The Underappreciated Michael Eisner - Part II
In 1993, Jeffrey Katzenberg made known his desire to become second in command to Michael Eisner. Such a succession plan would require Eisner to “demote” Frank Wells from President to Vice Chairman and Eisner was not on board with that.
When Frank Wells perished in a helicopter crash Eisner did not move Katzenberg into the now vacant President post. Yadda yadda ya, Katzenberg resigned and a legal feud ensued regarding Katzenberg’s contractual bonus agreement. Both sides were way off agreeing on a dollar figure so the court settled this dispute saying that Katzenberg was owed $280 million. Looking at that number it is hard to say he “settled” for that chunk of cash.
And as the story goes Katzenberg joined forces with Steven Spielberg and Davivid Geffen to form Dreamworks SKG. I’m sure you’ve heard people say that Shrek was modeled after Michael Eisner.
Years later it was disclosed that Roy E. Disney was not a fan of Katzenberg and found him to be abrasive. Eisner has admitted that Roy E. Disney once told Eisner that if he (Disney) would start a proxy fight if Eisner made Katzenberg President.
Eisner filled the vacant President slot with Michael Ovitz, one of the founders of Creative Artists Agency, with minimal involvement from Disney's Board of Directors. Ovitz lasted 14 months and left with a severance package of $38 million in cash, and 3 million stock options worth roughly $100 million, at the time of his departure.
Before Michael Eisner became CEO and Chairman of The Walt Disney Company he served as President of Paramount Pictures. So, it made sense that Eisner integrated much of his Paramount films with Disney. However, this move was not something that was, let’s say, favored by a lot of Disney executives and it soon came to a head.
On November 30, 2003, Roy E. Disney resigned from both his positions as Disney Vice Chairman and Chairman of Walt Disney Feature Animation. Roy E. Disney, a chip off the old block of Roy O. Disney, was not happy with the struggling theme parks and recent box office failures (such as The Emperor’s new Groove and Treasure Planet) and he privately blamed most of this due to the micromanagement atmosphere within the studio. There were also distribution disputes with Pixar Animation Studios and its CEO Steve Jobs. Pixar had produced Toy Story , A Bug’s Life, Monsters, Inc. and Finding Nemo.
On March 3, 2004, 43% of Disney's shareholders at Disney's annual shareholders' meeting withheld their proxies to re-elect Eisner to the board and gave the chairmanship position to board member George Mitchell.
In March 2005, Eisner made his intentions clear that he would be stepping down a year prior to what was in his contract. On September 30, Eisner resigned both as an executive and as a member of the Board of Directors. He was succeeded by Disney's President and Chief Operating Officer Bob Iger.
So as you can see Michael Eisner had ten years of success before things got shakey.
He has often been criticized for his miscalculation of Euro Disney in terms of not using capital to properly build the park and not fully understanding the culture in order to bring early success to that theme park.
His acquisition of the Fox Family cable network was not one of his better moves as he has been accused of over paying for that property.
I have often thought what would have Eisner’s legacy been had Frank Wells not perished in that helicoptyrt crash. As a team Eisner and Wells were very good and together they were able to figure out what worked for the good of the company and revitalized a struggling entertainment corporation.
It was almost as if they were mentors to each other.
In some circles Eisner has been criticized for not moving Katzenberg into the company's succession plan but again it was known that Katzenberg had an abrasive nature so that most likely weighed in on Eisner’s decision.
I do think that Eisner should be remembered for his ability to revive the Walt Disney Company and for the Disney Decade.
After all, he brought us as The Little Mermaid(1989), Beauty and the Beast (1991), Aladdin (1992), and The Lion King(1994), a period known as the Disney Renaissance. Eisner additionally broadened the company's media portfolio by leading the acquisitions of ABC, most of ESPN and The Muppets franchise.
He also was responsible for bringing us Disney-MGM Studios (now Hollywood Studios), Euro Disney (now Disneyland Paris) Disney’s Animal Kingdom, Disney’s California Adventure, Tokyo Disney Sea Walt Disney Studios Park and Hong Kong Disneyland.
In January 2006, Disney's corporate headquarters in Burbank was renamed to Team Disney - The Michael D. Eisner Building in Eisner's honor.
He deserved it…and the window on Main Street USA in Disneyland Paris.
You think Bob Chapek’s name will ever adorn a window?
Heh!
See you next time.