Mouse house makeover

Co.'s moods, methods change under Iger

When Bob Iger was picked to become president and CEO of the Walt Disney Co. almost two years ago, his mandate was to bring order and equanimity — and renewed growth — to a Mouse House that had endured years of internal turmoil.

Iger has been successful at boosting growth, but peace is a tall order in the entertainment business.

In August, on the first day that Oren Aviv reported for duty as the president of Disney’s Motion Picture Group — a key element in Iger’s turnaround plans — he was hit with the publicity malfunction that was “Apocalypto,” a film Disney was set to distribute.

Nothing could be as antithetical to the Disney brand as an intoxicated Mel Gibson making anti-Semitic slurs, but the “Apocalypto” crisis affirmed that the company is indeed on stable footing. Iger and Co. stood by the deal, released the film and saw it gross $50 million domestically — hardly the disaster some had predicted, particularly considering that it was a negative pick-up.

Pegged by critics as a “suit” with limited vision, Iger is proving them wrong. Indeed, he is presiding over what may be the biggest revolution at Disney since Michael Eisner stormed the kingdom more than two decades ago.

Although the makeover extends throughout the company, the deepest reconfiguring has been in the company’s live-action film, animation and new- media divisions, where there have been significant cutbacks, executive reshufflings and major acquisitions, led by Pixar.

Iger has been more hands-off in his approach to ABC, which has enjoyed more freshman hits this season than any other network with shows like “Ugly Betty” and “Brothers & Sisters.”

The overhaul is still very much a work in progress, and has not been without bumps in the road, but Iger is overseeing it all in a cool, collected manner that reflects his persona.

Stockholders’ response? A resounding “yes.” Disney stock, after hitting a seven-year-low just before Iger’s ascendance, has jumped 40% in the past year to $35 as of Feb. 22, tied with News Corp. atop the media sector. Earlier in February, Disney reported quarterly profits of 50¢ per share, 11¢ ahead of Wall Street expectations.

Iger’s stewardship is still evolving, but his tolerance for risk and inclusive management style has helped restore investor confidence in the stock’s potential, analysts say.

“Toward the end of his tenure, the celebrity part of Michael Eisner had taken over,” says David Miller, a Sanders Morris Harris analyst. “People wanted a CEO who would be more of a roll-up-your-shirtsleeves kind of guy and that’s what Iger is.”

Adds Dennis McAlpine, an independent analyst: “Iger continues to win points simply for not being Eisner.”

That statement is evident

in Iger’s dealings with Apple CEO Steve Jobs, whose relationship with Eisner broke down so badly by early 2005 that the two were publicly insulting each other’s work. A year later, Iger had put ABC/

Disney TV shows on Apple’s iTunes, acquired Pixar and installed Jobs on the Mouse House board of directors.

(Iger may have gotten a little more than he bargained for, however, now that Pixar toppers Jobs, Ed Catmull and John Lasseter are subjects of an SEC investigation into backdated stock options.)

Perhaps more than any other division, Disney’s film studio has endured shock. Last summer, the industry was stunned when Nina Jacobson was abruptly replaced by Aviv, then head of the studio’s marketing division. The move was accompanied by sweeping, company-wide cuts and a scale-back of the studio’s film slate, which is now deeply focused on the Disney brand — i.e., more pics from the Disney label, as opposed to the more adult-oriented Touchstone Pictures banner.

However, following that initial blast which was led by Disney Studios chairman Richard Cook, Disney’s film division has been quiet, almost too quiet, to the point that some have wondered if Aviv had turned the studio into the land of Sleeping Beauty.

That perception was fueled by the fact that Aviv has been largely under the radar as he’s been essentially rebuilding a studio from the ground up — reviewing Disney’s development coffers (much of which ended up in turnaround) and putting in place crucial pieces of Disney’s upcoming slate.

In December Disney is releasing the sequel to “National Treasure” (Aviv, who came up with the original pic’s story, will be an executive producer); and next year comes “Haunted High School Musical,” a feature version of the Disney Channel’s mega-hit telefilm. At least two other pics are about to be announced.

Aviv was also working with Cook and studio president Alan Bergman on a momentous partnership with Robert Zemeckis and his production company, ImageMovers. The company will be co-owned by Disney and will produce motion-capture pics (many helmed by Zemeckis) exclusively for the Mouse House.

A soft-spoken Ivy Leaguer who’s been at Disney for 16 years, Aviv is a self-described “impatient” person who sleeps four hours a night and is known to email colleagues at all hours of the day and night with percolating ideas. The notion that anyone thought he was sitting back with his feet up is particularly irksome to him.

“I want to win,” he says, as though to set the record straight. He’s sitting on a long, black leather couch in his sleek office in the Team Disney building in Burbank.

Aviv says this calmly, almost quietly, but there’s no missing his serious intent.

Those who know Aviv agree that he’s driven to succeed even more than your average, hyper-achievement-oriented Hollywood exec.

“Oren won’t fail,” says one producer. “He won’t allow himself to fail.”

