The Mouse under Attack revisited

First off, thank you, thank you, thank you, to my buddy and Museum Volunteer – Joseph!!!  “Storming the Magic Kingdom” is a marvelous account of the attempted hostile takeover of Disney in 1984.  So again Joseph, THANK YOU!!! 

Side Note:

After some travails with one of Amazon’s affiliate sellers, they came through on the second attempt to acquire to the book.  For those who use Amazon’s affiliate sellers frequently, I’d be cautious buying anything from Charleston Wholesale.  While they have a good rating on Amazon, I find the seller to be unreliable, temperamental, with somewhat questionable ethics, and an extreme dislike of the Postal Service.  Buy from them at your own risk.

                                                                                                                                                          

I have been asked by a few people if studying the history of The Walt Disney Company from the management angle destroys the magic for me?  It doesn’t, in fact it actually enhances it.  At least for me, when you learn of the dysfunctional executive management throughout its history, I am in reality more impressed by the “magic” that the company manages to create.  I seem to be someone who has been able to separate the appreciation and enjoyment of fantasy with the need for, and understanding of, reality.  When I’m seeing a Disney movie, or am in one of the theme parks, I don’t give a second thought to how the companies are run, or the personalities of the individuals involved.  If they can allow me, even for a few moments, to escape the bonds of reality and experience enjoyment, I am great with that idea.  But, that doesn’t discount the amazing story of how Disney to where it is today, or how it almost didn’t…  I find that part of the magic very interesting as well.

“Storming the Magic Kingdom” by John Taylor is an account of the individuals who attempted and in some cases succeeded in exploiting the effects of dysfunctional executive management of a company, and management’s efforts to thwart hostile takeover.  Any account of the many hostile takeovers, that have occurred, would be the same.  Some of you may be thinking that I’m being overly negative when I assert the claim of dysfunctionality, it’s not intended to be negative, but rather matter of fact.  Whether it be family, friends, non-profit or for-profit business, any where there are parties great than one involved in control, ego and personal agenda becomes involved.  Dominant egos tend to take or try to take control of the situation.  Supported by “Storming the Magic Kingdom” and several other tomes (check the side bar links for these resources) I have read about Disney management the following is my conjecture:

So what led to this attempted siege of Magic Kingdom’s castle?

The groundwork of this siege was actually laid when the company was started.  With the co-founders being brothers there was, at its inception, a dynamic to the company operation not found in most business.  Add to that, the personalities of the two brother being so diametrically opposed.  Walt Disney, the very gregarious, effusive, and the creative part of the relationship.  Roy Disney, the quiet, reserved, behind the scene, financial mastermind of the business.  To paraphrase Walt, he was a little bee, flying from garden to meadow pollinating the flower (the company’s creative project).  What hasn’t been clearing communicated was Roy’s position of rather quietly following behind Walt, creating and managing the financial requirement needed to allow these flowers (projects) to blossom.  This worked, and worked quite well, as the company began to experience success and grow, but the company grew to the point where this relationship began to create strains on the brothers’ relationship.  Had the brothers been just friends instead of family, we can speculate that the friends would just part ways, and what we have come to know as The Walt Disney Company would have most likely ceased to exist.  But, instead, the brothers soldiered on; Walt building and mentoring his cadre of creative people, and Roy doing the same for his operations people. 

Any hard core Disney fan has heard the company classifications of Walt’s Boys and Roy’s Boys.  Unless someone produces some, as yet unknown to me, recordings or personal notes between Walt and Roy, we will only have the recollections of the people around Walt and Roy to rely on.  I’m not knocking any of these people, but ask any attorney; some of the most unreliable evidence in a court case is eyewitness testimony.  You may see or hear something, but have no idea of the context of the situation.  With that in mind, one simple little comment may have been the catalyst which ultimately became the event and theatrics of 1984.  It is well publicized that Card Walker claimed that Walt once referred to Roy E. Disney as his “idiot nephew.”  Was Walt making a little joke at his nephew’s expense, was he taking a jab at his brother during one of their squabbles, did he really believe his nephew was an idiot.  If he were still with us today, I relatively sure that Card would say he knew Walt well enough to know his intent, but did he, really?  I don’t know of any of Walt’s other boys who have made similar claims to have heard Walt make comments like this about Roy E.  What I have learned about Walt from my research is that he was not a person to filter his feeling that much.  As far as I can tell, if Walt did make reference to his nephew’s intelligence to any of his other boys, they had the discretion not to repeat it to anyone else, a short coming, in my opinion, in Card’s character.

