Last Thursday, JimHillMedia.com ran an article which basically said that the folks over at "Save Disney" had bobbled many of the opportunities that were available to them during the month of March. That -- as a result of all these missed opportunities -- that Roy Disney and Stanley Gold's effort to unseat Disney CEO Michael Eisner had actually lost ground since that dramatic shareholders' meeting in Philadelphia back on March 3rd.
Well, it appears that the "Save Disney" people may have taken that JHM article to heart. For Roy and Stanley are finally on the move again.
Want proof? Then let's talk about Shamrock Holdings' decision last week to quietly sell off a significant number of shares that that firm held in Tadiran Communications, an Israeli defense contactor.
Back in March, Seth Lubove of "Forbes" Magazine -- in his March 15th "Disney Sinergy" article -- began asking questions about Shamrock's holdings in Tadiran Communications, whose wireless equipment makes it that much easier for the Israeli Army to keep tabs on the Palestinians. When Lubove suggested that it was somewhat unseemly that Walt's nephew should be profiting off of all the strife in the Middle East, Gold responded by saying "We're not making bombs or things that kill people."
Still, Seth's line of questioning must have struck a nerve with the folks at Shamrock. Which is why -- rather than leave themselves open to a potentially embarrassing line of questioning from the media once "Round 2" of the "Save Disney" effort officially got underway -- Shamrock Holdings quietly began to reduce its stake in Tadiran Communications. The company sold off more than 29 million shekels ($1 = ILS4.5150) worth of shares in the military communications company just last week. And Shamrock reportedly plans to sell off even more of its Tadiran shares in the future.
"Given the money that Shamrock was making off of that Israeli communications company, selling off those shares had to hurt," said one Wall Street insider. "But -- in the long run -- that was really the smart thing for Roy and Stanley to do. Disney and Gold have to remain the good guys in this situation. They have to appear to be better people than Eisner if 'Save Disney' 's ultimately going to succeed. Roy and Stanley can't afford to leave themselves open to any sort of criticism right now. So -- if reporters were already sniffing around Tadiran -- it really was the smart thing to do to dump those shares now."
Once that potentially embarrassing situation was dealt with, the "Save Disney" folks began moving forward with phase two of their plan. Which was to announce -- this past Wednesday -- that Disney and Gold would soon sue the Walt Disney Company in order to gain access to the official results of the March 3rd shareholders vote on Michael Eisner's re-election.
"Yeah. What's all that about?" you ask. Well, the info that Roy and Stanley are particularly eager to get their hands on are the vote tallies from participants in Disney's own pension plan. To find out how many of the Walt Disney Company's own employees thought that Michael was doing a poor job at CEO and needed to be removed ASAP.
According to people I've spoken with in Burbank, this number may be astoundingly high. With well over 70% of the participants in Disney's pension plan who chose to vote their proxy in this past shareholder election opposing the idea of Michael's re-election.
Clearly, once this info gets out, it will be hugely embarrassing for Eisner. Which is obviously why Disney Company management has been dragging its feet for weeks now. Deliberately delaying the release of this info. Trying to put as much distance as it can between the 43.4% withhold vote that Michael got at the shareholders meeting back and whatever percentage of participants in Disney's own pension plan said that Eisner must go.
(What's particularly galling about all this -- to Eisner, anyway -- is that Disney's CEO actually made an extra effort to try and reconnect with cast members late last year. This is why Michael made an appearance at Disneyland's employee Christmas party in December. This is also why Eisner spent New Years in Orlando, glad-handing as many cast members as he could at Animal Kingdom and Epcot. Trying to come across as the sort of CEO who really cared about what the front line crew was going through. It's just too bad for Michael that this empty gesture came across as just that. An empty gesture ...)
As for what Eisner's next move will be ... Right now, Michael is concentrating on making the Mouse some money. Doing everything he can to improve Disney's bottom line. So that Eisner will have plenty of good news to share with investment analysts next month when they chat -- by phone -- at the Walt Disney Company's next quarterly earnings conference call.
That's why -- just prior to the start of the April school vacation period (traditionally one of the busiest times, attendance-wise, at the stateside Disney theme parks) -- Eisner decided to raise ticket prices at both Disneyland and Walt Disney World.
Mind you, we're not talking about Disney's typical creeping-the-price-up-a-buck-a-year maneuver. Eisner rolled out the biggest ticket-price increase in the past 15 years. With the cost of a one-day, one-park adult admission jumping 5% from $52.00 to $54.75 (before tax) for Disney World visitors, and Disneyland ticket prices taking a similar jump (Now $49.75 for adults and $39.75 for children).
