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  1. #1

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    Fortune Loves Iger

    Fortune released a great article on Iger this morning:

    Bob Iger rocks Disney
    Seismic shift
    A lot of what's new comes from two big and related strategic changes Iger has made at Disney, and the way he has managed the business. One was his subtle but seismic decision to refocus the company and most of its more than 150,000 employees around its roster of "franchises," like the Jonas Brothers - Iger defines a franchise as "something that creates value across multiple businesses and across multiple territories over a long period of time."

    The second change was unsubtle: Just days into Iger's new job, Disney acquired Pixar Films, bringing Apple's (AAPL, Fortune 500) Steve Jobs onto the company's board in the process. In recent weeks these moves have contributed to a string of hits at the box office, including "High School Musical," "Beverly Hills Chihuahua," and the animated "Bolt."

    The Disney Channel, which has emerged as a centerpiece of the company's strategy, is expected to finish 2008 as the second-most-watched cable channel in primetime. For the third straight year it was first or second and the leader among small kids and tweens.

    Meanwhile, Disney has been touting Pixar's - sorry, Disney Pixar's - "Wall-E" as a Best Picture contender for the Academy Awards. Should "Wall-E" prevail, it would be the first time Hollywood's top honor went to an animated film, not to mention to a picture released under the Disney name.
    So far it's working. Over the past three years Disney, which ranked 67th on the Fortune 500 last year, cruised to the head of the media pack in terms of both its stock performance and its return on invested capital. Even after losing 30% of its value in the past six months amid the financial blowout, Disney has held up better than the S&P 500 and rivals like Time Warner (TWX, Fortune 500) and News Corp (NWS, Fortune 500). Under Iger, who turns 58 in February, Disney has become the world's largest media conglomerate by market value, worth around $40 billion.

    There is so much of what Iger calls the "Disney difference" in the company's stock price that some wonder if its premium is sustainable. Analyst Michael Nathanson at Sanford Bernstein noted that by late December, Disney's trading multiple, based on forecast 2009 earnings, had "ballooned" to 9% above the S&P's and more than 70% above those of its media-conglomerate peers, "the widest margin in recent history." He thinks either Disney needs to start trading down or the rest need to start trading up.

    And even at these levels, Disney stock is now slightly below where it was when Iger took over (he has two million options likely to expire worthless in February). As he put it to his European management team in a strategy meeting hours before joining the Jonas Brothers: "Unfortunately, all this success creates the ever-greater demand for more success."

    Between the impact of the economic crisis on tourism and the digital upheaval in the media business, the headwinds now are no less intimidating than those young Walt Disney faced when his first Mickey Mouse cartoon, "Steamboat Willie," debuted in 1928. Even so, Iger says, "We felt like we were the last to feel the pain, and we think we could be the first to heal."
    Under the radar
    It 's hard to overstate what a surprise Iger's early impact as Disney's CEO has been. A hard-working and likable hand who had been in the media business for more than three decades, Iger had no big claim to fame when he took the top job, having dwelled largely in the shadow of his boss, Michael Eisner.

    Eisner's run as Disney CEO is an oft-told tale: In the 1980s and early '90s he was credited with reviving an American icon, and in the mid-'90s he smartly acquired Capital Cities/ABC, tacking ESPN and a broadcast TV network onto the company's film and theme park businesses. But his later years saw a feud with board members, management chaos, and an unwanted takeover bid from Comcast.

    Eisner ran hot and cold on his top people, so it was unclear to anyone - even to Iger - what the succession plan would be. But when Eisner resigned, he did recommend Iger and the board eventually agreed - news that was received coolly by some investors. "There were many naysayers," recalls one. "People would call him 'mini-Eisner,' his yes man."

    Iger says the criticism didn't get to him. "I don't know that I was necessarily on a mission to prove people wrong," he says. "But I wanted very much to exceed expectations."
    The invisible man
    Unlike his predecessor, Iger doesn't host Disney TV shows. He pens no florid letters to shareholders. He uses an alias for his e-mail account - one that plays on his wife's name. "Personally I would prefer staying completely invisible or anonymous," he says, "but I don't think it would be good for the company."

