It’s Day 3 of Roy and Stanley’s “Oust Eisner” campaign. And — so far anyway — the folks on Wall Street don’t seem all that impressed.
Don’t believe me? Here’s a quick sampling of what some investment analysts have to say about the situation:
“Eisner’s not likely to go anywhere soon,” or so says Oppenheimer and Co. analyst Peter Mirksy.
“I don’t expect (Disney and Gold’s campaign) to have much of an impact,” sniffed Loop Capital markets analyst David Martell.
“They might have found a more receptive audience 18 months ago,” said Janna Sampson — a portfolio manager at Oakbrook Investments — as she dismissed Roy and Stanley’s efforts to recruit Disney stockholders to take part in their “Get Mike to Take a Hike” program.
So why is it that — given that the internet community has been so galvanized by all this talk of ousting Eisner — that Wall Street seems to have greeted this revolutionary idea with a shrug?
Because … well … let’s be blunt here, people: There aren’t really all that many investment analysts out there that are truly enthusiastic about the notion of Michael Eisner staying on as head of the Walt Disney Company through September 2006. But — then again — investment analysts are (by their very nature) a fairly cautious bunch. They don’t like taking risks.
So while Wall Street is at least willing to listen to what Roy and Stanley have to say, these folks then go pick up their copies of the “Wall Street Journal” and see that the price of Disney’s stock is up 39% from last year. And the studio’s current crop of movies seem to be doing well at the box office. And ABC’s ratings have gradually improved over the past three months.
Which is why investment analysts — while they really have no fondness for Eisner — are reluctant to rock the boat. I mean, what if the guy that Roy and Stanley bring in to replace Michael actually does a worse job of running the Mouse House than Eisner did? Right now, Wall Street is fairly optimistic about how the Walt Disney Company will do in 2004.
And Roy Disney and Stanley Gold realize this. Which why they’re trying to play down the recent gains in Disney’s stock price and all the talk about how attendance levels are up at the corporation’s stateside theme parks. Instead, Roy and Stanley are trying to make Michael Eisner himself the issue.
As in: Think about how much better the Walt Disney Company would be — how much more successful this corporation might be — if Michael Eisner weren’t still running the show.
This is the lynch pin of Disney and Gold’s Pixar stratagem. I.E. Due to his personal conflict with Steve Jobs, Michael Eisner is preventing Walt Disney Studios from closing a contract extension deal with Pixar Animation Studios.
But just yesterday, I got a peek at another page of Roy and Stanley’s playbook. And — to be honest — I was both thrilled and surprised to hear about what else these guys reportedly have up their sleeves.
What am I talking about? Well, do you recall Monday’s story — “Did Roy Jump the Gun?” — where I talked about how Michael Eisner had been embarrassed by the fact that he hadn’t be able to close the Jim Henson Company acquisition deal early year. Well, it appears that Kermit and Co. may soon be causing Michael even more discomfort.
According to several well-placed sources that I spoke with at the Jim Henson Company yesterday, Disney and Gold have supposedly been meeting quietly with members of the Henson family for months now. It’s even been suggested that Roy and Stanley may have played a part in the family’s decision to suddenly buy back the Jim Henson Company this past May, rather than allow the Muppets to be sold off to Mickey.
“So what’s the point of Walt’s nephew and Stanley Gold inserting themselves into the Disney/Henson negotiations?” you ask. Patience, Grasshopper. All will be explained shortly.
Okay, now how many of you recall the story in “Variety” last month which stated that the Jim Henson Company was actively looking for a partner? Some media conglomerate with fairly deep pockets and a great distribution system that could help Henson out with its film, TV and home video projects.
Well, Disney was one of the companies mentioned in this article. And — according to the folks that I spoke with at Henson yesterday — Disney and Gold (or their representatives) have supposedly been met quietly with the Henson family over the past few weeks.
“And what’s the purpose of all this cloak and dagger stuff,” you ask? Well, the Walt Disney Company is reportedly looking to get into a long term production deal with the Jim Henson Company — with the Mouse releasing and promoting a wide variety of movies, videos and TV shows that the Frog produces.
Furthermore, should the above arrangement prove to be pleasant, professional and financially beneficial to both corporations, the door might once again swing open for acquisition. As in: The Henson family would allegedly agree to sell the Jim Henson Company — lock, stock and Fozzie Bear-el — to the Walt Disney Company.
So what’s the catch? The Henson family will supposedly only agree to the above arrangement IF Michael Eisner is out as head of the Walt Disney Company.
You see the strategy that’s emerging here? “Michael Eisner can’t get Steve Jobs to agree to a Pixar contract extension. But Roy Disney — who’s a friend of John Lasseter — can.” And “Michael Eisner missed out on closing a deal to acquire the Jim Henson Company (again) in May. But the Henson family is willing once more to do business with the Walt Disney Company … provided that Michael Eisner is out of the picture.”
