08-08/16 Is the Honeymoon Over? Parts One & Two

[Chuck Oberleitner]

this business of show

Is the Honeymoon Over? Part Two
By C. W. Oberleitner
August 16, 2006

After more than a decade of hemorrhaging executive talent, thousands of layoffs, an abandoned tradition of 75 years of hand-drawn feature animation, multiple messy public lawsuits, unprecedented levels of customer dissatisfaction, and a boardroom-level battle for the heart and soul of the company, it appeared that peace and harmony had finally returned to the Walt Disney Company with Bob Iger’s appointment as Mickey’s new boss. At least, as noted in Part One, that’s what it looked like for Iger’s first seven months. In the conclusion of our story, we examine the similarities and differences between Disney’s current spate of bad press and the melodrama that marked the Mouse’s preceding decade.

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Is the Honeymoon Over? Part One
By C. W. Oberleitner
August 8, 2006

Even by Disney storytelling standards, it's been a remarkable first seven months for the Mouse House's new Big Cheese, Robert "Bob" Iger, as the company's myriad fans and Wall Streeters alike have praised virtually his every move. Now, though, with the leaking of news about layoffs at the studio, with more to come at Disney Imagineering, and the loss of two highly respected executives, fans and analysts are beginning to wonder if some of the new magic isn't wearing off, and if they might not be seeing a return to the dark days of the Disney of the '90s.

Read the full story here >>


Your thoughts...

[kcnole]

I don't see much of this as truly being a huge negative, definitely not a return to 90's management styles as the article hints at. First, the article implies at the beginning that the break between Shamalyn and Disney is a bad thing and a mistake on Disney's part, then this paragraph shows up at the end.

Lady in the Water opened in theatres on July 21. At an estimated production cost of $55 million, not including marketing costs, it only managed to pull in a little more than $18 million dollars during its first full weekend in release. After two and a half weeks, it has taken in just $38.4 million. Audiences and critics alike echoed Jacobson’s notes on the original screenplay with most saying that they “just don’t get it”.

It turns out that Disney was right. Shamalyn has a problem in that his movies (Sixth Sense aside) have very little substance and subsist mainly off of overblown hype. The only movie he's ever done to be truly great was Sixth Sense. Everything else has disapointed and fans are finally starting to figure it out.

Secondly, the cut in movie production, while on the surface, sounds like a bad thing, it may not be. Disney has been shipping out a large amount of movies, but most of them very low quality lately. If Lasseter and company are more interested in spending more time and care on making a quality movie then that's a good thing, even if it means less movies. I'd much rather see quality over quanitity any day.

As to the cuts, that's just business. I don't necessarily like the way they were all handled, but that's the way the chips fall. Disney definitely didn't have plans to call the one lady mentioned and tell her right before she went into delivery that she was getting laid off, she pushed the buttons and demanded an answer. You can't just decide not to let someone go because they're going into the hospital.

Now, most of Iger's rein as president has been mainly hype so far as, aside from the Pixar aquisition and calming the waters with Mr. Disney, we haven't seen his impact on the role of the parks. I think we'll find he falls short of some of the overly hyped statements we've heard, but I think he'll be far better than what we'd had the last few years.

So is Disney moving 100% in the direction I'd like? No, this whole global marketing thing is a horrible move in my opinion, (I see this as the main reason Disneyland lost Quimet.) but aside from that I'm pleased to at least seeing the parks move back into a status of rebuilding quality rather than moving on the cheap. I'd rather see nothing built at all than something put there cheap. Do it right or don't do it at all.

[cellarhound]

The problem is that it seems what is happening at Disney with it's inflationary struggles and lay offs may be indications that Economy is slowing at a much faster rate than anticipated...

Tommorow is the Earnings report where Iger will be takeing questions... I am interested in what he has to say about these issues and wether or not they are still on track for double digit profit growth.

The Honeymoon isn't over... It is just Iger is vacationing in a storm.

[WDW1974]

Great column, Chuck. I wish you got a bit more response here, though, for the effort and the perspective.

