Eisner aims to bridge some wide gulfs
This article was updated at 8:20 p.m.
NEW YORK — If Michael Eisner has his way, Disney is no more likely to sell Miramax than it would be to give up Disneyland — with or without Bob and Harvey Weinstein at the helm.
Speaking at a Sanford Bernstein investment conference in Gotham Wednesday, the unrepentant and doggedly upbeat Disney CEO was determined to convince investors that his brand of fiscal discipline and patience ultimately would restore Disney stock to its rightful heights.
Eisner reiterated the company’s double-digit profit growth mantra — which most Wall Streeters now know by rote — but his talk also highlighted some wide negotiating gulfs between Disney and some of its more important creative partners.
Asked whether Disney still would own Miramax in five years, Eisner was adamant that the renegade studio wasn’t going anywhere. “That’s like asking me whether we will own Disneyland five years from now. … But if you’re asking me who might manage Disneyland, that’s a different issue.”
Clearly, there’s still a big gap between what the Miramax co-chiefs want in their contract renewal (essentially a continuation of current terms), and what an increasingly cost-conscious Eisner is willing to provide.
Eisner insisted he likes the business, but as with the spat with Pixar, presumably not at any price.
“We’ve reduced capital at Touchstone and the animation unit by half. And we are attempting to take capital out of Miramax,” Eisner said.
“They were a little boutique, (and) now they’re (acting) more like a major and spending a lot more money,” he said, adding that talks with Miramax over the terms of the Weinsteins’ contract renewal were ongoing.
And while talks with Pixar have not resumed since Steve Jobs left the negotiating table earlier this year, Eisner wasn’t prepared to rule out detente with the animation house. He maintained it’s still in the animation company’s best interest to stick with the Disney marketing machine.
“I’m an eternal optimist,” he said, “but we can only make half the deal. … I won’t believe it’s over until it’s over.” Disney and Pixar will release “The Incredibles” this fall and “Cars” in 2005. The two are said to be working amicably on sequels to “Monsters, Inc.” and “A Bug’s Life.”
Eisner was equally adamant that his decision to pass on Michael Moore’s inflammatory docu, “Fahrenheit 9/11,” was justified on investor grounds. “We decided a year ago that the Walt Disney Co. should not be involved in a political process” that could risk “alienating half the population.”
“It was a gut call” that he would make again, said Eisner, adding that it all came down to “doing the right thing for the bottom line and our various constituencies.”
“It’s got nothing to do with censorship; we’re paid to make these decisions. We’re not government or a court … and we never made Miramax bury a film,” Eisner said.
Eisner’s Wednesday pep talk rallied the assembled portfolio managers and chief investment officers with reassurances about improved theme park attendance, strong ratings and CPM growth at ESPN. He was optimistic that ailing network ABC was only a few hit shows away from regaining profitability and confident that new technologies (including high-definition DVDs and the nascent Moviebeam VOD service) would keep the Mouse’s long-term growth engine purring happily past 2007.
Making room for Mel?
But it was the touchier topics, such as his tenure as CEO or the possibility of finding a spot for recently departed Viacom prexy Mel Karmazin, that had Eisner in a defensive posture.
While the rumor mill swirled about Karmazin wearing mouse ears, Disney’s reigning rodent wouldn’t bite when moderator Tom Wolzien, a Bernstein media analyst, asked if there might be a home for Karmazin at Disney. Instead, Eisner emphasized that Disney has deep bench strength of its own, thanks to an extensive talent planning operation that regularly reviews and promotes “high-potential” managers.
Eisner insisted ABC now has the right team in place to make major strides at the laggard network, but again, not at any price. He conceded ABC passed on “The Apprentice” when it wasn’t ready to meet the producer’s financial demands, but insisted he’d “rather lose a show than lose discipline.”
Improving a network’s performance, Eisner said, “is not about money, it’s about judgment, a little bit of luck, but mostly blocking and tackling and taking some creative risks.
Meanwhile, Eisner said Comcast’s unrequited quest for Disney simply helped prove the value of content over distribution.”Supply and demand is confirming what we’ve already known.”