the decisions you now criticize?
Disney: We should do the self-interest thing first. How does my self-interest differ from any shareholder in Disney? Ask them that question. I'd sure love to hear what they think.
Gold: What this company does and what Michael always does, he begins to demean anybody who opposes him. It goes on all the time. That's why this board is so reluctant to oppose him.
Disney: They always fail to mention, and they know perfectly well, that we were ... trying to make all of these points and work within the confines of the company itself and not let this become a big public to-do. We wrote a long series of letters to the board saying all the things we're now saying on the outside.