Disney and Pixar

[Peter Pirate]

Not wishing to defend Eisner, I still can't help but get anxious over the blatent lies and complete dismissal of what he has accomplished.

He did save Disney from numerous hostile takeovers upon his arrival and Eisner is given this credit, not Wells.

While it is true that recent Disney seems to be wallowing and certainly the Disney that some posters want will never return. In my opinion that Corporate Disney never actually existed. But lets just look at two numbers to indicate just what has transpired during his watch.

1984 Disney revenues: $1.65 billion.
2003 Disney revenues: $6.33billion.

1984 Disney Net Income: 98 Million.
2003 Disney Net Income: 229Million.

Pretty startling numbers, aren't they? So it is easy to see that something has transpired here. All of the money has not gone into Eisners pocket although he certainly must be credited with on of the best personal contracts in business history, I'd guess.

He obviously isn't a theme park guy or an animation guy. He's obviously not an internet guy or a tv guy or a sports owner guy. He does seem to be a movie guy at the moment, however. Whats the point? well, quite obviously this is not Walts' Disney.

With regard to Jobs. He may parellell Eisner in some ways as a CEO but quite obviously running Pixar hardly resembles the task of running Disney.

 

[mjstaceyuofm]

While Apple is nowhere near the size scope or magnitude of Disney, I can

Name 3 Jobs failures

that hurt Apple/Jobs on par or worse than the ones listed above for Disney: Lisa, Newton and Next.

 

[Peter Pirate]

Allow me to backpeddle a bit...I am not defending the current decision making of Eisner and I do not have much faith in his strategic plan, as it looks to me like he's not following one, other than in his publicity spin...I only seek to defend what I think he has done in the past, which I believe merits some positive consideration. I only bring it up because IMO it is simply cheap to bash, to say he never got it, to say he's never done a positive thing.

The other side of this particular argument is that while it may be true that Jobs hasn't made the big blunders that Eisner has on his tally sheet, the fact that the breadth and scope of current Disney, right or wrong, makes much of a comparison moot unless you're in the camp that says all of Disney's growth was in error and they should have tried to remain "Walt's" company even after he died...Which to me is a waste of time argument because (1) it didn't happen, (2) it can't happen now and (3) IMO it couldn't have happened ever. Walt was the only Walt.

IMO, a company of the scope idolized here isn't possible today. Sure quality can be given, Pixar IS a good example, but they are only one facet of what Disney deals with. There is no live action division, no theme park division, certainly no ESPN or ABC. How could any modern day company run a shop consisting of so many different arms, creating different content with a similar theme, do it all in house and keep track of it all AND maintain the expectation levels Walt had set up way back in its infancy? I don't believe anyone, save a creator could ever hope to pull it off because no matter how great the head may be. No matter how creative minded he may be. A company of this breadth has to have layers and layers of creative and management levels and these are human beings looking to get ahead. Sure some will have the art at heart but most won't and it will always fall to management at some level to sort it out. BUT that management person has the exact same dilemma and his goal may not exactly match the creative goal either...The quality for art cause is admirable but in the scheme of a multinational conglomerate it just isn't doable.

I read that in one year not long after Eisner took over, Disney created OVER 100 new companies! This was in the growth to avoid being lunch years, but can you imagine?

Eisner clearly is out of touch and the BTMRR incident proves just how serious this path can be. Let's hope he retires and a new leader with interest in the maintaining as much of a Disney legacy as possible is able to be found...Otherwise, as much as I hate to admit it, the Disney as even we 'Johnny Come latley's' know it could be in serious jeopardy...

Off topic...Well, I guess.

 

[Another Voice]

"He did save Disney from numerous hostile takeovers upon his arrival and Eisner is given this credit, not Wells."

What really saved Disney from numerous take-overs was the Bass Brothers and Roy Disney buying enough stock to take Disney out of play. Eisner gets credit only because he shoved his way in front of the cameras; he did nothing on the business end.

If you want to say that he personally animated The Lion King, wrote the script for Ruthless People and did the enginnering for 'Star Tours' - then you can probably say "he saved the company" creativity. But he did, he was the one that just happened to be around when thousands of hard working and talented people that really saved the company.

Projects that were Eisner's idea to start with or that he played a major role in have been unmitigated disasters. Everything from the Capital Cities/ABC merger to hotel situation at Euro Disney; from Go.com to Fox Family; from over saturation of The Disney Stores to design concepts for California Adventure.

It wouldn't be the first time in American corporate history that a great staff covered-up an inept boss.

Sure, it's not Walt's company anymore. The serious problems that Disney faces today happened because they abdandoned the fundemental principles that made Disney a strong company to begin with. Whether Walt was around or not - moving into broadcast television, becoming a "brand name" instead of focusing on quality and pretending to be a big swinging Eisner to join the Big Swingers club (through airplane leases, overpaying for cable stations, and expensive and stupid Internet policy) - that's the root of the problem.

