Disney : SUCCESSION PROBLEMS IN THE MAGIC KINGDOM Presented By:Pabak, Milan, Himani, Upsana
Mission & Vision of Disney:To be the most admired company in the world:equally admired for the integrity of our peopleand the way we behave as citizens of the world,as we are for the quality of our exceptionalentertainment experiences.
Mission:We will achieve exceptional performance byembedding ethical business practices into all of our daily decisions and actions.
Disney’s Business:Media NetworkParks and ResortsThe Walt Disney StudiosDisney Consumer ProductsDisney Interactive
The Walt Disney Era :Name: Walter Elias "Walt" Disney(December 5, 1901 – December 15, 1966)Birth Place: Hermosa, Chicago, Illinois, U.S. 1920: Formed “Iwerks-Disney Commercial Artists” along with Ub Iwerks. 1922: Founded his first studio “Laugh-O- Grams Inc.” 1923: Moved to Hollywood, California and Started “Disney Brothers Cartoon Studio”
…1923: First Distribution deal for‘Alice Comedies’1927: Decided to do an all-cartoonseries ‘Oswald the Lucky Rabbit’.1928: Walt Disney tried to negotiatea higher fee from the distributor“Universal Pictures”, but the ownershipright was with the distributor.- Universal Pictures had signed up mostof his key animators and planned to goahead with the series without WaltDisney
Mouse:1928 : Walt Disney and Iwerks beganto work on a new character “MickeyMouse”. They released their 3rd movie inMickey Mouse series ‘Steamboat Willie’with Sound.1928 : Renamed WDS (Walt DisneyStudio) as Walt Disney Productions(WDP).1928 : Introduced ‘Silly Symphonies’cartoon series with new technologicalequipments, special effects, animationand sound. Also launched new characterslike ‘Donald Duck’, ‘Goofy’ and ‘Pluto’
• 1932: Introduced color in animation movie making. Released first commercially released full-color cartoon film ‘Flowers and Trees’ and won an Academy Award for best cartoon.• 1934: Walt Disney started his plan to create a full-length animation movie ‘Snow White’.• 1938: ‘Snow White and Seven Dwarfs’ released.
1950: WDP introduced their first live action movie ‘Treasure Island’. 1955: First amusement park ‘Disneyland’ opened at Anaheim, California. 1966: Walt Disney died of Lung cancer and Roy Sr. took over. 1971: Roy Sr. died and Don Tatum took over.
Disney: 1980: Walker took over as chairman and CEO and resigned in 1984 due to poor earnings of WDP. Miller took over as chairman and CEO. WDP faced following difficulties from 1980-1984. i) WDP’s films were not attractive enough for the adult and teen market. ii) No major addition to theme parks. iii) EPCOT project was a kind of burden with high investment. (US $1bn.) iv) High attrition rate.(Animation employees left) v) Witnessed aggressive hostile takeovers by corporate raiders. vi) WDP US$32 Million to relinquish Disney Stock. vii) Share Price fall
WDP ‘TURN AROUND’ STRATEGY: Roy E. Disney and Gold teamed up with Bass Brothers (25% Stake). Miller and few other top executives ousted from the company by Roy E. Disney. Got a new leadership team with Eisner (Chairman & CEO) & Frank Wells (President & COO) Roy E. Disney joined as vice- chairman of Board of Directors and head of animation department.
Michael Eisner: A Success story• Eisner was President and COO at Paramount pictures.• Eisner brought two executives Jeffery Katzenberg and Richard Frank.• WDP got a huge success of ‘Splash’ in the first year under Eisner.• Splash was Touchstone Pictures’ first release. Touchstone pictures was founded by WDP in 1984
Continued … In 1985, 30 people joined left Paramount and joined WDP. In 1986 WDP became WDC (Walt Disney Company) Released many critically acclaimed live-action/ animation hits. WDC launched Disney Stores to merchandise branded products. Existing theme parks were expanded and new rides were added. Euro Disney was opened in Paris in 1992 and renamed as “Disneyland Paris”.
Continued… WDC also acquired Miramax Films in 1994. WDC acquired Capital Cities/ABC for US$20bn. Revenues reached around US$25 billion in 1994 from US$1.7bn in 1984. 2D & 3D animated films gained popularity. Pixar- Disney provided super hit animation movies.
Downfall of Eisner & turning point ofWDC:After Wells’ death in 1994, WDC faced many troubles like; i) Katzenberg resigned as head of animation and formed Dream Works SKG (DW). ii) Miachael Ovitz was brought in as President but he quit after 14 months and was pain US$140million as a severance package. iii) Shareholders filed case against Eisner and WDC Board in 1997. iv) High Profile Exists and legal suits affected WDC’s clean image. v) Internal dispute regarding abrasive management style of Eisner. vi) Television business faced a decline due to popular shows. vii) Terrorist attacks and recession hampered tourist traffic to theme parks. viii) WDC’s share price declined. ix) Roy E. Disney and Gold resigned and started campaign against Eisner. x) Pixar announced the end of partnership with Disney. xi) Comcast Corp. sought to take over WDC for US$66 Billion.
ISSUE OF SUCCESSION: 43% of shareholders withheld their votes for Eisner’s re-election on March 2004. California’s Calpers (nation’s largest pension fund) demanded Eisner’s resign. Iger, WDC President and COO was internal choice. 11-member Board decided to hire an executive search firm to find right candidate. In 2004, Board hired Heidrick & Struggles to find a successor. In 2005, WDC announced Robert Iger as CEO after Eisner.