In first year, CEO turns around the Dow component and boosts shares By Russ Britt, MarketWatch
LOS ANGELES (MarketWatch) -- It may seem like an obvious, logical move now, but even those who work for Walt Disney Co. Chief Executive Robert Iger initially thought buying Pixar Animation Studios was a big gamble.
When Iger pulled the trigger earlier this year on the $7.4 billion transaction, many in the entertainment industry questioned the wisdom of shelling out that much money for a company that puts out a single product once a year. Sure, Pixar had been wildly successful, scoring more than $3.6 billion in worldwide receipts, but it faces rising competition from other Hollywood studios.
Yet the move accomplished several tasks for Iger and Disney. It mended fences with Pixar chief Steve Jobs, who had grown weary of the mercurial Michael Eisner, Iger's predecessor. It also put in Disney's camp the animation specialist that had trumped its once-dominant position in the market. And it represented a symbolic but critical return to Disney's roots, seeming to quickly heal the deep divisions that ailed the entertainment giant.
"He basically put his money where his mouth was and put the program together and did it," said Dick Cook, chairman of Walt Disney Studios, the company's feature-film operation. "You know, I think [that was] an awfully, awfully bold move. But clearly [it was] strategically so smart because it is at the core of our business."
The Pixar buyout was just one of many moves made this past year that have won plaudits for Iger from all quarters. He's reached out to many estranged partners, freed Disney's corporate culture from the micromanagement days under Eisner and got the company looking toward the future. As a result, the Dow component is firing on all cylinders, exemplified by record earnings and a more than 40% rise in the company's stock since the beginning of the year.
It's also why Iger is the 2006 winner of MarketWatch's CEO of the Year Award.