How Much Turmoil Is Disney Really In? Please Read!

[CorbsVWL]

During the past few visits to Disney World in the past 2 years, we
have made a few observations that had raised some concerns with my
wife and I.
Nothing, at first glance, that I'd consider major but things that I
would consider "Cutting Corners" related to upkeep and facilities of
resorts and parks and things I would consider very uncharacteristic
of Disney.
We also had more than one experienec with a "not-so-friendly" Cast
Member which I thought was incredibly not "disney-like".

Upon mentioning some of our observations to another Cast Member
during a casual conversation, some of our fears were re-affirmed.
This Cast Member, who had been an employee for ~15 years, told us
that what we had observed has also been seen by other guests as well
as other Cast Members.
He told us that, primarily Cast Members who had been longer term
employees, had seen an alarming change in the "Corporate Philosophy"
and were very concerned that what was at the heart of making Disney
such a magical place for guests and employees, was being compromised
or lost by "higher-ups" within the organization.

I dismissed most of this until recently when I became aware that Roy
Disney resigned from the Board of Directors and when Comcast made its
attempt at a hostile take-over.
These two highly significant events told me at least to pay attention
to things going on with Disney.
As I've looked in to things a little further, I'm convinced that
there is at least reason to be concerned.
Yesterday, Roy Disney, made a presentation to a major financial
institution that one of my siblings works at.

If you really believe in the magic of Disney as much as I, I highly
recommend you check out Roy's web site at:

www.savedisney.com

and decide for yourself whether there is reason for concern.
I'm not sure what you and I can do but I believe enough in trying to
ensure that the values and expectations that have come to be
associated with this American icon, Disney, stay intact for my family
and future generations.

Please forward this email on to anyone you know who believes in the
magic of Disney!

Chris

 

[tjkraz]

You've probably spent a lot more time than I reading Roy's web site, so perhaps you can answer one question that seems to elude me.

Beyond the removal of a handful of current board members, what does Mr. Disney propose for the future of the company?

While I may (or may not) agree with his POV on the company as it currently exists, I'm pretty fuzzy on exactly what he sees for the future. Who should replace Eisner and the other board members? I've not read any specific names, and personally have a difficult time coming to grips with the possibility that Eisner et. al. should be removed simply because they are, collectively, the absolute worst individuals to have in their respective positions.

What am I missing here?

 

[CarolA]

I have to be honest that I am there a lot and don't see near as much of this as others. I think my attitude is probably the reason why. The glass is half full or half empty....

As for SaveDisney so far all they have accomplished is putting Disney in play with Wall Street. I am afraid this is going to have the exact opposite impact of what Roy wanted..... (unless the goal was to drive up his stock price so he could sell out for more money!) Disney is going to retrench to avoid this and that could include taking on lots of debt to buy back stock etc.... If anyone buys Disney they will probably have lots of debt. Lots of debt does not translate into spending on the Disney products.

Roy wants the company Walt ran. That was a long time ago and a more innocent era.

 

[PamOKW]

I agree. If the stated goal is to return Disney to the "way it was" putting the company into such turmoil may actually just drive it further away from the ideal. The world is a very different place -- not everything is controlled by Michael Eisner. The fact that childhood now lasts about 6 months has an effect on what type of entertainment children demand. While Disney can (and probably should) try to stick to their ideals, they also have to make money to stay in business. Behavior of CMs also has a lot to do with changes in society. A 50 year-old CM who has worked at WDW since they were a kid has a whole set of values that may be very different than today's 20 year-old from Haiti who is working as a housekeeper to support a family. There is a bigger learning curve for the Disney ideals. Heck, behavior of the guests has a lot to do with how things run. 30 years ago people would not be changing baby diapers on restaurant tables or letting kids stand in the middle of the CG and scream as often as happens now. There are a lot more people passing through WDW than before and problems increase.

Okay -- nuff said. I feel that Roy may be hastening the demise of the company rather than doing anything to help.

 

[Chuck S]

Originally posted by PamOKW

Okay -- nuff said. I feel that Roy may be hastening the demise of the company rather than doing anything to help.

Agreed, people need to be careful what they wish for, and think with logic rather than simply long for the "good old days".

