Michael Eisner joined an ailing Disney in 1984 and carried out a
miracle, writes Richard Cook
In the early 50s Walt Disney - like many successful film-makers - became
fascinated with the possibilities of the growing medium of television.
The TV companies had wanted to show Disney cartoons since they launched
more than a decade earlier. But only when the first colour techniques
were seeping through to the small screen was Disney ready to talk.
He held long conversations with both major networks before rejecting
CBS, then the largest TV company, with 74 affiliate stations across the
US, feeling that its colourisation techniques would not do justice to
The other main network, NBC, rejected Disney. Its president declared
that ‘television will never be a medium of entertainment’ and directed
the network’s 71 affiliate stations to broadcast only public affairs - a
policy which turned out to be disastrous.
So Disney was left with ABC, then the runt of the network litter, and
they stayed together for six fruitful years. ABC had only 14 affiliates
and, unlike the big two, had no stars, no hit shows and no real
prospects. What it did have were debts.
But Disney had produced more than 600 feature films, sold 30 million
Walt Disney comic books and supported 740 separate companies turning out
2,928 different souvenir items 24 hours a day.
Nevertheless, this odd couple did a deal. Together they helped build
Disneyland in California and introduced a grateful nation to shows like
Disneyland, Zorro and the Mickey Mouse Club.
These shows changed the face of US television and gave Disney a
financial bedrock that lasted long after its acrimonious split with ABC
six years later. From then on, Walt Disney took up with NBC.
It was not until Disney’s current chairman and chief executive, Michael
Eisner, joined in 1984 that relations with ABC began to thaw. Eisner,
after all, started out as a programmer at ABC.
In February this year, Eisner acquired Capital Cities/ABC, a deal which
formed the second largest media company in the world - a dollars 30
billion operation with a market capitalisation of some dollars 50
Even before the Capital Cities/ABC deal, Disney had an unusually wide
range of investments. Leaving aside the cartoons and films, it operates
seven cable channels, holiday clubs, book publishing, record labels, toy
shops, theme parks, theatre productions, film studios and two cruise
ships. It is even building a town, Celebration, outside Walt Disney
World in Florida.
Add to this the ABC network and the daily newspapers, radio stations and
magazines that came with it and you have some idea of the scale of the
The entertainment package does not entirely embody the same sugary
culture as the films and cartoons that carry the Walt Disney name.
Miramax, the film company responsible for the Quentin Tarantino shocker,
Pulp Fiction, is a Disney company, and cable offerings, such as the
History Channel, occupy the cultural high ground.
But the key to the whole operation, says Eisner, is that the success of
the past and present Disney movies forms the commercial lives of the
other Disney companies across the globe. Everything starts from the
films and radiates outwards.
Soon after Eisner joined Disney he started bringing the heads of the
European and Asian divisions together with their area management in
regional meetings. So, in Europe, the top 64 executives gather with the
sole agenda of coming up with ideas for improving synergies in the
company as a whole. The process is repeated in Asia, has always happened
in the US and will soon start in Latin America.
‘We put together a plan for how each division could promote other
divisions, how each division could promote Euro Disney [Disneyland
Paris], how television could be used as a franchise establishment and
how the company could benefit by general teamwork,’ Eisner explains.
The sense of teamwork he alludes to - of staff belonging to a Disney
family - draws considerable scepticism outside the company, especially
in the light of disclosures made about Walt Disney’s personal behaviour
in Marc Eliot’s unauthorised biography.
But team spirit is something to which Eisner pays more than lip-service.
His annual message to shareholders is full of news about his three sons’
achievements over the year - news the typical British ceo might not feel
obliged to share. But then Eisner is in an unusually powerful position
in the company - rare even for a chairman and chief executive officer.
When Eisner joined from Paramount, Disney had just handed the corporate
raider, Saul Steinberg, a profit of dollars 31 million not to launch a
bid for Disney. The share price had more than halved in 12 months and
costly film flops like the Devil and Max Devlin had eroded
Eisner had made his name with hit sitcoms like Mork and Mindy and Happy
Days for ABC and had gone on to make Saturday Night Fever and Raiders
of the Lost Ark with Barry Diller at Paramount. In five years he turned
Disney around, culminating in Pretty Woman in 1990.
Two years later he cashed in stock options worth dollars 192 million and
restructured the entire senior management team. He prepared to lead
talks with ABC to position Disney as the globe’s second largest media
company - and, arguably, the most important brand in the world.
DISNEY AT A GLANCE
Walt Disney Feature Animation produces full-length animated films, while
the Walt Disney Motion Pictures Group includes four other film companies
- Walt Disney Pictures, Touchstone Pictures, Hollywood Pictures and
It also owns the Miramax film company.
Films are distributed by Disney’s Buena Vista companies.
Walt Disney Television and Telecommunications manages the Disney
Channel and also owns KCAL-TV, an independent station based in Los
It makes TV shows through Touchstone Television and Buena Vista
Television, which also sells videos.
Theme parks and resorts include Disneyland, Walt Disney World and a
minority shareholding in Disneyland Paris.
Consumer products include Disney shops worldwide, Disney Publishing,
Walt Disney Records and Disney Interactive.
CAPITAL CITIES/ABC TV
The ABC Television Network Group now distributes programming to 224
affiliated stations and owns ten of its own. The ABC Cable and
International Broadcast Group is the majority owner of the cable sports
stations, ESPN and ESPN2, and a partner in the A&E and Lifetime cable
networks. It has stakes in production and broadcasting companies.
ABC Radio Networks serves more than 3,400 radio stations and owns 21 AM
and FM radio outlets.
Cap Cities/ABC Publishing Group owns seven daily newspapers, while the
Diversified Publishing Group produces more than 100 titles, mostly
technical magazines. Fairchild Publications produces the US fashion
bible, Women’s Wear Daily.