Walt couldn't have run Disney/ABC - nobody can run Disney/ABC because it's a rotten idea for a company. Just because it happened doesn't excuse the fact that the errors were made in the first place and no attempt has been made to fix them.

Some people see MegaDisney® as a good thing and clamour to buy all those branded snowglobes. In reality, it was the death of Disney and the beginning of just another consumer products company.

 

[DisneyKidds]

nobody can run Disney/ABC because it's a rotten idea for a company.

AV - I happen to be in agreement with you on this point. Disney has been pulled in too many directions and stretched too thin. Would that have been the case if Cap Cities, Go.com, Family, etc., etc. were all winners? I really don't know.

Anyway, regarding Disney/ABC being a rotten idea for a company......apparently Disney's MBA's aren't the only one's who would disagree with you. GE/NBC has their own set that thinks GE/NBC/Universal is a winning proposition. It will be intersting to see how they make a go of it.

 

[crusader]

You're kidding yourself if you honestly believe a publicly held company can remain status quo without losing market share; becoming stagnant to the consumer and ultimately ripe for takeover.

The need to expand and diversify was necessary and inevitable for a mature company during the mergers and acquisitions era. Otherwise, we'd now be discussing the harsh reality of how Walt's dream became the next RJR Nabisco Disney or whomever else you'd like to fit together.

I don't think MegaDisney is the problem. They can securely operate as that invisible giant hiding behind the themeparks and every other division within their empire. To argue that a corporate giant shouldn't become a conglomerate of holdings is unrealistic and out of touch with today's commerce.

You cannot blame the fact that the company is large on what everybody preferably finds individual fault with, in their own uniquely tailored consumer world.

There is a real lesson to be told about the habits of the consumer - we buy what we want and watch what we want according to our own standards - not what anyone else decides we should.

If you want to stereotype this as the snowglobe mentality than you'd have to place everyone in the same category with the exception of those who have Edison's original lightbulb in their house.

 

[mrtoadslastride]

Originally posted by mjstaceyuofm
While Apple is nowhere near the size scope or magnitude of Disney, I canthat hurt Apple/Jobs on par or worse than the ones listed above for Disney: Lisa, Newton and Next.

I think Newton came out while Jobs was away from Apple. The big difference I see with Jobs failures are that they were attempts at greatness. Maybe they came out before their time, or failed to capture market share, but in the end they were still good products. Eisner's failings haven't been good products that failed to find their place in the market. They were/are products that noone wants because when making something as cheap as posible is the number one priority the products are doomed to fail.

 

[DancingBear]

Originally posted by Another Voice
"He did save Disney from numerous hostile takeovers upon his arrival and Eisner is given this credit, not Wells."

What really saved Disney from numerous take-overs was the Bass Brothers and Roy Disney buying enough stock to take Disney out of play. Eisner gets credit only because he shoved his way in front of the cameras; he did nothing on the business end.

I disagree. The Bass Brothers stepping up, and Roy hiring Eisner and Wells held off Steinberg and Jacobs in 1984, but Disney remained a takeover target as long as its stock was seen as undervalued. Eisner unlocked the value of the corporate library and the Florida real estate. He also did something, even if it was just getting out of the way of Roy and Katzenberg, to reinvigorate the animation department. These actions boosted the stock value tremendously.

Then, to make sure that nobody saw Disney as a big cash cow, he went on an acquisition binge that created a lot of corporate debt.

And the company is still independent.

 

[Bstanley]

Actually Mr. Steinberg had already been bought off before The Big ME was offered the job, and The Bass Bros bought Mr. Jacobs (and friends) holdings before his employment contract was signed - so odds are he had little to do with either. Once 35% of the stock was in the hands of The Basses and Roy Jr the idea of another takeover evaporated.

Then, to make sure that nobody saw Disney as a big cash cow, he went on an acquisition binge that created a lot of corporate debt.

Ah the old Wharton school of business ploy.

Borrowing to make an acquisition to turn your present corporation into your new bigger corporation has been around at least since The Fuggers lent the money to Philip so that he could mount his hostile takeover attempt of British Mercantilism.

The key has always been to not overestimate yourself and over-extend. Still is apparently.

-bruce

 

[DancingBear]

Originally posted by Bstanley
Actually Mr. Steinberg had already been bought off before The Big ME was offered the job, and The Bass Bros bought Mr. Jacobs (and friends) holdings before his employment contract was signed - so odds are he had little to do with either.