This is really an ingenious strategy on Roy and Stanley’s part, don’t you think? Getting Disney shareholders to overlook the modest gains that the corporation has made over the past year by pointing out how much better the Walt Disney Company could theoretically be doing if Michael Eisner weren’t in the hot seat.
So what’s Michael Eisner’s response to all this? He’s still letting the members of Disney’s board do most of the talking for him. Though — as has been pointed out to me by numerous JHM readers — these guys aren’t really mounting all that spirited a defense of the Mouse House’s Big Cheese:
So says Nome de Plume:
Take a closer look at those messages that Disney’s Board of Directors have been issuing to the media on Eisner’s behalf. Notice how careful the language they’re using is. How tepid it sounds. These guys are just going through the motions, Jim. Doing what they have to to keep Michael happy. But nothing more than that.
Maybe Disney’s Board of Directors really do have an Eisner exit strategy in place. And Mitchell and Co. are actually working in tandem with Disney and Gold to pull a pincer maneuver from without and within. Til the pressure gets so great that Disney’s CEO has no choice but to resign.
But if this is really the case … why didn’t Disney’s Board of Directors just leave their original Eisner exit strategy in place? Just allow Michael to somewhat gracefully announce that he’d be retiring of his own volition in September 2004 and then let Disney’s CEO ride off into the sunset.
“The Poet” (who finally checked in again this afternoon — hurrah!) offered up these intriguing answers to the above query:
Supposedly, not one of Disney’s Board of Directors actually trust Michael Eisner right about now. Their worry is that — after Roy Disney, Ray Watson and Thomas Murphy were forced to resign this week (in accordance with the corporation’s new governance, which insist that all directors must now retire from the board when they reach 72 years of age) — Michael might replace these corporate officers with three new directors who would be much more sympathetic to Eisner’s plight. Which means that Michael might be then be able to weasel out of his previous arrangement. Which would allow Eisner to stay on as the head of the Walt Disney Company ’til the end of his contract — which is September of 2006.
So — by making a co-ordinated effort now (with Roy and Stanley on the outside and Mitchell and Co. on the inside) — Eisner wouldn’t have any wiggle room. And — provided that enough public pressure could be brought to bear — Michael could conceivably be forced out of his CEO position at the Walt Disney Company well ahead of September 2004.
“The Poet” also went on to say that Disney’s Board of Directors is said to be uncomfortable with the size of the “golden parachute” that Eisner is insisting on receiving. The figure that’s reportedly being bandied about isn’t quite a billion. But “The Poet” suggests that it could be well north of $500 million.
In this post-Richard Grasso / NYSE scandal era (where CEOs are regularly being taken to task by the media for excessive compensation and bonuses), Disney’s Board of Directors is reportedly worried that — should the news break about how much the Mouse is supposed to pay Michael in order to get him to move along — that it could be another PR disaster for the corporation.
More importantly, given the enormous amount of money that we’re allegedly talking about here (which is said to be more than the amount that Mickey paid out to Jeffrey Katzenberg and Mike Ovitz combined), Disney stockholders could conceivably rise up in revolt. Which might result in the Board of Directors getting released from their extra-cushy jobs as officers of the Disney corporation.
So — with this grisly possibility rolling around in the back of their minds — Disney’s Board of Directors supposedly began exploring more affordable options. Like the possibility that — if there were a loud enough public outcry — they could possibly embarrass Michael Eisner into exiting earlier, under his own power. Which (hopefully) would result in the corporation having to offer a smaller financial “parting gift” to the company’s soon-to-be-former CEO.
You see what I’m saying here, folks? The stuff that’s made it out into the mainstream media to date. It’s all just the tip of the iceberg. All the players aren’t out on stage yet. The real drama now is being played out behind-the-scenes. As Roy and Stanley quietly and carefully recruit allies for their cause and Eisner weighs his options. And — all the while — Disney’s Board of Directors continue to say that they’re standing firmly behind the corpoartion’s CEO … when what Mitchell and Co. are really supposedly up to is looking for an opportune time to push Eisner out a window.
You know — according to this friend I have in Vegas — the current odds on Michael Eisner being out of the Walt Disney Company by January 2004 are 3 to 1. Me personally? I’m not sure that things are going to move quite that quickly. I’m pretty certain that Michael is going to wage a pretty tough campaign to hang onto his job.
But even so — were all the stuff that we’ve discussed in today’s JHM article to actually come to light (with Pixar allegedly only agreeing to sign a contract extension with Disney if Eisner is gone, the Jim Henson Company supposedly only agreeing to a long term production deal with the Mouse if Michael’s out of the picture, plus Roy and Stanley reportedly working in tandem with Mitchell and Co.) — it’s really hard to see how Eisner’s actually going to be able to hang on.
Hmmmn … maybe now might be a good time to call Vegas and see if I can’t get in on some of that Eisner exit action?
Your thoughts?