INTERNATIONAL: MEDIA OWNER PROFILE; The man who made Mickey and Minnie into megastars

Michael Eisner joined an ailing Disney in 1984 and carried out a miracle, writes Richard Cook

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

Disney cartoons.

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

Disney operation.

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.



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.


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.


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