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Marty
07-19-2002, 11:33 AM
Originally posted by Al Lutz in his column
But here, the Walt Disney Company is a publicly owned company. That means we have to do what the shareholders want to do, and unfortunately, we can't do what we want with all the money."

But what he said next was the kill all statement of the entire meeting: "And so, when we are faced with the decision to do what's right versus what will make money, 9 times out of 10 we have to choose what will make money. I know it's not what we'd like to hear, but that's the reality of it."

Everyone's jaw dropped. But hey, at least he didn't lie or dodge the question... Needless to say, for the rest of the time everyone involved was very subdued with the rest of their conversations and questions...


Good thing I wasn’t there. The gall of some people – in it only for the buck. Disneyland is a public service, not a commercial enterprise. Profit has no place at the happiest place on earth. If Disneyland is ever going to improve, those in charge have to smarten up and start running the place as if it were a government agency. That way only good decisions will ever be made. ;)

merlinjones
07-19-2002, 12:09 PM
Profit doesn't come from cynical, cruddy product, driven only by relentless brandmarketing and personal greed agendas. "Common" business school wisdom and lack of insight into the true business of Disney has done nothing but force the stock price lower and lower in recent years.

The stockholders can't be blamed for bad management decisions (as if everything the execs ever conceived was pre-approved profit making - - it obviously isn't).

If profit was the true point, why aren't we seeing "Song of the South" and its hundreds of millions in revenue on home video in this time of need?

This is about egos and groupthink, Marty, nothing else.

It's obvious to everyone but those on the inside track with no gut understanding of how to dig themselves out of the latrine.

Time for a new business approach at the Disney Company... Walt's.

Marty
07-19-2002, 02:00 PM
Originally posted by merlinjones
Profit doesn't come from cynical, cruddy product, driven only by relentless brandmarketing and personal greed agendas.

Actually, it does. Lots of money is made everyday marketing directly to the lowest common denominator. I think what you mean (and I would agree) is that profit doesn’t necessarily need to come from cynical and cruddy product. There are ways to meld the quest for excellence with the need to watch the bottom line. As you point out, Walt was a genius at this process. Unfortunately, there are few like him – people who can consistently deliver quality goods and show a good return on investment.

The problem with returning to Walt’s way of doing things, though, is you need somebody like Walt in charge. That’s a pretty tall order.


Originally posted by merlinjones

The stockholders can't be blamed for bad management decisions (as if everything the execs ever conceived was pre-approved profit making - - it obviously isn't).


I couldn’t disagree more. Stockholders ultimately get exactly what they deserve. Management serves at the discretion of the board and if management isn’t doing the job the stockholders want then the board should turf them. Pretty simple really, if you own it, you take responsibility for it. And as we have seen in the news lately, ignorance isn’t an excuse. If your management team is hiding anything from you, then you are not doing your due diligence. My guess is that while the stockholders are unhappy about the current state of Disney stock, they are satisfied with the steps the current management team is taking to combat the situation – namely deliver a lot of cruddy product channeled through the relentless exploitation of Disney brandmarketing.

But to the thrust of my original post, merlin, I was only pointing out how ludicrous it is to feign shock when one uncovers “evidence” that Disney considers profit an important factor when deciding whether to go ahead with projects. No need to be alarmed folks. This is actually a good thing. Unfortunately, quality doesn’t necessarily translate into profitability. And before it does anything else, Disney management has to ensure that Disneyland survives as a viable business proposition.

Of course, I still think that Disney is still delivering lots of quality – at least as far as it can be measured through the reaction of my kids. And if it is good enough for them, it is good enough for me.

