Don't Spoil Disney's Ride- Business Week- 5/12/05
Stanley Gold and Roy Disney, busy brewing up trouble for President Robert Iger, should bury the hatchet. They wanted growth -- and now they're getting it
It didn't take long for the Walt Disney's (DIS ) latest dustup with dissident former directors Stanley Gold and Roy Disney to come up at the company's May 11 earnings call. The first question lobbed at Disney's president, Robert Iger: Was the lawsuit filed 48 hours earlier by the two former directors "noise" -- that is, nuisance litigation?
After all, the company had just reported an impressive 29.9% hike in second-quarter earnings, to $698 million, on $7.8 billion in revenues. At 33 cents per share, the numbers beat the 32 cents expected by analysts and was 27% ahead of a year earlier.
"PLAIN FED UP." Iger, selected by the board on Mar. 13 to succeed retiring CEO Michael Eisner in October, was ready for the question: "I will not allow myself to be deterred or distracted" by the lawsuit or anything else, he declared.
In their suit, Gold and Disney seek to have Iger's elevation overturned, in part because the Disney board failed to conduct a fair and open search for a successor, the duo allege. Iger said yesterday that he has noted the mood of Disney staffers, who would just as soon have peace break out. "They are plain fed up and want the rhetoric to end so that they go back to doing what they do best, which is to create world-class entertainment."
He has a point. Instead of making Iger get out of the way, perhaps Gold and Disney should withdraw their suit. The two pulled off one of Corporate America's most impressive revolts a year back, helping to whip up shareholder discontent that drove the entrenched Michael Eisner from his CEO spot after a 45% negative vote at the company's annual meeting. They had an impact as conscientious shareholders.