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The Definitive Disney Dissing
Posted By Barry Ritholtz On February 13, 2004 @ 7:23 am In Film,Finance,Media | Comments Disabled
The definitive trashing of Disney CEO Michael Eisner comes not from the WSJ  or the NYT , but rather from the left coast: The L.A. Times . Michael Hiltzik lays it all out in a comprehensive piece that does not pull any punches. With harsh — but accurate — words for both Eisner and his lackey Board of Directors, Hiltzik wonders aloud how the hell Eisner was ever permitted to overstay so long:
“Increasingly isolated in his corporate redoubt, Michael Eisner must be contemplating the strategy to pursue when you’ve got a reputation as a cold, imperious leader with an uneven track record, a host of alienated ex-associates and a well-financed opponent determined to place your management style and fiscal stewardship under the microscope.
He could seek advice from the last Californian who waged a survival battle from the same position. Then again, things didn’t turn out too well for Gray Davis.
To say that the Walt Disney Co. chairman faces a political problem as daunting as Davis’ is perhaps to be unfair to Davis. The former governor was arguably the victim of external economic forces, compounded by his unappealing personality. But Eisner’s personality defects have been a major contributor to the long-term ailments that have now made his company the target of a takeover bid from Comcast Corp.”
Simply brutal stuff. Here’s the competitive overview which reveals exactly how far Disney has fallen from grace:
“In recent years, Eisner’s Disney has ceded its domination of its core businesses to others. Children’s entertainment is now identified as much with Viacom Inc.’s Nickelodeon as with Disney. The company has kept its position atop the filmed animation business largely by renting the creativity of its soon-to-be ex-partner Pixar Animation Studios. Its theme parks have lost their reputation as spotless and safe family havens. (On Wednesday, a Disney employee at its Orlando, Fla., theme park was killed when he was run over by a float.)”
If you are at all interested in corporate governance, then here’s your money quote:
“In an ideal world, a responsible board of directors would have long since hooked a leash to a chief executive who performed this way. But rather than function as a useful counterweight, the Disney board has generally behaved like the House of Peers in the Gilbert & Sullivan song, which “did nothing in particular, and did it very well.” (Except that the Disney board hasn’t even done nothing very well.)
The board granted Eisner lavish bonuses in years when Disney stock rose, and withheld them when it fell, but it seemed to devote scant consideration to whether he was building long-term value for the company. Add up the numbers, and you find that Eisner collected a total of $30 million in cash bonuses from 1996 through 2002, a period in which the stock rose an average of 2% a year.”
Just devastating. If you have been following this tale, you owe it to yourself to read the entire piece.
A Close Look at Eisner’s Stewardship of Disney Shows Many Weaknesses 
L.A. Times, February 12, 2004
Comcast’s Bid for Disney Ripples Through a Linked Industry 
DAVID D. KIRKPATRICK
NYTimes, February 13, 2004
Disney, Struggling to Regain Glory, Gets $48.7 Billion Bid From Comcast 
BRUCE ORWALL and PETER GRANT
WSJ, February 12, 2004 5:15 p.m. EST
Article printed from The Big Picture: http://www.ritholtz.com/blog
URL to article: http://www.ritholtz.com/blog/2004/02/the-definitive-disney-dissing/
URLs in this post:
 Image: http://www.latimes.com/business/la-fi-golden12feb12,1,7936693.column
 WSJ: http://online.wsj.com/article/0,,SB107650105603626825,00.html
 NYT: http://www.nytimes.com/2004/02/13/business/media/13MEDI.html?ex=1392008400&en=9bec0739fb1c4ec1&ei=5007&partner=USERLAND
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