Ghoulish Delight
07-19-2002, 02:17 PM
And what percentage of the stock does Eisener own? And Pressler? And Harris? And...you get my point. There are thousands and thousands and thousands of stock holders out there. But the controlling stock interests are ON the board, so of COURSE the stockholders aren't going to outvote the board. I vote against the Disney establishment any chance I get, but my 60 shares isn't even a speck of dust on the radar screen. It doesn't stop me from voting, but you're dreaming if you're waiting for some sort of stockholder uprising to turn the current state of Disney around, you're dreaming.

coronamouseman
07-19-2002, 02:56 PM
A couple of observations:

(1) Not all investors invest money in a company for the same reason. Some investors invest simply to make a profit at some point in time; others invest because they believe in what the company does and want to be a part of that company from both a financial and literal sense. Yes, if one expects that most of the stockholders are of the first type, then the company, as directed by it's directors (who supposedly represent the stockholders) will be steered in that direction.

(2) If you have a "golden" name or franchise like Disney, one would think that the goal would be to retain those qualities that go in to that name. But great care must be taken not to abuse that image or to allow situations where the perceived quality of the "brand" can be undermined. Maybe what some people are talking about is that the Disney "brand" has been subject to a number of situations which have tarnished that golden image.

(3) Disney is not a "public trust" or nonprofit pleasure-producing organization - it is a profit-making enterprise in which the owners are seeking the greatest returns. Old Walt himself was very much a businessman ..............

Ghoulish Delight
07-19-2002, 03:19 PM
Originally posted by coronamouseman
A couple of observations:

(3) Disney is not a "public trust" or nonprofit pleasure-producing organization - it is a profit-making enterprise in which the owners are seeking the greatest returns. Old Walt himself was very much a businessman .............. Ah, but you've forgotten point #4. People like me. I am BOTH a Disney fan, in love with the magic of the franchise and what it has meant to me growing up, AND an investor with a stake in profits. I firmly believe that the way to larger profits IS to take care and treat the Disney product with respect, and produce the quality that the Disney name is known for. Yes, Walt was a businessman. And his business was to provide people with the highest quality entertainment he could create, thus engendering in them a love and loyalty that kept them coming back for more.

Somewhere someone has come up with this ridiculous notion that it is impossible anymore to maximize profit by maximizing product quality. That cutting corners, reducing costs, and playing to lowest common denominator is the only way to turn a buck. Balloney. Walt knew that wasn't true. I know that's not true. Clearly, with the stock going no where but the gutter over the past 5 years (or more), that strategy IS NOT WORKING (I can't scream that enough). What part of "the stock price dropped again" do these suits no understand? Someone once said (I can't for the life of me pin it down. Possibly Freud, possibly Einstein, possible neither) that one definition of insanity is doing the same thing and expecting different results. For years these nimrods have been prducing garbage and have been watching their bottom line plummet. And yet they keep swearing that "they have the best interests of the stock holder in mind," and that the next piece of junk they turn out will save so much cost while driving up revenue.

Get a clue. It's time to a clean start. Get rid of everyone. Bring in people who realize that a large investment now in high quality, high creativity ideas will translate into long term profitability, repeat customers, and higher stock prices. I want them to answer to THIS stockholder. No more schlock!

innerSpaceman
07-19-2002, 03:40 PM
Originally posted by Ghoulish Delight
Get rid of everyone. Bring in people who realize that a large investment now in high quality, high creativity ideas will translate into long term profitability, repeat customers, and higher stock prices.
That is the essence of the Disneyland cycle. I, for one, am glad we are on the inevitable downward trend that will eventually lead to entirely new management and thus a renaissance. It last happened in the early-to-mid 80's when the Disney Co. was in such bad shape that market vultures were salivating at the imminent opportunity to tear it apart and sell off the individual pieces for greater value than the whole. Eisner and his crew rode in on a white horse, the company become a monster success, and Disneyland benefited (for a while) from being wonderboy's new toy.

Nothing like that will happen again till Eisner is dead and gone, and the company really hits the skids. This is all happening, but is going to take so much more time to play out that I don't know how many of us will be alive to see the dawn that will eventually follow this dark night.

Marty
07-19-2002, 06:46 PM
Originally posted by Ghoulish Delight
...controlling stock interests are ON the board, so of COURSE the stockholders aren't going to outvote the board... but you're dreaming if you're waiting for some sort of stockholder uprising to turn the current state of Disney around, you're dreaming.