    Iger made an early decision that most of his time as CEO would be spent "managing inside the walls" of the Magic Kingdom.
    Jobs told Fortune that Iger won him over when he said that as soon as he found out he was going to be CEO, he spent a day at Disneyland going on every ride and watching every show - and observed that all the new ones were based on Pixar characters. Today, Jobs gives Iger and the board input on everything from store design and videogaming to China. "I consider Bob Iger a friend," says Jobs. "I don't have a lot of friends. I just really like him, and he's a really solid guy." (Try to put a dollar value on that.)
    "When he took that job, Disney was really messed up," recalls Jobs. "Bob looked at the guys running the divisions and said, 'You're in charge of your businesses now.' " Giving more authority to division heads was a page out of Iger's Cap Cities playbook. "People have plenty of room to make decisions, and they should feel amply empowered and trusted. But everybody has got accountability and responsibility," he says.
    "Cars" may be exhibit A of Disney's franchise machinery at work. Three years after the movie came out, sales of licensed merchandise are running at more than $2 billion annually. A "Cars" sequel is in production. Disney will soon launch an elaborate Cars virtual world. But the biggest bet on "Cars" is Cars Land, a 12-acre stretch of Disney's California Adventure theme park set to open in 2012.

    On a Monday afternoon not long after Iger's trip to London, he was at Disney's famed (and so hush-hush there's no sign outside) Imagineering offices in Glendale, Calif. He was joined by John Lasseter, who was enjoying the early buzz on "Bolt," the first decent Disney animated film in years, and one on which the Pixar folks had made major modifications.

    Lasseter and Iger were eyeballing wood and foam scale models of Cars Land. The biggest draw in the mini-park will be a ride featuring animatronic characters from the movie and "cars" that go 40 miles an hour but seem much faster in places, thanks to new projection technology. Lasseter crouched as he made his way through the 1/8 scale mockup, adding his own sound effects for each twist and turn. "Look at this! Have you seen this, Bob? Lean down and take a look. It's like the movie, except you're there."

    Upstairs, designers were doing what's called "pre-viz" work, wearing headgear that allowed them to explore a virtual 3-D rendering of the ride and stroll around (or fly above) Cars Land.

    In an industry with a miserably low success rate for mergers, Iger gets high marks for Pixar. And he notes that Cars Land would not have been possible on this scale - or with Lasseter and his colleagues' hands-on input - if not for the acquisition.

    ...


    One thing that's definitely not in the cards - sorry, conspiracy theorists - is some kind of Jobs master plan leading to an Apple-Disney merger. Asked what his long-term intentions are as the company's largest shareholder, Jobs says, "I think there are some companies that transcend just being businesses. Disney is one of those very special companies, and I think it's very special companies that prosper in the long run. I've never worried about my investment. I know that it's going to be just fine. Family is a renewable resource."

    Iger, meanwhile, perhaps best sums up his mission at Disney as he walks out of the Cars Land meeting and pauses to say hello to a woman who works in the building. "It's the happiest place on earth," Iger tells her as he turns to go. "Let's keep it that way."
    Much more here: Bob Iger quietly brings big changes to Disney - Jan. 5, 2009
    "If you build it right, they will come." - Bob Iger

    "I'm not a literary person. As far as realism is concerned, you can find dirt anyplace you look for it. I'm one of those optimists. There's always a rainbow." - Walt Disney



    "I don't care about critics. Critics take themselves too seriously. They think the only way to be noticed and to be the smart guy is to pick and find fault with things. It's the public I'm making pictures for." - Walt Disney

  2. #2

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    Re: Fortune Loves Iger

    I made comments in the News thread.
    I do prefer this over a blowhard who can't run the business without the brains (who died in 1994).

    And I had no idea that Cars merchandise was doing so well. Some other web site, two years ago, thought Cars was a major failure. I'll take a $2 billion in revenues failure over watching some other company laugh with their $2 billion in revenues failure any day.
    "Here You Leave the World of California Today and Enter the World of, um, er, California Today."

