The Lion King's under fire

HOLLYWOOD REEL

Walt Disney chairman and CEO Michael Eisner has been the talk of Hollywood for the last week.

In his 19 years at the helm, Eisner, 61, helped build the Walt Disney Company from a take-over target into one of the world's most powerful entertainment companies, worth $47 billion.

Today The Walt Disney Company, based at Burbank, California, includes the Disney movie studio, the ABC television network, ESPN cable television network, the global Disney Channel, five theme parks and merchandising.

How did Disney perform in 2002-2003? On 27 November 2003, Disney announced that box office receipts for films distributed through its Buena Vista subsidiary this year had topped $3 billion. The company's productions "�including "Finding Nemo" "� grossed more than $570 million worldwide.

"Pirates of the Caribbean" saw Disney box office receipts rise to $ 3.08 billion. For the eighth time in the last nine years, Disney's distribution company, Buena Vista Film Distribution, has received more than $2 billion at the world box office.

Eisner's efforts have paid huge dividends. "Forbes" magazine listed his wealth at more than $630 million. Eisner was formerly president and chief operating officer of Paramount Pictures, which he joined in 1976.

Before that, he was senior vice president for prime-time programming at ABC Entertainment. The energetic Eisner is known in Tinsel Town for his creativity, business acumen and ability to take difficult financial decisions.

But two high-profile exits from the Disney board of directors tarnished his public image last month.

Roy Disney, a nephew of the late Walt Disney, son of Roy O. Disney, one of the founders of the company and the last remaining family member on Disney's board of directors, resigned from the company and vowed to mount a shareholder campaign to oust Eisner.

Amid demands for the resignation of Eisner, another Disney director, Stanley Gold, also quit the board.

Roy Disney, the company's second-largest individual shareholder (up to US$ 600 million), in a letter to Eisner accused him of creating a company which appeared "rapacious, soulless and always looking for a quick buck." Disney cited his "failure to bring back ABC Prime Time from the ratings abyss it has been in for years."

Eisner was accused by Roy Disney of "consistent micro-management of everyone around him with the resulting loss of morale throughout this company."

Disney, who had received a pin from the company for 50 years of service a week before resigning, claimed that The Walt Disney Company deserved fresh, energetic leadership at this challenging time in its history just as it did in 1984.

Gold in a five-page resignation letter attacked the board's "insularity" and said it had failed to challenge the decisions of the management. Instead, it had simply "rubber-stamped" them.

For some time Eisner has been facing mounting shareholder pressure owing to the poor performance of the ABC TV network and the theme parks. Since buying ABC TV Network in 1996, Disney has not been able to return it to its former glory. It even burned out its mega-hit "Who Wants to Be a Millionaire" by running it as many as four nights a week.

But the world's entertainment markets are the major focus for Disney.

Recently announcing the appointment of Andy Bird as president of Walt Disney International, Eisner said: "From a strategic perspective, one of Disney's most significant long-term growth opportunities resides in markets outside of the United States, and it is crucial that the company continue to have a well-coordinated approach to business development around the world."

In England, Disney is launching its long-awaited new free-to-air channel on the UK's Freeview digital terrestrial platform on January 12 next year. Called "Daytime," the new channel will show comedies, made-for-TV movies and soaps, primarily from the US.

In India Disney has informed the Foreign Investment Promotion Board (FIPB) that it will invest $30m over five years in an Indian subsidiary to finance the launching of its pay TV channel 'The Disney Channel.'

The company also plans to explore other business ventures, including the production of movies in India, development of theme parks and resorts and the marketing of consumer products and other branded merchandise.

In California, meanwhile, The Walt Disney Company's board immediately moved to support Eisner in a statement which rejected former board member Gold's accusations as "untrue and unwarranted allegations." Disney also announced that its annual dividend would remain unchanged at 21 cents per share.

With the boardroom battle going public, the big question being asked in Hollywood by investors and shareholders of Disney is that after 19 years at the helm is Eisner the best person to run the company?

Disney with his family heritage may have popular support. Some support has already come in, particularly from animation professionals and fans who feel that Eisner willfully dismantled Disney's fabled theatrical animation operation. Some animators who had worked at Disney even began an online signature campaign.

But with the company's financial performance, good box office run, home video sales and stock up nearly 42 per cent this year, investors and shareholders may look the other way.

The Lion King may or may not retire from Mouseland but for now the company is likely to remain at the top of Hollywood's heap.

Lall is the president and CEO of LALL Entertainment, a company based in Los Angeles and New Delhi. He can be contacted at lallentertainment@hotmail.com