I didn't mean to imply otherwise, only that bringing in the new management team was part of the strategy of the Bass Bros./Roy strategy, and that the actions of Eisner/Wells in the early years corrected the undervaluation problem that made Disney an attractive takeover candidate in the first place.

 

[Another Voice]

" Eisner unlocked the value of the corporate library and the Florida real estate"

Actually no.

Eisner dragged his feet to a huge extent on moving into the home video. Remember he was the one that sued all the way to the U.S. Supreme Court in an attempt to make VCRs illegal. Once he lost the suit they had no choice and the home video business boomed.

The growth in Florida had little to do with uncovering the value of real estate – it came from raising prices. The smart thing he did was to take the money made during the boom of the eighties and plow it back into the property. Granted, it wasn't for the purest of business reasons (hotels happened because Eisner saw himself as a patron of architecture and Disney/MGM Studios happened because he hated the people running MCA/Universal), but good things did happen.

The business side of the company was changed by Frank Wells who reorganized the company and the company's finances. The single most important change was the creation of the film partnerships which brought in huge amounts of capital to fund Disney movies.

The other "big changes" were already in process. Disney had already successfully moved in to Hollywood style live action films through Touchstone Pictures before Eisner; 'Little Mermaid' was already into pre-production as well. Eisner did try to step in with such things as 'Oliver and Company', but the damage was minimized.

Eisner did bring two things of value to the company – Jeffrey Katzenberg on a lease and the hot line number to the Betty Ford Clinic. Disney's film division recovered through a series of small budget, well made films that turned an immense profit.

Disney wasn't so much an organization that had been rotted from top to bottom – instead it as a company that had been suppressed by an uncertain and unambiguous management at top. Removing that cap unleased a lot of potential that was already inside the company. Is not accurate to say that Eisner stepped in and set the place on fire. A lot of what was accomplished happened without his involvement, some even happened despite his involvement.

A large measure of today's problem is that the sense of individual ability and "Disney" has been ground out of the company. So much more is controlled through the top than in the past, so much of what happens at Disney is no longer creative but merchandising.

There is a vastly different mindset in people who sit down and say "I have to make this good" and those that sit around and say "which one of these will make the most money".

It's the difference between Pixar and Disney.

 

[DancingBear]

A-V, I think there is a certain amount of absurdity in parsing your post, as you're essentially saying: "Pay no attention to the man on the cover of all those magazines through the late '80s--sure, he was the CEO, but he really had nothing to do with the dramatic stock increases after he was hired. I, Another Voice, know what Roy Disney, the Bass Brothers, the Disney Board (even the 1980s board), and the financial press, and the stock analysts, didn't know---Eisner had nothing to do with any of it."

Of course, I will go ahead and parse anyway:

Originally posted by Another Voice
" Eisner unlocked the value of the corporate library and the Florida real estate"

Actually no.

Eisner dragged his feet to a huge extent on moving into the home video. Remember he was the one that sued all the way to the U.S. Supreme Court in an attempt to make VCRs illegal. Once he lost the suit they had no choice and the home video business boomed.

Are you talking about Sony v. Universal (with Walt Disney Productions as co-respondent)? The Betamax case? Hmmmm, that case was commenced in Federal District Court in California in 1976, decided by that trial court in 1979, had a 9th Circuit Court of Appeals decision in 1981, was argued before the Supreme Court in January, 1983, reargued in October, 1983, and decided in January, 1984. Just how was this Eisner's case?

I have no way to verify this quote right now, but found this in a quick search:

Eisner may have had the most early success in home video. He accomplished this in spades by packaging and proffering the "classics" of Disney animation in the expanding home video market. These video revenues provided an immediate boost to the corporate bottom line. In 1986 alone, home video revenues added more than $100 million of pure profit. In October, 1987 when Lady and the Tramp was released on video, the Disney company had more than two million orders in hand before it ever shipped a copy.

http://www.museum.tv/archives/etv/E/htmlE/eisnermicha/eisnermicha.htm

The growth in Florida had little to do with uncovering the value of real estate – it came from raising prices. The smart thing he did was to take the money made during the boom of the eighties and plow it back into the property. Granted, it wasn't for the purest of business reasons (hotels happened because Eisner saw himself as a patron of architecture and Disney/MGM Studios happened because he hated the people running MCA/Universal), but good things did happen.

Hotels happened because Eisner (and whatever smart people were working for him) realized that they could make a lot more money by keeping people on the property rather than creating profit for all the off-site hoteliers. The hotels got architects like Michael Graves and Robert A.M. Stern because of Eisner's architectural ambitions. It wasn't just about raising prices, it was about turning WDW from a 2 or 3 day visit where you likely stayed at a hotel off-property, to staying for a week and keeping your dollars in-house. Leaving aside the obvious resorts, etc., don't forget about Typhoon Lagoon and Blizzard Beach, the Disney Vacation Club (huge success selling prepaid hotel reservations), and even the cruise line. And then there's Celebration, definitely an Eisner project, and a success.