 

[PKS44]

This has nothing to do with changing times- more innocent eras, etc...this has to do with sound business philosophy that is lost on every generation...every generation thinnks the rules have changed and there is a different way to do business successfully--there is not--the same rules that applied to Walt's time apply now...for a business to succeed FOR THE LONG TERM- it must be very good at what it does--it most focus its time, investment and energy at doing what it does well, and people have to want what it is selling. Notice it is not about growth or shareholder value--those are byproducts not goals of a good business--any business that makes it a goal to grow and increase shareholder value has lost sight of the real goals that will deliver those important byproducts....Everytime a business says it is okay if we cut this or that because it will make us more money--that is a nail in its own coffin...it is short term thinking and long term suicide in business...there are businesses that know this and thrive even in these cynical times Two businesses related to Disney which have adhereed to such sound practices are Pixar and Oriental Land Company- the company the owns and operated Tokyo Disney Resort. They both refuse to compromise on quality even though they could reap rewards in the short term--read Steve Jobs conference call for Pixar where the morons keep asking why they don't just do more sequels--and Jobs keeps telling them over and over and they just don't get it--they have only so much time to work and if they are taking time to do sequels than they are not working on the new stuff--or if they make time for both they are not making either as good as they need to be...that is so 180 degrees opposite of what Eisner does and now even plainly states is Disney's modus operandi (he used to give lip service to creativity and quality-now it is all about reducing costs and increasing shareholder value)

In other words--Roy is doing nothing but trying to do what his website's name says--save Disney from its current collision course with history.

Paul

 

[raidermatt]

Beyond the removal of a handful of current board members, what does Mr. Disney propose for the future of the company?

I believe that if board members receive 35% or more in "no" votes, alternate candidates can be put up for election.

That would be when we would get more details, and then have the opportunity to make a choice.

While Disney can (and probably should) try to stick to their ideals, they also have to make money to stay in business.

In reality, it's not about ideals. Its about a successful business model that was abandoned. (Of course believing in it as an ideal probably signifies a greater committement, and therefore a greater chance of success, but I digress...)

Sticking with that business plan and making money are not mutually exclusive. Further, part of that business plan includes adapting to a changing environment (not a diaper changing environment). Its not about the "good ole days"... its about developing a dynamic, quality "Show"-driven vision.

Of course, that's not as easy as some other paths...

 

[tjkraz]

Originally posted by PamOKW
I agree. If the stated goal is to return Disney to the "way it was" putting the company into such turmoil may actually just drive it further away from the ideal.

It's funny you should put it quite that way, Pam.

I remember reading posts from people who had visited the World around the holidays, talking about how many CMs seemed to be in a listless, dumbstruck state regarding Roy's resignation and subsequent actions.

Guests talked about how the "magic" was gone and CMs seemed to be just going through the motions. The post that began this thread said basically the same thing.

The reality that jumped out at me was that Roy's actions were actually what directly lead to the problems many guests noted. Unless I'm mistaken, many people (shareholders included) have been disappointed with Eisner for the better part of a decade. But, in my opinion, this recent bout of malaise can be traced back a single event--Roy Disney's resignation and subsequent public attack on the current board.

While I am certain he feels motivated by the Big Picture, I still have trouble coming to grips with his overall vision.

 

[CorbsVWL]

quote:
--------------------------------------------------------------------------------
Originally posted by PKS44

They both refuse to compromise on quality even though they could reap rewards in the short term (referring to Pixar and Oriental Land Company)
--------------------------------------------------------------------------------

Paul,

You hit the nail on the head, in my opinion.
Quality is at the very heart of what is Disney.
If all of a sudden that core building block is being compromised, or at the very least, de-valued/less-emphasized for short term gains, only bad things are to come down the road.

Regardless of the era, strong successful businesses start from a grass roots/core set of beliefs that define all that a company is and does.
It's a mission statement of a business that all those associated with truly believe and follow regardless of their respective roles.
Regardless of changing times, these core values can never be sacrificed.

I'm not advocating for Eisner or Disney because I don't know enough about their true philosphical views.
Disney has been a huge player on Wall Street for far too long for that to really be a factor.