This price increase -- coupled with record attendance levels this week at Disney's Anaheim and Orlando resorts (twice already this week, two of Disney World's theme parks have had to close their gates because they reached capacity) -- should give Michael something to crow about at next month's quarterly earnings conference call.
As for ABC ... that television remains a stone around Eisner's neck. Now fourth place in the ratings race (trailing behind CBS, NBC and Fox in households, total viewers and that crucial adults 18-49 demographic), ABC is clearly in need of some drastic change. Which is why network chairman Lloyd Braun has reportedly been asked to vacate his post. As to who might replace Braun ... among the names that are being floated are Anne Sweeney, president of the ABC Cable Network and Mark Shapiro, ESPN's executive vice president in charge of programming and production.
Of course, to hear the folks over "Save Disney" talk, all of this frantic maneuvering that Disney's management is doing right now amounts to little more than re-arranging deck chairs on the Titanic. "The key problem is Eisner," say Roy and Stanley's people. "He has to go."
Well ... That idea would probably be a whole lot easier to sell if there had been some sort of radical fluctuation in Disney's stock price. Which would clearly indicate that Wall Street had lost confidence in the Walt Disney Company's current management team. But that hasn't happened. Throughout the month of March, the stock's price bobbled back and forth between a high of $26.70 and a low of $24.24.
Mind you, the stock's relatively low price and middling performance over the past 30 days isn't exactly a ringing endorsement of the Mouse House's current management team. But -- at the same time -- the very fact that Disney's stock price HASN'T gone in the toilet since March 3rd speaks volumes about what Wall Street really think of Disney and Gold's "Save Disney" effort.
"Roy and Stanley really had Wall Street's attention at the start of March, Jim," continued our unnamed insider. "But then they never followed through. Never told us what Phase Two of their plan was. Which is why the investment community isn't really paying attention to what "Save Disney' is doing right now. They're more interested in hearing what comes out of the Disney Corporate retreat later this month."
That two day retreat -- which will supposedly involve all of the members of Disney's board of directors meeting in private to discuss what the future of the Walt Disney Company will be -- will reportedly be held at Disney's Grand Californian Resort Hotel the weekend after Easter. Among the activities that are scheduled for Disney's board members are a private after-hours preview of DCA's soon-to-be-opened new thrill ride, "The Twilight Zone Tower of Terror."
Of course, what would probably make life a lot easier for Roy, Stan and the "Save Disney" crew would be if Eisner and the board -- while riding "Tower of Terror" -- were to get sucked into an alternate dimension. But somehow ... I don't think that that's going to happen.
"So what WILL happen next?" you query. I predict (and let's remember that my predictions should be taken with a grain of salt. After all, I'm the guy who reported -- back on February 26th -- that the "Save Disney" folks were concerned that they wouldn't be able to get more than 15% of the proxy vote. And we all remember how THAT turned out, don't we? Anyway ...) that this threat-of-taking-the-Walt-Disney-Company-to-court-to-release-those-pension-funds-numbers is just the start of the legal maneuvers that Shamrock Holdings is going to try. I think that -- sometime over the next three months -- that we'll see Roy and Stanley reach for their old Polaroid playbook and then ...
Well, I'm pretty sure that attorneys with ties to the "Save Disney" effort will argue that the board of directors of the Walt Disney Company have clearly ignored the will of the corporation's shareholders. That -- rather than bring about the radical change that Disney's stockholders were asking for -- the company's board of directors have made these tepid, half hearted moves to give the illusion of real change. EX: Having Michael Eisner give up the role of chairman of the Walt Disney Company, making him just the CEO of the corporation. But then basically negating that change by making George Mitchell, a man who's been rumored to be in Eisner's pocket right from the get-go, the company's new CEO.
If this really is the strategy that Roy and Stanley are thinking of rolling out, then the pressure's really on Disney's board of directors during this month's two-day retreat. When they exit this meeting, Mouse House managers had better have a pretty clear message for the media about how things are going to change in the board room ... Or I can see the "Save Disney" people bringing this whole sorry affair up before a judge in Delaware in the not-so-distant future.
Again, I know. That's probably not the big dramatic finish that most of you were hoping for. A lot of you who have written to me over the past four weeks seem surprised that Eisner wasn't out on his ass just days after the meeting in Philadelphia. That's not how the business world works, people. There are a lot of variables involved here. Some of which (I hope) I've brought you up to speed with with today's articles.
Of course, if some of you have other aspects of this whole somewhat bizarre situation that you think that JHM readers need to be aware of, feel free to post them over on the site's discussion boards.