The other "big changes" were already in process. Disney had already successfully moved in to Hollywood style live action films through Touchstone Pictures before Eisner; 'Little Mermaid' was already into pre-production as well. Eisner did try to step in with such things as 'Oliver and Company', but the damage was minimized.

Wasn't Touchstone's first feature "Splash", which came out in 1984? I'd hardly say that means Disney was established in live action films. Down and Out in Beverly Hills, Ruthless People, and Three Men and a Baby followed in the Eisner/Katzenberg era. And Little Mermaid may have been in pre-production in 1984, but it wasn't released until 1989.

Eisner did bring two things of value to the company – Jeffrey Katzenberg on a lease and the hot line number to the Betty Ford Clinic. Disney's film division recovered through a series of small budget, well made films that turned an immense profit.

Disney wasn't so much an organization that had been rotted from top to bottom – instead it as a company that had been suppressed by an uncertain and unambiguous management at top. Removing that cap unleased a lot of potential that was already inside the company. Is not accurate to say that Eisner stepped in and set the place on fire. A lot of what was accomplished happened without his involvement, some even happened despite his involvement.

I don't get it. Does he get credit for hiring Katzenberg or not? If the company had "uncertain and ambiguous management at the top" before Eisner, just what did it have afterwards? Even if all he did was unleash potential which was already inside the company, does he get no credit for that?

It's fine to say that you don't like the direction the company has taken under Eisner, particularly over the last 8 years or so, but to deny Eisner's effect on the company in his first 8 years is revisionist history.

 

[airlarry!]

DB:

I truly do not understand your points:

Video: I found this book site, which claims Disney was involved with Universal in the suit against Sony at http://www.utexas.edu/utpress/excerpts/exwasven.html

However, film companies were not yet recognizing the value of video in reaching an increasingly mobile population. Universal and Disney sued Sony, and the case went all the way to the Supreme Court. The American film companies lost the case.

Hotels: AV argues that Cou$in Mikey's input was in raising the prices, something I am pretty sure he admits to doing in his own autobiography. Check it out sometime, mine is holding up the back leg of my trash can...err...safely in storage. He lauds the fact that the property was underutilized and underpriced (something LandBaron would no doubt attest to).

Movies: AV gives credit to the Cou$in for doing what he did at Paramount (again from his autobiography)--where he brought in movies at or below budget, with relatively good stories, small budgets, actors on the rebound who are willing to sign for less money, and look at the record of the early movies Touchstone did...their all with up and coming people or people willing to work for less. It is only when he went Big Hollywood that his lack of skills at that segment showed.

Additions to the company: Seriously, name one project sprung from his brain that has flourished. Read the autobiography first, and you will see that he had a direct hand in the European project, including overbuilding on the hotels, and underwhelming the Europeans with food and attractions. He has, over the years, taken credit for The Disney Institute (flop), the impetus behind the acquisition of Go.com (superflop), the purchase of ABC/CapCom (megaflop EXCEPT for ESPN properties et al), the building of the Swalphin (heck he made Arch Digest for his 'patronage' for that one.)

Look, it is okay to disagree with The Voice. But, let's inject some reality into this discussion. Ei$ner's personal pet projects (usually stemming from his trips to Idaho) like ABC, Fox Family, The In$titute, and Go.com have been his Hindenbergs.

Did he save Disney from the pawnshop, split apart? Yep. But, then he cunningly became the pawnshop owner himself. That is really the difference between us and them. Do you think Ei$ner is a knight or a worm

 

[DancingBear]

AV said Eisner didn't deserve credit for unlocking the value of the corporate library because he was slow to embrace home video, as evidenced by his involvement in the Betamax case.

If you'll read my post more carefully, you'll see that I clearly stated that Disney was a co-respondent with Universal in the Betamax case; however, my point was the case well preceded Eisner's hiring at Disney.

If you'll read your own link, it says such things as:

"William Mechanic was named the president and chief operating officer of Twentieth Century Fox on September 27, 1993. The item on his resume that clinched the appointment? It was Mechanic's nine-year stint leading the Walt Disney Home Video division. He had built on the natural advantages of Disney product to take a dominant market position in the sale of prerecorded videos."

9 years? That would be back until 1984, right?

Also:

"Here the exemplary studio is the Walt Disney Company, which was uniquely positioned to take advantage of video. After initial hesitation, the company decided to plunge ahead and rose to dominance. Disney was the one film studio that was not purchased."

So, thank you for posting support for my giving credit to Eisner for (1) exploiting home video, and (2) avoiding takeover of Disney.

