Our sense of ownership about the Disney characters should not make us sentimental about the company, writes Hugh Linehan
There's something about Disney. News this week of a hostile takeover bid for the company which gave us Mickey Mouse, Donald Duck, Bambi and Dumbo spilled over from the financial pages into the general media in a way that would hardly have happened with any other business item. Of course, in financial terms alone, it's a huge story - the biggest proposed media merger of all time, eclipsing even the AOL/Time Warner deal of a couple of years ago. But the fact that it's Disney means that we all feel involved. However ambiguous our emotions may be about the institution dubbed "the Mouse House" by its enthusiasts (and "Mouschwitz" by its detractors), Disney has annexed a slice of all our imaginations. After all, like Bambi, it got us when we were young.
Now some faceless cable company is threatening to buy up Mickey and Donald and Goofy (not to mention Huey, Dewie and Louie). Comcast is the largest company of its kind in the US, but few people in the rest of the world have ever heard of it. The Enchanted Kingdom, it seems, is threatened by masked raiders. It would be a grievous error to be remotely sentimental about any of this. A lot of effort has been invested over the years into building up the image of the company's founder as a benevolent storyteller and paterfamilias. The real Walt was an emotionally remote and ruthless businessman who crushed trades unions and had an unwholesome interest in Nazism. His familiar signature may be one of the world's best-known trademarks, but Walt Disney wasn't actually a particularly good animator. He was, though, a very astute businessman. A biographer, Richard Schickel, recalls a moment towards the end of his life when Walt was asked what he was proudest of. "The whole damn thing," he snapped. "The fact that I was able to build an organisation and hold it."
As Schickel points out, these were not the sentiments of anyone's uncle, "except perhaps Scrooge McDuck".
What makes the battle for Disney so fascinating is the clash of powerful egos and personalities involved. At the centre of it all is the ageing lion king, Michael Eisner, beset by rebellions and defections and weakened, say his critics, by a board packed with sycophantic courtiers. Around him circle his enemies: keeper of the flame Roy Disney; ungrateful upstart Steve Jobs; protégé-turned-bitter-rival Jeffrey Katzenberg, and the newly arrived knight challenger, Comcast CEO Brian L. Roberts
Eisner has been king of the jungle at Disney for almost two decades. When he took power, the company was in terrible shape, its fabled animation division cheapened and downgraded after years of neglect, its theme parks underperforming, its share price underwhelming. Within 10 years, Eisner, with the assistance of his able lieutenants, Katzenberg and Frank Wells, had effected a stunning turnaround: Disney features such as Beauty and the Beast and The Lion King had introduced a new generation to the joys of high-quality animation, and the Disney brand had been reinvigorated and expanded through a range of leisure, retail and cable TV outlets.
As it faced forward into the high-tech future of the late 1990s, Disney seemed perfectly poised to take advantage of the brave new world of media convergence which everyone said was just around the corner. If content was king, then Disney, with its globally recognised brand name, was set fair to be lord of the jungle.
Except it didn't quite work out that way. Wells, the company president widely described as "the glue that held Disney together" during its rebound in the 1980s, was struggling to keep an increasingly difficult relationship between Eisner and Katzenberg from rupturing further. When Wells died in a helicopter crash in 1994, Katzenberg made an unsuccessful bid for the presidency, then resigned and formed DreamWorks SKG with Steven Spielberg and David Geffen. For the last 10 years, Disney has been relatively stagnant. Its greatest successes in the public eye, the digital animations Toy Story, Monsters Inc and Finding Nemo, have actually been produced by a separate company, Pixar, which last month announced that it was breaking off negotiations on a new contract with the Mouse House. Pixar's next two movies will be distributed by Disney, but after that the company is free to deal with competitors such as Rupert Murdoch's Fox media empire.
Meanwhile, some (though not all) of Disney's own animation efforts, such as Treasure Planet, have underperformed at the box-office. New theme parks in Europe and Asia have so far failed to meet revenue projections and all Disney's leisure operations have suffered in the aftermath of September 11th. Worst of all, the company spent billions acquiring the ABC television network in the US, only to see ratings and advertising revenues go into freefall.
For shareholders, the picture is not all bleak, although for employees it may be. The company is in the process of closing many of its retail outlets. It has cut the size of its animation division from 2,200 employees in 1999 to 600 today. But its cable TV operation is still highly lucrative. And the last 12 months have seen some signs of a revival, sparked by the box-office profits of last year's hit, Pirates of the Caribbean (itself a fine example of synergy, as it was "inspired" by an adventure ride at a Disney theme park). On the face of it, then, it might have seemed that Disney was embarking on the same process of reinvention which has invigorated other ailing iconic brands such as Levi's and McDonald's.
But Eisner's enemies smell blood. Roy Disney, nephew of Walt (of whom, providentially, he is the spitting image), resigned from the board two months ago, and has launched a grassroots campaign to depose Eisner. According to Roy (a frequent visitor to these shores, with a holiday home in Co Cork), "daring dynamic, creative management" at Disney "has given way to a staid and inbred group under the singular imperial rule of an emperor and his enabling court". Along with fellow former board member Stanley Gold, Roy has set up www.savedisney.com, a website urging shareholders to force a change of regime.
Somewhat surprisingly for film journalists like this writer, to whom the company has always presented the genial Roy as the standard-bearer for good, old-fashioned Disney values, this rebellion was dismissed as being of little or no consequence. But the failure to secure the Pixar deal seems to have ignited the battle for the company. Combative Pixar CEO Steve Jobs made it clear that his deteriorating relationship with Eisner was a major reason for dumping the talks. Eisner was equally dismissive this week about the man who co-founded Apple Computer Inc and introduced the world to the iMac and iPod: "He created the computer, or at least Windows, or whatever he created, and did a good job."
But Comcast executives have said they would reach out to Pixar, suggesting the valued partnership could be revived if Eisner was out of the picture.
Battle lines are being drawn. Eisner received strong support this week from Disney's presiding director, former senator George Mitchell. But Roy Disney told reporters that Eisner's situation reminded him of The Wizard of Oz, with the company's rank and file chanting: "Ding, dong, the witch is dead!"
It still remains to be seen, though, who gets to wear the ruby slippers.