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Eisner To Step Down A Year Early

#1 User is offline   QuickGold 

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Posted 14 March 2005 - 04:21 PM

Quote

Disney Shares Surge on CEO Announcement

By GARY GENTILE, AP Business Writer

LOS ANGELES - Michael Eisner, the longtime CEO of The Walt Disney Co., will step down a year earlier than expected, handing over the reins to Robert Iger and ending a tumultuous stint atop the entertainment giant.

Disney shares edged up 9 cents to $27.68 in morning trading Monday in a muted response to Sunday's announcement. Its shares have trdaed in a range of $20.88 and $29.99 over the past 52 weeks.

Iger, 54, the firm's current president and chief operating officer, was named to succeed Eisner as chief executive. He will assume his new role Oct. 1. and will co-lead the company with Eisner during the transition, Disney's board said.

He inherits the company as it continues an earnings recovery, opens a new theme park in Hong Kong, enjoys a ratings boost at its ailing ABC network and builds on success of its dominant ESPN cable network.

"This is not a broken company. If things go right for Bob, it could be a phenomenal performer in the next few years," said Larry Haverty, a portfolio manager at Gabelli Asset Management.

Iger will face many challenges, however, including repairing some of the relationships damaged by Eisner, negotiating broadcast rights with the NFL, expanding Disney into China and India, protecting its content from piracy while embracing new technology, and warding off another shareholder challenge from disgruntled ex-directors Roy E. Disney and Stanley Gold.

Eisner, who said he would step down in 2006, will end his tenure at the company after serving 21 years. Iger will become only the sixth leader of Disney in its history.

Iger is seen as less polarizing that Eisner, a trait that might give Disney another chance to cut a new deal with longtime partner Pixar Animation Studios, the makers of such hits as this year's Oscar-winning "The Incredibles."

"I think probably Bob has better success doing something that could benefit the Disney shareholders," Haverty said.

Pixar CEO Steve Jobs (news - web sites) has said he would wait before talking to other studios about distributing his films until after Disney choose Eisner's successor. Pixar has one more film to deliver under its current Disney deal.

Iger, who was named president in 2000, has already won praise from Miramax Films co-chairman Harvey Weinstein.

Eisner has repeatedly clashed with brothers Bob and Harvey Weinstein since Disney bought the independent studio in 1993. Disney is close to ending its 12-year relationship with the Weinsteins in a deal that will see Disney keep the Miramax name and library while the Weinsteins leave to form their own company.

On Sunday, Harvey Weinstein praised Iger's choice, though it will not change the outcome of the talks. "I've had a great working relationship with Bob Iger and think he's a terrific choice," Weinstein said.

Iger's people skills will be tested when it comes to dissident shareholders Roy Disney and Gold. The two criticized Disney's board Sunday and hinted they might lead another shareholder revolt.

"We find it incomprehensible that the board of directors of Disney failed to find a single external candidate interested in the job and thus handed Bob Iger the job by default," the two men said in a statement. "The need for the Walt Disney Company to have a clean break from the prior regime and to change the leadership culture has been glaringly obvious to everyone except this board."

But Disney board chairman George Mitchell said Iger's choice came after a "lengthy, thorough and professional selection process" that included serious consideration of outside candidates.

He declined to be more specific, but an EBay Inc. spokesman confirmed Sunday that the online auction company's CEO Meg Whitman had withdrawn her application for the job Friday after being interviewed.



"We believe Bob Iger represents the right blend of continuity, of very successful performance, particularly over the past two years in which Bob had played a major role... and a recognition of needed change" in the areas of new technology and expanding the company's business in Asia, Mitchell said.

He added that drastic changes in the company are not needed.

"If you are a major investor and the company has produced a 60 percent increase in earnings, has just increased its dividend 14 percent, has record cash flow and a substantial increase in return of invested capital, you don't encourage major change," Mitchell said.

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#2 User is offline   TinkerBell1981 

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Posted 14 March 2005 - 05:34 PM

I hear this Iger guy is an Eisner clone. I guess we'll see what happens. :|
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#3 User is offline   PixieDust 

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Posted 14 March 2005 - 05:37 PM

I had hearsd that they weren't going to hire directly that high up in the company. If Iger can change his ways they do better, but for Eisner to step down a year early I think him and Iger have something up their sleeves. We'll see though.
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#4 User is offline   QuickGold 

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Posted 14 March 2005 - 06:28 PM

If Iger can get the Disney-Pixar relationship fixed, he's good in my book.
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#5 User is offline   Micah 

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Posted 14 March 2005 - 06:40 PM

QuickGold said:

If Iger can get the Disney-Pixar relationship fixed, he's good in my book.


Ditto
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#6 User is offline   PixieDust 

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Posted 14 March 2005 - 08:20 PM

If he fixes the Disney/Pixar thing and lets everything else go to poop then he's not okay in my book. lol.
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#7 User is offline   Abu 

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Posted 15 March 2005 - 02:55 AM

Go read Disneywar.

