Screws tighten on Iger and Eisner amid ire of investors

This article was updated at 9:42 p.m.

NEW YORK — Walt Disney prexy Bob Iger told investors Tuesday that he and boss Michael Eisner were rattled last week by a resounding vote of no confidence from shareholders, a record 43% of whom refused to support Eisner’s re-election to Disney’s board.

Iger, speaking at the Bear Stearns media and entertainment conference in Palm Beach, Fla., insisted Disney’s response — yanking the chairman title from Eisner and handing it to former Sen. George Mitchell — was a big enough step for now. But he said the board and management are highly sensitized to the fact that their reputations and jobs will be on the line if the company fails to deliver on its upbeat growth targets.

Bottom line: The board is giving Eisner another chance, but it won’t tolerate the dim results it’s accepted for the past five or more years. And the directors finally will provide the kind of oversight they should have been delivering all along.

“The board’s reputation is on the line … and performance comes first, before the relationship that any of the board members has with management,” Iger said.

Iger also told the confab audience he thinks Comcast will come back with a second, higher bid for the Mouse — despite Brian Roberts’ declaration to the contrary Monday.

“I sense an inevitability to another offer being made. … That’s just my opinion,” Iger said. If another offer is forthcoming, Disney’s board “will take it seriously and consider it appropriately … which is exactly what it did the last time around.”

Disney nixed the first offer and is expected to do the same with a second unless it’s a great deal richer.

Iger acknowledged, “There is certainly a way to grow a company by managing both distribution and content. … There is a model that could work.”

But mostly, he questioned the push to merge content and distribution. Iger said Disney has never felt it needed distribution, and he said he’s not sure why Comcast feels it needs content.

“The notion that Brian needs a movie studio to jumpstart (video-on-demand) is preposterous. He can license (what he needs). I don’t quite understand why he has to own content to have access to it.”

Time Warner, Iger noted, has owned great content and a great cable company for years, and “I’m not sure whether it was ever exploited perfectly or proved to be the perfect combination of assets.”

Iger slammed those who questioned Mitchell’s integrity as “reprehensible.”

But many Wall Streeters find the splitting of the two top jobs a purely cosmetic, even insulting, response to unprecedented shareholder discontent.

Iger was surprisingly candid when asked how he felt about the swirling succession talk while he sits in the No. 2 chair. “It hurts a little bit sometimes. But I’m a big boy. … It goes with the territory. You have to deliver as a management team, and if we deliver then I think my chances improve dramatically. And if we don’t, I think I shouldn’t get the chance.

“I do have an alternative,” he joked, referring to a stint years ago as a weatherman in upstate New York. “It’s nice to have other skills to fall back on.”

He said the main tasks facing the company are improving ABC primetime and Fox Family and reinvigorating Disney’s animation biz. He admitted the Mouse had mistakenly relied too heavily for too long on 2-D animation as 3-D became the preferred medium. He said the company has 20 to 30 3-D projects in development, starting with “Chicken Little.”

“As the business changes, animators have to adapt to new technology. It’s been arduous for a number of animators. Many have made the transition; some have not and they did not survive,” he noted.

As for ABC, he declined to say how long he’s prepared to give the net’s entertainment prexy, Susan Lyne, to turn the network around.

In response to a question, he said Lyne’s weekly commute between New York and Los Angeles, while not ideal, isn’t a problem. “Our job is to support her and give her the time and the room to perform. It does take time. I am probably the most impatient of anyone because my reputation is on the line,” said Iger, who started working at ABC 30 years ago.

ABC is looking for dramas and a hit reality show. He joked he’d gotten an email suggestion for a skein called “The Successor” — a combination of “Survivor,” “Millionaire” and “The Apprentice.”

Iger said news and daytime are strong and the net’s cost structure is more sound. He said a prediction that the net will turn a profit in 2005 is “quite realistic.”

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