Iger May Take Fall for ABC

[Sarangel]

Here's the link to a Business Week Article about Disney's attempts to turn ABC around this fall. Iger seems to be the one being eyed by the board to take the fall if ABC doesn't get its ratings up. Here are a couple of interesting quotes:

Disney's board of directors has called Chairman Michael Eisner on the carpet and told him they expect ABC to shape up -- and soon.

Even before the board gave Eisner its directive, he and Iger were hard at work trying to right their listing ship, reading scripts and taking meetings with just about anyone who might have had a promising premise for a show.

Looking ahead, the Disney high command is eager to give its shows every chance to turn around the network. Eisner and Iger, say Braun, have ordered the rest of the Disney Empire -- its theme parks, ESPN, and Disney Stores -- to pitch in. Each will help promote ABC's prime-time line up this year, he says.

Little wonder Iger and Eisner are calling in the heavy artillery. ABC last year represented 23% of Disney's $25.3 in revenues. And with advertisers fleeing, the network lost $87 million in the last six months, down from operating earnings of $454 million for a comparable period last year. That made ABC one of the biggest drags on Disney's earnings for the six months ended Mar. 31, when overall earnings fell by 29%, to $692 million, on revenues of nearly $13 billion.

And it's not clear yet those advertisers are betting along with Iger and Eisner. In May, after watching pilots for the new shows, advertisers bellied up with $1.5 billion in ad sales for the so-called up-front market for shows that will air in September. That's an 8.3% decline from last year's emaciated ad sales, according to Advertising Age. And ABC was the only one of the six networks to see a decline from last year's already abysmal sales in the upfront season.

The problem is that not many folks are left to fire, says one Disney insider. And with the board demanding changes, that might point the finger at someone like Iger, a former ABC president before the 1996 merger.

That would be a shame. He's known at Disney headquarters as -- with apologies to soul singer James Brown -- "the hardest-working man in show business." He routinely arrives at Disney at 6 a.m. and works past dinner, e-mailing from home after that. But Iger, much like Bob Pittman at AOL Time Warner, may end up taking the rap for the parent company's inability to make an acquisition work.

Dare we hope that the Board takes Eisner's head instead?

Sarangel

 

[Another Voice]

The “rumors” are that it isn’t the board that’s thrown Iger over the cliff (it’s already done except for the press release and a decent period of mourning to allow ABC’s fall schedule to fail to the levels already expected). No, Mr. Iger is simply yet another in a long line of executives sacrificed by Eisner. It’s a power play - nothing more, nothing less.

And to echo what the article says, it’s generally considered that Iger is both a harder working and a better executive than Eisner is. The problem is that the board owes their cushy jobs to Eisner, not Iger. Frankly, one of the board members was the principle of the school where Eisner’s kids went. Does anyone think that she has any delusions about how she is to vote to keep that huge board member paycheck coming in?

The next couple months are going to be really fun to watch. Now that the heat is on corporate boards more than a few state pension funds are rumored to be targeting Disney for corporate reform. The Mouse’s board has been the poster child for corrupted boards throughout the nineties and several groups figure this will be a good place to start. There are rumors that Disney is already working on plans to restrict the annual meeting as closely as possible. My favorite rumor is that they want to show-off the amazing success of DisneySea by having the meeting at a retreat outside Tokyo. THAT would be fun to watch them pull off.

 

[lrodk]

Eisner also has his architect friend Robert Stern on the board, who has received many design contracts from Disney over the years. If I remember correctly Mr Stern has also done work on some of Eisner's personal properties. I think there's no questioning where his loyalty lies.

Currently there are only two board members who have been around longer than Eisner(Roy Disney, Mr Watson), which just goes to show the extent to which Eisner has influenced the current make-up of this board.