Since Iger is going to be the man, hopefully he can distance himself from enough from being Eisner's handpicked man that Pixar will come back.
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#8 User is offline   Mr.MGM 

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Posted 15 March 2005 - 03:53 PM

Yes!
No more Eisner! No more Eisner!
He's a dirty liar!

(20K, you will be avenged, somehow... :) )
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#9 User is offline   QuickGold 

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Posted 15 March 2005 - 04:06 PM

This looks promising:

Quote

Iger's to-do list: 1. Pixar
Disney's new CEO after Eisner needs to determine if he really wants Steve Jobs to go away.
March 14, 2005: 12:19 PM EST
By Krysten Crawford, CNN/Money staff writer

NEW YORK (CNN/Money) - With Walt Disney Co.'s ABC network on the rebound and its theme parks once again drawing hordes of thrill-seekers, incoming CEO Robert Iger has one key item on his immediate to-do list: To buttress a movie division that's facing the loss of two major ventures.

One of the losses -- the decade-long reign of Bob and Harvey Weinstein at Miramax Film, owned by Disney (Research) -- is all but guaranteed. After many months of tumultuous wrangling over terms of their exit, the Weinsteins are expected later this year to leave Disney and the acclaimed, but costly studio they founded in 1979 and sold to Disney for $80 million more than a decade ago.

The status of the other venture -- a lengthy and hugely lucrative co-production and distribution deal with Pixar Animation Studios -- is far less certain. Pixar Animation CEO Steve Jobs, who called off negotiations over a new contract after sparring with outgoing Disney head Michael Eisner, told analysts last month that he was waiting until Disney picked a new CEO before deciding what to do about a new distribution partner.

For Jobs, Sunday's announcement that Iger will replace Eisner as head of the world's second-largest media company means "it's fish or cut bait time," Dennis McAlpine, an independent media analyst, said Sunday.

As for Iger, "the first thing he's going to have to do is reconcile the agreement with Pixar (Research): either keep them or let them get away," added McAlpine.

Richard Greenfield, an analyst with Fulcrum Global Partners, worried in a note sent to clients Sunday that Iger will feel pressure to cut a new deal with Pixar, but under terms that could be less-favorable to Disney, "as an early sign of his capabilities as CEO."
A long and profitable marriage

Pixar and Disney first teamed in 1991 and, under a production deal whereby they split costs and profits, have churned out six blockbuster animation films that together have grossed $3.2 billion at the worldwide box office. One of them, "Finding Nemo," is the 10th highest-grossing film ever, and another, "The Incredibles," just won an Oscar for best animation film of the year.

Pixar and Disney have one more film to release -- "Cars," due out in 2006 -- before their current contract officially expires. Talks over a new deal ended abruptly more than a year ago after Jobs walked away from the negotiating table in part because of his dislike for Eisner. Jobs, who felt that Pixar had proved itself, wanted to pay Disney a lower distribution fee and did not want to share the profits any longer.

Since the talks broke off in January 2004, however, speculation has been rampant within the industry and on Wall Street about whether the two studios would renew discussions and strike a new deal. Those rumors were further fueled last fall when Eisner, under fire from shareholders upset about Disney's slow growth in recent years, said he would resign. On Sunday, Eisner said he would leave the CEO post this September and quit as a Disney director next year.

This much is clear: the view among some analysts is that Disney needs Pixar more than Pixar needs Disney.

That's especially so since Disney is about to lose the Weinsteins, the creative minds behind a string of Oscar-winning films including "Shakespeare in Love" and "Chicago." With the exception of "The Incredibles" and "National Treasure," Disney had a disappointing 2004 at the box office.

It's not known whether Iger, a veteran of Disney's ABC television unit, and Jobs have discussed any deal -- or whether they even like each other. Both companies have moved forward with post-separation plans. Disney is building its own in-house computer animation division, which faces its first big test with "Chicken Little," due out in November.

The company, which owns the rights to the Pixar library, has announced plans for a "Toy Story 3" and plans to roll out sequels to "Finding Nemo," "Monsters," "The Incredibles" as well as "Cars."

Jobs, for his part, has said Time Warner (Research)'s Warner Bros., News Corp. (Research)'s Twentieth Century Fox and Sony Corp. (Research)'s Sony Pictures all have the global distribution network to meet Pixar's needs. Time Warner is the parent of CNN/Money.

Speaking to analysts in February, Jobs said Pixar had held off on signing a new distribution deal because of the CEO vacancy not just at Disney but also at a few major Hollywood studios, including Paramount Motion Picture Group. Paramount, owned by Viacom (Research), tapped talent agent Brad Grey as its new head in January.

Among the rumored candidates for the Disney job were Peter Chernin, the president of Fox Entertainment, and Jeffrey Bewkes, chairman of Time Warner's Entertainment & Networks Group.

"We clearly have slowed down the process of picking a new partner to see how this (Hollywood) game of musical chairs will end and who the new CEO of Disney will be," Jobs said last month.

Looks like that game is now over.