You are missing the point, the board is (or at least should be) made up of stockholders. And if you want to show displeasure at the current board, sell your stock. Simple as that. That is how the system is supposed to work.


Originally posted by Ghoulish Delight
Somewhere someone has come up with this ridiculous notion that it is impossible anymore to maximize profit by maximizing product quality. That cutting corners, reducing costs, and playing to lowest common denominator is the only way to turn a buck. Baloney.

It’s not the only way to turn a buck, but it is the easiest and safest way to make money. And that is exactly what is happening. Disney executives understand full well that they are compromising quality when they take the easy time-tested approaches to their particular projects. But this route offers lots of protection – even if you end up with a dog, profits probably won’t suffer very much. Large corporations force this perspective on their executives. For the large Disney shareholders (mutual funds, pension funds, large security firms), profitability is the only thing that matters. They don’t (nor should they) care one whiff about the Disney legacy – unless it impacts share value. Given the choice between a risky project that could bring in huge returns or a boring been-there seen-that project that probably won’t fail but will only provide modest returns, these guys will opt for the latter.

If you want your management team to give you quality winners, you have to give them license to fail – the freedom to occasionally return with quality losers. Without this freedom, you force your people to stick to proven but stale formulas. I doubt very much whether the current management team feels very secure with the idea of spectacular failures right now. This in turn tends to drive away top notch talent: either these people are forced out after one of their ambitious projects does not have the expected financial returns, or they get fed up with the lack of opportunity to work on the kinds of projects they are best suited for.

That's why I think you are kidding yourself if you think a wholesale replacement of the management team will make a big difference. The new guys will face exactly the same pressures the current team is up against. Large coporations skew toward mediocrity. In other words, it is Disney's success (mostly under Eisner) that is doing them in now. Take away Lion King, Little Mermaid and a few Touchstone hits and maybe Disney is not in this position today. Instead you have a smaller, leaner but more focussed company. The kind of place where there is room for projects that succeed artistically while failing financially.

cemeinke
07-19-2002, 06:56 PM
Profit is what's left over after you take your revenue and pay off your expenses. You increase your profit by either reducing expenses or increasing revenue. Of course as you reduce your expenses, you also risk reducing your ability to produce revenue. Afterall a closed park has no expenses, but probably isn't making too much either.

It seems Disney, as many Companies are focused too much on short term economic tweaks - reduce staff and salaries to reduce expenses, bump up the parking & admission to increase revenue. There's no creative vision, like Walt had to carry things through 5 or 10 years out. I mean, Walt has a succesful cartoon franchise, there was no need to do feature length animation. Walt had a successful Film studio, there was no need to build a theme park. Walt had a successful theme park, he had no need to build a Community. I think you'd have a hard time finding shareholders of today willing to risk their money on any of these leaps.

Of course most of us become shareholders now through our 401(k) & retirement plans and as such we don't want people to risk our "retirement" money, we want a steady return on investment that we can depend on, from solid companies like Disney.

What's lacking is a creative visionary ready to take a few risks and bet the Company on something big, something outside the normal business model for the industry. I'm glad Disney took the risk of making Atlantis, a bit of departure from the normal animation fare with dissappointing box-office. I'm saddend that the Company has cut into it's talent pool in trying to curb it's expenses.

Disney need to create new product if it expects to survive, new movies, new characters, new theme parks, and other new ideas. One wonders what Disney will do when their lawyers fail to get yet another extension on Corporate copyrights and Mickey slips into the public domain. Maybe they'd think differently if they knew the characters they created today would have to sustain them without the help of Mickey, or Donald, or Pooh.

Well InnerSpaceman, I hope you're right and a renaissance is coming.

merlinjones
07-19-2002, 07:32 PM
Marty: With all due respect, IT'S NOT WORKING, either from a financial or creative standpoint. The stock is the pits, so is the product.

The definition of madness is repeating the same behavior over and over expecting the outcome to be different.

So it all looks logical on paper... the fact is IT'S NOT WORKING and HASN'T BEEN WORKING FOR MOST OF THE LAST DECADE!