One of the key points I took from “Storming the Magic Kingdom” was Ray Watson acknowledging that Disney had no acknowledged corporate plan in place when he became the Chairman of the Board.  Not surprising, given what I’ve address in the previous paragraph, and Walt’s Boys and Roy’s Boy trying continue management as they’d been mentored by their respective co-founder.  What I don’t think was understood was that Walt and Roy, as brothers, had (my conjecture) an unspoken and therefore un-communicated plan under which they operated.  Even as the rife open and grew between them, this unacknowledged plan allowed the company to continue to flourish.  Unfortunately for the boys, this is something that can’t really be mentored.  Once Roy passed away, after the opening of the Magic Kingdom at Walt Disney World, the unique dynamic of the Disney Brothers intuitive relationship at the helm was completely lost.

Don Tatum as CEO and Card Walker as COO, lacking the co-founding brothers relationship and without any real plan, where handicapped from the start.  By all accounts, Card became the dominant force in Disney leadership, and with the oft heard mantra, “What would Walt Do?”  …established himself as the protector of Walt Disney’s legacy.  Unfortunately, in my opinion, in protecting his mentor’s legacy, he lost touch with Walt’s forward looking philosophy.  While Walt had, in effect, move on from the studio, to the development of his theme park in the early 50’s, even though the studio was in capable hands he continued to monitor and inject his creative input when needed.  If you look at the movies produced by the studio in 50’s and 60’s, under Walt’s guidance, I see offering, that while rather formulaic and holding to his family entertainment values, were in fact evolving as the audiences began to change.  A look at movies produced after Walt’s death in 1966, and you find a listing of offering that, while holding true to Walt’s legacy and the Disney brand, failed to evolve with changing family entertainment demands, resulting in declining revenues and hence reductions in offerings, and ultimately the perceived importance of the studio to the overall success of the company.

As much as I don’t like to do it, and find it hard to fault the man, in the noble effort to protect and preserve Walt Disney’s legacy, Card Walker almost destroyed it.

When next we meet, I’ll be revealing how I still think Ron Miller is someone how deserves much more recognition for his contributions to The Walt Disney Company then he has received, and how two rather introverted family members played roles important roles in the outcome of the siege on the Magic Kingdom.

In-between now and then watch for a couple of trip reports for upcoming events.

Have a Disney-rific Day!!!

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 mr.grumpyguy@gmail.com

You can find us on Facebook at:  Discovering Disney History on FB

The Next Chapter and Ron Miller Revisited

Having just recently finished Jack Lindquist’s memoir, “In Service to the Mouse, I felt it necessary to come back to my last two posts as I have found things I hadn’t heard or seen before.  As I had indicated in “The Next Chapter,” there is not a lot published on the management period between Roy O’s death and Michael Eisner arrival.  Jack Lindquist’s memoirs begin to address that void, and as a highly placed executive in the organization, instrumental in understand the period.

Probably one of the most significant points in Jack’s book relates to an observation of Ron Miller’s nature.  Jack’s assessment was that Ron was a very shy man, and probably didn’t really have the type of ego necessary to run and company like Disney.  Having had the opportunity to meet Ron, I can say that I can see that shyness in his demeanor.  At a height of about 6’4”, probably closer to 6’6” if I had to guess, and built – still – like the football tight-end he once was, he has what could be called an intimidating presence. I have known a few individuals like Ron, and have found it not uncommon for them to possess a real shyness as a result.  A little side note, give people a chance, you’ll often be surprised how wrong you can be in your expectations, and as said, having met Ron, you won’t find a nicer person, in my opinion.

Another side note:  It occurs to me that some may be questioning my use of first names being a little disrespectful or inconsiderate.  It is not intended to be either.  Walt, himself, set the standard by insisting that people call in Walt, and it has been my experience that this holds true even to this day within The Walt Disney Company and organizations associated with Walt Disney.  I use first name out of the uttermost of respect for the individuals I tell you about in these journals.

