Fortune Article on Ei$ner

[DVC-Landbaron]

Saw this and thought you'd like it.

Fortune Article

Were the last two paragraphs written by his PR firm or by Ei$ner himself??

Have fun!!

 

[Captain Crook]

What a breath of fresh air! Fortune magazine telling it like it is. Come on Landbaron, you can't think these editors on on Eisner's payroll, can you???

It's about time his caring & dedicated side were showcased...

I do believe AV will have a disturbedly different view though.

 

[Panthius]

"We have an unbelievable array of brands to drive growth and operating income," says Iger. "We just have to maximize them."

I suppose that the previous quote fully explains what Disney is about under the Michael Ei$ner regime....$$$. It has been said many times that Disney's philosophy is to make as much money as they can in as many avenues as they possibly can and this quote from Ei$ner's second in charge basically states at least this much.

Eisner says. "I tie myself to the mast, and I don't listen to the Sirens. The Sirens in my business are agents, investment bankers, the media, people saying that your testosterone level is gone because you haven't made an acquisition in the last ten minutes.

The reason why some are finding that the company is beginning to fall from graces may just happen to be because Michael Ei$ner is not listening to anybody. he has a clouded view of where the company presently is which is making his view of what to do next incorrect from the start.



Either way, however, Disney is the most magical place on earth and I would love to be there right now, but hopefully it will stay that way as time goes on. Unfortunately, I do not necessarily see this happening.





Panthius

 

[Sarangel]

Thanks for the article Landbaron. I love this quote:

So it's no surprise that Eisner's reputation, which rocketed to the sky with Disney's stock, has come crashing down lately as the company has stumbled. He has been so widely criticized for his ego, his arrogance, his outsized pay packages, his inability to keep key people, his control-freak predilections, and his weak board that it's easy to forget that only a few years ago he was lionized--no pun intended--and deservedly so. When Eisner took command at Disney in 1984, the company had lost its way; he and his team of gifted executives proceeded to dazzle even the cynics in Hollywood.

The biggest problem seems to be that he is no longer dazzling anyone, and that he is unwilling to take the heat for mistakes even though he's still quick to grab the credit.

I find it ineresting that Eisner remains optimistic about the future:

"We've solidified our company, going forward," he says. "When the economy turns, and when the fear of flying goes away, when we get a couple of hits on ABC--and because of how lean we've made the company--I believe it becomes a gusher. I want to be here to take advantage of all the work we've done and all the crap we took. When it all comes out in the wash, we'll still be the premier growth company in our business."

Perhaps. He's revitalized Disney before, when it was in much worse shape than it is now. But these are different times, and this is a different company, and he's the same Michael Eisner, still convinced he can do it all. He can't. Like any star, he's only as good as his supporting cast.

I'm not sure I believe the future is as rosy as Eisner paints it & the writers of the article make a good point in saying that he needs a strong infrastructure in order to come out ahead, but it doens't address the possible ways Eisner can keep good execs... I think Eisner says all the right things, but that he has problems with execution.

Ah well, we can only hope that something good comes out of all this.

 

[Another Voice]

A phone call home –

“Hi honey, I just checked in. I just had to call, this hotel is amazing! I opened the windows to see what’s outside – CAMELS, CAMELS as far as I can see!”

Yea, there’s nothing like being on a $3 million press junket to bring forth insightful journalism, is there?

You’ll see a lot of camels wandering for the next three months. Time to talk up the stock price and the bond rating too. Wall Street is nervous, more so now than ever. A stock price below $20 brought far too much attention out here in Hollywood. We’ll just get the camels to do some more spins and all will be well.

I have no doubt that Mr. Eisner selected all the furniture in the hotel. He’s very good at picking options selected by his staff – it passes for creativity these days. It’s nice that a CEO has time to decided if the building’s too Moroccan or clichéd African. I wish he spent just as much time worrying about The Disney Stores. But then, tending camels is a little easier than fixing a business, isn’t it?

