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Tuesday, April 5, 2011

Company History – The Next Chapter

Let spend some discussing what brought the Walt Disney Company to current incarnation.

Sadly, we have reached a point where our two founding fathers or brothers in this case, have passed on.  Walt Disney in 1966, while planning for his next great adventure in Florida, and Roy O. Disney in 1971,  shortly after completely the first installment of his brother’s dreams for Florida.

In 1968 Donn Tatum was promoted to the position of President at Walt Disney Productions (later to become the Walt Disney Company), it appears that Donn shared the duties of President with Roy O until his death in 1971.  This would make sense, as Roy was busy bringing Walt Disney World’s first park, The Magic Kingdom, from dream to reality.  I imagine Donn was more responsible for the day-to-day operations of the Company as a whole, but there is a void in the information available for the Disney Company during this period.  Upon Roy death in 1971, Donn ascended to the top leadership role for, the then, Walt Disney Productions, become the CEO and Chairman of the Board, with Esmond Cardon “Card” Walker assuming the post of President.  Prior to becoming President Card served as Executive Vice President and COO. When Donn retired in 1976 Card assumed the role of CEO, with Ronald W. Miller, Walt Disney’s Son-In-Law, ascending to the position of President a few years later, in 1980, and the CEO in 1983 upon Card Walkers retirement.  Donn Tatum remained Chairman of the Board until 1980, with Card Walker holding the position from 1980 until 1983.   Ron Miller never achieved the COB position, and with a major shake-up, and some family strife, was ousted from all leadership responsibilities in favor of the incoming management team of Michael Eisner and Frank Wells.  More on the Eisner/Wells era later.

Unfortunately, there is not a much else to be said factually about the Disney history for the years 1972 through 1984.  Apparently, Donn Tatum and Card Walker, who have both passed on, did not leave memoires and the time at Disney, and no one has been able to get Ron Miller to sit down and talk while he is still with us.

Note for Ron Miller if you happen to read this…  I would love to be the person you sit down with to relate your Disney experiences too, but please, do sit down with someone.  You are an amazing person, and an invaluable well of information for a period in the Disney history where little is available now.

So unless TWDC (The Walt Disney Company) green lights a book or access to the Archives for a book on the Disney history of this era, there is not much information available to do a reasonable assessment of this period, and we’ll need to examine the rumor and innuendo that have become the pseudo-facts of the period, trying to make some sense of the period.  I have tried to piece together a coherent analysis of the period with the extremely limited information available.

The couple of actual facts we can address are, one, there were 58 feature movies released between 1972 and 1983, and three of which were animated.  In comparison there were 60 features released in the preceding 11 year period, with 4 being animated.  No significant difference there, but, I think it should be noted that with film production schedule taken into consideration, some of the movies released during the early Tatum/Walker period began production during the preceding management’s reign, as well as movies released in the early Eisner era were green-lit during his predecessor’s administration.  Since I have been unable to find any consistent or reliable financial documentation online to assess individual film success, I’m am left to assume for now that the financial success of film released between 1972 and 1988 is relatively comparable to the period of 1960 to 1971.  I have heard claims on a few fan boards that the Disney Studio was hemorrhaging cash during the time that Ron Miller was president, but I can’t find evidence to support that claim, and the historical stock price for that period do not support that contention either.  In 1984, before his departure, Ron Miller is credited with creating the Touchstone label to allow the Studio to get into the productions of movies not normally associated with the Disney name.  Touchstone’s first release was the resounding success, Splash.

During Card Walker time as CEO, Epcot opened at Walt Disney World as its second gate, at a cost estimated to be between 800 million and 1.4 billion dollars.  While Epcot never approached the level of Walt Disney’s original concept for EPCOT (Experimental Prototype Community of Tomorrow), I think Epcot along with the opening of Tokyo Disneyland the following year, and the recreation of Touchstone really set the stage for the creation of the entertainment mega-corporation known today as The Walt Disney Company (TWDC).

Before we start looking at what became TWDC a few years after Ron Miller, the last Disney family member. left the executive management of Walt Disney Productions.  It should probably be noted that Roy E. Disney, Roy O’s son, had, in 1977, resigned the board position he’d held since 1967 and left the company.  But, I’ll be doing a more in depth profile of Roy E in a later posting.  But for now, what lead to Ron’s departure?

