Eisner and Roy - Sympathy Please

[dcentity2000]

We expect far too much of both Roy Disney and Michael Eisner. We expect Roy to save the world and for Michael not to ever make mistakes - a sad indicator as to our own credibility as 'intelligent people'.

The reason for this thread is so that I can stop defending Eisner in every bandwagon-ish thread in this forum and clear up once and for all the question of whether I hate Roy or not (the answer is no).



First, a little history.

Eisner was INVITED to the board (if not completely dragged in) by Roy Disney in 1984 amidst a buy out crisis. Eisner immediately set out increasing share value until a "record high of $43.63 was touched in 2000" (Boston Business). Just before this, Roy "resigned from the board in 1984 to initiate a stock battle for the company while it was headed by Ron Miller, Walt Disney's son-in-law. Disney was later reinstated." (ABC News).

Credit here to the both of them: Roy kept the hostiles off the company to his own risk and Eisner turned the company around.

"Eisner is credited with building the company from a minor maker of mediocre films and proprietor of two theme parks in 1984 into a media giant that includes five theme parks around the world, the ABC Television network, the ESPN sports cable channel and one of the highest-grossing movie studios." says China Daily, and indeed, this is echoed, not only in Forbes, who say he turned the "company into a media powerhouse", but also by business history gurus such as the one below:

"By 1991 the Walt Disney Company had become a true corporate power. Specifically, as 1991 began, it ranked in the top two hundred of all U.S. corporations in terms of sales and assets, an outstanding 43rd in terms of profits. In terms of its stock value Disney had grown into a $16 billion company, with mind boggling sales of $6 billion per annum, and profits approaching $1 billion per year. This was a media corporate giant, of a rank with Time Warner or Paramount, no marginal enterprise anymore."

To read more on Eisner's power building demonstration, see http://www.museum.tv/archives/etv/E/htmlE/eisnermicha/eisnermicha.htm

"But Eisner's reign hasn't been without hiccups, and his compensation has long been a bone of contention with investors." Forbes is absolutely right.

Eisner did, amongst saving the company from eventual death, make mistakes. He lost the company roughly what Roy Disney did through a string of accidents, the worst being $2m in trying to groom a replacement to himself. So, in truth, we can't really bash either of them for losing that money. If we do, it has to be equal. Fair's fair. They both did good and they both did bad.



Shareholders, led by an angry Roy are now trying furiously to oust Michael as around the time of the September 11th attacks income from tourism fell and Disney shares slumped. ABC also slumped at this time, an unwelcome catalyst.

Interestingly, though, is the fact that shares fell at every hostile move by Roy Disney - "20 cents to $23.80 in New York Stock Exchange composite trading." (Boston Business) in the first instance.



Eisner seems to be back on track, thankfully. In 2003 shares rose 43%, a huge increase. In the mean time, "shares have risen 3.6 percent since Roy Disney and Gold began their campaign in December. The company's fiscal fourth-quarter profit more than doubled to $415 million from $175 million a year earlier because sales increased at the Disney studios and cable networks" (Boston Business).

So whilst people try to oust him, Eisner has undone the last few mistakes and is making the company a lot of money again.



Bottom line is, Eisner shouldn't be chucked out on the strength of some questionable decisions and neither should Roy be bashed on the strength of some poor financial use. You have to take the good with the bad. Eisner earned the company in terms of value alone $14,000,000,000 and a lot more besides - currently he has got the company earning around $150,000,000 per annum. Nice.

So please, don't just jump on any old excuse to bend to peer pressure. Without Eisner, your Disney would be in little bits spread around the hungry media giants, whilst I'm sure the same applies to Roy. Both deserve to be in that company and to tell you the truth, I'm wondering if it can survive without either.

Disney needs a heart - that's Roy.
Disney needs a head - that's Michael.



Don't cause the company any more harm. Just try and support it








Rich::

 

[wtg2000]

I bought my stock in 1989 at $10 per share (this is adjusted for the splits). It's increased 2.5 times.

