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Old 08-22-2002, 12:03 PM   #1
mrtoadslastride
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Debate: Storming the Magic Kingdom

I just finished reading Storming the Magic Kingdom and I highly recomment it to anyone who has not read it! It has a great deal of info about the struggles Disney went through in the mid 80's which resulted in Eisner and Wells being brought in. It also gives the reader an understanding of the forces (Gold, Roy Disney) who now appear to be pushing Eisner out of Disney.

After reading the book I have few questions.

What happened to Eisner??? Everyone quoted in the book thought that he was the right guy (He convinced Bass and Jacobs who really wanted a business type in the CEO role) . The book even quotes Wells as saying that if Disney has to chose either Eisner or Wells they should go with the creative guy (Eisner). Was he just a good BSer? How responsible was he for the success Paramount experienced while he was there?

Eisner (on page 207) wanted to leave Paramount because Gulf and Western didn't understand that the growth Paramount had experienced during the previous 8 years could not continue. He even says that a Studio can only do 12-15 good movies a year, not 25. So what happened, Eisner seems to have realized that a company cannot grow at 20% every year. Why is he now destroying the company to try to make it happen?

Finally, would Disney be better off now if the Roy side and the Walt side had joined forces (as Gold wanted them to do during the Steinberg raid) to buy back the company and take it private?

After reading the book, I now tend to agree with Scoop's argument that Eisner does not receive credit (at least on our little corner of the DIS boards) he deservers for turning Disney around. However, he blew it big time by not replacing Wells, and after the last 8 years he has to go!

p.s. Does anyone have any recommendations for books that cover the business of Disney after 1987?
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Old 08-22-2002, 12:12 PM   #2
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I think Wells was likely WRONG.
Of course it would have been foolish to say anything bad about Eisner anyway. Would have been bad for the company.

I DO think that when he didn't have control of the Wall Street side of things, he definatly was not bad for the company. I wouldn't say he "GOT" it, but he maybe let people who did get it do their thing.
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Old 08-22-2002, 12:15 PM   #3
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Quote:
However, he blew it big time by not replacing Wells, and after the last 8 years he has to go!
Actually, Eisner did try to replace Wells, but somehow the chemistry was never right (think Ovitz & Katzenberg). Part of the problem that us, 'little people' don't often see (or understand in my case) is the EGO involved in being a player in Hollywood. Apparantely, most of those in positions to make changes (good or bad) also have huge egos that can blind them to other opinions.

Another point re: Eisner is that people change. 20 years (more or less) at the helm of a company has to have made Eisner a different person than when he went in. Given that most of his time has been as the head of a successful company, and it's not too big a stretch to say that his ego has likely grown some in his time there. I think it is very telling that the same people who engineered Eisner's installation are trying to engineer his removal...

As for the business after 1987, you can try to wade through Eisner's Autobiography. It's slanted, but does cover from Frank Well's death onwards, as well as his reasoning for why he made the decisions he did.

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Old 08-22-2002, 12:50 PM   #4
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Translation: Either that strategy is dead, or it includes a breakup of the current structure and privatization of part? (say parks and animation?)

Mind you, I'm not saying privitization is the right route, or even doable with the parks and/or animation division, but just wondering if that's on the table.
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Old 08-22-2002, 01:10 PM   #5
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Hey Scoop,

So spill the beans...

Does Gold still want to go private? Do you know what the rest of the board thinks of him (they didn't seem to think to much of him in the 80's, BTW how did he get back on the board?) Is the Walt side and the Roy side working togethor? Who are the Bass Brothers supporting now?

I know we have had this discussion in the past, but Eisner did from within what Steinberg wanted to do from the outside. As evidenced by his huge salary the last 5 years, and the amount of stock he now owns. Somebody will have to step up and buy a large chunk of the outstanding stock to get rid of him.
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Old 08-22-2002, 01:47 PM   #6
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Taking the company private looked at one time to be the only way for them to get any input/control. Roy had resigned from the board and Gold was just some annoying outsider that no one had to listen to. It wasn't until he was able to court the Basses, Jacobs...that they started to get some leverage.

It doesn't seem to be a strategy Gold has employed in his other ventures, so I'm not sure he is fixated on this as a necessary solution. Could they sell off ABC and get the nut down enough to be able to pull off an LBO ??? With Vivendi assets poised to hit the market, and all the market uncertainties, sounds like a tough proposition.

For now, I'd just be happy to know that he is committed to make a change if he is anything like the catalyst he was 20 years ago.
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Old 08-22-2002, 01:59 PM   #7
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I believe the Bass Brothers sold most if not all their stock in the disney co. to settle a margin call.
Eisner was the right man at the time, but that time has passed him by!!! When Eisner came on board the company was at a very lowpoint but had great assets that eisner could use. The vault was full of movies to make easy money and and most of wdw's property was undeveloped. It was easy to make easy money as before eisner's arrival the co. didnt fully utilize the property nor did they charge what they could for park admission. And with technology changing ie- vcr's/dvd etc. it made for easy money by using the vault to sell product. And with the help of katzenberg/Wells the company flourished, but once they left and eisner was on his own the debacle's started and still go on with little hope till eisner's contract is up or he is removed. Eisner was a intergal part but was only a cog in a machine where as now he runs everything.
Now the next leader has a depleted vault and little ability to wring more money out of the development of the property as everything is being priced at the max rate.
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Old 08-22-2002, 02:35 PM   #8
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BoB O, in one of the other top threads in this forum a link was posted that showed that Sid Bass still holds a large amount of DIS Stock.
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Old 08-22-2002, 09:45 PM   #9
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I knew they sold some disney stock but was certain if they sold all of it or not.
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Old 08-22-2002, 09:50 PM   #10
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I knew they sold some disney stock but was certain if they sold all of it or not.
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Old 08-23-2002, 01:48 PM   #11
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"The Bass family of Texas has sold a sizeable chunk, 135 million shares, of their stake in media conglomerate Walt Disney Co., a spokesman confirmed Friday."

The article this represented about 6.4% of total Dis stock. It didn't state what they had left.
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Old 08-23-2002, 02:23 PM   #12
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At one point I think they owned around 20% of the company. They could still own as much as 13% of Disney.
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