So, to get back to Ron Miller…  It is much easier to understand how Ron’s shyness might have been interpreted, viewed, and expressed by some, as detrimental to the company.  As has been expressed by many, successful leaders in most arenas but most especially the entertainment industry tend to be outgoing and with egos larger than most.  I still hold that, had Ron not loaded the bases for Eisner and Wells, they would not have been near as successful in the near term.

As I was reading Jack’s memoirs, I was a reminded of some passages from Bob Thomas book, “Building a Company.”  This book stated that even before Walt’s death in 1966, there was somewhat a division in management, and there were Walt’s boys and Roy’s boys.  The two camps, when encountering an issue with the other, would go to their leader with problems, and then let the brothers work it out.  When Roy passed away, I seem to remember that Donn Tatum as one of Roy’s guys, took over as CEO, with Card Walker (one of Walt’s boy) taking on the role of Executive VP and COO.  However, without the brothers’ dynamic relationship to work through issues and not Walt to advance the creative element, I think management did kind of devolve into a contest between the two camps to advance the philosophies of their respective departed leader.  There was a bit of “What would Walt do” going on, and this seems to be confirmed by Jack’s accounts.  Best I can tell Card Walker was very much Walt’s boy, and this too may have made it difficult for Ron, with his shyness, to exert his presences.  Even when Card retired, he still held a position on the Board, which probably still hampered Ron’s authority.  Jack relates a couple of stories where Card challenged him about raise the admission prices and Disneyland.   Jack also confirmed how much Card was against the creation of Touchstone, and adamant that the Studio remain true to the Disney fair of the past.  So, it is likely in my mind that Disney was struggle as Ron took over CEO position in 1983, and was given very little time to make any course correction before his ouster in 1984.  Shyness aside, Ron served up a company in position for Michael
Eisner to create his quick turnaround.

If Card Walker and Donn Tatum can be inducted into the Disney Legends, then as I have recently heard, Ron Miller should inducted for his contributions, his filmography as a producer alone should assure his induction.  For that matter, Diane should join her Mother Lillian and Aunt Edna in Legends Plaza.  Come on TWDC, isn’t it about time to correct this oversight?

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 mr.grumpyguy@gmail.com

Review: In Service to the Mouse

Back in July of last year, I, along with some friends and family of the Walt Disney Family Museum, got the opportunity to spend and couple of hours on two afternoons with Disney luminaries on the occasion of Disneyland 55 anniversary.  One of those Disney luminaries was Disney Legend Jack Lindquist.  Jack was hired as Disneyland first advertising manager and spent the next 38 years developing and implementing some of the most creative and memorable marketing campaigns in the Disney Theme Parks’ history.  Activities such as Grad Night at Disneyland, and The 30^th anniversary: Gift Giver Extraordinaire were Jack’s creations.  Jack retired from the company as President of the Disneyland amusement park in 1993, received a window on Main Street, actually on the City Hall Building.  “J.B. Lindquist – Honorary Mayor of Disneyland.  Jack of all trades, Master of Fun,” and was inducted as a Disney Legend in 1994.  So on that joyful day, July 17, 2010, the 55^th anniversary of Disneyland, we got to enjoy Marty Sklar, Tony Baxter, and former Disneyland Presidents Matt Ouimet, and Jack Lindquist trade stories back and forth, and answer questions about Walt Disney and Disneyland.

So when I discovered Jack Lindquist was writing his memoires of his 38 years “In Service to the Mouse,”  it had to go on my reading list.  I've got to tell you how pleased I am that I did…  First, like most Disney or Disney related or inspired activities, the people distributing Jack’s book are top notch.  Since I wanted a signed copy, I ordered my copy from the Neverland Media LLC website (click side bar link for more information).  About a day after ordering, I got confirmation that my order shipped, and then received another very nice email the next day, informing me that there had been an error, and an unsigned copy was mistakenly shipped.  I was free to keep the unsigned copy, and that the signed edition would be on its way to me shortly.  The issue was resolved before I even knew one existed. KUDOS!!!  So now I have a signed copy to keep in pristine collector’s condition, and second working copy which I can read and re-read as often as I like…

