See that banner at the top of this page? That means that I support the “Save Disney” effort. That I think that Roy Disney and Stanley Gold have their hearts in the right place when it comes to the future of the Walt Disney Company.
But — that said — does that mean that I think that Roy and Stanley have done a real bang-up job with their “Save Disney” campaign? No. To be honest, I think that Disney and Gold — and particularly the staff at Shamrock Capital Advisors — have already dropped the ball on a number of occasions. Missed some pretty obvious opportunities to further their cause.
Which is why I’m thinking — as we get closer and closer to next week’s events in Philadelphia — that things may not go exactly the way Disneyana fans are hoping.
You see, in the heart-of-hearts of diehard Disney fans, the deal would go down … Well … Like something straight out of a Disney movie. Evil would be vanquished (which — I’m guessing here — would mean that Disney’s current CEO, Michael Eisner would be suddenly swept from power and then forced to scrape gum at the Disney theme parks for the rest of his life) and good would triumph (which — again, I’m assuming here — would mean that Roy and Stanley would assume control of the Walt Disney Company, appointing a new board of directors that truly cares about the customer’s concerns as well as a management team that would immediately restore the Mouse House to its former glory).
Well, that’s a nice fantasy. But that’s NOT how things are going to go down next Wednesday in Philly.
“And why not?” you ask. Because Disney’s annual meeting ISN’T going to be the end of the story. Not by a long shot. Though Disney and Gold’s “Oust Eisner” efforts has gotten a lot of press coverage lately AND a number of important members of the investment community (Among them ISS, Glass, Lewis and Co. and Calpers) have decided to tell to their clients that they recommend withholding their proxy votes for Eisner and several members of the Board of Directors … that still may not be enough to bring about any immediate change at the Mouse House.
“So what’s the hold-up?” you query. The wild card here — of course — is Comcast. The current buzz among Wall Street types is that the cable giant is expected to unveil a brand new, improved bid (which will allegedly feature a much larger cash component) for the Walt Disney Company early on the morning of March 3rd. So that someone attending Disney’s shareholders meeting will just HAVE TO bring up this new development up during the Q and A session. Which will — obviously — force Eisner and/or Disney’s Board of Directors to address this issue in an open forum.
Now — given that “What will Comcast do next?” is the primary cause of concern nowadays among Wall Street types … this Philadelphia-based cable giant is now throwing an enormous shadow across the corporate playing field. Which — inadvertently — has thrust Disney and Gold out of the spotlight.
Which is why — ever since Super Bowl Sunday — Shamrock Capital Advisers’ “Oust Eisner” effort has quietly been changing its tactics. Sure, the “Save Disney” website is still covered with messages that say “Please Exercise Your Right to Vote” and “Please Join Us in Philadelphia.” But — behind the scenes — the emphasis seems to have changed from a grassroots effort to one that targets institutional investors. Organizations that control large blocks of Disney stock. Which — provided that they vote along the lines that Roy and Stanley are suggesting — could have a much greater effect on the outcome of the proxy vote than wooing individual investors might.
Which I understand. More importantly — given that ISS; Glass, Lewis and Co. and Calpers have agreed to recommend to their clients that they throw their proxy votes Disney and Gold’s way — this effort really seems to be paying off. Shamrock seems to be getting the largest possible return for the least amount of effort. More bang for your buck, if you will.
The only problem is … this coming Tuesday is the “Save Disney” Briefing and Reception at the Loews Hotel in Philadelphia. Where Roy, Stanley and the folks at Shamrock hope to put on this enormous show for the media. Where cameras will (hopefully) capture the stirring image of a roomful of rabid Disney supporters. People who are anxious to see Eisner swept from power and the Mouse House restored to its former glory.
At least that’s what Disney, Gold and their staffers are hoping for. The sad fact of the matter is … a number of the folks that I’ve spoken with recently now aren’t all that sure that they’ll be going to Philadelphia next week. As Patty T. — one Disney shareholder that I’ve been exchanging e-mails with this week — put it:
“What’s the point now, Jim? With Comcast going after Disney, Roy’s effort almost seems like an afterthought. So what difference is it going to make now in the long run if I go to Philly or if I don’t go to Philly? I feel like this matter has been taken entirely out of my hands.”
Still other Disneyana fans are said to be angry at Roy and Stanley. Why for? Because these people feel that the only reason that Comcast Corp. is now attempting to take over the Walt Disney Company is because Disney, Gold and their crew at Shamrock raised such a ruckus about how weak and worthless Eisner was back in December.
