Mitchell sez co. 'on target'; analyst ups estimates
The Happiest Place on Earth is again displaying at least a modicum of good humor, judging from the public pronouncements of senior management at the House of Mouse on Thursday.
“We’re doing pretty well,” allowed Disney CEO Michael Eisner, unseated as conglom chairman just hours after its contentious annual meeting last month.
“I’ve spent more time here this week than ever before,” said Mitchell, upped to chairman from presiding director. “And I have heard nothing to suggest that we’re not right on target.”
Eisner, Mitchell and Disney prexy Robert Iger addressed a group of Mouse investors Thursday at a financial conference hosted by CS First Boston’s Bill Drewry on the studio’s lot in Burbank.
Such confabs would never feature the kind of outright heckling seen at Disney’s annual meeting (though anti-Eisner Web site SaveDisney.com delighted in noting the investors conference was held on April Fool’s Day). But Eisner was asked about losing the chairman’s title to Mitchell.
“George has taken a lot of weight off my back,” he said. “I didn’t come to this arrangement kicking and screaming. I was happy with this arrangement — especially with George.”
Whether Eisner has taken to heart the criticism of his management style that led to the change is open to interpretation.
“Frankly, I’m going back to work,” he said and quickly added, “not micro-managing. … I don’t want to be accused of that. But I am going back to work with as many people as I can.”
Eisner said he hopes to help further turnaround efforts in conglom’s theme parks, animation and broadcasting operations.
Iger was asked if ABC — already reeling from lackluster primetime ratings — will be further hurt by the spread of digital video recorders, which allow viewers to skip over television commercials.
“I haven’t heard of anybody who’s come up with a silver-bullet solution,” Iger acknowledged.
But he expressed confidence that broadcasters will ultimately find a way of dealing with the threat and prevent advertiser flight.
Overall, Disney’s had a pretty good week, at least as measured against the immediate aftermath of its March 3 annual meeting.
On Monday, a judge dismissed the Slesinger family’s claims for additonal royalties in the Winnie the Pooh case (Daily Variety, March 30). An appeal is expected, but the ruling was both important and unexpected.
The courtroom developments may have helped Mouse shares on the New York Stock Exchange, where the stock appears to have stabilized. And there’s little sign of any broad skittishness on Wall Street akin to the continuing disease among many institutional shareholders.
Conglom’s shares rose 36¢ to $25.35 on Thursday, with the stock recently trading well north of its 52-week average of $22.
On Wednesday, Smith Barney analyst Jill Krutick reiterated a buy rating on Mouse shares while raising earnings estimates for the next two fiscal years amid improving prospects at Disney theme parks and cable networks. ABC remains a point of concern, however, she said.
The analyst also warned that results for Mouse’s fiscal second quarter — set for release on May 12 — will be hurt by the early posting of prints and advertising costs from a pair of upcoming movies, “Home on the Range,” set for April 2 release, and “The Alamo,” unspooling April 9.
“The tracking, we’re told, is strong on ‘Home on the Range,’ and ‘The Alamo’ is getting unbelievable word of mouth,” Eisner told investors at Thursday’s conference.
Recent theatrical releases including “Brother Bear” and “Hidalgo” have performed acceptably, he said, with “Bear” expected to do particularly well on homevid.
Disney theme parks are rebounding primarily because patrons are finally coming back after a protracted preoccupation with terrorism fears, Eisner said.
Still, the drumbeat of dissidents continues to reverberate in the Magic Kingdom. Perhaps most notably, Disney critics at major pension funds continue to agitate against Disney management even as industryites await signs of a renewed Mouse takeover campaign by Comcast or others.
“There will still be noise out there as long as my enemies are still my enemies,” Eisner acknowledged. “(But) I’ve never been more confident about the prospects for the company.”
Just Wednesday, Pennsylvania Treasurer Barbara Hafer groused to the Philadelphia Inquirer that Disney directors were using “the lamest excuse I’ve ever heard” in recently explaining why they hadn’t wrested the chairman’s title from Eisner earlier on advice from consultant Ira Milstein. The corporate governance guru had suggested the move be timed to the expiration of Eisner’s contract in 2006, Mouse directors said.