Having just completed this tome, I have to say that “In Service to the Mouse” is a must read for any Disney Aficionado, especially those interested in the history of Disneyland and the Disney company.  Jack was there at Disneyland’s beginning.  It is a rare first hand account of what goes go behind the scenes at one of the most iconic companies operating today.  The stories are told in short little vignettes where Jack entertainingly recalls events and activities provides insights not know to very many during his tenure with the Disney Company.  I won’t reveal the stories here, if you want to know, please go pick up the book.  But, I will say that I found the unique and enterprising gin delivery system deployed during one Grad Night quite entertaining.  And, as a miniature Partners statue greets me every morning (the most prized item in my Disney collection), it warms my heart to know that Jack Lindquist played a role in bringing that amazing sculpture into reality.  The adventures and agonies of creating the Pavilions of World Showcase at Epcot are both enlightening and entertaining, and Jack provides a very honest, insightful and humanizing view of the management of a company that has becoming so iconic in today’s culture.

This may sound trite, but I laughed at parts, and cried at others.  However, foremost, I learned things I didn’t know about an organization which has become the gold standard in entertainment today.

Thank You Jack!

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 mr.grumpyguy@gmail.com

A profile of Ron Miller

Ronald William “Ron” Miller was introduced to Diane Disney on a blind date while he was attending USC, where he played left-end on the football team.  After dating for awhile and with the approval of Diane’s parents they were married on May 9^th 1954 in Santa Barbara.  Shortly after marrying, Ron was draft into the Army.  Diane related a story one evening at the Museum that, at her father’s request, she was even there on Disneyland’s opening day.  She was at Fort Ord, in Monterey, where Ron was stationed at the time.  The Miller’s have seven children, Christopher, Joanna, Tamara, Jennifer, Walter, Ronald, and Patrick.  Walter being named after his Grandfather – Walter Elias Disney Miller.

After leaving the military, Ron played a season of professional football for the Los Angeles Rams as a tight-end.  Walt attended two games, seeing his son-in-law get pretty seriously laid out on the field.  Ron related one incident where he was laid out cold in the 1^st quarter and didn’t wake up until the 3^rd.  Walt was pretty sure Ron was going to wind up dead or worse crippled playing pro football, and recommended that Ron come to work for him.  Ron took him up on the offer and went to work at Walt Disney Production as a production assistant.  His first job as a PA was to pick up Tommy Kirk from the studio and deliver him to the location set for old yeller.  Ron learned the movie business from the ground up from his father-in-law, becoming a director, and producer (assistant to executive).  He rose through the company ranks to the position of President in 1980 and Chief Executive Officer in 1983.  Only to be ousted in 1984 by his cousin-in-law, Roy E. Disney, in favor of having the team of Eisner and Wells come in to run the company.

I’ve heard many claims that Ron Miller was an inept manager, and that the studio was bleeding cash from many failures at the box office, and that this was what led to his ouster.  I have found this information on several fan boards, where you can find a wealth of personal opinion on the anything Disney but a real dearth value and accurate data on this particular era in Disney History.  Ron was in the top executive leadership positions of the Walt Disney Productions for a very short time, President for about 4 years, and the top spot - CEO for a about a year. Let’s look at some of the accomplishments of Ron Miller during his very short tenure as President and even shorter term as CEO:

To start with, in 1980 Walt Disney Home Entertainment had its first releases, with Dumbo being the first animated release in 1981.  Disney had its first co-produced picture with Paramount Pictures – Popeye in 1980.  Epcot opened in 1982 with Tokyo Disneyland opening the next, and the Disney Channel, the cable network concept that began in 1977 and was announced in 1981, finally launched in 1983.  But the two events of 1983 and 1984 that I think laid a significant foundation for TWDC and Eisner’s early successes when he came in as CEO and Chairman of the Board, were the creation of Touchstone Films in 1984 and Silver Screen Partners in 1983.