Business isn't a religion with rules that must be clung to. It's a business. A business that IS NOT WORKING.

Defending the principles behind Business 1A won't change that, but looking at history will. Reinvestment in creative employees and quality product worked for Disney in the 30's, 50's, 60's and 80's. Why not now? (and yes, I agree they need a new creative genius down there - find one - - and not from a corporate headhunter!).

Ghoulish Delight
07-19-2002, 08:04 PM
Exactly, MJ. Point to the proof that the current Disney business model (that is, put out the cheapest crap you can get away with, pander to the lowest common denominator, and treat and pay your employees like dirt) is leading to these fabulously high profit margins and I'll capitulate. But they aren't. We've got one park that's gasping for air, stock price in the toilet, and a movie that's screaming to be merchandised well that these monkeys couldn't cash in on if Stitch showed up on their doorstep with a surfboard full of money. You keep saying that the stockholders should then boot the people making the decissions. I'm saying that the people making the decissions ARE the stockholders. Eisner, Pressler, Harris. Between the suits that are running the parks, they own enough stock to do whatever they want. And they don't really have to care about the price! Their salary is astronomical and, as Eisner demonstarated in the early 90s, they have stock options that allow them to just make a few Mil any day they please no matter what the current price is.

Agreed, there are tons of business making a mint on cutting costs and quality while raising prices and sales. It's a valid business model...if it proves successful. But Disney has gone through a decade of proving, in their case, that it's UNsuccesful. So CHANGE IT! Sure, they are riding on Eisner's coat tails. But look what got them there. Bold, risky moves by Eisner. Not cheap schlock.

Nigel2
07-19-2002, 09:35 PM
Originally posted by cemeinke
Profit is what's left over after you take your revenue and pay off your expenses. You increase your profit by either reducing expenses or increasing revenue. Of course as you reduce your expenses, you also risk reducing your ability to produce revenue. Afterall a closed park has no expenses, but probably isn't making too much either.


Close, but not quite, there are fixed costs involved.:)

Also, Walt wasn't a killer buisnessman with the parks, if I remember correctly he was in debt but did have the ability to keep the creditors away. The only problem with finding the right person is that all the people in front of them would have to voluntaraly give up their grab for CEO, and the top dog doesn't want to let it go either.

FunFactorGuy
07-20-2002, 12:15 AM
..Just a newbie to the stock options/stock world. Why IS it that all these huge company executives, who seemingly can be paid so astronomically by themselves, basically, be allowed tock options within the comapany that they run. Especially when it seems that there is no limit on the amount of stock they can purchase, besides the thickness of their wallet? This confuses me, because it seems like a total path to ultimate company implosion, especially if Eiser & company apparently don't do what is required (who cares what they want) to keep the company headed in the right direction?

It's like, the company raises billions by IPO'ing, investors invest, the company is then in the position to be able to pay these head guys outrageous salaries (sign their own check, it seems), so that they can then buy up the majority of the stock, and then who comes out on top? Sounds like an extremely great way to get rich at the expense of others (and a cultural, historical icon)

Nigel2
07-20-2002, 12:19 AM
Well the stock option is just another added perk, plus when it goes down they can write off even more of it to losses, taking less of their pay. Plus the more stock, the more power you have, and they just want to keep it secure.

cemeinke
07-20-2002, 12:25 AM
The idea behind stock options as incentive compensations. Without options executives could get paid millions of dollars even if the stock tanked. By giveing them options, the chance to buy stock at a fixed price regardless of current market value, it would encourage them to raise the stockprice and make the shareholders happy. If the stock tanked, well the execs wouldn't get the bonus of the options, and just get their smaller percentage salary.

I think the idea is still good, but unfortunately I guess we found that it also encouraged fraud to jack up stock prices, so we have to find a better way to control for that.