I’m sure everyone at the studio will be glad to read they don’t know how to run a business without Michael’s help. That will make the company’s e-mail a little more interesting read if nothing else. And The Street wonders why Disney can’t keep talent when the boss says his staff can’t read a script or design a costume and he has to step in and make suggestions. I mean Jerry Bruckheimer so valued Michael’s help on ‘Pearl Harbor’ that he took ‘Blackhawk Down’ (a truly great Oscar-worthy box office hit) to Columbia Studios.

And of course, we get the “when” motif one more time. “When” ABC produces a hit, “when” animation kicks in, “when” people are willing to pay for the parks, “when” the stores turn around, “when” the Disney brand is hot again. That camel show seems to be run just as many times as repeats of ‘Whose Line Is It Anyways?’.

In short, there’s absolutely nothing new in the article. It’d be nice for Eisner to stop talking how capable he is of staging a turnaround, and get around to actually doing it.

 

[DisneyQuacker]

I am glad for sure that someone finally put Eisner in his place with that article only reading some of it. I think that he should learn from it and get the entire Disney Company back on it's feet. These are only my mere thoughts but I was at Disney World last year and I think that the Magic is real gone from Disney now it's mostly a big sham. It's a huge commerical. I think that Disney has to get their few remaining big whig's to work. He has to get them imagineering things for the parks to keep the family together and to get their minds off everything going on. No doubt I love Disney. If I could go every few months I would. But I think they need to work their problems out from the Inside.

 

[Captain Crook]

So he is buying off Fortune magazine, huh. Glad to hear the journalists at Fortune have no perspective or ethics...

As for the Hotel, it (DAKL) is truly amazing. I'm sorry you can't see that, but Mike did produce a truly great, one of a kind Resort right smack dab in the middle of a one of a kind Resort. Perhaps it isn't the arena you'd consider magical but one glace over at the Resort board would let you know that most guests (of DAKL) are finding it truly magical.

Camels. camels??? I don't get get it. Is Aladdin being re-released?

As for the studios not being able to run without Michael, where exactly did you read that (or read that in)? I didn't see it...But then I suppose the AOL mangement team tires of Mr. Case's interference as well...The nature of the camel, er beast.

ABC needs a couple of hits, why is that statement worthy of objection? TV is so wishy washy, is full of such crap that it doesn't take a genius to see that it's no more than roulette that decides what the next "big trend" will be. ABC is certainly in as good of position as any to hit that trend and with their new edict to family television I suspect they're laying the groundwork for a return to what Disney does best, which should spell success.

As for actually staging the turnaround, it seems presumptious to expect Mike to lay it on the table for us - He never has before...Well, he did with PH & I'll bet he knows what a mistake prognostocations of that form are now. But we are still feeling the economic woes of Sept 11. People ARE afraid to fly, unemploymet IS skyrocketing and the goverments stimulus plan looks like it will stmulate only those not needing it, so give him credit for keeping Disney moving during these trying times and take solace in the fact that at least USF is getting hit worse than Disney - A clear signal that the Disney Theme Park brand was fading is nothing but a load of fertilizer from naysayers...Besides that Monsters is bringing in barrells'o'dough & PH has to be quite profitable now that it's all shook out.

I'm happy Mikes got a positie outlook...So do I!

 

[Another Voice]

Captain, sir. You of all people should know that Disney puts spitting camels on all their new spinner rides.

Yes, the Animal Kingdom Lodge is a very nice hotel. The architects, designers, engineers, decorators and planners all worked very hard on it. But to give the credit for all that creative effort to man who did nothing but watch a presentation of fabric swatches is nothing short of an insult to the real talent who built the place. Corporate ego and self aggrandizement has a long Hollywood tradition, but there are limits even here. Besides, such flattery usually comes with a weekly check being passed in the opposite direction.

