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Anatomy of a Mouse
 JACOB WEINSTEIN
April 2004
Disney Shareholders Meet at 12th and Arch
Roy Disney Takes on Michael Eisner for $27 Billion in Cheddar
Inside the halls of the Pennsylvania Convention Center, the microphone is slowly moving up the aisle, passed from Disney shareholder to Disney shareholder, finally reaching a 22 year-old in jeans. Calmly, loudly, she addresses Michael Eisner, chairman and CEO of the Walt Disney Company.
“My name is Jen Dziekan from Longmeadow, Massachusetts, and I own four shares of Disney stock. I bought it not for the five cents you give back to me, the thirty-three cents you give back to me, or the one dollar that I might get back in the future. I bought it for a piece of the magic.
“I bought it because I love going to the park. I love going to the stores, and I love feeling that magic. Have you been to a theme park lately?”
Most people buy stock because they think it will go up. If their stock has gone up fifty percent over the last year, as Dziekan's has, they aren't likely to wake up at four in the morning and drive two hundred and forty miles to an annual shareholder's meeting to confront the CEO.
But this is not a story about most people. It is a story about people who own stock in the Walt Disney Company, thousands who gathered one balmy March week in Philadelphia to restore their company's “soul” and bring back its “magic.”
It was the cast members at the Holyoke Mall Disney Store who first turned Dziekan on to the notion that the company of which she owned four tiny pieces might be headed in the wrong direction. For years she had been visiting the store, in earlier days to buy Little Mermaid dolls and picture frames and Mickey Mouse hats and keychains, and in more recent months simply to chat with the cast members, which is what the Walt Disney Company calls its employees. She wished she could offer support, but the merchandise had gotten too tacky, and the movies it promoted too mediocre, to tempt her any longer.
“I keep going back, hoping they will have figured it out and come out with something really cool that I just have to buy,” she says. “It never happens.”
During a December mall trip, however, she learned some news that made her wonder whether the store might finally reverse its sad decline. An outfit called SaveDisney was seeking to oust longtime Walt Disney Company CEO Michael Eisner, and the cast members were eager to be saved. “They know the store is doing bad,” she says. “They know it is in line to be sold. They were looking into trying to buy it, turn it into a franchise. They hate Michael Eisner.” The SaveDisney movement seemed like something of a corporate savior, not only of their stores and their cast memberships, but of the whole magical circle of life that brings consumers everything from summertime multiplex tickets to Grammy-nominated original soundtrack albums at the holiday season. Dziekan soon joined the cause. “Cast members at the store say, ‘magic trust and pixie dust.' It's a way of saying, ‘We'll get through this.'”
The SaveDisney.com website alerted Dziekan to other disconcerting developments within the Disney empire. Nondescript brown receptacles had been spotted soliciting trash throughout the Disneyland theme park. “Everything in the park has a theme,” she explains. “Adventureland has a jungle safari theme, so the trash cans are supposed to be painted with leaves. But lately you go there and they're just brown trash cans.” It was not the sort of ordinariness, Dziekan feels, that Walt Disney would have tolerated.
"Disney was very … I don't want to say anal, but he was a particular man. Things had to be done right, no matter how long it took or how much it cost. Before Walt died … nobody knows if he's cryogenically frozen or not … ”
(In actuality, Walt Disney's body was cremated, but a persistent suburban myth has him frozen and buried beneath Disneyland's Pirates of the Caribbean ride. The noteworthy thing here is the leitmotif of the resurrected father redeeming the sins of his wayward sons, which clearly, Dziekan explains, was a power Walt wished he had.)
“He wanted to come back to life to fix all the mistakes in his theme parks.”
And so it seemed especially momentous that SaveDisney was the project of a man who shared not only the Disney name but the familiar animated eyes, sloping nose and sunken chin of the father himself, Walt Disney's nephew Roy.
