On the chessboard of corporate politics, Michael Eisner may be staring at the endgame.
Comcast Corp.’s surprise $50 billion offer Wednesday for Walt Disney Co. presents Eisner, who has spent two decades as Disney’s chief, with the unhappy choice of stepping aside in favor of a hostile bidder or engaging in a fight that is sure to focus searing attention on his management shortcomings.
It appears to be a lose-lose proposition for the 61-year-old executive, who hasn’t faced that scenario often in his business career, which began with a job as a page at NBC and soared to the top of the conglomerate that now owns the rival ABC network.
“Eisner is the last of the baby moguls who believed from the start in the sanctity of being a top corporate executive,” said Joe Roth, the Revolution Studios founder who headed Disney’s studio unit from 1994 until 2000.
“He has always enjoyed running a large company. He’s not going to turn it over willingly,” Roth said.
In a brief statement on Wednesday, Eisner said the Disney board will evaluate the Comcast offer. But investors, analysts and Hollywood players were quick to note that Eisner himself has become an overriding issue in the struggle over Disney.
“It is obvious that, if Comcast succeeds in its bid, Michael Eisner is gone,” said Jeffrey Bronchick, chief investment officer of the Los Angeles-based money management firm Reed Conner & Birdwell Inc., which owns nearly 1.5 million shares of Disney and about 900,000 shares of Comcast.
That would clearly cheer critics, who hold Eisner–an aggressive manager with a hands-on style that alienated a string of now-departed subordinates–responsible for failures in the Burbank giant’s TV network, cable and movie operations.
Even as news of the Comcast bid hit, Rockville, Md.-based Investors Shareholder Services, the largest U.S. adviser to money managers on proxy-related issues, recommended that clients oppose Eisner’s retention as chairman. A string of shareholder suits filed in Delaware on Wednesday demanded that directors consider the Comcast offer and seek the highest possible value for the company.
Meanwhile, corporate gadfly Roy Disney, recently pushed off the Disney board, said that Eisner’s situation reminded him of “The Wizard of Oz,” with the munchkins chanting: “Ding, dong, the witch is dead!”
Yet Eisner’s departure under pressure would also be an unwelcome milestone for a generation of aging entertainment chieftains–Barry Diller, Michael Ovitz, Bob Daly, David Geffen, Jeffrey Katzenberg and others–who grew up together in the 1970s. Most are now looking at the end of their run as the aggressive younger tycoons make their grab for power.
Raised by an affluent family on New York’s Park Avenue, Eisner first made his mark as a young programming executive at ABC, where he had a hand in hits such as the comedy series “Happy Days” and the mini-series “Roots.” In the mid-1970s, he teamed with fellow ABC alumnus Diller to run Paramount Pictures. On the heels of phenomenal success with pictures such as “Beverly Hills Cop” and “Raiders of the Lost Ark,” Diller departed to run 20th Century Fox, while Eisner soon took charge of Disney in a close partnership with former Warner Bros. executive Frank Wells.
Wells died in a 1994 helicopter crash, leaving Eisner firmly in charge of the corporation precisely as its fortunes began to drift. His boldest stroke was to acquire the ABC television network, a $19 billion deal approved by shareholders in 1996. He argued at the time that he was uniquely equipped to turn the struggling network’s fortune around, yet it has dropped into fourth place and remained a drag on corporate earnings.
His biggest embarrassment, however, came just two weeks ago, when Pixar Animation Studios announced that it was ending negotiations to renew a lucrative partnership that had brought the studio hits such as “Toy Story” and “Finding Nemo.”
Pixar chief Steve Jobs quickly made it clear that his deteriorating relationship with Eisner was a major reason for dumping the talks.
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But Martin Kaplan, an associate dean of USC’s Annenberg School for Communication and a former Disney production executive, said that Eisner has survived difficulties before and had a longer ride than most other Hollywood chieftains.
“He’s been the head of that company for 20 years and that’s already three or four miracles,” he said. “Whether he has a miracle left is an open question.”
Some believe Eisner has been weakened by a sustained attack by two of the most high-profile board members–Roy Disney, the nephew of the company’s founder, and Stanley Gold–who seek his removal.
“Eisner is looking a little wobbly,” said Matthew Harrigan, media analyst with Janco Partners near Denver. “He’s getting hit from all sides.”