Mouse Fire Not Doused
Future Uncertain For Disney Board
By Carl Diorio© Daily Variety. Thursday, March 4, 2004
A day after Disney's operatic annual meeting -- and a quick coda wresting the chairman title from CEO Michael Eisner -- investors were poised for the sound of another shoe dropping.
Comcast was clinging to claims that its dramatic bid to acquire Disney remains a fair one, but many expect the offer to be sweetened at some point. And over in Burbank, an attempt to return to business as usual following Wednesday's tumult belied the fact that so many are still calling for Eisner's ouster.
"Everybody's got their nose down, and there's not a lot of discussion of the situation," said one "cast member" on the Disney lot. "It's a little odd."
Former U.S. Sen. George Mitchell now runs the Disney board following his elevation late Wednesday to chairman. That action has drawn reactions ranging mostly from stifled yawns to wry criticism.
Disgruntled former Mouse directors Roy Disney and Stanley Gold, whose anti-Eisner campaign led 43% of Disney shareholders to refuse approval of Eisner's retention, said they disapprove of giving the chairman's post to Mitchell, who saw a big 24% of shareholders vote against him.
Board 'doesn't get it'
"This board just doesn't get it," the duo said in a statement Thursday. "Once again, we see half-measures, cosmetic changes and poor choices. Apparently, they think they can just ignore the 24% no-confidence vote Mr. Mitchell received from the company's shareholders, which clearly demonstrates they do not believe in his leadership."
Merrill Lynch analyst Jessica Reif Cohen wrote in a research note that the board action "may not be enough to satisfy shareholders. At the very least, "shareholders will place Mr. Eisner as well as the board on a very short 'leash,' " she predicted.
"Unless Disney is planning on negotiating peace in the Middle East, we fail to see the logic in this move," Fulcrum Global's Richard Greenfield wrote.
Eisner, in an interview with ABC's Ted Koppel following the annual meeting, said he expects to remain CEO until his contract's expiration in 2006.
Mitchell criticism rapped
Disney prexy Robert Iger, appearing on CNBC on Thursday, reiterated that Eisner wouldn't budge and labeled criticism of Mitchell as "reprehensible."
But many believe Eisner will be lucky to hang on until year's end, given the size of the no-confidence vote against him. For the present, there are no overt signs of a move to oust the Mouse chief exec.
"Everything in me says that's not going on yet -- not with this board," observed Gary Kaplan, prexy at Pasadena-based executive search firm Gary Kaplan & Associates. "I just don't think they're at that point yet."
A winning Comcast bid would make the matter moot in any event, as the cabler would install its own Disney chief after absorbing the House of Mouse. Disney directors have said they would be willing to review any "fair" offer.
Comcast's Feb. 12 bid was entirely stock-based, so the subsequent rise of Mouse shares and dip in the Philadelphia cabler's shares killed any premium the offer repped for Disney investors. Therefore, many believe Comcast must improve its stock-swap formula or throw in some cash to boost the value of its $50 billion-plus proposal.
Both companies' stocks rose Thursday. Mouse shares climbed 15¢ to $26.80; Comcast added 31¢ at $30.71.