As for the studio, saying something like, “I discovered they had no idea how you could run the business profitably,” might motivate the movie people you work with. It sure won’t help the morale of the studio folk that I deal with. Even the brothers that run Miramax are jumping ship (perhaps you didn’t see those deals signed with Universal and Columbia). If the idea of a “profitable” studio is this year’s line-up of ‘Pearl Harbor’, ‘Atlantis’, ‘Texas Rangers’ and ‘Out Cold’, then Hollywood accounting really is a Black Art.

If it’s so presumptuous for Mike to lay out his recovery plan – why has he done so every year for the last five years. It’s an annual rite just before the stock holder’s meeting. How this round of cutbacks and this spate of layoffs with turn the corner. How this belt tightening sets the stage for the future. How this painful period of cost containment will let the company grow. By now they must have a full time staff just to research spiffy new euphemisms for “budget cuts” because they’ve used all the other ones. There’s been enough “groundwork for success” laid to pave all of Texas by now. People want to see results, not camels that spin.

It’s funny how that Michael and a large talented staff produced tremendous growth and great successes. And how Michael all by himself produced “we’re not as bad as Universal”. It used to be funny, then it became sad, now it’s pathetic.

Wishful thinking and willful denial will not solve problems. It is time for Disney to stop talking about how great they are – and to actually do great things again. Give us a movie that is worth seeing, a theme park attraction that amazes, a television show that inspires. Hirer people with a talent beyond marketing spin. And put people around Mike with the ability to say “no” as well as the ability to say “yes”.

Better yet, it’s time to put Michael in his place.



P.S. – The press junket that “bought off” the reporter for ‘Fortune’. Good lord man, this is Hollywood. We invented the buy off. How do you think we get all those glowing quotes in the movie ads? There isn't a handler in town that would break a sweat wringing out a puff piece from some financial reporter.

 

[Captain Crook]

Where's the calvery? I have to go to Miami today & can't properly respond (& surely AV has work to do, as well). Are there any other "authors" out there - particularly those who see it from my side???

Anyway...

Oh, spitting camels, hehehe, I get it...Although it wasn't one of your better ones, AV!

Now, the AKL. He was the man with "hands on" (that you so hate) so why doesn't it count this time? If he picked the furniture for the rooms from swatch choices or pictures so what? Do we think Walt did any more? Now granted Walt actually came up with the ideas that we've known and loved and he was able to follow them through to fruition. We know Eisner won't be doing this whole scale, and while I give you the fact that he is FAR from perfect - do you know he wasn't the guy who wanted the AKL experience first?

As for studio profitability, it seems that our man scoop, live from Nasville, Tenn., has been monitoring this troughout the year. Scoop, how do the numbers look?


Results? You want results? Results of what? They made good movies last year (Princess Diaries & Spy Kids, for two). Animated movies Well, we know Atlants flopped, but Monsters, Inc. seems to be a catchy little flick & the released to DVD movies...Did they not go over very well? The Parks. Well, they showed they can still design with TDS. They flopped at DCA but still managed to introduce "Soarn' Over California" from it. We have "Space" to look forward to
and rumors abound about the possibilities on the table for BK.

ABC sucks with Millionaires decline...But you know what? Even as the number one network they still pretty much sucked, didn't they? TV is tv and for Disney is the best place to showcase & advertise in house & be profitable from advertising (which they aren;t doing right now) - Not very glamerous, but hey, it's tv!

I understood Hollywood junkets, just didn't know "Fortune" reporters were on that beat. If so or if not, it's still journalism and good or bad probably a dose of salt is needed for accuracy.

Ok, gotta go, off to never land...And I do mean "never"...Sorry gcurling...

 

[JeffJewell]

there has to be a middle ground here...I think Fortune did a good job trying to find it

...I felt about the same about the Fortune article. It's funny, after reading the Captain's posts, I went back and re-read the Fortune article: I had no idea why Cap would be seeing an article with lines like "when will Michael Eisner be held accountable for Disney's woes?" as a "breath of fresh air;" shouldn't _I_ be the one appluading such lines?