Since I don’t have memoirs or other documentation of the period to know exactly what happened, I’ve got to use more subjective information.  Fortunately, the best I could find is pretty good.  I was able to find historical stock price information from 1962 to present.  While it doesn’t tell you what was going on, fluctuation in closing prices and timing to known events can give you a pretty good idea.  With a split adjusted price of about $37 a share in January 1962, the stock rose to a price of about $100 a share in October of 1967.  This would indication to most analysts that the company’s financial performance was good.  In Oct ’67 the company announced to 2 for 1 stock split.  For those who may not be financial savvy, that would give each shareholder one additional share of stock for each one he or she owned before the split.  The value of your holding doesn’t change, just the number of shares you own.  Shares are revalued to account for the new shares available, so a stock valued at $100 before a split would now be worth $50 post split.  I only point this out because I have seen analysis done by untrained individuals that conclude a serious financial problem when witnessing a significant drop in stock price related to a split.   So through the end of the 60’s the stock continued to do quite well, and another 2 for 1 stock split occurred in March of 1971.  This is fairly easy to assess this we know several fact of the period.  Shortly before his death in 1966, Walt Disney announced the acquisition of several 1000’s of acres in central Florida, about 27,000 acres, which has grown to almost 33,000 today.

With the major addition to the corporate balance sheet created by the land acquisition, Walt and Roy’s penchant for proving financial people wrong, and the prospect of the associated increase in future earnings, it is relatively easy to understand why the stock continued to rise into the early 1971, even with the passing of one of the founders, and creative force behind the company earlier successes.  Armed with Walt’s plans, Roy was able to muster the creative forces Walt had developed be bring an east coast Disney experience to life, and the company was rewarded amply for the effort in increased stock value.  Even though Roy O passed away shortly after the Magic Kingdom open at Walt Disney World, the success of the park provided for the company’s performance to continue to increase stock value, and another 2 for 1 stock split occurred in January 1973.

After the 73’ stock split, the stock dropped to a low of $19 in beginning of December 1974.  As memory serves, we were in a recession around that timeframe, created by the 1973 oil crisis and the costs from waning gasps of the Vietnam War.  So, barring actually documentation to the contrary, one would assume that this recession, coupled with nothing in the way of significant advancement from the company, was the majority contributory factor to this decline in stock value.  Tracking Disney stock prices against the Dow Jones Industrial Average (DJIA) of the time we can see a direct correlation, with Disney actually performing better than the Dow on several occasions.  This would lead me to conclude that, while there were no really significant positive corporate events that would elevate stock prices during this period, there were also no negative events as well.  Much like any sitting President of the United States gets credit or blame for current events that are really outside of his (one day soon I’ll have to use the his/her describer) control, the same often befalls the presidents and CEO’s of corporate organizations.  Stock prices is one of those items considered to be under a CEO’s controlled, even though these stock values are as much controlled by the current global economic conditions, as by a company’s executive leader.

So now we move to the rift that led to a family to a Disney family split. 

In 1977, Roy E. Disney left the company, citing poor product quality and issues with manager as his motivation, but did maintain his board position.  So, he was not there for day-to-day operations when Cousin-In-Law Ron Miller became President in 1980.  One does wonder if Roy may not have been in line for that promotion, had he stayed.  With the company, his Father and Uncle founded, was facing a corporate raid and greenmail attempt in 1984, Roy from the Board of Director in 1984, a position he’d held since 1967, to launch his first “Save Disney campaign, citing lack of creative quality, poor use of company resources as his reasons for pursuing an ouster of current management – his cousin-in-law, Ron.  The campaign which was successful, led to the installation of the Eisner/Wells team as the new management team.

In our next blogisode, we’ll profile Ron Miller, who in my opinion is probably the least appreciated of the Disney company leaders.

Your comments or questions are always welcome.  If you have a correction or something you think I should look at in my research, please feel free to contact me at


  1. Thank you for writing this article. Until now, I believed I was the only person who was interested in the 1971 - 1984 period and found so little to read about. The Bob Thomas book "Roy O Disney Building an Empire," barely scratched the surface time period after Roy's death. I've emailed Jim Korkis and he mentions very little also. The James Stewart book "Disney Wars" picks up from 1984 until now.

    1. Thank you for your praise Patrick. The period you mentioned seems to be very sparse for information. It appears not many want to talk about it, and most who do, do not have much but negative to say about it. I will continue to seek additional details.