However, if the core values that define Disney are really being compromised, you have to look to the very top for accountability.

 

[married@wdw]

While I think Roy has caused turmoil, he has experience to back up his actions. He made very similar moves when he brought Eisner and Frank Wells (who was the real genious and never got the credit he deserved) into the Disney fold and rescued the company.

While the company Walt ran was in a much more "innocent time" -- it was all about quality, just as it should be today! Quality is vastly lacking at Disney right now -- it's all about the bottom line. Disney calls Brother Bear a success, but who's standards are they using? They set the bar high with Beauty & the Beast and Lion King -- and they didn't reach it with Brother Bear. The Disney stores are full of junk. While Philharmagic is an adorable show, they could have taken it lightyears further than they did -- but why bother? People will come because it's new. They sold off their World Championship baseball team -- certainly profitable, but what about the fans? Pixar makes quality movies, but the cost to keep them around is too high -- how can you put a price tag on Toy Story's success? And choosing to close an animation studio that gave us one of the few bright lights in traditionally animated features lately -- Lilo & Stitch -- still has me scratching my head.

Where is the quality and care in these decisions?

Comcast claims to have started their discussions about a Disney takeover as early as last August. If that's the case, Roy's actions may have helped them along, but certainly didn't start the process rolling.

Simply stated, I hated what Paul Pressler and Cynthia Harris did to Disneyland, and in looking back carefully, Eisner has had the same effect on the rest of the company since Frank Wells died. Maybe Paul and Cynthia took too much of that blame as Eisnr micro-manages everything. Eisner needs to go!

 

[PKS44]

Originally posted by tjkraz

The reality that jumped out at me was that Roy's actions were actually what directly lead to the problems many guests noted. Unless I'm mistaken, many people (shareholders included) have been disappointed with Eisner for the better part of a decade. But, in my opinion, this recent bout of malaise can be traced back a single event--Roy Disney's resignation and subsequent public attack on the current board.

I believe the facts and evidence show that you are, indeed, badly mistaken--and what you call reality is likely nothing more than your misperception of reality....you want to make Roy's resignation/ CM malaise a cause effect and you only see it going one way...what Roy says--and what the evidence shows from many many many many many complaints, posts, reports etc that all pre-date Roy's resignation is that the malaise was there BEFORE Roy resigned and was one of the CAUSES for Roy to resign-- not vice versa...actually it is more accurately stated that mismangement by Eisner has left the company without a soul (sound core philosophy) which led both to CM morale problems AND led to Roy resigning...common cause NOT cause and effect..

Your mistake is a well known one commonly demonstrated by the following example:
the more churches there are in a community the more crime....
conclusion??/Cause/effect?

No just a common factor--more people equals more churches and more crime both.

 

[Chuck S]

Originally posted by raidermatt
I believe that if board members receive 35% or more in "no" votes, alternate candidates can be put up for election.

But Roy and Stan would NOT have to put these folks up for formal election at this time, it would not have to be a formal nomination. He could say "If we succeed, I think Kermit, Piggy and Gonzo would be on the list of folks that would make good nominees." They are asking stockholders to blindly follow them WITHOUT any detailed plans for the company other than "restore the magic"...so we are asked, in a sense, to vote for a totally unknown entity - just oust Eisner, et al. No one whose track record we could look at for consideration, we may not be thrilled with Eisner, but at least we know what we're getting.

 

[sgtdisney]

Walt always felt that if you did something right and put on a good 'show' people would be willing to come and spend the money.

Michael has the mentalilty of doing the least you can, charge the most you can and people who love Disney will pay it. Unfortunately, after a while the very things that make people love Disney disappear and their goes the customer base.

I think in any era Walt's 'vision' would be the best at long term profitabilty. I realize he is dead, and times change, but good solid business practice is timeless.

Just as Walt needed Roy to temper his spending, Eisner needed Wells to keep him in check. Eisner without Wells was a disaster waiting to happen.

 

[CarolA]

I remember reading posts from people who had visited the World around the holidays, talking about how many CMs seemed to be in a listless, dumbstruck state regarding Roy's resignation and subsequent actions

This just stikes me as too funny! I was there over the holidays and saw none of this.