Upon re-reading, I realized that we must all see what we want in the article. Eisner is allowed to expound his unique vision of Disney's situation; "Maybe I'm crazy, but I don't consider this a crisis," while the writer makes clear the valid counterpoints to his fantasies, like "When things go wrong, he tends to distance himself and blame others; when they go well, he takes credit," and "he ought to be finding great creative executives and giving them the clout to run the businesses he can't."

Indeed, if you make it to the final paragraph: "He's revitalized Disney before, when it was in much worse shape than it is now. But these are different times, and this is a different company, and he's the same Michael Eisner, still convinced he can do it all. He can't. Like any star, he's only as good as his supporting cast," you realize that, although the author gave Eisner a couple column inches worth of the same quotes he has spouting for years (he again tries to say Disney is a content company, even after the $5 billion re-run outlet deal. The article's author never mentions that Eisner's pants burst into flame, at that point of the interview), the article is one that is ultimately critical of Eisner's policies, particularly in the time since Wells died.

Sounds like Fortune was dead-on, to me.

Jeff

 

[JeffJewell]

...whether or not this will be seen as being a "good business decision" is a long way away (although if that satellite company is able to axe ABC Family from about twenty percent of the households that Disney thought they were buying, a less-than-positive result could be realistically determined fairly short-term), but even if it _is_ a good idea to do what everybody else is doing, why buy a $5 billion _outlet_ if your company is dependent on your _content_?

What's "under my skin" is that Eisner has the brassies to say "I don't listen to the Sirens. The Sirens in my business are agents, investment bankers, the media, people saying that your testosterone level is gone because you haven't made an acquisition in the last ten minutes" and that Disney is a company that "only succeeds or fails on the quality of its products" while his actions are to make a huge media acquisition and to budget-cut huge chunks of quality out of animation and theme parks, Disney's core content businesses. What's further "under my skin" is why any sensible human being would try to find a way to justify that behavior.

I mean, what picture are you trying to paint of Eisner? Here's a man whose public statements fly directly in the face of his actions as CEO. Am I supposed to celebrate Eisner because he's an enormous unrepentant liar, or because his actions contradict his stated business philosophy to such a degree that it appears he simply does not know what the hell he is doing? Which of those guys is the one you're defending, here?

Jeff

 

[JeffJewell]

Again, sorry if my last post seemed anything more than playful and ironic

...no apology needed. Matter of fact, the argument could easily be made that it was my post that might have seemed more (or less, depending on how you look at it) than "playful..." glad we've gotten to the point that we can latch onto the nuggets in our conversations rather than get stuck on that.

That deal sticks in my craw so much because it seems to undermine or at least contradict a lot of the "good noises" that Eisner makes sometimes; and because it seems to be such a blatant example of the man saying one thing then doing something completely different. This is a different level than "AK will have Beastly Kingdom... well, maybe it'll get BK later." This is saying "we're a content company not affected by the 'acquire media outlets' bug... well, perhaps we're an acquirer of media outlets, after all." Listening to Eisner is like watching a Kevin Nealon bit.

There's also the irony of Eisner calling OLC a bunch of maroons for spending so much on a park (that is blowing away its attendance projections, as we speak) while spending even more than that amount on an outlet (that may be withering away in court, as we speak). It seems OLC lives by the "content" mantra, whereas Eisner gives it only lip service.

Sorry if I seem argumentative today; it's deathly slow in here today and my sometimes spicy verbiage can come across as less conversational than I intended it to be. That was my intent here, only to further conversation. I'm not sure I really disagree with much that you said, except that I'm not as sure as some seem to be that a Disney that encompassed only animation and theme parks could not be a viable, successful Disney. I'd use Pixar to argue that point: by basing their business on story-telling and attention to detail, Pixar is in an enviable position in the industry; actually, I'd say they were poised to make some serious noise in the industry once they put their Disney obligation behind them. If the chance came up for me to buy either stock, I'd certainly go with Pixar at the moment.