In 1989 the Dow was 2,500 and now sits over 10,000 - a 4 times increase!

Disney stock has seriously lagged behind. Even if it were $40 per share it would just be even with the Dow.

If I'd invested my money in bonds at only 5% I'd have doubled my money.

Also, a one-day ticket to D-MGM has gone from $30 to $55 in that time - almost double.

So Disney stock hasn't really performed that well under Eisner since 1989.

And if you bought your stock in the $30-$43 range, then you are definitely not happy.

 

[WDSearcher]

Originally posted by wtg2000
And if you bought your stock in the $30-$43 range, then you are definitely not happy.

How does the September 11 backlash in tourism figure into that? Even if the stock has underperformed, 9/11 was a totally unexpected and unpredictable event that affected tourism and tourism-related businesses to a much higher degree than many other businesses in the Dow.

I don't know how much difference it would make, but is there a way to adjust for that?

 

[wtg2000]

I could be wrong but it seems to me that the stock had fallen from its $40+ high to the high $20s before 9/11. And besides, tourism is only part of the company. After 9/11 people went to movies, rented DVDs and videos and watched TV more so Disney should have gained in those areas to offset drops in the parks.

In January of 2001 it had fallen to $31 from a 52-week high of $43.88

 

[Another Voice]

To save bandwidth, I'll be brief:

"He lost the company roughly what Roy Disney did through a string of accidents, the worst being $2m in trying to groom a replacement to himself."

There is not a single "intelligent person" that would for a second believe that Fox Family, GO.com, California Adventure, all plush Disney Stores, a billion in personal compensation, the Katzenberg lawsuit, Disney Studios Paris and all the rest are "accidents".

And he paid Michael Ovtiz more than $200 million, not two.

Michael Eisner, without the help of Frank Wells and the rest of the management team assembled for him, has blundered from one disaster to another. It was not Eisner that turned Disney around, it was the work of thousands and thousands of talented and hard working people. Eisner collected the credit (and the paychecks). But left to his own means, Eisner is being shown as the shallow suit which he is.

All the time Disney was a "marginal company" – it remained intact and independent. All the other Hollywood Studios – those Warner Brothers and Paramounts – were eaten and split apart by other companies. It was only Disney that survived and in the Eisner/Wells era it flourished by following traditional Disney businesses and rediscovering what their role was.

It's been in the last ten years, when Eisner's true nature was allowed free reign, that Disney has become imperiled.. Eisner is the one that put Disney up for sale, Eisner the one trying to sell the Stores, Eisner is the one running around the country soliciting "spectaculars" bids. Eisner killed Disney, and now he's trying to sell bits of the carcass

Don't cause the company any more harm. Remove Eisner now.


P.S. As for sympathy…Eisner's taken over a billion from Disney. Seems he can afford to hire people to feel sorry for him.

 

[dcentity2000]

Originally posted by WDSearcher
How does the September 11 backlash in tourism figure into that? Even if the stock has underperformed, 9/11 was a totally unexpected and unpredictable event that affected tourism and tourism-related businesses to a much higher degree than many other businesses in the Dow.

I don't know how much difference it would make, but is there a way to adjust for that?

See, that's what I was wondering. Does anyone know? I know that Disney gets a lot of money from parks admission and hotels as well as the shops and food courts within; would the sudden halt in tourism have given the shares a kicking?

nb. I know that poor ABC performance also contributed to share prices falling, was just wondering if 911 was partly to blame?



