Conflict at Walt Disney bursts wide open Date 4/12/03
By Christopher Parkes in Los Angeles and Peter Thal Larsen in New YorkPublished: Financial Times 1 December, 2003
Roy Disney, pictured, resigned as vice-chairman of the Walt Disney entertainment group on Sunday and called for Michael Eisner, chairman and chief executive, to follow suit, bringing to a head a conflict that has been brewing for a decade.
"It is my sincere belief that it is you who should be leaving and not me," he said in a bitter letter that criticised Mr Eisner's performance and style on seven counts.
The departure and open hostility of Mr Disney, nephew of Walt Disney and still a substantial shareholder are likely to reignite the debate about the media company's direction.
It marks the end of a relationship that dates back to 1984, when Mr Eisner was appointed to rescue the company from break-up raiders.
The letter detailed criticisms that Mr Disney had offered privately and had been repeated in writing from Stanley Gold, a board member, and head of Mr Disney's private investment group, Shamrock Holdings.
It said the company, under Mr Eisner's leadership, had "failed during the last seven years in many ways". It had failed to bring the ABC television network's primetime schedule "back from the abyss", he wrote.
Attacking the "timidity" of group investments in its key theme parks in California, Paris and the resort under construction in Hong Kong, he said "you have tried to build parks on the cheap and they show it and the attendance figures reflect it".
The company was seen by virtually everyone associated with it as "rapacious, soulless, and always looking for a quick buck rather than long-term value," Mr Disney said.
Also included in his catalogue of complaints were the "creative brain drain", which was especially trying for Mr Disney who, as chairman of the feature animation division, had seen his empire whittled down by heavy lay-offs.
Mr Eisner had also failed to build constructive relationships with its successful Miramax film subsidiary, and Pixar, the computer animation company responsible for most of the Disney-branded hit cartoons.
Mr Disney also referred to the chairman's consistent refusal to establish a clear succession plan, and accused him of eroding morale across the company.
In the past two years, an enlarged board and other measures have quieted most external criticism.
A statement from the Disney board said Mr Disney had not been nominated for re-election to the board because of mandatory age limits. He is 73.
"It is unfortunate that the application of these unanimously adopted governance rules has become an occasion to raise again his criticisms of the direction of the company, and calls for change of management, that have been previously rejected by the board," it said.