Transition over, Eisner sez
A correction was made to this article on Mar. 24, 2005.
NEW YORK — Disney’s outgoing CEO Michael Eisner said the “transition has already taken place” and that he’ll be the “junior partner” to Robert Iger during the next six months, according to Wall Streeters who attended a private meeting in Gotham with Disney management.
Incoming topper Iger indicated Disney will pursue solo five sequels to Disney/Pixar pics, but promised several dozen analysts and money managers Tuesday that he’ll reopen talks with the red-hot animation house. He acknowledged publicly for the first time that “personality issues” impeded previous negotiations between Eisner and Pixar chairman Steve Jobs.
“Iger suggested Pixar’s superlative track record makes it a place that has perhaps the best talent in the animation business today,” analyst Kathy Styponias of Prudential Securities wrote in a note to clients.
“I think I owe it to the company to explore a deal, but I will be managing for the bottom line — not the headline,” Iger said, according to another attendee.
Iger indicated the key lies in unlocking value for sequels. Disney is now entitled to 92% of sequel profits under the current deal, which will expire with “Cars.”
Iger also said a deal with Miramax toppers Harvey and Bob Weinstein is done and the parties are dotting the i’s and crossing the t’s.
Merrill Lynch analyst Jessica Reif Cohen described the meeting “as a passing of the torch, of sorts.”
Disney’s board announced March 13 that Iger would become the Mouse’s next chief following the resignation of Eisner in September, a year before his contract expires.
The search process has been heavily criticized. Iger indicated that the campaign to win the post had been exhausting and time consuming, according to one person present.
He said some of his priorities will include exploring opportunities in China and India, and expanding in the videogame space.
Eisner seemed relaxed and happy, attendees said, occasionally speaking over Iger.
Iger described a less centralized Disney with more autonomy granted to individual units and fewer execs reporting directly to him.
“I wouldn’t say we would completely decentralize. We still need someone to monitor things at the corporate level,” interjected Eisner, according to one person at the meet.
Iger didn’t discuss who might replace him as president.
“Mr. Iger said, that while not in a hurry, he had already discussed the issue with Mr. Eisner and that he planned to hold board discussions … ‘sooner rather than later,’ ” Reif Cohen wrote.
The board also needs to appoint a chairman to replace former Sen. George Mitchell, who plans to retire.
As for the ongoing negotiations with the NFL, Reif Cohen said her analysis indicates that a contract including both ESPN and ABC could be in the range of $1.6 billion.
“In our view, however,” she added, “Disney could be willing to forego the ABC contract altogether given current losses estimated at $150 million annually.”