Said B.B. in a recent note to me:
“The press keeps talking about how Comcast only is going after Disney right now because ‘there’s blood in the water.’ Well, Roy Disney and Stanley Gold are the guys who actually put that blood in the water. They’re the ones that who mortally wounded the Walt Disney Company this time around by talking up how many problems they’d had with dealing with Michael Eisner’s management style.
So — if the Disney theme parks eventually get sold off to the highest bidder or the Disney Company gets broken up and sold off in pieces — remember who it was who brought us to this point, Jim: Roy Disney and Stanley Gold.”
Mind you, when I tried to make the folks at Shamrock aware of these concerns last week, all I got was politely pooh-poohed. Said one unnamed “Save Disney” rep that I exchanged e-mails with back on February 17th:
“That’s funny — I have gotten just the opposite response everywhere I go. The Pixar and Comcast stories have energized the base and underscored Roy and Stan’s complaints. People are excited and aware of the coming event.”
Which may very well be how the people inside of Shamrock are actually thinking things are going right now. But — standing ‘way out outside here, ‘way out here on the middle ground — I can’t help but notice some rather troubling signs.
Like what? Well — for example — remember when Roy and Stanley initially announced their “Save Disney” campaign? How they were hopeful that they’d be able to persuade 35% of Disney shareholders to withhold votes for Michael Eisner, John Bryson, Judith Estrin and George Mitchell. Which would then (perhaps) send a message to Disney’s Board of Directors that some sort of change had to be made.
Well, did you notice how — over this past weekend — the numbers that Shamrock said it was shooting for suddenly got revised downward? Take a look at this excerpt from Roy and Stanley’s recent interview with USA Today:
Q: What percentage of shareholders do you hope vote “no” against Eisner and three directors at Disney’s annual meeting.
A: We’re looking for 15% to 20%. If we hit 20%, it would be a big-time message.
Which — you have to admit, folks — is a big step down from the previous announced goal of 35%.
Which almost (perhaps) might explain why Shamrock has begun downplaying the significance of what might — or, more importantly, what might NOT — happen at next week’s “Save Disney” rally … er … reception and briefing as well as at Disney’s annual meeting. Instead of boastful statements, we’re now getting cautious predictions like this one. Where Stanley Gold recently told a reporter at “Business Week” that:
“This is not a fight we can win this year,” concedes Gold, acknowledging that the lack of large blocks of Disney shareholders makes it harder to mobilize a base of support. “But we’re planting some seeds for next year.”
So — as I said in the headline for today’s article — the “Oust Eisner” campaign is no longer a sprint. It is a marathon.
And — judging by how confidently Eisner has been behaving lately — this could be a very long marathon indeed. Following his no-fatal-gaffes appearance on CNN’s “Larry King Live” last Friday night, Michael seems rather sure of himself. So sure of himself that Disney’s CEO actually made an unscheduled appearance on the red carpet this past Saturday night. Where Michael chatted with reporters at the premiere of Disneyland’s latest stage extravaganza, “Snow White: An Enchanting New Musical” as if he didn’t have a care in the world.
Why is Disney’s Big Cheese acting so blasé? Could it be that he now has a killer bit of info in his back pocket? That — back in 1997 — Roy Disney himself then had 15% of Disney shareholders withhold their proxy vote for his re-instatement.
So — if Shamrock’s proxy effort fails to achieve significantly more than 15% of the vote next Wednesday morning — then expect Eisner to say something like: “Given that Disney’s Board of Directors didn’t toss Roy out on his rear when he got a 15% withhold vote back in 1997, I seriously doubt that they’ll ask me to step down with only a [fill in a number between 15 — 20%].”
I’m sorry if this story comes across as fairly downbeat to the Disney faithful. And please understand that I remain a supporter of the “Save Disney” campaign.
But — given that I may am not all that thrilled with the mixed messages coming out of Shamrock Capital Advisers these days AND that I wish that Roy and Stanley’s people were doing a better job of reaching out to both institutional investors AS WELL AS the Disneyana community — I obviously have some concerns. Which I thought that I should share with JHM readers.
That said, I still urge JimHillMedia.com readers to come out en masse in Philadelphia.
Why for? Well … because — to be honest — I think that these guys could use all the help that they can get right about now.