AV also took issue with my giving Eisner credit for unlocking the value of the FL real estate. He said: "The growth in Florida had little to do with uncovering the value of real estate – it came from raising prices." He also said, "hotels happened because Eisner saw himself as a patron of architecture."

I took issue with this, as I believe that Eisner built hotels as part of a strategy to more fully utilize the revenue-producing potential of the Florida real estate, not just as a patron of architecture. This building boom, and the raising of prices, seem consistent with my claim that Eisner "unlocked the value of the FL real estate," particularly when you also consider a project like Celebration. (Does Celebration count as "one project sprung from his brain that has flourished"? And just what was such a flop about the Swan and Dolphin?).

[Oh, and BTW, although "Oliver & Company" is clearly not part of the Disney pantheon of great films, it grossed $53 million plus. As a point of reference, the megahit "The Little Mermaid" came out one year later and grossed $84 million plus. I don't see any production cost numbers for Oliver & Co., but it hardly seems the massive failure that AV implies.]

I don't think you'll see anything in my post defending the acquisition of CapCities and such as good business decisions. I did mention that major acquisitions put the company into debt, which made it a less attractive takeover target, but that's different than saying it was a good idea.

I also haven't taken issue with assertions that Eisner screws around with creative types, or with the argument that Disney would have been better off to develop/keep CGI and creative animation capacity in-house rather than do the deal with Pixar.

As I said, "It's fine to say that you don't like the direction the company has taken under Eisner, particularly over the last 8 years or so, but to deny Eisner's effect on the company in his first 8 years is revisionist history."

As far as "injecting reality" into the discussion, I've just been trying to keep AV honest in his posts. In this thread alone, he's made at least the following factual errors:

--"The original deal envisioned that all sequels would be direct-to-video or television based."

--The Co-Production Agreement was "mostly so Disney could get software cheap."

--"There was never any risk whatsoever on Disney's part."

--"Eisner dragged his feet to a huge extent on moving into the home video."

--"[Eisner] was the one that sued all the way to the U.S. Supreme Court in an attempt to make VCRs illegal"

 

[Another Voice]

Lawsuit
As far as I know there was the Sony v. Universal case (pre-Eisner, although he was running Paramount at the time and supporting the lawsuit), lawsuits against dual deck VCRs, lawsuits and lobbying to prevent video stores and consumers from transferring purchased tapes and much more recent attempts to require the government to force electronic manufactures to prevent "copying". Some of the details of these cases may have become jumbled in my faulty memory.

I apologize for any misstatements.

However (you knew that was coming), Eisner retains a long track record of disliking any new technology. Hardly one to "unlock the value" he is mostly fighting to keep what already exists. How long did it take Snow White to come on out VHS? And why are there so many holes in my Disney DVD collection? My faulty memory does not recall him bursting into Bill Mechanic's far-off-the-lot office demanding that he put the classics out on tape to raise money. And exactly how quickly has jumped into DVD? And the new digital technology - http://www.larta.org/pl/NewsArticles/14March02NYTIMES_Piracy_hightech.htm. Not exactly the statements of someone looking for new ways to bring in the bucks.

Home video has become a tremendous revenue source for Hollywood. All[/I] of Hollywood. Disney got late to the party but still reaps the benefits. Eisner is simply doing what everyone else was doing. What real innovation has Disney accomplished in home video? What real "unlocking the value of Disney" did Eisner perform that any of the others didn't do? What did he do that someone else running Disney won't have done either?


Pixar

The reason Disney contacted Pixar was to seek software support for Feature Animation's CAPS project. Disney was going to use computers to reduce the cost of animation by a)having computers render backgrounds (getting rid of background artists), b) having computers create the "in-between" frames (getting rid of the inbetweeners) and c) having computers create electronic "cells" for final rendering (getting rid of inkers and painters). Pixar was already marketing software. Since Disney didn't want to develop everything in house they bought software for CAPS and hired Pixar to help with some of the technical development. Already having an association (and helping Disney with a few films already), the relationship went into "we'll work for free if you'd like to distribute this little movie we have?" At no time does my faulty memory recall Eisner bursting into Roy Disney's office screaming "I just found this great company that makes great movies and I demand we sign a deal!!!".

The relationship with Pixar broke down exactly because the sequels were supposed to directs. That's who Toy Story 2 started life; when it became a theatrical release Pixar want it counted as a "real" movie under the contract. That's the way Hollywood works – I don't think Jerry Bruckheimer is going to lower his take from irates 2 because it's a sequel.