Jeff

 

[Another Voice]

So many topics…

I too didn’t find the article leaning too heavily one side or the other. It seems that Wall Street is in a slightly anti-Eisner mood these days and the article simply reflected it. It just boils down to a desire to see results. They’ve been getting promises for years now and they’re becoming very impatient. A quick look at a graph of the stock price over the last five years tells you everything about the Street’s opinion.

As for TV, considering it’s the largest business unit within the company it has to do more than promote the other areas of the company. It has to make money on its own, a task that strangely has eluded Eisner and Iger despite their backgrounds with the network. There is an amazing degree of cowardice shown in ABC where it should be the one area of the company that can the most risks. Producing a show for television is much less expensive than a movie or even a decent theme park attraction. And the rewards can be astounding. But the network lurches from one “me-too” show to another, none of them with a hint of originality or imagination.

Speaking of which, Vivendi’s own TV deal has nothing to do with buying a “rerun” network. USA Networks used to be the television division of Universal and was sold by Seagrams to raise money for record company purchases. Universal’s new owners wanted the unit back. And as a French company, Vivendi is barred from owning a American network. USA Net is about as close as they can get at the moment, although there are rumors about a corporate re-location which would let them bid on NBC or ABC(?!).

Fox sold Fox Family because they grew tired of dealing with the Saban Company and with Pat Robertson – and because Fox Family was a money-losing sinkhole and Fox wanted to put those resources into the hugely successful Fox Kids channel. It was really that simple; Hollywood likes to be seen as a place of strategic moves and intricate cleaver schemes, but most business is rather mundane. Ego and the profit motive control things around town just like in any other industry.

In fact, I think there is a definite lack of a strategy at Disney these days. Instead of playing up the company’s strengths, Eisner just seems to be chasing all the other kids around the playground. “Gotta get me a network, gotta get me more cable, gotta get me a big time summer movie”. No one wants a Viacom with funny ears or an AOL TimeWarner with large real estate holdings.

After all these years, Eisner still doesn’t understand “Disney”. He understands it as a brand, he knows how to manipulate it as a marketing machine. But he doesn’t understand its soul. He doesn’t understand the magic behind a cartoon mouse, the power of a story on the imagination, or the draw of seeing dreams made read.

Cleaver cable deals aren’t going to save Disney. Only recapturing the public’s imagination will.

 

[Bob O]

theDscoop Where is the evidence that eisner understands "Disney's Soul"???
His last 5 years of running the company has been a major financial failure(as evidenced by its stock price). And a major creative failure as evidenced by its lack of animated or live action films that have been overwhelming success(and you cant count pixar as the only thing disney about them is disney was behind the marketing but not the creativity that created the movies.
And now the companies saving grace-Theme parks are in the doldrums and DCA is a major flpo that will take untold millions to fix. If it wasnt for his hand picked crony board he would be gone. Apparently he believes the picking out of furniture is more important than the running of the entire company

 

[Captain Crook]

Bob O, the current stock price is hardly indicitive of the performance of the Company over a five year span. If you'll recall, Disney hit the low 40's just 18 months ago or so (that is recollection)...Just look at the Company profits over that five year period if you want justification and yes, this last year is going to be way off - but still not even close to red figures.

The Theme Park doldrums have little to do with Eisner/Management/Disney...It's the economy & post Sept 11, pure & simple.

DCA...Well, I haven't been there so I can't comment, have you?

Now, that "crony Board" is the same board that allowed Eisner to lead Disney to the huge profits (I alluded to earlier) during the 90's...And they were huge. So maybe you don't like Disney's recent trends, but it isn't fair to say his tenure has been weak.

 

[Another Voice]

“I don't think the Walt Disney Company of Walt's days could exist today.”

Interesting. I don’t see Pixar spending $5 billion on a fourth tier cable channel so they can survive as a mega media giant. And building a vast media empire of movies, television, cable, publishing and retail didn’t prevent TimeWarner from being gobbled up by another corporation.

