Eisner handpicked company's choice
Eisner handpicked company's choice
By Richard Verrier and Claudia Eller
Orlando Sentinel and Los Angeles Times
March 14, 2005
LOS ANGELES -- Walt Disney Co. directors promoted President Robert Iger on Sunday to succeed Chief Executive Michael Eisner, the final chapter in Eisner's 21-year reign that saw the company mushroom from a moribund studio into one of the world's biggest entertainment giants.
The selection ends one of Hollywood's most watched and controversial executive searches to find a new chief for the fabled studio. Starting Oct. 1, Iger will head a 100,000-employee company that is home to Mickey Mouse, a global theme-park network, classic films such as Snow White and the Seven Dwarfs, the ESPN sports broadcasting juggernaut and the ABC network.
One of Hollywood's most enigmatic figures, Eisner will remain a director of the company until his term expires at the company's annual meeting next year. At that point, he will leave for good the company he was hired to turn around in 1984.
Under Eisner, Disney grew from $1.7 billion in revenue in 1984 to $30 billion today, while earning the executive hundreds of millions of dollars in salary, bonuses and stock profits. But his legacy was tarnished by criticism of his autocratic management style, frayed relations with key creative partners and the company's lackluster performance during much of the past decade.
Iger's appointment caps a remarkable turnaround for the 54-year-old executive, who just one year ago was viewed as a long shot.
Critics said Iger lacked creative vision, faulted his role in overseeing the then-struggling ABC and saw him as damaged goods because of his close ties to Eisner, whom shareholders had just rebuked with a 45 percent no-confidence vote.
But the longtime TV executive's stock soared in a matter of months.
The hit new ABC shows Lost and Desperate Housewives clicked with viewers. ESPN continued to mint profits, while an improvement in Disney's overall earnings tempered criticisms from shareholders. In a workmanlike way, Iger campaigned on Wall Street by holding a string of meetings with top investors and analysts to lay out his vision for the company.
"Bob's a very likable, well-known quantity," said Jeffrey Logsdon, an analyst with Harris Nesbitt Gerard. "And over the last six to nine months, Bob has taken a more visible role with Wall Street, and that's raised the confidence of many."
Neither Iger nor Eisner was available to take questions from reporters.
Disney left the answering of questions to Chairman George Mitchell, who stressed to reporters that Iger was the best-qualified candidate and that he will show his independence in making tough decisions.
"There will be changes," Mitchell said. "Bob is not Michael."
In a brief statement, Iger said, "It's truly an honor to be entrusted with the responsibility of guiding this great company that occupies such an important place in the hearts and minds of millions the world over toward a very bright future."
Iger was Eisner's handpicked candidate, and his selection failed to mollify critics who said the company needs nothing less than a housecleaning going forward to fully regain its magic.
Roy Disney and Stanley Gold, who quit the Disney board in late 2003 and led the shareholder revolt against Eisner last year, accused the board of failing to find "a single external candidate interested in the job and thus handed Bob Iger the job by default."
The two added that, "Shareholders should seriously consider replacing this board and starting anew."
But Iger's elevation was well-received among industry analysts and some executives.
Miramax Films co-founder Harvey Weinstein, who is negotiating a split from the company amid tensions with Eisner, praised the board's choice.
"I've had a great working relationship with Bob Iger," Weinstein said.
Iger cut his teeth as a television weatherman and reporter before joining ABC in 1974. He joined Disney when Capital Cities/ABC was acquired by Disney in 1996 and promoted to president in 2000.
In taking the job, Iger confronts numerous challenges, including demonstrating to the board and shareholders that he can emerge from Eisner's shadow and successfully carry out the strategy he has articulated for growing Disney during the next decade, which includes boosting Disney's international presence.
Among his biggest decisions will be selecting a strong No. 2.
It remains unclear when he will do that or whom he will tap. Company insiders say the short list includes studio Chairman **** Cook, Chief Financial Officer Tom Staggs and Ann Sweeney, co-chair of the company's media networks.
Additionally, while earnings are up, Iger still faces vexing problems in the company, including the financially ailing Euro Disney theme-park resort and resuscitating its bedrock animation division. Some said Iger may try to salvage Disney's fractured relationship with Pixar Animation Studios, which a year ago broke off talks to extend its partnership with Disney.
At one point, the board's short list for Eisner's successor included Yahoo Inc. CEO Terry Semel, News Corp. President Peter Chernin; Time Warner Inc.'s Jeff Bewkes, who is chairman of the company's entertainment and networks group, as well Viacom Inc. Co-President Tom Freston.
By last week, that list subsequently narrowed to eBay Inc. Chief Executive Meg Whitman and Iger.
Those were the only two to be interviewed by the full board, although individual directors had made overtures to other candidates, according to sources close to the search.
Although many in Hollywood and Wall Street expected Iger to get the long-sought promotion, few thought the board would move so swiftly for fear that it would be criticized for not conducting an exhaustive search. The board had set itself a June deadline to name a new CEO.
But several events during the past week forced Disney directors to move more quickly on the matter.
Chief among them a decision Friday by Whitman to withdraw her name from the race.
Whitman was interviewed in Los Angeles at a Disney board member's house a week ago Sunday. The interview lasted three hours and was attended by Eisner.
On Friday, Whitman called Mitchell to inform him that she was pulling out. Sources say Whitman was frustrated that the board didn't get back to her in a timely fashion as it had promised.
The action left members of the Disney board scrambling Saturday to make a final decision on whether to anoint Iger or continue the interview process.
After several hours of vigorous discussion Saturday night, directors ultimately decided that it was in the best interests to name Iger and bring an end to a process that was becoming increasingly distracting to the company and its executives.
"Finally," said one weary Disney executive, expressing the sentiment of many colleagues at the company's Burbank lot.
Richard Verrier can be reached at 1-800-528-4637, Ext. 77936, or email@example.com. Claudia Eller is a reporter for the Los Angeles Times, a Tribune Publishing newspaper. Los Angeles Times staff writer Chris Gaither contributed to this report.
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