  3. #3

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    Re: Fortune Loves Iger

    God, how I love that last quote.

    While I despise the Jonas Brothers and HSM, they are certainly money makers and I'd rather see them making money and contributing to a better company than sitting there and flopping.

  4. #4

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    Re: Fortune Loves Iger

    Iger is really an amazing guy at the helm. Just listening to him talk is so much different than other blowhards out there. Really quite refreshing.


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  5. #5

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    Re: Fortune Loves Iger

    I've seen the article, but I have yet to read it. But, there are several things already worth noting.

    (1st) The article is by Disney's competition, as "Fortune" magazine is published by Time/Warner.

    (2nd) Let's not forget one of Disney's latest franchises, the Fairies Franchise. That apparently earned the company $800 million, worldwide, in 2007.

    (3rd) I'd like to know how much that suit Iger is wearing in the photo cost him. Probably more than I make in a week.

  6. #6

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    Re: Fortune Loves Iger

    What amazed me about Iger, happened relatively quickly. As Eisner exited Disney, ( remember that LONNNNNGGGGGGGGGGGGG excruciating exit ) quickly Iger rebuilt all those burned bridges and healed so many feuds with other companies (including Pixar), after Eisner's scorched earth policy. Iger really proved to be a master negotiator, and finding the right balance for the Pixar team merging into Disney. One other little negotiating skill further proved Iger's committment to Disneny fan's, in bringing back to Disney the rights to Oswald the Lucky Rabbit! Other feuds with Lucas and Speilberg, have also subsided.

    It really does look like Iger has Disney's long term future in mind, as opposed to the short sided and short termed future that Eisner was doing to Imagineering, Animation, and DL/WDW.

    With Iger joining forces with the talented team from Pixar, John Lasseter is being given a great chance lead a good part of the Disney empire. The kind of change that J.L is bringing to Disney is beginning to emerge, and it looks to be a good change.

    Unfortunately, some of Iger's underlings are being proven over and over again to reflect an ugly side to Iger's management. Most notably, Jay Rasulo has proven himself to be something of a porcupine in a room full of baloons. He just doesn't have the right style nor the right ideas for Disney, he just doesn't love or "get" what Disney is all about. The years of too many dreams, the demolition of the Disney Gallery, and over and over and over again FORCING on Disney the "Disney Parks" Logo on everything.

    Iger will only be as good as the people he has in management, and it would be a good thing for Iger to get rid of those who "Don't Get Disney", in order for Iger to maintain his good reputation.

  7. #7

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    Re: Fortune Loves Iger

    I agree, Aladdin. I was really really impressed when he brought back Oswald. It speaks volumes. The parks may always have their issues that our die-hard fan boys will never agree with, but the man shows that he cares and does things in what HE thinks is in the company's best interest. And you really can't help but appreciate that.

    Even when he was asked about Song of the South at a stock holder meeting years ago, he answered in a way that was not pre-recorded but showed that he really wasn't comfortable with it being released. And even though you wish that wasn't the case, you're glad that it's because he feels strongly enough about it... and not because he's just listening to political advisors or whatnot.


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  8. #8

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    Re: Fortune Loves Iger

    Disney has thrown out their past in order to cater to their "franchises" like the Jonas Brothers. Iger has done a really good job with Disney so far, but this whole idea of Disney being exclusively about Hannah Montana and Pixar is not good. I love Pixar and don't mind Hannah Montana, but when Disney uses these things to the exclusion of traditional animation and classic Disney stuff, it's gone too far.

    I would recommend Disney come out with a "Disney Classic Channel" to supplement the loss of the *real* Disney Channel in 2001. It should be the current Disney Channel that has to move over, but I would be willing to forfeit that channel in order to get real Disney content back. Surely in this day of 10 MTV channels we could come up with 1 more Disney channel to put the 80 years' worth of content Disney has been ignoring recently.

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