Rich::

 

[PKS44]

Echoing all the AV said and pointing out that the dcentity2000 is painting a misleading an very very very incomplete and inaccurate picture of Eisner's reighn---as has been pointed out many times over--Eisner did well when he had Wells to help...since then he has not done well and the most important thing is that it is clear he has NOT LEARNED from his mistakes just as dcentity2000 has not learned--there is no recognition of where things have gone wrong-never an admission that he has miscaculated except in hiring Ovitz --the rest is all something or soeone else's fault- how about admitting he overpaid for Fox Family that Go.com was a huge mistake, and the most worrisome is his refusal to see the different outcomes between a Calif Advent and a DisneySea as clear evidence that his basic strategy of doing it cheaper is a recipe for failure...Japan has had a far worse economy than we. They have had a particularly bad economy for amusements, theme parks etc which built up during their boom--that industry has been decimated--and yet..Tokyo Disney --guided by a management dedicated to giving the BEST- investing their profits not pocketing them and cutting costs to try to increase them-----Tokyo Disney is boosting their dividend, raking in the dough and watching their investments pay off...
Eisner is bad--that he was ever good is not the issue--he has no clue of what made him good in the first place and he must go...Roy has made it clear that he "gets it"--that wealth is a byproduct not a goal--true corporate wealth is no different...CLICK HERE

after reading that and then reading what Eisner says the goal of the company is (to promote company growth and increase share holder value) and you know all you need to about these two men--Eisner has neither head nor heart for business anymore---

 

[dcentity2000]

Originally posted by Another Voice
To save bandwidth, I'll be brief:

...Michael Eisner, without the help of Frank Wells and the rest of the management team assembled for him, has blundered from one disaster to another. It was not Eisner that turned Disney around, it was the work of thousands and thousands of talented and hard working people. Eisner collected the credit (and the paychecks). But left to his own means, Eisner is being shown as the shallow suit which he is.

Until such time as you provide any substantial evidence this will remain as a simple opinion and therefore is about as substantial as hear-say

Facts that could challenge the initial post: figures which prove that Eisner took more than he gave (probably around the $59bn mark would be the minimum) and a past track record which suggests a failure to manage companies.

Opinions wither in the glare of fact.

Sort yourself out.




Rich::

ps. I do, of course, awknoledge any effort, successful or unsuccessful, carried out by any parties with direct or oblique intention to benefit the company

 

[PKS44]

dcenty2000-

you may have missed my post as yours came in after mine--but the facts speak very clearly about what has happened in the last 7 or 8 years and Disney as judeged by multiple methods has been ranked as having BAD management. The worst CEO according to Forbes in one evaluation....

you cannot look at the recent direction this company has taken and say that it is the same as it was when Eisner began--it is changed- and it is changed for the worse. You cannot just look at the last year- or the who last 20 years...you must look at what choices this management is making---abandoning core company values that have made it what it is--this is not just the ranting of disgruntled family or lunatic fans--the company will succeed or fail depending on whether it can get abck to those sound fundamentals that ALL businesses have such a hard time understanding and sticking to---for long term health a company must give, not cut, must invest, not cut back, must maintain quality not accept its reduction....this new economy has not changed these truths--and Eisner like so many before thinks he can get away with giving less instead of more.

 

[dcentity2000]

Originally posted by PKS44
he has NOT LEARNED from his mistakes just as dcentity2000 has not learned--there is no recognition of where things have gone wrong-never an admission that he has miscaculated except in hiring Ovitz
...
Roy has made it clear that he "gets it"--that wealth is a byproduct not a goal--true corporate wealth is no different...CLICK HERE

after reading that and then reading what Eisner says the goal of the company is (to promote company growth and increase share holder value) and you know all you need to about these two men--Eisner has neither head nor heart for business anymore---

1. If you announce that your company is in the sticks, your share price falls and the company becomes subject to hostile bids. The comcast one came after Roy brought light to this matter, for better or for worse.
2. A reference to a biased and/or purposive news source is about as useful as a chocolate teapot. CNN, BBC World or ViaNews may be useful.
3. Flaming someone, even if you don't agree with them and are desperate to ridicule all proof they have researched in front of everyone in order to emphasise your point of view is never nice. We'll leave the name calling out for now, shall we?