Touchstone Films, later to be renamed Touchstone Pictures was created to the Disney Studios to create films that catered to an different audience then the traditional Disney animated and family friendly fare.  Disney’s earlier attempts to release movies targeted toward more adult audiences under the Disney banner failed to perform even marginally well at the box office, since audiences expected something different from Walt Disney.  With the other studios unencumbered by the expectation of producing a particular film genre, they had a pretty significant advantage competing for the audiences of the period.  While I rather doubt the hyperbolic claims that the Walt Disney Studio was hemorrhaging cash, the financial data doesn’t support this contention.  But, if the studio was losing money, it very well could have been the partially the result of releasing these adult oriented films under Walt Disney Pictures.  One also has to wonder if the movies had any negative impact on the normal stable of movies from Disney because of audience confusions.  Creation of the Touchstone label gave the Walt Disney Productions more options.

Silver Screen Partners is a Limited Partnership created to provide financing and ownership for movies of Walt Disney Pictures and Touchstone.  After associated offering cost and fees, the public offering raised $74 million available for investment in films.  Seven films were produced with Silver Screen Partners investment funds.  Flashpoint, released 8/31/1985, Heaven Help Us, 2/8/85, Volunteers, 8/16/85, Sweet Dreams, 10/2/85, Head Office, 1/3/86, The Hitcher, 2/21/86. And Odd Jobs, 3/7/86.  Total investment from the partnership for these pictures was $73.8 million.  I can’t find box office figures for the first and last film, but the middle 5 grossed about $45 million.  Giving more credit than if probably due, and assuming a simple average of the other 5, I’ll estimate the box office for the first and last of about a rather generous $8.1 million.  I only do this to demonstrate that, with a rather generous estimate, these films grossed about $61 million, well short of the $73.8 million invested.  One might look at this as an abject failure, however, from Walt Disney Productions’ perspective this was a win.  Disney got to produce these movies, on the chance they would be box office smashes, without having their resources or income statement, on the line.  Why was this possible?  While I haven’t done a detail investigation of SSP, I suspect that it was formed to take advantage of tax codes of the period.  Now with a bit of tip to my proletariat upbringing, these tax codes allow people with too much money to invest in activities suspected to be losing ventures, what we all know are tax shelters.  This limited partnership was successful enough from TWDC point of view that the partnership saw an SSP II, III, and IV offered, and stayed active until the tax laws changed in 1998.  There will be more on this in future articles about the next period in Disney history.  But for now, I think Ron Miller deserves a great deal more credit for laying a solid foundation for his successors’ and the company’s financial success in his short 4 years at the helm, instead of the bashing he seems to take among uninformed detractors that he was inept or ineffective as Disney President of CEO.  Would the Eisner/Wells team have succeeded so quick, had Ron taken a different coast before he was deposed?  I don’t think so.

Then there was the greenmail and corporate raid that was being attempted in 1984 by investor Saul Steinberg, with the intention of breaking up the company and selling off the pieces.  Roy E. resigned his board position and mounted his first “Save Disney” campaign leading to Ron’s ouster and replacement with Michael Eisner and Frank Wells at the head of the company.  Again this takeover attempt is touted by many as evidence of Ron’s ineffectiveness in leadership and a failing company.  While this may be a popular notion of corporate raids, fostered by movies like Pretty Woman and Wall Street, the truth in this case is that the Disney Company was worth more in separate pieces than as a whole operation.  The studio was probably being the weakest performer at the time, not surprisingly because Ron’s initiatives to correct the studio’s performance issues had only recently been instituted and yet to produce any real results.  Again, I have to challenge whether Eisner and Wells would have been able to enact their “turn around” strategies as successfully without Touchstone and SSP in place upon their arrival.  So, the takeover attempt was not a result of a failing company, but rather, and solid success company experiencing a momentary downturn and undervaluation in the market.  Those conditions create a perfect and prime target for corporate raiders.

I would content the Ron was a victim, so to speak, of his own success, not the inept or ineffective leader, as many claim.  It is impossible to say now, but, it is my opinion that The Walt Disney Company we all know today would not exist today with the actions of Ron Miller back in the earlier 80’s.  He deserves far more credit the he is receiving today.

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 mr.grumpyguy@gmail.com

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 mr.grumpyguy@gmail.com