ME "knew" about Comcasts bid before the event.

[freediverdude]

All I know is, if we EVER end up with Six Flags' Epcot or Cedar Fair's Coaster Studios, I will drag my paper shredder out to the car, load it in the trunk, drive to Disney World (at this point the name might be Six Flags Magic World), park in the Cedar Fair Kingdom lot, take my shredder out of the trunk, drag the shredder to the parking lot tram, ride the tram to the transportation and ticket center (who knows what THAT would be named now), drag my shredder onto the ferry boat, ride across the Seven Coasters' Lagoon, get off the boat and drag the shredder to the turnstyles, enter the park, drag my shredder into Six Flags Over City Hall, and right there in front of the guest services castmembers, plug in my shredder, take out my premium annual pass, show it to them, shove it loudly down my shredder, pass sleeve and all, and without saying a word, turn around and proceed back out to my car, never to return again!

 

[DancingBear]

Originally posted by manning
It is always the duty of the board to get the best possible price.

The company is in play, whether Disney likes it or not. The offer puts it in play. Refusing the offer doesn't take it out of play.

That's not what the Revlon case says.

 

[DancingBear]

Originally posted by raidermatt
Sure, except they've agreed to review better offers. So independence is not the true issue, its price.

manning is right... unless they have a position that NO price would be in the best interest of the shareholders, they have a duty to properly consider legitimate offers. While its reasonable to say the Comcast offer is not adequate, it certainly is legitimate, and should have been reviewed as such.

A Board could never take the position that no price is sufficient. I think the Board's actions thus far are entirely consistent with Revlon, Unocal, et. al.

Here is a quote from Revlon:

However, when Pantry Pride increased its offer to $50 per share, and then to $53, it became apparent to all that the break-up of the company was inevitable. The Revlon board's authorization permitting management to negotiate a merger or buyout with a third party was a recognition that the company was for sale. The duty of the board had thus changed from the preservation of Revlon as a corporate entity to the maximization of the company's value at a sale for the stockholders' benefit. This significantly altered the board's responsibilities under the Unocal standards. It no longer faced threats to corporate policy and effectiveness, or to the stockholders' interests, from a grossly inadequate bid. The whole question of defensive measures became moot. The directors' role changed from defenders of the corporate bastion to auctioneers charged with getting the best price for the stockholders at a sale of the company.

http://www.law.unlv.edu/faculty/rlawless/mergers/revlon.htm

 

[Chuck S]

Wasn't the Unocal mess partly the result of the company using assests to fight off a take over bid from T. Boone Pickins?

Takeover bids generally serve one purpose, to destroy the company that is being absorded Even if that company fights for independence and wins, the costs are often too great to be absorbed, resulting in the selling off of major assets.

 

[raidermatt]

Walt was (1) done with Animation (2) done with theme parks (3)done with live action and (4) dead set at building HIS E.P.C.O.T.

He was "done" in the sense that he no longer wanted to be bothered with the detail of such things. He had people who knew what he wanted, and he wanted to put his attention in his next big move, E.P.C.O.T.

None of us know if he would have succeeded, and Peter's right, the point is moot.

Eisner's no Walt and Comcast is no Disney.

True, if you are referring to the Disney of the past. However, the Disney of the present is not the true Disney we grew to love either.

The Disney of the present, which is Eisner, is apparently not capable of running certain areas of the business. Certainly Comcast couldn't push ABC much lower than 4th place...

No, Eisner is not the Disney we loved. We know that. However, its at least possible that Comcast would allow somebody to run "traditional Disney" as traditional Disney.



On this whole "the Board wants Disney to remain an independent entity" stuff...

Let me ask this... Other than self-preservation, what makes anyone believe that either Eisner or the Board truly feel the same way we do about Disney's independence? That Walt's legacy is present in the Disney of today, and that the company can be run best by the people who are running it now?

If any of you actually think that Eisner and the Board actually believe what you are saying they do, then I've got a bridge to sell you...

 

[DancingBear]

Originally posted by raidermatt
On this whole "the Board wants Disney to remain an independent entity" stuff...

Let me ask this... Other than self-preservation, what makes anyone believe that either Eisner or the Board truly feel the same way we do about Disney's independence? That Walt's legacy is present in the Disney of today, and that the company can be run best by the people who are running it now?

I never claimed any of that. The stand for independence in the face of Comcast was a strategic move. The Board would certainly sell for the right price (any Board would have to), and although I'm not certain whether Comcast would be good for Disney, I don't know of any better White Knight option right now.

But, I did want to point out that the immediate "No, thanks, we'll just remain independent" response to Comcast's overtures were entirely consistent with the case law guidance for Board exercise of fiduciary duties (and the best strategy for preserving independence).

Certainly Eisner and his bunch have made a lot of bad decisions, but they are sophisticated business folks, with plenty of access to top-notch legal and investment banking advisers and such. The canned response to Comcast wasn't done on a whim, and was far from:

"this release doesn't show his management skills in a good light"

"This was a personal (and emotional) response to what should be a company decision"

"Because this refusal was more of a knee jerk reaction than a well thought out response."

"His ego forced him into a situation where he was " kneejerk" reacting to events as opposed to leading them under circumstances that were in the best interest of the company."

"his response is no more than a "sit on this and swivel" coupled with a "flipping the bird" signal."