Where is the evidence that “small and good” is doomed to failure and the “huge and mighty” means everlasting freedom?

I have seen far more well-run companies that make bad movies file for bankruptcy than I have seen poorly-run, good product companies go under. Disney’s problem is not “business related”. It has nothing to do with cash-flow rates, excessive spending, or any other MBA buzzword soup.

Disney’s problem is that their product is substandard. Fix that, problems are over. I have not seen any indication that The Company is making any serious effort to improve there product quality. THAT was the “magic” of the turnaround, and it will work again. There was no fancy accounting tricks used, it was producing good movies that brought in the cash again.

But all the recent moves are in the exact opposite direction. Fox Family’s only reason for existing to amortize program costs. It won’t make the programs better. It won’t even make more programs. It will just spread out the loss more. To pay for it, Feature Animation has been gutted, some say punished. WDI has been shut down for all intents and purposes. The latest theme parks are so poorly produced even Disney’s most ardent fans won’t pay money to see them. The movies are considered a joke in the industry and their own “quality” subsidiary is signing production deals with other studios in town.

It doesn’t matter how many cable channels you can show it on, you’re in serious trouble if you think ‘Sorority Boys’ is the only product you show on them.


P.S. Captain, the attendance at the parks was way off starting last holiday season, long before September. Perhaps you remember all those cutbacks you kept on justifiing.

 

[Captain Crook]

Yes, Voice, I do remember... the economy was going to heck in a handbasket as soon as it was apparant that Bush was going to be President, but it was still economics...September 11 was just the dagger in the back that forstalled any serious or immediate turnaround.

As for Pixar...They're independent for now and only for as long as one of the richest men in the world is having fun with his toy...I don't expect them to be "independent" for much longer, do you?

 

[All Aboard]

Name for me one company that when it's founder was alive was regarded in extremely high esteem for creativity and quality that retained that same reputation after that founder's death and in the absence of his/her family running it.

Perhaps you can, and I am wrong. But I think the bulk of our grumblings about the "way Walt would have done it" are perfectly moot.

I don't believe that Mike is making wise decisions right now, don't get me wrong. But I think that alot of us here desire something the just doesn't exist (and cannot exist) in the realm of reality.

Without the presence of Walt, the Disney Company never could be the same organization that it was. It never stood a chance. No other person can step in and suddenly gain the same level of passion that he had for HIS company, HIS dreams, HIS imagination. It's just not possible. That's setting a goal or desire that just won't be achieved.

That said, I'm sure there are folks that can come closer than Mike, but I wouldn't count on that person being found so easily.

 

[Bob O]

CaptainCrook the economy went south when clinton was president, a bad economy inherited by Pres. Bush(as well as all the terrorists problems left but thats a different subject).
In the last 5 yrs the disney stock may have had ups and downs but the reality is right now the stock is worth what it was 5 yrs ago with no signs to believe it will improve any time soon , but more likely slide further as their is no magic bullet to improve all the divisions of the disney company that are in free fall at the moment. And apparently eisner is more concerned with furniture or changing scenes in animated movies/micromanaging small parts rather than taking positive steps to help the company as a whole. The board is cronies and was voted on of the worst boards recently in a review by business week magizene, why else would a teacher from his sons school ever been appointed a board member.
The theme parks are in the doldrums due to decisions eisner made, pure and simple. How he set his priorties in the company means no money for the theme parks when they badly need a infusion. How greenlighted DCA which is a money loser and opned up a half day park in AK?
In the stock market you can only live off past results for so long, its time for eisner to show us the money, how is he going to refocus the company so it will make a profit and be creative enough to get the public to spend their money on disneys product in all its various forms.

 

[Captain Crook]

Bob O, I won't get any more political here than my previous statement. The rest of the rhetoric can exist on the debate board...suffice to say you and I disagree on virtually every statement you've made (or I've made, depending upon the view), and for Rumors Board harmony, I'll leave it at that...