Looks like Iger wants to get Pixar back
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#10 User is offline   Mr.MGM 

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Posted 15 March 2005 - 04:08 PM

Yes! :woot:
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#11 User is offline   PixieDust 

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Posted 15 March 2005 - 05:07 PM

Eisner probably helped chose Iger because of the Pixar thing.
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#12 User is offline   QuickGold 

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Posted 19 March 2005 - 10:19 AM

AP Interview with Iger

Quote

Disney's New CEO Reflects on His Style



Friday March 18, 4:43 PM EST


LOS ANGELES, Mar 18, 2005 (AP Online via COMTEX) -- Robert A. Iger will become just the sixth chief executive in the storied, 81-year history of The Walt Disney Co. when he succeeds longtime CEO Michael Eisner on Oct. 1. Disney's board unanimously gave Iger the promotion last Sunday.

As Disney's No. 2, Iger kept a low profile while Eisner was the company's very public face, hosting the "Wonderful World of Disney" television series and generally playing the role of celebrity executive.

Iger shies away from comparisons to Eisner, who has led the company for 21 years. But it appears Disney's top-down corporate culture will change under Iger, who says he'll rely on a team approach.

Iger, 54, has spent his past five years as president and chief operating officer getting to know the movie, theme park, consumer products and television divisions of the sprawling media conglomerate.



He has taken a keen interest in technology and in encouraging executives to work together more closely to identify key franchises and develop products around those themes.

In private, Iger is funny and warm, joking at his own expense about his brief experience as a TV weatherman in Ithaca, N.Y., in 1973.

"I remember I used to put these Velcro things on a map behind me, like clouds and rain, and they would fall off while I delivered the weather," he laughed.

In an interview with The Associated Press, Iger described his style, goals, personal affection for the Disney brand, and his e-mail exchange with Pixar CEO Steve Jobs.

----

AP: It has been said that Disney, because of its emotional connection to the public, is not just another media company. What does Disney mean to you?

IGER: I grew up on Disney. I raised my two older daughters on Disney, and I'm in a way raising my two young sons on Disney. Disney experiences are very significant in their lives.

I spoke with Walt Disney's daughter the other day, Diane Disney Miller. We had a great conversation. She was thrilled that an insider was chosen. I talked about wearing a Davey Crockett hat in the '50s or watching 'Spin and Marty' as part of 'The Mickey Mouse Club,' or watching her father host the Disney program that was on every week.

What an unbelievable feeling it is to have grown up in the '50s in the United States with all of that and then to be where I am today.

I think having a real sensitivity and an appreciation for what Disney means to people around the world is very important. It's not just any company.

AP: How will you be different than Michael Eisner?

IGER: I'm loathe to compare myself with Michael. I can talk about who I am and you can draw your own conclusions as to how I might be different.

I bring a different personality to the job and some different skills and different experiences. Interestingly enough, when it comes to how we feel about this company and how optimistic we are about its future, we're in lock step.

AP: What then is your vision for Disney?

IGER: I believe that in order to attract and retain great executives, it's very important that we show a trust for them and empower them. But that has to be done in an environment where we are being called upon as chief executives to have shareholder value in mind.

I also am a person that is accessible and enthusiastic, and I think I'm a very good listener.

AP: Michael Eisner was famous for being involved in small details, such as picking out the color of drapes in hotel rooms. Will you be that involved?

IGER: I have always believed in observing him that he has been unfairly criticized at times for making suggestions that actually created value, even if those suggestions appeared to be somewhat small in nature.

I'm sure there will be times when I have suggestions large or small. But my goal is to create a team, to rely on the team, to operate this company as a team.

AP: What do you see as Disney's biggest challenge?

IGER: Our biggest challenge is to be nimble and to be capable of adapting to a changing environment.

Our mission is to create more high-quality entertainment for more people to consume in more places more often. As challenging as that might be to achieve, we begin with a great asset base, a strong set of executives, a great set of characters, brands and creativity and that should go a long way.

AP: Disney's lucrative deal with Pixar Animation Studios is set to expire soon, and they have said they are talking to other studios about a new distribution deal. Will you seek to restart stalled talks with Pixar CEO Steve Jobs?

IGER: We did exchange e-mails. I fully expect to talk to him at some point in the future, I can't say when. I certainly feel it's my responsibility to fully explore whether there's a way to continue a relationship with them.

I have the utmost regard for that organization and for what they've accomplished and tremendous amount of respect for Steve. It would have to be the right deal for the company.

AP: Have you talked to large investors and made any attempts to reach out to (dissident ex-directors) Roy E. Disney and Stanley Gold?

IGER: I've been talking with our largest shareholders for quite a long period of time - over a year. I actually have reached out and talked to a number of them this week, those investors that really care long term about the company and that have been willing to participate in free, healthy dialogue over this past 12 months about where this company is today and where it has to go.

I intend to continue to do that. I'm not going to get any more specific about any one in particular.

By GARY GENTILE AP Business Writer

Copyright 2005 Associated Press, All rights reserved

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