Other Animation

When little girls want to dress up like characters from Oliver and Company then perhaps you can claim it as a "success". There's a lot more in "unlocking the value of Disney" than champing an instantly forgotten movie that made 37% less than a movie that was almost killed. The secret of "unlocking the value of Disney" is the company's ability to cross market products – theme parks, TV shows, consumer products, etc. Little Mermaid earned much, much more for Disney than its box office number implies. Perhaps a quick count of the Oliver and Mermaid related items at the Disney Store would give a quick read.


Hotels

Eisner's contribution to the hotels at WDW was to agree with what people had been saying for a long time – "why don't we do it ourselves". And it was a good move on his part to finally get Disney rear in gear on the issue. A deal had already been signed for a large hotel and convention center on property. Eisner came in and tore up the deal and said "we can do it ourselves" (unfortunately what he did was a tad illegal and the outside company sued and won the right to build what became the Swan and Dolphin).

Yet it's very clear from the Euro Disney fiasco and the massive overdevelopment at WDW that people were more interested in building hotels than actually making money at it. It was Eisner's personal direction to increase hotel occupancy at EDL (and his selection of the architects) and a near similar situation at WDW (and we won't even start on the Team Disney out there). And if you have any doubt that playing Patron of the Art is more important than "unlocking the value of Disney", please come out to Burbank and see the temple he built to himself.

Disney already owned Arvida – a huge Florida land developer – before Eisner showed up. Celebration (which is really a housing development) was simply selling off property and nothing but a one-shot "unlocking". I suppose I am still "unlocking" the value of the Plymouth I sold back in college if that's the criteria. But to me "unlocking" implies a way of continuing to receive value, not a grab-the-cash-and-run mentality. Most of development work at WDW is simply duplicating off-property businesses – mini-golf, water parks, strip malls, McDonalds. Yes, Eisner gets points for putting in a business plan, but it's rather shallow and unimaginative.


Pay No Attention to the Crowd Behind the Curtain!!!

What really "unlocked the value of Disney" was not one man. It was the hard work and efforts of thousands of people. I'm glad you mentioned Bill Mechanic's name. He was the one that transformed Home Video from a stepchild into a major profit center. He and a lot of people in that organization.

Egos are powerful things, it's rather intoxicing to think of oneself as the master of all. And for the public it's easier to asscribe all things to one source - especally when the company already had a long history of doing that with its founder.

Eisner gets credit simply because he was the hired public face for the company. It's much like the way Walt got credit for a lot what the company did as well.

What either really deserve credit for is something much harder to see.

 

[DancingBear]

Originally posted by Another Voice What did he do that someone else running Disney won't have done either?

Well, he did what the people who were running Disney immediately prior to his coming there did not do.

The reason Disney contacted Pixar was to seek software support for Feature Animation's CAPS project. Disney was going to use computers to reduce the cost of animation by a)having computers render backgrounds (getting rid of background artists), b) having computers create the "in-between" frames (getting rid of the inbetweeners) and c) having computers create electronic "cells" for final rendering (getting rid of inkers and painters). Pixar was already marketing software. Since Disney didn't want to develop everything in house they bought software for CAPS and hired Pixar to help with some of the technical development. Already having an association (and helping Disney with a few films already), the relationship went into "we'll work for free if you'd like to distribute this little movie we have?" At no time does my faulty memory recall Eisner bursting into Roy Disney's office screaming "I just found this great company that makes great movies and I demand we sign a deal!!!".

Not sure of your point here. Here's the chronology, according to Pixar's 10-K:

"Pixar's relationship with Disney dates to 1986, when Pixar and Disney entered into a joint technical development effort that resulted in the Computer Animated Production System ("CAPS"), a production system owned and used by Disney in certain of its two-dimensional cel-based animated feature films. Disney first used CAPS for The Rescuers Down Under and subsequently used it for other animated feature films, including Beauty and the Beast, Aladdin, The Lion King and Pocahontas. In 1992, certain employees of Pixar and Disney were jointly awarded an Academy Award for Scientific and Engineering Achievement for CAPS."

"In May 1991, Pixar entered into a Feature Film Agreement with Walt Disney Pictures, a wholly-owned subsidiary of Disney, which provided for the development, production and distribution of up to three feature-length motion pictures (the "Feature Film Agreement"). It is pursuant to that Feature Film Agreement that Toy Story and the Toy Story home video were developed, produced and distributed."

[Not "would you distribute our little movie," but "would you help finance, market and distribute movies with us (and give us creative input as well)."]

"In August 1995, Pixar entered into a non-exclusive CD-ROM
development and publishing agreement with Disney Interactive, Inc. ("Disney Interactive"), a wholly-owned subsidiary of Disney, for the development, production and distribution of CD-ROM titles based on Toy Story (the "CD-ROM Agreement"). It is pursuant to the CD-ROM Agreement that the two Toy Story CD-ROM products were developed, produced and distributed. Both the Feature Film
Agreement and the CD-ROM Agreement were superseded by the Co-Production Agreement."