Years of being referred to within corporate ranks as “Walt's idiot nephew” never really bothered Roy E. Disney, who had a castle in Ireland, a Boeing 737, seventeen million shares and a part-time position heading the animation department to console him. But in November, when Michael Eisner informed the 73 year-old that, in accordance with longstanding company policy, he was getting too old to serve on the board of directors, something struck. Perhaps, in the way physical resemblance seems to haunt the aimless inheritors of vast power and prestige late in life, Roy's iconic name and facial likeness to Walt finally burdened him to act. He and his longtime investment partner Stanley Gold, a fellow Disney director, abruptly sent angry resignation letters to the company board of directors and, began an online grassroots movement to remove Eisner from power and SaveDisney For Future Generations. By December they had acquired the domain name, and by January they had posted detailed instructions as to how small-time shareholders could join the movement by mailing their annual proxy forms to Disney's Burbank headquarters with a vote withheld for the reappointment of Michael Eisner. As with the ballots in old Eastern bloc nations, there was no alternative candidate to lead the company. The website assured its readers, though, that enough withheld votes would “send a message” to Eisner that he ought to resign. Dziekan waited for her chance to effect change to come in the mail.
But the ballot never arrived. A call to her financial advisor at AG Edwards yielded excuses, but no ballot and no annual report. Time was running out. “It was then that I realized I had to go. I knew that if I didn't go I'd be kicking myself later,” she says. There was little question as to which way her ballot would be cast.
***
The Walt Disney Company, which took in $27 billion in revenue last year, is comprised of many parts. There are theme parks and hotels and cruise lines, three movie studios (Disney, Touchstone, Miramax), and television operations—local and national, cable and network. There are record labels and a book publishing company and the struggling Disney Stores. But more importantly for the purposes of this story, there are things that are clearly and obviously Disney, things that are moderately Disney, and things that don't really seem Disney at all, yet contribute to its top lines, its bottom lines, the stock price, and the dividends.
The things at Disney's core usually bear the Disney trademark: Disney cruise lines and Disney on Ice and Disney animated movies like The Lion King and said movies' spinoffs like the Lion King Broadway production, or the Disney theme park attractions like Pirates of the Caribbean or Treasure Island and said rides' spinoffs like the Pirates of the Caribbean movie and Treasure Planet. Finally, there are the Disney mall stores at which the accompanying dolls, keychains and Halloween costumes are sold.
Then there is a middle class of the semi-Disney and the PG-13-Disney and the in-transition-Disney. This includes things that are clearly Disney but not necessarily labeled as such: the Steve Martin Queen Latifah odd couple comedy Bringing Down the House and all M. Night Shyamalan movies. There are things whose seeming un-Disneyness is so distinct they almost have to be Disney: Bad Santa and Chasing Amy. Finally, there are things in transition: some that were once squarely, solidly Disney but now seem less so: Hilary Duff, a year ago the face of the Disney Channel flagship Lizzie McGuire show; today, following acrimonious negotiations, simply another jailbait blonde diva-in-training on Disney's Hollywood Records label.
In the last camp are things that are almost, if this is possible, Disney neutral, except that they all share an annual report and a balance sheet and a chief executive officer. Namely, these things are ESPN, the sports media powerhouse that became a part of Disney when Disney acquired its parent company the American Broadcasting Company in 1995. ESPN has very little to do with pixie dust or cast members or “magic” and everything to do with making money. ESPN's cable fees and advertising dollars bring in almost a billion dollars in profit to Disney's bottom line. This is a large part of the reason that Comcast, which spends $2.60 a month giving each of its twenty-one million subscribers their Sportscenter fix, is so keen on trading her four shares for three and a quarter of theirs.
But as Disney's profit centers have moved further and further away from its spiritual center, the company's pixie dust breathing, fantasy-obsessed investors have not been replaced by Coors-guzzling, sports-obsessed ones. By the time Eisner realized the extent of the gap between the company's business and its ownership, Walt's idiot nephew was already harnessing it to his own advantage.
***
One day earlier, as Jen Dziekan tries to decide whether on not the trip to Philadelphia would be worth the gas money and lost sleep, Roy Disney sits in a conference room at the Loews Hotel, working the media. More than one hundred delegates have gathered here today from such exotic locales as Tokyo, Rome, and Vanity Fair. There is a frenzied feel about the place: tripods being assembled, recording devices prepped, pens scribbling, flashbulbs blinking, Comcast hovering, $27 billion in revenue and possibly the most iconic corporation in American history in the balance. Roy's partner Stanley Gold begins with a chat on a few of the supposed casualties of Michael Eisner's notorious micromanagement—the ill-advised acquisition of the Fox Family Channel, ABC's dismal ratings record, the company's falling-out with its digital animation studio partner Pixar. Then, Roy takes the microphone. He is white-haired and balding and uses phrases like “hearts and flowers” and “baby and bathwater.”