FunFactorGuy
07-20-2002, 12:48 AM
Okay, that makes sense about the encouragement to increase stock value by making your comapany successful, but doesn't it seem wrong and dangerous that the head execs of these companies who are able to purchase (financially able as well as given the stock)the majority of the shares become the emperors of their own domain. However, I suppose they are in a precarious position as wel, as it could all come crashing down with them on the top and everywhere in between...

~~~~~~~~~~~~~~~~
Canadians have an abiding interest in surprising those Americans who have historically made little effort to learn about their neighbour to the North.

Peter Jennings

Marty
07-20-2002, 01:43 AM
Originally posted by merlinjones
IT'S NOT WORKING, either from a financial or creative standpoint. The stock is the pits, so is the product.


From a creative standpoint, that's just an opinion. I and a lot of other people would disagree you. And as far as the stock price is concerned, it only sucks when you compare it to the inflated highs media conglomerates were enjoying a few years ago. The company is still making money and revenues remain strong.

Despite all this, I mostly agree with your post. Disney is largely spinning its wheels on the creative front and is in danger of burning up all the good will it stockpiled over the years. And we also agree on the solution: just go out find yourself a Walt-like genius who can point the company back in the right direction. Since you don't want use a corporate head-hunter, I suggest placing a classified ad - Wanted: Creative genius who understands the revenue models employed by entertainment conglomerates. Apply in person.

Oh, and one more thing. Once you got your guy, you need to give him (or her) some room to actually make meaningful decisions. So you had better set aside some time to make your case to all of Disney's major institutional investors. You know, the guys who applaud the easy profits you get by producing direct to video knock off's of classic Disney features.

Good luck.

merlinjones
07-20-2002, 05:41 AM
>>Oh, and one more thing. Once you got your guy, you need to give him (or her) some room to actually make meaningful decisions. So you had better set aside some time to make your case to all of Disney's major institutional investors. You know, the guys who applaud the easy profits you get by producing direct to video knock off's of classic Disney features.<<

If they have to be made, they shouldn't suck at least.

merlinjones
07-20-2002, 05:58 AM
I have not at all been surprised by the recent corporate scandals. From what I have observed over the years the principles of stock compensation and executive bonuses have done nothing but encourage a slash and burn mentality and potential fraud.

It's often not a case of execs having been compensated for successfully selling and managing their product - - or for creating profitable new incentives - - that's just a paper illusion - - it's more often a case of rewarding those able and willing to deconstruct something enough to squeeze false "profits" out.

These are not real profits but dwindling, deconstructed assets disguised as profits. A situation not good for any company of status... particularly not for the production and maintenence of quality product or for creating decent, respectful working conditions.

With all those stock options and golden parachutes in hand, a bad exec can can slash and burn and hold the city for ransom all at the same time with no natural "correction" able to touch them.

The flaw in this system is an assumption that excutives will act responsibly or honorably in the pursuit of growth. Like socialism, this is a flawed model of human behavior.

The whole system will not heal until rampant executive over-compensation is a thing of the past.

This has been happenning in the Disney company for years. In my opinion, Eisner's pocketbook holds the restoration money for Submarine Voyage and Tomorrowland, the proper second theme park in Anaheim that wasn't built, the retirement money of lifetime Disney employees let go early, and the overhead to support feature animation or Imagineering. Are these eliminated expenses profits? No, these are assets squandered to enrich the executive.

And we are all "crazy" if we complain about it... sheesh. Staggs and his ilk should be ashamed.

Get someone in there who can make an honest dollar.

coronamouseman
07-20-2002, 10:30 AM
A couple of comments:

(1) Stock options were originally intended to be "incentive" which meant that (a) an executive had to stay at a company for at least 4-5 years to become vested in all of their potential options and (b) that if the executives did their jobs properly, the stock would later be worth much more than the option price. But in recent times, with the massive inflation which has occurred in executive compensation, the vesting period and/or pricing of options/stock for executives has become more of a hiring perk than the long-term commitment it was intended to be. You don't give some CEO enough vested stock options to retire tomorrow - it gives that CEO a feeling of safety that will dilute their unending commitment to the ongoing success of the company. You stretch out that bonus compensation so that it only becomes available after certain goals and achievements have been accomplished.