"On February 24, 1997 Pixar and Walt Disney Pictures and
Television entered into the Co-Production Agreement pursuant to which Pixar, on an exclusive basis, will produce five computer animated feature-length theatrical motion pictures (the "Pictures") for distribution by Disney over approximately the next ten years."

There is nothing in the description of the Co-Production Agreement about further software sharing.

The relationship with Pixar broke down exactly because the sequels were supposed to directs.

Wrong again. From Pixar's own 10-K filed in March, 1997 (just after the Co-Production Agreement was signed):

"Derivative works include theatrical sequels, made-for-home video sequels, television productions, interactive media products and other derivative works as more specifically provided in the Co-Production Agreement (collectively, "Derivative Works")."

"A Derivative Work that is a theatrical motion picture would not count towards the five Pictures to be produced under the Co-Production Agreement."

How much clearer could it be?

That's the way Hollywood works – I don't think Jerry Bruckheimer is going to lower his take from irates 2 because it's a sequel.

Pixar didn't lower its take on the sequel. Cost and revenue sharing were treated exactly like the other pictures. It just didn't count toward the minimum.

Note that Pixar was not required under the Co-Production Agreement to produce Derivative Works, they were just given the opportunity to do so.

The secret of "unlocking the value of Disney" is the company's ability to cross market products – theme parks, TV shows, consumer products, etc. Little Mermaid earned much, much more for Disney than its box office number implies. Perhaps a quick count of the Oliver and Mermaid related items at the Disney Store would give a quick read.

Well, I didn't mention Eisner's successes at increasing merchandising revenue, thanks for doing so. Since you've clearly blamed Eisner for all the excesses of merchandising in other threads, I assume this is one revenue stream you'll be willing to give him credit for.

Celebration (which is really a housing development) was simply selling off property and nothing but a one-shot "unlocking"...But to me "unlocking" implies a way of continuing to receive value, not a grab-the-cash-and-run mentality. Most of development work at WDW is simply duplicating off-property businesses – mini-golf, water parks, strip malls, McDonalds. Yes, Eisner gets points for putting in a business plan, but it's rather shallow and unimaginative.

Yes, developing and selling off a piece of real estate can be unlocking its value, particularly when it's a piece of real estate that is somewhat detached from the main hunk of land at WDW, and when the Company was facing a loss of its agricultural tax treatment of the property. Sure, it's not an evergreen source of revenue, but, in a sense, neither is putting The Lion King on DVD.

Whether the plan is shallow and unimaginative or not is debatable, but it has certainly been successful in making WDW more of an all-inclusive resort destination, notwithstanding the odd Pop Century slowdown, Port Orleans FQ shutdown, etc.

What really "unlocked the value of Disney" was not one man. It was the hard work and efforts of thousands of people. I'm glad you mentioned Bill Mechanic's name. He was the one that transformed Home Video from a stepchild into a major profit center. He and a lot of people in that organization...Eisner gets credit simply because he was the hired public face for the company. It's much like the way Walt got credit for a lot what the company did as well...What either really deserve credit for is something much harder to see.

Of course the success of any large company rides on its many employees--so what? Where were these thousands of employees before Eisner got there? You admit that the prior management was ineffective, but you refuse to give Eisner credit for any changes. How, under your system, does Eisner get no credit for the things the many Disney employees did (including those like Katzenberg whom he brought on board), and yet he gets the blame for a tragic accident on Big Thunder Mountain?

Honestly, AV, I generally find your comments to be thought-provoking on the direction/destruction of the company philosophy and such, but it seems like your venom for Eisner is so strong that you refuse to give him credit for anything at all.

And for the record, I certainly don't think the man is infallible. The attempted screwing of Katzenberg (I'm no fan of the midget, and I don't think he should have been promoted to President, but it was poor judgment not to work out the severance properly), the hiring of Ovitz, etc., certainly speak to that. But, as one critical article I read said of him, "Eisner wasn't always an empty suit."

 

[airlarry!]

DB:

Errors, errors, let's point out errors:

Video-- DB, you claimed that the VCR case was not Ei$ner's. This is not true; he was instrumental both before Disney and after in attempting to shut down the very market that has made Disney tons of money since. Remember, I am not necessarily criticising Ei$ner for this move--but I'm not going to whitewash the fact that he did reverse his thinking somewhat by allowing the company to be dragged into the video market. The query here is why Ei$ner did not have the foresight to see the exploding video market. It is not necessarily a criticism of Ei$ner, because there were arguments back then that the video tape market would kill the theaterical release market. I admit that, but it still does not change Ei$ner's history. Oh yeah, it is not what Mechanic did, as you say, but what Ei$ner's thoughts were. Remember, the discussion here is what Ei$ner can take credit for, not what happened despite him.

