The Impact of Michael Eisner at Disney

Aug 29, 2024

Notes on the Lecture: The Michael Eisner Era at Disney

Introduction

  • 1923: Disney Brothers Studio founded by Uncle Walt and father Roy Disney.
  • Current concern about the direction of the Disney Company.
  • Call to action for Disney shareholders: vote no on re-elections of Michael Eisner and others.

Michael Eisner's Background

  • Born: March 7, 1942, in Mount Kisco, New York.
  • Grew up in a wealthy family and received a degree in English from Denison University in 1964.
  • Career path:
    • Started at NBC as a page.
    • Moved to CBS, then ABC as senior VP of programming.
    • Became president of Paramount Pictures in 1976, turning the company around with hits like "Grease" and "Raiders of the Lost Ark".

Crisis at Disney in the Early 1980s

  • Profits declining and morale low after Walt Disney's death in 1966.
  • Roy E. Disney believed the company had lost its creative focus, becoming too profit-driven.
  • CEO Ron Miller clashed with Roy E. Disney over creative vs. profit focus.

Eisner's Appointment as CEO

  • Roy E. Disney sought a new leader, eventually choosing Eisner for his creative vision.
  • Conducted extensive research on Disney operations before assuming role.

Eisner's Early Initiatives

  • Focused on revitalizing the animation division.
  • Invested in new animated films including "The Little Mermaid," "Aladdin," "Beauty and the Beast," and "The Lion King."
  • Expanded Disney's theme parks:
    • Developed new parks and improved existing ones.
    • Launched Disney Cruise Line.

Financial Growth

  • Disney's market value grew from $2 billion to $222 billion between 1984 and 1992.
  • Increased customer satisfaction and employee morale.

Tensions and Conflicts

  • Frank Wells' death in 1994 marked a turning point.
  • Conflicts arose with Jeffrey Katzenberg over creative differences and compensation.
  • Katzenberg's resignation led to further instability.

Eisner's Management Style

  • Autocratic and controlling, leading to alienation of talented executives.
  • Despite successes, faced criticism for not adapting to new industry challenges.

Major Acquisitions and Challenges

  • 1995: Acquired ABC for $19 billion, but faced scrutiny over network performance.
  • Euro Disney opened in 1992, burdensome debt and criticism for poor market research.
  • Tensions with Miramax and Pixar led to various conflicts and setbacks.

Decline and Ouster

  • By the early 2000s, Roy Disney and shareholders pushed for Eisner's resignation due to declining performance.
  • 2003: Roy Disney resigned from the board, leading to increased pressure on Eisner.
  • Shareholder revolt and a takeover bid from Comcast prompted Eisner's eventual departure.

Conclusion

  • Eisner's legacy is mixed: marked by growth and innovation, yet also controversy and leadership struggles.
  • Ultimately transformed Disney into a major entertainment empire, but left under scrutiny for management style and decisions.