Those corporate loans you hear about are the other component to this. If stock options are "incentives", they are taxed in the year they are exercised at a rate of up to 25% - so if an exec gets options for shares valued at $1M, that exec will have to pay AMT of approximately $250,000 in anticipation of the eventual capital gain of $1M. So what many companys do is loan the exec that AMT so that exec is not out of pocket that $250K. Newest thinking on this is - make executive cough up $250K so that they will have additional incentive to make the stock go up. It's not all as simple as stated, but close - the point is that there is risk to the CEO but consider that leverage to have that person perform.
Again, not something happening right now. Eisner gets his options, Disney pays his AMT, when he sells shares he pays Disney back. No risk to ME and he gets richer than all of South America (except Columbia).

(2) There is sometimes a large gap between where the "rubber meets the road" and the cockpit of major corporations. Actual managers of day-to-day activities will do whatever they feel will make it possible for them to meet company revenue and profit levels even if they don't see the global impact to the company of what they are doing (maybe cutting some corners in quality or changing processes to be easier to implement). Unless a company has very watchful and dedicated middle management, such changes could go unnoticed. And then, finally, when upper management sees a problem, they have to investigate, restructure and re-establish proper procedures. So despite what many of us in these postings feel is a company policy in regards to changes in quality or operations, it may not really be the actual goal or mission of upper management but rather a lack of information getting to them about how such things are done. Alternatively, if management puts forth directives and does not monitor how those directives ultimately get implemented, then they will have more chaos. When was the last time (if any?) that anybody on the planet felt that Eisner or other Disney management was actually listening to a customer rather than dictating what the customer was going to like in the latest Disney movie or theme park or theme park attraction?

So is Disney experiencing problems different from any other corporation? Probably not ...........

merlinjones
07-20-2002, 12:40 PM
>>So despite what many of us in these postings feel is a company policy in regards to changes in quality or operations, it may not really be the actual goal or mission of upper management but rather a lack of information getting to them about how such things are done. Alternatively, if management puts forth directives and does not monitor how those directives ultimately get implemented, then they will have more chaos. When was the last time (if any?) that anybody on the planet felt that Eisner or other Disney management was actually listening to a customer rather than dictating what the customer was going to like in the latest Disney movie or theme park or theme park attraction?<<

Yes, but let's say Eisner is on a walk with Lasseter who complains about the upkeep on Tom Sawyer Island (which happened) - - Eisner feigns shock (or may really be shocked), calls someone and yells at them to fix it (as reportedly happened).

Many months later it still isn't fixed and there is no fix in sight.

So was it just a show?

Or - - Do the middle level managers and their agendas or the ungainly system itself ultimately have more power than the CEO?

Or - - Is the company REALLY run by the C-F-O and his minions? (my choice). Should an accountant network be making creative or strategic decisions like this?

In any event, why is anyone getting a bonus at all if they can't afford the upkeep on a bridge? Shouldn't that money be used to protect hard assets before its given out as a perk?

Marty
07-20-2002, 08:27 PM
Originally posted by coronamouseman
…Actual managers of day-to-day activities will do whatever they feel will make it possible for them to meet company revenue and profit levels even if they don't see the global impact to the company of what they are doing (maybe cutting some corners in quality or changing processes to be easier to implement). Unless a company has very watchful and dedicated middle management, such changes could go unnoticed. And then, finally, when upper management sees a problem, they have to investigate, restructure and re-establish proper procedures. So despite what many of us in these postings feel is a company policy in regards to changes in quality or operations, it may not really be the actual goal or mission of upper management but rather a lack of information getting to them about how such things are done…

…So is Disney experiencing problems different from any other corporation? Probably not ...........

This is so right coronamouseman. The issues that Disney faces are really no different than the difficulties lots of other large companies are going through. Some on this board like to think that Disney's problems could be solved with a few coats of paint and another killer attraction. But the truth of the matter is that at best these are quick fixes that do nothing to address the structural reasons for the current state of affairs.