Hotels--Sigh....I guess I could cf this site for an extensive discussion as to why the Swalphin is considered by most here to be a less than stellar addition to the resort. First, Disney does not own the hotels, and missed out on an opportunity to maximize revenue at a crucial, key piece of real estate (again, Ei$ner himself was extremely upset about this, as per his autobiography). Second, the architecture intrudes upon the sight lines at EPCOT's World Showcase background. Third, they were not included in the EPCOT monorail transportation background, showing again a lack of foresight and resort management contributing to the underwhelming traffic planning measures undertaken in the last ten years.

Movies--Hard to add to what AV said, but when I read this,

I don't see any production cost numbers for Oliver & Co., but it hardly seems the massive failure that AV implies.]

I actually coughed up my Mickey Head buttered breakfast roll. I take this as an implication that one could compare the success of Oliver & Co to Little Mermaid. That dog won't hunt. The lifeblood of any creative empire is so much more than the raw number of tickets sold on a first theatrical run. Heck, by that count, Pearl Harbor is a smash, and The Princess Diaries is a waste of Disney's time. Toy Story is so-so, and Finding Nemo is the bigger movie of the two (that may well come true, but I'll bet you right now that Toy Story is bigger in the consumer's mind than Nemo).

Pixar--Are you saying that Disney agreed that Toy Story 2 was part of the deal? That is the interpretation I get from reading your statements, that the parties agreed that TS2 was part of the five. This is simply not true. Pixar developed TS2 as a DTV production, and ramped it up when everyone agreed the story was so strong it had to be released to theatres. Any good lexis/nexis search will show you newsarticles from that time when Disney and Pixar argued that TS2 should have been or should not have been part of the five picture deal.

The five "wrong" statements don't seem so "wrong" after all.

Give Ei$ner his due. He prevented that corporate raider from taking over the company. What you still haven't answered is, did the takeover happen anyway, just with a different scenario? And will Disney be sold off in pieces at the end?

 

[Another Voice]

I don't have time for a detailed discussion, so for the moment let me just post the introduction…

I will admit I see things from a different perspective than most on these boards – it is very much a "back stage" view of things. My view is that his real talent is in playing politics. He can manipulate people and situations to his advantage with amazing skill. Working in Hollywood is, of course, a huge advantage to people like this because the town is nothing but illusion and the reality is carefully hidden from view. Give people enough money and they'll beleive anything.

Eisner is someone who accumulated credit for the work of others to such an extent he began to believe that he had talent himself. This was helped by a company and public culture of "one man does everything", a culture that fit Eisner like emperor's robes*.

The problem is whatever talents that made him a successful suit in Hollywood (the ability to pick middle-of-the-road semi-successful projects and bully people into working cheap all the while surrounded by buffering layers of management and creative people) have turned into a curse when he began to push forward large scale efforts on his own. Eisner used to be a suit at Paramount and an executive-on-a-lease at Disney. One helicopter ride and some board room politics later he's now running everything by himself. His true character is coming out.

It's the Peter Principle played in public on a massive scale. But with the amount of money involved (from the company side) and personal involvement (from the fan side) there is tremendous incentive to view the emperor's robes as dazzling as ever. While everyone tries very hard not to see the naked man, Disney is being marched down the path of oblivion.

Eisner is best at exploiting – people, contracts, properties (intellectual or real) – but he's not a creator. If you're view of Disney is for them to be a repackager of other people's ideas and products, then he's your guy. But I wish for Disney to remain a creative enterprise with the ability to generate new wonders, new ideas, new magic. I want the artists, not the wholesalers.

* Eisner would always tell the story about how Walt kept a photographer on staff just to take pictures of Walt. Eisner would use it as an example of ego gone wild, of vanity, of wasting the corporate money, and of "how things are different now". I'd always remember that story when I watched him scurry across the lot to get his toupee fitted in Make-up before he shot the introductions to 'The Wonderful World of Disney'. Another prefect fit.

 

[Walt's Frozen Head]

Eisner is best at exploiting – people, contracts, properties (intellectual or real) – but he's not a creator. If you're view of Disney is for them to be a repackager of other people's ideas and products, then he's your guy. But I wish for Disney to remain a creative enterprise with the ability to generate new wonders, new ideas, new magic. I want the artists, not the wholesalers.

I agree... but would add that I believe the creative enterprise is the logically and demonstrably superior business plan for the long haul.

No one cares what "you want," you know. It's all about the money.

 

[BRERALEX]

As usual i have nothing to contribute just need to get my post count up.

I just finished Keys To The Kingdom ( the rise of ME and the fall of everyone else) last night and i think it's something every hardcore disney fan needs to read.