"Eisner could have easily responded in a fashion that would have been "correct" both in a polite business sense to Comcast's offer and more importantly in his personal and the boards' general fiducary duty to the shareholders. He chose not to, he (and you it seems) think that a company the size of Disney should behave in no more a professional and "streetwise" sense than a "mom and dads backyard coffee and cake" operation."

I don't find it surprising at all that Eisner was expecting and prepared for the call from Comcast. Heck, A-V was throwing Comcast's name around here months ago.

 

[crusader]

I don't understand this mentality that the management of Comcast is "good or better" for Disney.

All Comcast cares about is Comcast. They want ESPN, ABC and the vault to pawn. They have absolutely no experience beyond distribution so how is it that they will be able to provide solid programming and financially profit from running a network?

It won't be through advertising revenue I can assure you - the consumers will be paying once the FCC relaxes more regs.

So why not support Disney partnering with a more strategic ally to provide direct programming? Comcast the cable distributor has a problem with image - very similar to AT&T back in its' day.

Think about how many consumers abandoned that monopoly as soon as they became confident in the reliability of another provider. Many of us will be doing the same thing with Comcast as soon as a viable choice becomes available.

The management at Comcast view the parks as nothing more than currency and institute the most abhorrent customer service and employment practices I've seen in a long time.

There is a far greater lack of independence with the Roberts family, so you can forget about fair and responsible governance.

All the employees care about with respect to Disney is getting in for free.

I am at a complete loss as to the reasoning behind this merger as being favorable for the Disney shareholders or the Disney company beyond the stock impact.

 

[Peter Pirate]

I agree crusader.

Though there is certainly "a chance" that Comcast could do the right thing and run the Disney subsidiary as we all hope it would be done...But realistically how big is this chance?

Comcast is just another big guy, another player and their vision to this point certainly hasn't contained any 'magical' philosophies. Certainly nothing from which any Disney lover could take grasp of and conclude that they would surely "get it."

The long odds are that a Comcast takeover will result in the split up of Disney not along any creative lines but rather financial ones. Decisions that will benefit the Comcast bottom line.

 

[raidermatt]

I am at a complete loss as to the reasoning behind this merger as being favorable for the Disney shareholders or the Disney company beyond the stock impact.

Again, because most of the criticisms you lay at Comcast's feet can be laid at Disney's as well. Then there's some more as well.

Comcast is just another big guy, another player and their vision to this point certainly hasn't contained any 'magical' philosophies. Certainly nothing from which any Disney lover could take grasp of and conclude that they would surely "get it."

Again, the same can be said of Disney itself. The only thing we can hang onto with the current team is they have the Disney name on the door. Of course, Comcast wouldn't change that as it is too valuable, so at worst, its more of the same.

Comcast is not the optimal solution. However, they can't run ABC any worse, and if they do better, it releases some of the financial pressure from the other areas.

Further, there are indications that they are willing to let the experts run their businesses, something the current Disney does not do.

Call it the lesser of two evils if you will, but sometimes, when you ignore the situation for too long, you are left with nothing else.

Hopefully, it hasn't come to that.

 

[Peter Pirate]

Matt, I will grant your objective opinion of what current Disney has done although respectfully disagreeing...But, current Disney, while not taking the 'high road' that we'd all like is not currently selling of its 'bits' piece by piece as of yet, which I am totally convinced Comcast WOULD do. Further, I don't believe there is nearly enough chance of the sale, dismantling (by Comcast) being organized enough to allow the right pieces of Disney to be bought by the 'right guys'. I think it'd be a fire sale and the bottom line would be all anyone would be looking at until the spirt behind what we few Disney geeks see (or once saw) would be memories without argument.

As I've oft repeated, as an independent, Disney still has the possibility of hiring someone who 'gets it' at some point (hopefully soon) in the future.

 

[raidermatt]

Disney has sold off pieces of its land in FL, there are non-Disney hotels in the Epcot area (as much as one may like them, the ownership is the issue here).

They are outsourcing animation while scaling back their own.

The stores are only waiting for a buyer.

I think it'd be a fire sale and the bottom line would be all anyone would be looking at until the spirt behind what we few Disney geeks see (or once saw) would be memories without argument.

What's left of the spirit exists below the corporate levels, and is in the process of being driven out as we speak.

I realize a Comcast takeover could result in a quickening of the process, but I'm willing to take the chance because its possible things will improve.

Its sort of like a sick patient who we know will die under the current care they are receiving. But there is a new treatment that can be used... It could speed the process, or it could reverse it.

Given how far along the patient already is, I think we have to take the chance.

Provided of course, no other options are presented.

In this

 

[Peter Pirate]

Provided of course, that no other options are presented.

Ahhh...Well, there it is, don't you think?

 

[airlarry!]

Stanley Gold is looking at the Third Way, and doesn't believe that ComCast, as the deal is presently constituted is the right way to go.

Gold said that he still preferred Disney to remain alone and said Eisner's ouster could help the entertainment company's stand-alone prospects. "Our druthers is to stay independent. The best way to stay independent is to get a new CEO," he said.

Mr. Gold is right. The best way to remain independent, is to get a new CEO, one who can right the ship, raise the stock price to fend off the invaders, and restore the legacy.

We wouldn't be in this mess had Ei$ner not blah blah blah yada yada yada (cf the voluminous posts on Ei$ner's mistakes), but with the stock price hitting its low in the middle teens in the last year or so, raiders had to come calling.

What if Mr. Gold and Mr. Disney hadn't spoken out?

I believe the Comcast deal would already have been done--and it is no coincidence that this year's meeting was in Philly.