That ambition was put to work when Aviv was named prexy last summer. He had little production experience since he was a veteran marketer, who began his career at Grey Advertising before landing at Disney, where he rose up the ranks to prexy of marketing and chief creative officer.

But in his new role, he went into overdrive. Over the Christmas holidays, he summoned a Disney exec to his house to help him better understand the nuances of writers’ deals.

Aviv was also aided by Cook, with whom he is close.

“Oren and I have known each other a long, long time,” says Cook. “I think we both are on the same page as to what exactly we want to do, how we want to do it.”

Though still early in his tenure, Aviv’s decisions so far are clearly aligned with Disney’s decidedly Disney-centric track. “National Treasure 2” and “Haunted High School Musical” have proven track records. (Aviv admits that “Apocalypto 2” is not in the works.) They fit in well with other Disney mainstays such as “Pirates” and “The Chronicles of Narnia.”

However, there are no hard and fast rules. The studio recently bought “Jihads in Paradise” for Jerry Bruckheimer, a drama about Islamic terrorists based on an Atlantic Monthly article.

“Pirates 3” hits theaters this summer, and “The Chronicles of Narnia: Prince Caspian,” a co-production with Walden Media, is due out in 2008.

Other pics due out this year include Touchstone’s buddy comedy “Wild Hogs” and supernatural thriller “The Invisible,” directed by David Goyer; Disney’s family comedy “Underdog,” produced with Spyglass Entertainment; and

Cinderella story “Enchanted,” starring Amy Adams and Patrick Dempsey.

Cook says there’s a chance that the “Pirates” franchise may continue but that “there are a lot of moving parts.”

Not rocking the boat isn’t a bad strategy at the Mouse House at the moment, considering that the studio’s most recent quarterly profits more than quadrupled to $604 million from $128 million a year ago.

But that figure was largely driven by homevideo — namely, revenue from DVD sales and rentals of “Pirates: Dead Man’s Chest,” “Chronicles of Narnia” and “Cars.”

As for theatrical releases last year, “Pirates of the Caribbean 2” and “Cars” were major money-makers, but lately the studio has been on less of a roll. “The Prestige,” “Santa Clause 3” and “Deja Vu” made only modest profits.

It’s safe to assume that Disney is in countdown
mode until May 25, when the third “Pirates” comes out. The first two films have grossed over $1.5 billion in worldwide ticket sales alone.

As part of its new mandate, Disney is trimming its slate overall, from about 18 pics a year to around a dozen.

Cook and Aviv say too much emphasis has been placed on Disney making substantially fewer movies, insisting that there will only be a “few” fewer pics.

Whatever the distinction, Disney is narrowing its focus, and one of Aviv’s first tasks last fall was to weed out projects that no longer fit the Disney mandate. In his first month on the job, he put over 100 scripts that were in development into turnaround.

Miramax’s current production budget is about $300 million per year, a fraction of what it was in the company’s later days under Harvey & Bob Weinstein.

Aviv has also had to get used to saying “no.” With only so many slots to fill on the Disney slate, and considering that some of those will inevitably go to Pixar, Disney Animation and mega-producers such as Bruckheimer, there’s less to go around at Disney than at the other majors.

“It’s like we’ve lost a buyer,” laments one agent.

But Aviv says that he would never not make a film simply because of a limited slate. “That never drives my choices,” he says. “I’m not looking for a number. I’m looking for ideas.”

Rather, he says, he’s simply more choosy and “tough on the choices I make. If I say ‘yes’ less often, that’s OK because when I say ‘yes,’ the commitment’s real.”

Even so, there’s some anxiety among producers on the Disney lot who increasingly begin their pitch sessions with: “It’s just like ‘Pirates!’ ”

Since Aviv took over, no production pacts have been cut at Disney but he says he’s continuing to review deals based on their productivity.

One deal that many are watching closely is that of Scott Rudin, whose reputation is for producing pics such as “The Queen” and “Notes on a Scandal.”

The producer moved to Disney in 2005 after nearly 15 years on the Paramount lot to produce pics for both the Mouse and Miramax.

Two years later, Disney

has switched gears. Although Rudin is a clear match for Miramax (which released “The Queen”), it’s less obvious how he’ll fit in with Disney’s focus on broad, family-oriented pics.

Rudin, who points out that he’s produced plenty of broad comedies, such as “Sister Act” and “School of Rock,” doesn’t see the strategy shift as bad news.

“I think it’s very good for a producer when you have a deal at a studio to be told, ‘This is the box we need to fit you into,’ ” he says. “It’s very helpful. It means you don’t waste your time. A narrower mandate is not in itself a limitation.”

Already, he seems to be reacting to the new Disney environment. Rudin recently signed a first-look deal with “American Pie” producer Craig Perry, and hired Mark O’Conner — a former producer and Fox exec who worked on family comedies such as “Cheaper by the Dozen 2” and “Night at the Museum” — as VP of production.

For his part, Aviv enthuses over Rudin, saying that he is “all about quality” and that “we can use his sensibility.”

Looking back on his first six months, Aviv smiles at the notion that anyone thought Disney was inactive. “Not from where I sit,” he says.

(Dade Hayes in New York and Ben Fritz contributed to this report.)

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