“I've had emails asking me when we stopped cleaning the restrooms,” Roy Disney tells the audience. “Frankly, I'm also worried about ride maintenance in the theme parks. There's trash everywhere. Whoever takes over is going to need to change a lot of light bulbs, both literally and figuratively.”
But just when Roy Disney's grievances are starting to seem a bit too micro to be blamed on Eisner's micromanagement, Disney addresses the macro state of affairs at the media company as he sees it.
“Sometimes artistic talent doesn't adhere to the rules. Sometimes the most talented people need to be nurtured. Right now, the second anyone tries to stick their little head out of the rabbit hole, they get smacked right back down.”
The reporters scribble this down as if it were news to them, as if they were shocked to hear of such mistreatment, having come from the nurturing environments of FOX, Condé Nast, NPR, BBC, Knight-Ridder, Asashi Shimbun and the Wall Street Journal. But maybe it is news, for those companies are not Disney. Disney is supposed to be different. In the front row sits Jim Hill, a hefty man with a gray beard in a gray sweater who, like Jen Dziekan, is a longtime Disney fan. But Jim has ascended to a higher and more nuanced level of Disney fandom that he calls “dweebdom,” which has landed his stippled mug on the front page of today's Wall Street Journal. Hill can even boast of a personal live interaction with Roy Disney, when Roy called him on the phone one night in December for tips on how he should “reach out” to the fan community. This level of mainstream recognition has earned him, at least for today, the title ‘King of the Dweebs.' Jim Hill began chronicling Roy Disney's coup attempt hours after he resigned from the board on the Disney-obsessed site he co-owns with his ex-wife Michelle Smith, JimHillMedia.com. He's waited months for this meeting.
The King Dweeb is looking forward to filing his dispatches and giving an interview to MSNBC, and enjoying the fact that, for today, everyone is obsessed with his obsession, but the real treat is putting faces to some of the more prolific screen names of the digital Disney world over cheesesteaks and Atkins-compliant salads at the Independence Brew Pub.
Dweebs, it seems, like to dress the part: Hill's fiancé Nancy Stadler in a pink terry Disney California Adventure sweater; Hill's West Coast correspondent Chuck Oberleitner in a gray polo with black Mickey Mouse insignia; MousePlanet.com columnist Mark Goldhaber in a company polo shirt replete with rainbow Mickey-head logo; JimHillMedia.com columnist Jeff Lange in a shiny brown faux-crocodile watch with gold detailing that depicts a golden replica of Walt Disney's head in the left corner. Most of the dweebs have never met in person, but they act like old friends. When all this is over and Roy or Michael or Comcast's Brian Roberts has declared victory, they will still be at the parks every other weekend, still be at the theaters for every Disney release, still be online instant messaging one another into the wee hours.
The dweebs, like the fans and the cast members, loathe Michael Eisner, and they spend lunch dishily recounting the reasons. For instance, there was the Eisner brainchild they refer to as the “Cake-sicle,” an episode several years ago in which Eisner directed Cinderella's blue-and-white castle at Disney World to be re-decorated as a “Pepto-Bismol pink” birthday cake celebrating Disney's fifty-year anniversary, complete with inflatable plastic “icing” curlicues. As the days wore on, these curlicues deflated, and were seen wagging sadly on the breeze, semi-bloated, over all of Disney World. “People have their weddings at Cinderella's castle,” Jim Hill explains. (He himself had his first wedding at the Disney Beach Club Resort.) “There were a lot of cancellations after that. People just cancelled their whole wedding when they saw the Pepto pink.” There are other offenses, all cataloged on JimHillMedia.com: the refusal to pay a retired Lion King animator for his commentary track on a commemorative DVD; the erection of a stainless steel panel on the California Adventure Park concert hall that ended up reflecting sunlight into nearby apartments and killing off houseplants; the company's maddening inconsistent awarding and withholding of press credentials to JimHillMedia.com (Hill's reporters get press access to Disneyland, but not Disney World or the Disney Cruise Lines; it's “absurd.”)
Suffice it to say, all dweebs present are in agreement that something at Disney needs saving. But until today, none has really questioned whether or not Roy is the man to save it.