Rich::

 

[dcentity2000]

Originally posted by PKS44
dcenty2000-

you may have missed my post as yours came in after mine--but the facts speak very clearly about what has happened in the last 7 or 8 years and Disney as judeged by multiple methods has been ranked as having BAD management. The worst CEO according to Forbes in one evaluation....

you cannot look at the recent direction this company has taken and say that it is the same as it was when Eisner began--it is changed- and it is changed for the worse. You cannot just look at the last year- or the who last 20 years...you must look at what choices this management is making---abandoning core company values that have made it what it is--this is not just the ranting of disgruntled family or lunatic fans--the company will succeed or fail depending on whether it can get abck to those sound fundamentals that ALL businesses have such a hard time understanding and sticking to---for long term health a company must give, not cut, must invest, not cut back, must maintain quality not accept its reduction....this new economy has not changed these truths--and Eisner like so many before thinks he can get away with giving less instead of more.

But surely the purpose of a company, even the oblique purpose, is to make money and grow in size?

Besides, you are both saying that you cannot base the present upon the past performance yet your reason for wanting to oust Eisner is because of poor past performance... :?

Please explain this?

The overall result of Roy's and Eisner's efforts have been, overall, condusive to this. The company is currently growing fast again and making profit. Aside from the hiccup - a major one - this has been the majority trend. One that we should support and not disrupt by chopping up the board.





Rich::

 

[dcentity2000]

Eisner's firing the original and catastrophic board, combined with his own $2m mistake, cost $340m. Apologies.

As for Roy's cost to the company... I've read in a few places that it tots $320m but these sources aren't the NYTimes or anything, so I'll be wary of this for now. At one point the number sky rocketed to $450m but I just think that's ludicrous.

The costs include his new office and, for the most part, his film 'pet project' which he axed for apparently no reason.

Both men seem to have lost far more money than I originally thought. Sausages. Time to hire a woman, methinks. Tink will do




Rich::

 

[wtg2000]

I know that poor ABC performance also contributed to share prices falling, was just wondering if 911 was partly to blame?

Again, I believe the stock was falling before 911 but I can't find the numbers other than the one I posted.

But - to compare year ending Sept 2001 to Sept 2002, the consumer and film divisions stayed the same in revenue and profits. However, resort revenue decreased $7 billion to $6.5 billion (not a catastrophic drop) and profits decreased $1.6 billion to $1.2.

The big drop though was in media. Despite equal revenues, the profits were nearly cut in half from $1.76 billion to $1 billion. I'm not sure what attributed to that and it would be interesting to see how other media companies fared.

Eisner inherited one of the most beloved "brand" names in the world. And at a time when video was starting. He had a library of Disney films to make a pile of money. I think anyone could have done that. He's also used this to do remakes and sequels. He also had two of the most beloved tourist destinations in the world - which he has expanded, making them bigger but not necessarily better.

From the outset, Eisner had hundreds of millions of dollars dropped into his lap. When he's tried to create new ventures he's been less than successful in most cases.

 

[dcentity2000]

wtg2000, the other media companies flourished - I think that's where things went wrong

Sadly ironic, given that Eisner has a long and proven track record in media - I think he was recruited from ABC, wasn't he?

I think you're right - he's done well at using what there is and expanding it, but the recent, in house Disney exploits have been dubious:

Atlantis - Flop
Lilo & Stitch - Adequate
Treasure Planet - Flop
Brother Bear - Adequate

It's possible that this was due to the Pixar partnership - if Eisner had too much confidence in this he could have been tempted to use Pixar as his film machine.

Unlucky, is all I have to say over that.

Now, let's all hope that the new in house CG dept he started can rescue things and that the cell animation team pulls together!



Rich::

 

[BRERALEX]

The comcast one came after Roy brought light to this matter, for better or for worse.

If your referring to the Comcast bid wasn't it already in the works? the Stockholder meeting took place in Philly, Comcasts hometown, and i'm sure that was setup before savedisney.com was up.

Bottom line is, Eisner shouldn't be chucked out on the strength of some questionable decisions

but what do you say to such a larger number believing that they should chuck him out on the street?

Steve Case bounced with how much? Almost half as much no confidence? just looked it up 22% no confidence.

 

[Zurg]

Bottom line is, Eisner shouldn't be chucked out on the strength of some questionable decisions

At his pay grade yes he should.