One other thing, most put the blame for Disney failings squarely at the feet of Mr. Eisner. I, on the other hand, think he is one of the few people who could actually turn things around. Merlinjones has made some persuasive arguments that what Disney really needs is another Walt. It's not that I don't think such people don't exist, but if Walt were alive today I don't think he would go anywhere near a company like Disney. It's too big and too diverse. A talent like the kind Walt possessed requires room to maneuver, something he would never get in the kind of media conglomerate Disney has morphed into. Anybody who replaces Eisner is going to have far less freedom to do what they want than Eisner currently enjoys. If Walt were indeed hired today to replace the CEO, he would quickly find himself stymied by the relentless financial restrictions large corporations impose on their senior executives.

Because of Eisner's past success, he is probably the only person who can forge his own way. Nobody else coming in would ever be given that type of freedom. Sure, you can argue that you couldn't do worse with somebody else. But I don't think that is the point. What a lot of people on this board want is someone who can come in and make a dramatic difference. But given the current structure of the company, nobody but Eisner would ever be allowed to take the kind of chances required to make just such a dramatic difference.

merlinjones
07-20-2002, 08:42 PM
>>Merlinjones has made some persuasive arguments that what Disney really needs is another Walt. It's not that I don't think such people don't exist, but if Walt were alive today I don't think he would go anywhere near a company like Disney. It's too big and too diverse. A talent like the kind Walt possessed requires room to maneuver, something he would never get in the kind of media conglomerate Disney has morphed into. Anybody who replaces Eisner is going to have far less freedom to do what they want than Eisner currently enjoys. If Walt were indeed hired today to replace the CEO,he would quickly find himself stymied by the relentless financial restrictions large corporations impose on their senior executives. <<

You're right about Walt.

But this isn't about him - - right now I'd just settle for someone with good taste, a good eye, a golden gut, a storyteller's sensibility, a sense of responsibility toward the position - the company - its history and toward people in general, an inner child's intuition and maybe just someone who liked Disney movies as a kid and "gets it"... Who needs a genius? Right now we have none of the above. I'd even settle for any ONE of the above qualities.

merlinjones
07-21-2002, 04:35 AM
>>A talent like the kind Walt possessed requires room to maneuver, something he would never get in the kind of media conglomerate Disney has morphed into. <<

I think a case could be made against the kind of media conglomerate Disney has morphed into. See AOL/Time-Warner and Vivendi Universal.

Would the stockholders (and the public) be better served with a breakup of these dysfunctional global behemoths?

Disney functioned better as a boutique content company. Perhaps its time to spin ABC Media off into its own fate.

Marty
07-22-2002, 11:04 AM
Originally posted by merlinjones

I think a case could be made against the kind of media conglomerate Disney has morphed into. See AOL/Time-Warner and Vivendi Universal.

Would the stockholders (and the public) be better served with a breakup of these dysfunctional global behemoths?


My point exactly, though I think it would very hard to convince the shareholders that this is the route to take. The prevalent feeling in the market place now is that to compete effectively and to provide full value for your assets, media companies require multiple outlets to leverage their brands. Personally I think this is a bunch of gobbledygook, as has been emphatically shown by what has happened with Time\Warner and AOL. Nevertheless, I still think it would be difficult to wrest ABC and ESPN away from what we commonly think of when referring to Disney (the parks and the movies).

For Disneyland itself, I see very few benefits of being part of a large conglomerate. Most of the financial rewards reside on the other side – ABC can use the Disney brand to produce and market TV shows. In other words, being connected with a more media outlets (like TV) is just a way for Disney to exploit what is already becoming and already diluted brand.

So yes, I think it would be better for Disneyland if Disney were to sell off its other interests. However, that is incredibly unlikely. Basically there are 2 circumstances where such a thing could happen:

Disney loses a ton of money over a short period and is forced to sell something (maybe the best argument for building TDS in Anaheim.)

Somebody else buys Disney specifically because it wants the TV side of the business and sells off the Disney side of the business to pay for the purchase.

The thing is, though, because the company is so large, it unlikely that either of these will ever happen.