“Did you notice the way they used ‘Carousel of Progress' as the theme song for the end of the presentation?" Jim asks the table, halfway into his cheesesteak. “I haven't heard that since the sixties or seventies.”
The dweebs erupt into song: “It's-a-great-big-beautiful-tom-mor-row ...”
“It just seemed like they were trying to make a very emotional appeal to the fans here,” he cuts in.
“It's the Walt Disney Company,” Stadler counters, perhaps familiar with the argument her fiancé is about to advance. “There are thousands of people with an emotional connection to the company. That doesn't mean it's not smart to appeal to them in that way.”
“Do you want to know how many times Roy went to work in the eighteen months before he resigned?” Jim Hill persists. “They know this because they got his computer logs. Thirty-seven times. In eighteen months. People are spinning Roy as this grandfatherly preserver of Disney's spirit, but until he was fired, he was too busy with his yacht.
“And it's not like Shamrock Holdings is some nice little family values operation. They're businessmen too. It's the classic misdirection technique. ‘Look over here at the kindly grandfather while we crush Michael Eisner's balls!'”
But wouldn't the dweebs like to see Michael Eisner's balls crushed, after all these years?
“I'd like to see them filleted,” pronounces Chuck.
“I'd rather not see them at all!” adds Nancy coyly, to uproarious laughter.
Jim Hill won't voice an opinion. He may loathe Eisner, but Roy will have to do more than start a website and print a bunch of T-shirts to earn his magic trust.
***
“It hurts me to see trash floating in the water at our parks, paint peeling off the buildings, cast members telling me that we've lost the magic … ”
Roy's disembodied voice is accompanied by the bleating of pre-recorded strings. It is the type of music you hear as the sun is just rising again on the poignant new reality of the pre-happy, pre-ending Disney animated classic, before Ariel regains her voice and the spell on the Beast is broken. The room is lit in dim, soporific mauve hues, and on the screen flicker slides of the Walt Disney company's early days—animators in high-waisted trousers; family photos taken in the original Disneyland. Eight hundred shareholders sit attentively in yet another conference room in the Loews as the SaveDisney “rally,” basically a video presentation hosted by Roy and Stanley, begins. Another six hundred latecomers are sitting on the carpet in the hallways, watching a live feed of the proceedings on televisions. Some wear mouse ears, other carry sequined Snow White bags; many have red and blue SaveDisney T-shirts.
Some have come from Ohio and Florida for this, dressed as if the Loews Hotel were itself a theme park, although the closest thing they get is a peculiar presentation by Charles Phoenix, the Los Angeles “histo-tainer.” Charles Phoenix sports a pair of black Mickey Mouse ears and bounds about the stage as he presents a slideshow of vintage Kodachrome photographs taken in the early days of the Tomorrowland section of Disneyland. Phoenix's patter often veers into naughty double entendre. When he points to a photo of four little girls wearing matching mint-green dresses standing in line for a ride behind a couple of white T-shirted youths, Phoenix jokes, “I hope they get on with those guys behind them, then it'll really be Mr. Toad's Wild Ride!”
Neither Disney nor Gold nor Phoenix talks about ESPN or Comcast. No one mentions profit margins or projected growth rates, or anything really, besides the halcyon days of Tomorrowland. And animated films.
“It's so sad to watch this art form (animation) die before my eyes,” the quote flashes on the video screen, credited to a “Starving Artist.”
Animation, for the record, hasn't “died.” Last year Disney's Finding Nemo was actually the highest grossing animated film of all time; it happened, however, to utilize the computer animation techniques perfected by the Pixar animation studio with which Disney just cut its ties. With the rise of three-dimensional computer animation, two-dimensional traditional animation has declined from its 1995 peak, when the phenomenal success of The Lion King meant middle-tier Disney animators were making $300,000-plus in salary. (So if they're starving now, at least they lived well in the mid-1990s.) This is an advancement in technology, the same thing that is behind the switch from bank tellers to ATMs.