FWIW, the Jay Rasulo-Matt Ouimet 'tension' (that's my word, putting it mildly) is absolutely the reason he left. Starwood may have put on the table an amazing offer, but it never would have been there if Matt had been happy under Jay. JR (fitting initials, although he couldn't fit into Larry Hagman's charisma boots if he had a makeover by the Queer Eye boys) is a control freak who is holding on to his own job by hie fingernails as he -- and Disney -- continue to screw up their relationships with the COMMUNIST China government. Between dealing with HKDL's very disappointing, yet sooooo predictable, start and the negotiations for Shanghai (which have NOT gone well at all, despite any Disney spin to the contrary), Jay has no time to deal with a charismatic, likeable, intelligent, guest-quality-minded, exec like Matt. It's all about globalization right now, so all those grandiose plans for DL and DCA that fanboys have been drooling over sit in limbo, while JR pushes for the Year of a Million Free Churros, Fastpasses and Tinker Bell tees. It's sad to see but the attitude in Burbank, largely over WDW but DL suffers as well, is that people will just show up and visit domestic locations whether or not reinvestment occurs.

That wasn't good enough for Matt, who did an amazing job with the DCL. I took my first cruise with them in 2002, the nadir period for WDW in so many ways, yet the cruise was simply amazing in every way. Matt saw himself in the role of Parks head at some point, but Jay (and to a lesser extent Al 'I ruined WDW' Weiss) were never gonna allow that to happen.
Neutering Matt, and the other puppet execs at WDW and DLP who only care about being in their positions, was the last straw. Matt wasn't going to have to go through Jay for everything when he had Iger's ear and key Imagineers too.

Ed Grier is a numbers man, not that that makes him bad automatically, but during his tenure in Florida at the Disney-MGM Studios, that park fell apart both creatively and upkeep wise. Epcot also suffered during his year or so there. And let's not forget, when in Tokyo he wasn't much more than the 'overseer of the brand' to the OLC guys. It's not like he was responsible for the parks being amazing and loyal to the Disney Way.


As for Nina, she was likely the victim of the same mindset, even with the meek Dick Cook heading the Studios. She wasn't afraid to speak her mind ... hell, the woman deserves a Humanitarian of the Year Award just for making M.Knight Is The Most OVerrated 'Talent' in LaLaLand cry ... and that's not what Disney wants.

Sadly, it does sound like Eisner's last decade when so much executive, as well as creative talent, walked out the door. Let's hope the similarities end there.

Just a few thoughts ...

[cellarhound]

Originally Posted by WDW1974

Sadly, it does sound like Eisner's last decade when so much executive, as well as creative talent, walked out the door. Let's hope the similarities end there.

This is why many of us, stockholders, have argued for a change in the Organizational Behavior of Disney with the removial of Eisner...

I didn't think it was enough... and I still don't... Eisner granted these men power based on the fact that they followed his mentality of not overing premium value when buying Disney products.

Globalization will garantee double digit growth into the near future with China opening it's market... It has done so not only for Disney but Starwood as well - which is ironic...

I still think there wasn't enough bloodletting in the corporate management after Eisner left... Many of the same faces who have made bad decisions have continued to be allowed their bad behavior recently... Don't get me wrong... there are some new faces added with Pixar in high level positions... But it simply is not enough in other areas...

Rasselo and Cook need to move on from their positions... Cook needs a promotion, because he hasn't shown the ability to handle the studio solo with out Eisner looking over his sholder, I think he needs help... Rasselo, a extended vacation of about a year before he finds a new position...

[Doopey1]

Great column, Chuck. I wish you got a bit more response here, though, for the effort and the perspective.

I agree, great columns. I think the loss of Ouimet is the first significant black mark on Iger's tenure. He was clearly a top-notch talent and had the potential to do great things for the parks in the future. I wonder if Iger was even aware of the problems between Matt and Jay and the level of discontent.

I'm willing to withhold judgement on Jacobson's dismissal and the re-org of the film division. Although she was apparently well-liked and respected in the industry, I generally support the idea of downsizing the overall film production slate. Still, would have been nice to keep her in some role in the company.

In general, although these are two significant losses (one definitely negative, one potentially negative), I don't think it means WDC is back to the "bad ol' days". It's still early in this new chapter of Disney leadership. I'm still optimistic about where the film and animation divisions are headed. And I've about had it with those "other websites" that continue to blast "Cars" as a disappointment. It just doesn't hold water.

[Ghostbuster626]

Jay Raysolu has to go. He is a remnant of Eisner...a cancer infecting, corrupting, and destroying the company.