Disney heir takes battle to new level
By Michael McCarthy
USA Today
Just call Roy Disney the mouse that roared, as his campaign to try to oust Walt Disney Chairman and Chief Executive Officer Michael Eisner becomes more personal.
Roy Disney has unveiled a revamped version of his anti-Eisner Web site, SaveDis ney.com. Disney, nephew of founder Walt Disney, and ally Stanley Gold quit the board on Nov. 30 and Dec. 1, and publicly called for Eisner's head.
The Web site paints the $27 billion company as the tragic kingdom and invites shareholders and consumers to "Join Our Fight."
Roy Disney, Gold and other Disney family members plan to attend the company's March 3 annual meeting in Philadelphia and might ask for a vote of no confidence in the board and Eisner, whose contract runs to September 2006. They have missed the deadline to initiate a proxy fight.
"This is a real struggle in which Michael and 10 to 20 suits surrounding him continue to reward themselves with bonuses and raises," says Gold, a one-time corporate raider who manages Roy Disney's investments, among them about 1 percent of Disney, as head of Shamrock Holdings. "They're doing it on the backs of the workers, the little guys, and they're doing it on the backs of the parks."
Last week, Roy Disney also attacked Eisner's decision to close the Orlando, Fla., animation studio that made films such as "Lilo & Stitch."
Although some of the 258 staffers will move to the headquarters in Burbank, Calif., most will lose their jobs. As Disney shifts to more computer animation, it is shrinking its traditional operations.
The move shows Eisner's de-emphasis of creativity and total indifference to the impact his decisions have on the people who helped to make the company great, said Roy Disney, 74, the last of the founding family to work at the company.
Wall Street seems to be shrugging off the power struggle: Disney's results are rebounding and so is its depressed stock price.
In a speech on Jan. 6, Eisner said he anticipates 30 percent earnings-per-share growth for fiscal 2004. Powered by such hits such as "Finding Nemo," a computer animation film released under its deal with Pixar, and "Pirates of the Caribbean," Disney became the first studio to top $3 billion in global box office sales in 2003.
Cable networks are strong, and theme parks seem to have stabilized. Even struggling ABC could return to profitability in 2005, CFO Tom Staggs says.
While Disney shares fell from a peak of $43 in 2000 to less than $14 in 2002, the price rose 43 percent in 2003. Shares closed at $26.66 yesterday.
Disney also is reforming governance. This month, the board re-elected former Sen. George Mitchell, who joined in 1995, as presiding director. It also adopted stricter governance standards, added two independent directors and reclassified John Bryson of Edison International as a "non-independent outside director" because his wife works at Lifetime, partially owned by Disney.
"Results are back on the upswing, and Eisner is addressing the corporate governance issue. As long as he continues to meet or exceed shareholder expectations, he'll be fine," predicts analyst Michael Gallant of CIBC World Markets.
But research associate Paul Hodgson of The Corporate Library, a corporate governance research firm, warns: "There's still an impression that it's a one-man board, that what Eisner says, goes."
It was Roy Disney, along with Gold, who in 1984 recruited Eisner, 61, to save the company from corporate raiders. But he and Gold became Eisner's most vocal board critics.
In coming months, Roy Disney and Gold promise to unveil their own plan for Disney and are taking their case to large shareholders. Gold says they do not support a sale of Disney but would support "restructuring" some assets.
As for Eisner, Gold says there are 10 to 12 executives inside and outside Disney who could replace him.
Gold says : "We've got a lot of ideas on how to improve the company."