Theme parks, on the other hand, have been the casualty of many factors. First, in the attempt to shut one another out, the big theme park companies built too much—movie theater companies did it too, and they're still reeling. Then there is the changing travel world. When it's as cheap to visit Paris or Prague or Beijing as it is to visit Disneyland—and the visa doesn't take a year to come—theme parks suffer. Finally, when kids grow older younger—that is, out of watching animated movies and straight into makeup and the mall and video games—theme parks suffer. All are documented trends with which other media companies—and toy companies and travel agencies and airlines—are grappling, and are the reasons these companies are making cutbacks and closing stores and planning a little more conservatively for tomorrow. But this isn't about tomorrow. It's about Tomorrowland, and “A Great Big Beautiful Tomorrow,” and mostly, yesterday. For a few hours, Roy has transported this capacity crowd back to yesterday, to Disney's past, perhaps to their own youths. And that is Roy E. Disney's big coup. The audience leaves the mauve-tinted room, imbued in the fuzzy faith that Disney can Bring Back the Magic if only Eisner can be deposed. Roy has taken the power to manipulate a crowd into believing they are somewhere else entirely away from the company that once housed the manipulation masters.
***
“I believe our mission has always been to be bringers of joy, to be affirmers of the good in each of us, to be—in subtle ways—teachers. To speak, as Walt once put it, ‘not to children, but to the child in each of us.'” Roy is speaking to all the shareholders now, not just the “dissidents” who joined him yesterday, but the reception as interpreted by applause is just as warm. Again, the venue has been overbooked. Journalists who didn't arrive hours early watch the proceedings from televisions in the Marriott. “We do this through great storytelling, by giving our guests a few hours in another world where their cares can be momentarily put aside, by creating memories that will remain with them forever. This is the core of what we've come to call ‘Disney,' and to my mind, our single biggest need is to get back to that core …”
Jen Dziekan drove two hundred and forty miles to be here for this. It was worth it. She is standing two rows behind Roy Disney and his partner Stanley Gold, right next to a retired “imagineer,” one of the casualties of computer animators. Later, Roy will shake her hand and thank her for her support, despite the fact that her votes are meaningless next to his own seventeen million, or Eisner's thirteen million, or the votes of the two billion-plus shares in circulation. A pale-lipped Eisner mounts an anemic rebuttal:
“I think I have to say that the conclusions you just heard are fundamentally wrong. I believe you have just heard rhetoric that replaces reason.” He backs up his own rhetoric with an endless speech extolling Disney's financial successes over the past year. As Eisner rattles off numbers, ratios, percentages, and product names in defense of himself and his company, it becomes apparent that if rhetoric has replaced reason as a motivational force for corporate reform, the rhetoric is at least a little easier to listen to. The votes are tallied. “One billion, seven million, seven hundred and fifteen thousand, six hundred eighty two shares in favor of re-election. Seven seventy one million, six hundred and ninety one thousand, two hundred ninety seven shares withheld.” Fierce frowns over laptop calculator options abound. “That was at least twenty percent,” says one journalist to another. “That's forty three something percent,” the other corrects. When everyone figures out what these huge numbers mean, they speak loud and clear. Forty-three percent of Disney's shareholders have no confidence in the company's chairman and CEO to do his job in a satisfactory manner. It is not a majority, but it is twice as big as the vote that forced Steve Case to leave the company formerly known as AOL Time Warner (now, simply, Time Warner). This last year, Michael Eisner gave Disney investors a forty percent return on their money. Last month, forty-three percent of them voted to get rid of him.
A few weeks later, Jen Dziekan has resumed her non-Disney life, which includes listening to Megadeth and Metallica and riding a motorcycle. Her nemesis, Eisner, lost his title as chairman of Disney's board of directors in the aftermath of the March 3 shareholders meeting, but retained the title of CEO. He has pledged to spend more time with the company's sluggish ABC network property. Roy considers his job only halfway done, vowing that so long as Eisner draws a paycheck from the Walt Disney Company—be it as CEO or custodian of the kingdom—he will be there, blogging every plain old trash can, disgruntled cartoonist, and lascivious Tigger into a second wave of shareholder wrath. His website asks the faithful to join him in “round two of the fight to move Michael Eisner from his position—any position—at Disney.” And he still has Dziekan on his side, at least for now.
“I hope we're gonna hit the climax soon and live happily ever after. It's getting drawn out and irritating, like a bad Disney movie. In a way when you look at any of the movies really, there's always one bad guy who brings everything down, and then Prince Charming comes and saves the day. Hopefully that will be Roy and Stanley, and then everybody else will live happily ever after.”
Loren Hunt is Contributing Editor at THE PHILADELPHIA INDEPENDENT.
Related Links:
 Jim Hill Media
Save Disney
The Mouse
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