Q: When is a lawsuit not really a lawsuit?
A: When it’s something that you file with a deliberate eye toward what you’ll get in exchange for eventually agreeing to withdraw that same lawsuit.
Friday’s announcement — which revealed that Roy Disney & Stanley Gold were abandoning their 20-month-long effort to “Save Disney” — took many Disneyana fans by surprise.
“Why would Roy & Stanley pull the plug now?,” asked one JHM reader in an e-mail that she sent me yesterday morning. “I thought that when ‘Save Disney’ filed that lawsuit in Delaware back in May, insisting that Disney hadn’t conducted a proper search for a new CEO, that this signaled that Disney & Gold were in this fight right ’til the bitter end.”
Actually, no. According to company insiders, Roy Disney has reportedly been ready to throw in the towel for quite a while now. Frustrated by the fact that he & Stanley Gold’s effort to bring about significant change at the Walt Disney Company appeared to have stalled out, the former vice chairman has reportedly been looking for a somewhat dignified way to bring the “Save Disney” story to a close.
The only problem was — during their initial discussions with Bob Iger about possibly bringing an end to hostilities — Roy & Stanley found that Disney’s CEO-to-be wasn’t exactly in a generous mood.
As one unnamed Disney Company official explained it to me yesterday:
Bob was all for closing the book on this whole thing. But — given all the awful things that Disney & Gold had said about Iger as well as several other members of Disney’s board of directors — Disney’s new CEO initially wasn’t willing to offer these two any sort of new position within the organization. Bob felt that creating even a largely ceremonial role for Roy would be setting an awfully dangerous precedent.
But Roy & Stanley had fought too long (And spent far too much. To date, these two have reportedly spent over $20 million on their “Save Disney” effort) to just walk away empty handed. Which is why Disney & Gold decided to up the ante.
This is why — back on May 9th — they filed suit in Delaware Chancery Court against the Walt Disney Company. Insisting that the corporation had not mounted a proper search of a new chief executive officer before they offered the position to Robert Iger.
Our unnamed official continues:
To be honest, that was a brilliant but ballsy move on Roy & Stanley’s part. By filing that lawsuit in Delaware, they signaled to Mouse House managers that — although all parties involved here knew that the “Save Disney” effort was basically out of gas — Disney & Gold were still capable of throwing a very large monkey wrench into Mickey’s plans.
In fact, had this court case actually gone forward, it could have potentially undermined Iger’s authority right from the get-go.
In response to the initial filing of this suit, Disney’s PR flaks did their own huffing & puffing. Insisting that:
” … this frivolous and baseless lawsuit reflects the mean-spirited, self-serving interest of two ex-board members.”
But the bottom line is: The ploy worked. Spurred on by Chancellor Chandler’s June 6th decision that Roy & Stanley’s suit would indeed be allowed to go forward (In fact, a August 8th trial date had already been set), representatives from the Walt Disney Company & “Save Disney” began meeting in earnest last month in an effort to work out a lasting cease-fire.
Unfortunately, once that deal was eventually reached … Well … While it may have allowed Disney & Gold to save face, this agreement didn’t leave the two founders of “Save Disney” with anything approaching real power.
Oh, sure. Roy has been made a director emeritus on Disney’s board of directors, not to mention being offered a consultancy with the corporation as well as a new office on the lot … But — that said — under the terms of this deal, Walt’s nephew doesn’t get to sit in on any board meetings. Nor is he allowed to vote on anything anymore. More importantly, the company’s officers aren’t actually obligated to listen to anything that Roy has to say.
As for Stanley … Given that Friday’s announcement deliberately makes no mention of this former board member being offered a new position and/or accepting any new responsibilities at Disney, you can pretty much assume that Gold has been left out in the cold here.
And as for what these two then had to give up in order for “Save Disney” & the Walt Disney Company to eventually reach this agreement … it’s almost too painful to talk about here.
To be specific: For the next five years, Roy & Stanley have agreed not to run an alternate slate of directors and/or submit any shareholder resolutions at Walt Disney Company annual meetings. Disney and Gold were also forced to say that they now supported Iger’s leadership as well as acknowledged Michael Eisner’s 21 year tenure as Disney’s CEO.
As our unnamed official explained:
Those last few terms of the deal? It’s like Disney was deliberately rubbing Roy & Stanley’s noses in it. Forcing these two proud men to issue a public statement that praised the very same guys that Disney & Gold once insisted weren’t fit to run the Walt Disney Company? That’s just cruel. It’s like they are going out of their way to make this process as painful as possible for the “Save Disney” team.
Mind you, to take some of the sting out of this very public humilation, Disney’s PR staff did agree to hold off on releasing this announcement to the press ’til late Friday afternoon. So that the news wouldn’t actually break until after Wall Street had closed shop for the week. More importantly, so that business reporters wouldn’t really get the chance to write about this subject ’til Monday morning. And — by then — hopefully some other sordid business-related story would have come along to crowd Roy & Stanley out of the spotlight.
It’s also not a coincidence that the Walt Disney Company & “Save Disney” chose this week to jointly release this announcement. Given that Roy Disney is literally getting ready to “sail off into the sunset” as part of the 2005 Transpacific Yacht Race, the corporation’s former vice chairman will (of course) be unavailable for comment for the next few weeks. And — by the time Roy gets back to Burbank — this whole story will (hopefully) be yesterday’s news.
So now … Well, it’s probably extremely premature to do this. But one wonders what the “Save Disney” legacy is going to be? 10 years from now, what will people be saying about what Roy & Stanley tried to accomplish?
Now there are those out there who will try & categorize Disney & Gold’s “Oust Eisner” effort as a complete & utter failure. And given that I’ve been such a vocal critic of “Save Disney” for the past year or so, I’m betting that most JHM readers will automatically lump me with those folks who will be dismissive of what Roy & Stanley tried to do.
Well, that’s where you’d be wrong. While I’m obviously disappointed that Disney & Gold dropped the ball after the 2004 annual meeting in Philadelphia (Not to mention that I wish that these two guys had done a lot more while Disney’s traditional animation unit was circling the bowl) … The fact of the matter is Michael Eisner IS stepping down on September 30th, a full year ahead of schedule. Thanks in large part to Roy & Stanley’s efforts. So I think that the “Save Disney” guys at least deserve some credit for that.
And as for many of the other areas that Disney & Gold wanted addressed … Disneyland is looking 100% better these days. More importantly, Disney’s board of directors is making an extra effort now to observe good governance procedures.
And as for the revival of traditional animation at Walt Disney Studios … There have been an awful lot of interesting rumors flying around lately … So let’s wait to see what happens once Walt’s nephew gets back from Transpac.
Beyond that … I guess we should all be happy that Disney & Gold’s ploy back in May actually worked. And that — by threatening to bring another lawsuit against the Mouse — these two were then able to lure Walt Disney Company officials back to the negotiating table. Which eventually resulted in these warring factions finally working out some sort of settlement.
Speaking of ploys … How many of you out there seriously believe that Walt Disney Feature Animation will go forward with production of “Toy Story III”? Were you to talk with many animation professionals, you’d discover that most folks in the industry think that this is just another bait-and-switch tactic on Disney’s part, designed to get Steve Jobs back to the negotiating table?
So, coming soon to JHM, look “Ploy Story II.” Where the Walt Disney Company attempts to trick Pixar Animation Studios into extending its co-production / distribution deal.
Your thoughts?