His judgement is a lot worse since he became a solo act.

He has the distinction of the highest ever no confidance vote in modern US shareholder vote history.

The guy got the pink slip he had coming specifically because of the questionable decisions he has made, unfortunatly his pet board has their heads in the sand.

 

[mitros]

What you really need to do, IMHO, is to start a " SaveEisner" site.
{In deference to you, I left out the $ I usually use in his name}


AV, thanks again!

 

[manning]

dcentity2000-- In your opinion, what are Eisners strengths and weaknesses?

 

[Another Voice]

"Until such time as you provide any substantial evidence this will remain as a simple opinion and therefore is about as substantial as hear-say"

An interesting debating tactic – especially coming from someone quoting "major" news sources like an unheard of publication 'Boston Business', uses as "supporting" evidence a link to a now closed museum of broadcasting in Chicago and to Disney-owned 'ABC News' (you mentioned something about "a reference to a biased" source in a later post, did you not?).

So, until such time as you provide any substantial evidence this will remain as a simple opinion and bogus and/or biased sources. (I will withhold my comment on your favored BBC World as I believe the credibility of that institution has just recently been exposed for all to see).

The simple proof is that Disney's value is less today than it was years and years ago. Simply read the annual reports – about as direct source of information as you can get. Spinning as wildly as it can has to at least allow some of the painful reality seep through.

The share price is lower now than it was in 1990s. Disney's ABC Network went from being the highest rated network, the #4 among "The Big Three" (bettered by Rupert Murdoch of all people). A "stunning studio operation" based on two movies produced out-of-house – a one by a company that now refuses to have any dealings with Disney. The Disney Stores are up for sale. And there have been no plans ever articulated that will guarantee two more big hits every quarter.

Eisner's problem is that he retains power by promising too much. Now that's being held accountable to the promises, he's fumbling and searching for scapegoats. For a while a lot of people were blinded (either by the money or willingly) to the reality.

But the truth is out there.

Please provide evidence where the $5 billion investment in Fox Family has paid off. Please provide evidence where the hundreds of millions spent on InfoSeek and GO.com have paid off. Please provide evidence where the $1.5 billion spent on the California Adventure and Disney Studios Paris has paid off. Please provide evidence to where the $15 billion in current debt has been properly invested and paid off. Please provide evidence where abandoning the billions in revenue from Feature Animation had paid off.

In the end, one can only conclude that Eisner has cost The Walt Disney Company far more billions of dollars than just the money paid to him personally.



P.S.
"Now, let's all hope that the new in house CG dept he started can rescue things and that the cell animation team pulls together!"

Funny – Eisner spent several hundred million dollars to buy and develop a CGI group. They made one movie and then he fired them all. As for "cell animation" pulling it together, the only thing the that must be pulled is a certain CEO's cranium removed from another location on his anatomy.

 

[PKS44]

Originally posted by dcentity2000
1. If you announce that your company is in the sticks, your share price falls and the company becomes subject to hostile bids. The comcast one came after Roy brought light to this matter, for better or for worse.
2. A reference to a biased and/or purposive news source is about as useful as a chocolate teapot. CNN, BBC World or ViaNews may be useful.
3. Flaming someone, even if you don't agree with them and are desperate to ridicule all proof they have researched in front of everyone in order to emphasise your point of view is never nice. We'll leave the name calling out for now, shall we?



Rich::

1)Comcast has known about Disney being weak long before Roy left--and why just latch on to Roy leaving as the trigger..what about Pixar? This is all just silly and misguided...it ignores the fundamental reality that this company has been weakening for a long time--not all of it Eisner's fault I might add--his core audience is growing up and there are fewer 6-10 year old to replace them--but again fundamentally he has mismanaged his assets--recent stock rises ignore the overall pattern the stock is far worse now than 7 years ago.

2) Not sure what you are talking about regarding a biased news source-
3) not at all clear where there was ever any name calling at all...as for ridiculing...just pointing out all the flawed and incomplete assertions...no personal insults were used as I re read what I wrote.