I was there last week when COMCAST was taking them over and the CMs seemed just the same as Christmas. To be honest the Comcast takeover would have more impact on CMs that Roy leaving.

Having lived thru horrid events at a company founded by a man who was wonderful and then run by a man who could make Mr. Eisner look like a saint, I am pretty sure that your average CM just keeps keeping on just like I did. LOL!

 

[RLAlden]

Being a Disney fanactic and having attended training at Disney on creating their culture, I have become concerned by some of the business decisions that are being made by the top executives at Disney. Although diversifying is something that we should all do from an investments standpoint, I think in business there are times where you should focus on what you do best, and not just diversify for the sake of getting bigger. For example,

1) When Disney bought ABC, my initial response (and still is today) was why? Is it to be able to show Disney movies, or get cheaper advertising for WDW, or what?

2) Why get involved in owning professional sports teams? They are a lot of hassle and definitely not one of your core competencies.

3) Why don't you share some of the profits you've made with key partners, such as Pixar? I am not privy to all of the contractual specifics, but I certainly believe a contract could have been put together that would have been a Win/Win for Disney & Pixar.

4) Why did you shut down River Country? Just kidding, although it was our favorite...from a young family's perspective...

5) Why put a race track in at WDW? Maybe it's making money, but I surely haven't seen anything special going on there. The World of Sports complex, with all of the tournaments it hosts, brings thousands of folks to WDW per year, so it seems to be a success. But, I'm not sure the race track is doing that?

The answer, in my opinion, to all of these questions (except #4) is EGO. Disney was already the best without having to be the biggest. I believe they need to focus on what they do well and focus on how they can continue to provide the "Disney Difference" over all of their competition.

In terms of who can take over for Mr. Eisner when he retires, I'll throw my name in the hat. The person needs to have a passion for what Disney is and what it's all about, as well as knowing that he/she must surround themselves with quality people. When I'm placed in charged, I'd hire a financial guru and then focus on keeping the magic alive.

 

[manning]

many companies that strayed away from their core business has gotten into trouble and either went under or went back to its core business.

Disney has to get back to its core business!!!!!

 

[airlarry!]

Mr. Chuck S:

You have mischaracterized what SaveDisney's intent is in calling for this election. It is more correctly seen as a 'no confidence' vote on the slate of officers Mr. Ei$ner is offering.

To vote no, is not to vote out Ei$ner, it is only to allow Mr. Disney the opportunity to put up his own slate of officers (something he is not allowed to do at this time under DIS's own rules). If you do not like the slate he chooses, then you can vote Mr. Ei$ner slate.

So the correct question is not

No one whose track record we could look at for consideration, we may not be thrilled with Eisner (sic, should be Ei$ner), but at least we know what we're getting.

voting whether or not you are thrilled with the job Ei$ner is doing, the real question is:

Do you have confidence in Ei$ner and the slate of officers he has handpicked to lead DIS?

Answer that question please.

 

[Chuck S]

airlarry,

I voted my shares as the company recommended. Now, if you will re-read my other post, notice again that I said their is NOTHING prohibiting savedisney from discussing POSSIBLE nominees in the event the no confidence vote succeeds. They would NOT be presenting a formal slate for stockholder consideration at this time. It would be the same as saying "I wouldn't mind seeing P. Diddy as the chairman." They have not done so, and again, are simply asking the stockholders to open the door for them on faith alone. I would possibly have been persuaded to vote no if I had known just what direction Roy hoped to steer the company, or those he would possibly select from to nominate to the board. As for now, he is asking us to vote for pixie dust, and pixie dust does NOT build or sustain a corporation.

There is also nothing preventing savedisney from proposing a plan of what divisions they would either close and sell off, or restore, and HOW someone may go about that. Just because Roy bears the Disney name does not mean he or his group is the best for "Disney".

 

[married@wdw]

I do believe in one article I read recently, either Roy or Stan said Steve Jobs would be an excellent addition to the board. Can't find the actual article though!

 

[Chuck S]

married@wdw,

Steve Jobs was discussed here on the boards in a few threads. While he may be a good person to put in feature animation...his forte is CGI, not business management...look at Apple.