With increased vocalism, business analysts and media reporters alike are calling into question openly Michael Eisner's future with the company. I was watching a forum on CNBC last night on the Kudlow & Kramer show which dealt exclusively with the "DIsney Mess". The panel of three analysts(one which was known historically as an Eisner sympathizer)all agreed that it was time for him to move on so that the company could begin a transition of healing. As I've stated before, because of Eisner's stubborn nature and massive ego, things are likely to get a lot worse for Disney as he micromanages what's left into the ground. The Orlando Sentinal has run an article today which addresses this very topic. Like it or not, expect to see many more of these columns/discussions in the media in the weeks/months to come.
Here's the article as it appears in the OS:
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"Don Shula. Tom Landry.
Bill Frederick. Winston Churchill.
Lee Iacocca. Jack Welch.
They were great in their prime and in their time. But they didn't realize when it was time to step aside, so their departures became painful spectacles.
To this list, do we add Michael Eisner?
Disney stock has been dropping like the dot-coms. Certainly some of this has to do with the recession. But consider these corporate decisions:
Disney lost almost $2 billion in its 1999 Go.com Internet venture.
Disney rushed to open hundreds of Disney Stores, only to have the demand for Disney merchandise drop sharply, forcing the company to begin closing stores amid big losses.
One reason for the merchandising plunge is a lack of movies with marketing spin-off potential, such as The Lion King and The Little Mermaid.
The Disney purchase of Capital Cities/ABC for $19 billion in 1995 seemed like a great match. But ABC has been in the TV-ratings cellar ever since, despite the reputed genius of Disney entertainment and Eisner's personal involvement in scheduling.
Eisner's micromanagement is, in part, blamed for the rapid turnover of company executives. The biggest debacle was hiring Michael Ovitz as president in 1995. He left the next year, taking $90 million with him.
Despite all this, Eisner gets by because of the goodwill he built up by rescuing the company in 1984, when corporate raiders were circling. So investors patiently wait for him to get back on track and deliver soaring profits again.
For the sake of the Orlando parks, which have become cash cows bolstering the company, let's hope so.
But was Eisner the right man to save Disney in 1984 and the wrong one to run it now?
His genius when he took over Disney was tapping into underutilized assets. He revived those old Disney classic movies from the vault. He took all that empty land at Disney World and plopped hotels and parks on it. He jacked up admission prices. He revived the moribund movie studio and brought back the animated classic.
Eisner accomplished all this with two key players, company President Frank Wells and studio whiz Jeffrey Katzenberg. Wells died in 1994, the same year Katzenberg had a nasty falling-out with Eisner.
Call it coincidence, but that's when the mistakes began. It might well be that Eisner's genius is incomplete by itself. Give him Wells, and he's brilliant because Wells covered for Eisner's weaknesses. Together they were the perfect CEO.
It is the nature of people at Eisner's level not to recognize their own faults, to believe that they are the reason for success and the cogs below them are expendable.
But it is quite obvious that Katzenberg was not expendable. How many others who left the company also were not expendable?
Eisner's response -- typical for people at his level -- is that problems result from a lack of his input. So the micromanaging increases, as does the alienation of other executives.
Jimmy Carter did the same thing in the White House. Brilliance and total control can result in arrogance and isolation.
Lee Iacocca once said he was better at saving sinking ships than running them once they were afloat.
Disney investors may well be wondering the same thing about Eisner."
Here's the article as it appears in the OS:
-----------------------------------------------------------------------------------
"Don Shula. Tom Landry.
Bill Frederick. Winston Churchill.
Lee Iacocca. Jack Welch.
They were great in their prime and in their time. But they didn't realize when it was time to step aside, so their departures became painful spectacles.
To this list, do we add Michael Eisner?
Disney stock has been dropping like the dot-coms. Certainly some of this has to do with the recession. But consider these corporate decisions:
Disney lost almost $2 billion in its 1999 Go.com Internet venture.
Disney rushed to open hundreds of Disney Stores, only to have the demand for Disney merchandise drop sharply, forcing the company to begin closing stores amid big losses.
One reason for the merchandising plunge is a lack of movies with marketing spin-off potential, such as The Lion King and The Little Mermaid.
The Disney purchase of Capital Cities/ABC for $19 billion in 1995 seemed like a great match. But ABC has been in the TV-ratings cellar ever since, despite the reputed genius of Disney entertainment and Eisner's personal involvement in scheduling.
Eisner's micromanagement is, in part, blamed for the rapid turnover of company executives. The biggest debacle was hiring Michael Ovitz as president in 1995. He left the next year, taking $90 million with him.
Despite all this, Eisner gets by because of the goodwill he built up by rescuing the company in 1984, when corporate raiders were circling. So investors patiently wait for him to get back on track and deliver soaring profits again.
For the sake of the Orlando parks, which have become cash cows bolstering the company, let's hope so.
But was Eisner the right man to save Disney in 1984 and the wrong one to run it now?
His genius when he took over Disney was tapping into underutilized assets. He revived those old Disney classic movies from the vault. He took all that empty land at Disney World and plopped hotels and parks on it. He jacked up admission prices. He revived the moribund movie studio and brought back the animated classic.
Eisner accomplished all this with two key players, company President Frank Wells and studio whiz Jeffrey Katzenberg. Wells died in 1994, the same year Katzenberg had a nasty falling-out with Eisner.
Call it coincidence, but that's when the mistakes began. It might well be that Eisner's genius is incomplete by itself. Give him Wells, and he's brilliant because Wells covered for Eisner's weaknesses. Together they were the perfect CEO.
It is the nature of people at Eisner's level not to recognize their own faults, to believe that they are the reason for success and the cogs below them are expendable.
But it is quite obvious that Katzenberg was not expendable. How many others who left the company also were not expendable?
Eisner's response -- typical for people at his level -- is that problems result from a lack of his input. So the micromanaging increases, as does the alienation of other executives.
Jimmy Carter did the same thing in the White House. Brilliance and total control can result in arrogance and isolation.
Lee Iacocca once said he was better at saving sinking ships than running them once they were afloat.
Disney investors may well be wondering the same thing about Eisner."
