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Get Four
|  | FEBRUARY 9, 2004
By Ronald Grover 2004's Other Election Battle: At Disney It's Roy Disney and Stanley Gold vs. Michael Eisner on the campaign trail, trying to woo shareholders in a coming showdown vote In this primary season, one of the hottest races isn't for the White House. It's for the Mouse House. Indeed, as Presidential candidates have been trooping through Iowa, New Hampshire, Missouri, and beyond, a whole different set of campaigners have been trolling for ballots among shareholders of Walt Disney (DIS ). This vote will take place not at the polls but at Disney's annual shareholder meeting on Mar. 3 in Philadelphia, and at stake is Chairman Michael Eisner's continued stewardship of the Disney Empire. On one side in this battle are former Disney board members Roy Disney and Stanley Gold, who have been pitching their platform to institutional shareholders in New York, Washington, D.C., and elsewhere in an attempt to get them to sign up for their dump-Eisner campaign. The duo also plans a campaign-style rally in Philly, the night before Eisner & Co. hold their shareholder meeting. On the other side, of course, is Eisner, who shows up at pretty much the same campaign stops, a board member in tow, to spin the media giant's version of the story. TOUGH INCUMBENT. On Feb. 2, for instance, Disney and Gold went to Rockville, Md., spreadsheets in hand, for a presentation to Institutional Shareholder Services, an investor research group that provides information to 700 shareholder groups on how to vote on proxy issues. Two days later, Eisner visited, with former Senator George Mitchell, Disney's presiding director, sprinkling the room with talk of building earnings and comebacks by ABC-TV and Disney's theme park unit, says ISS Senior Vice-President Pat McGurn. Roy Disney and Gold also trekked to the AFL-CIO's Washington (D.C.) headquarters, says Bill Peterson, director of the union's office of investments. Eisner and board member Judith Estrin were scheduled to show up there as well. Who's likely to be the winner? At this point, Eisner looks be a tough incumbent. Indeed, even Disney and Gold, who have a laundry list of Eisner missteps, admit that it's a long shot for them to oust the chairman or the other three independent board members they're trying to get shareholders to vote against. Simply put, like the voters who go to the polls in most Presidential elections, these shareholders are likely to vote their pocketbooks. And with Disney's stock price up by some 33% this year, they'll likely keep Eisner in power for awhile longer. "PLANTING SEEDS." Disney and Gold say their goal is to get 35% of shareholders to vote against the incumbents. Why that number? Under a "shareholder access" proposal made by the Securities & Exchange Commission in October, but not yet enacted, shareholders have the opportunity to offer their own slate of board candidates to replace members who get less than 65% of the vote. With a hot Web site and almost daily letters and other messages against Eisner, the Disney Duo thinks they can get to that number in Philadelphia. "This is not a fight we can win this year," concedes Gold, acknowledging that the lack of large blocks of Disney shareholders makes it harder to mobilize a base of support. "But we're planting some seeds for next year." To make their case, Disney and Gold came well prepared to the campaign stops with the ISS and AFL-CIO, say both McGurn and Peterson. In fact, the former Disney board members have also filed a seven-page document with the SEC that explains their complaints in colorful detail. Among them: The "creative and businesslike management of Eisner's first years with the company have given way to" a "staid and inbred group" that shies away from creativity and recycles old ideas. Disney under Eisner also overpaid for Family Channel, hasn't revived ABC's ratings fortunes, and built a new theme park in Anaheim, Calif., that consumers rejected because it was "smaller and subjectively less special park than Disney's older parks," according to Gold and Roy Disney.
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