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EISNER UNDER FIRE

Disney's Corporate Drama Turns Into a Blockbuster

The shareholders meeting draws long lines. It has anger, whimsy -- and even some quips from the headliner, Eisner.

March 04, 2004|James Bates, Richard Verrier and Meg James | Times Staff Writers

PHILADELPHIA — Never mind Walt Disney Co. epics like "Pearl Harbor" or "The Alamo," due out next month.

"Don't you think that the human drama of what's going on in the corporation is worthy of a Disney movie itself?" asked Laura Jean Watters of Staten Island, N.Y.

Watters and her mother, Jean, joined a crowd of Disney shareholders, some of whom began milling outside the old Philadelphia & Reading Railroad train terminal here about 5:30 a.m. Wednesday, more than four hours before the start of a momentous shareholders meeting.

Many, like the Watters, were mom-and-pop investors who hold relatively small amounts of Disney stock and had never before attended an annual meeting.

This one they didn't want to miss. Some came clad in Mickey Mouse and Tigger garb, some arrived with children in tow. Some wanted to express their frustration, some to lend their support. But most were drawn by the unfolding question of whether Disney Chief Executive Michael Eisnerwould survive an uprising of dissident shareholders.

At one point, nearly 1,000 people were queued up for the first-come, first-served seating in the Pennsylvania Convention Center's Grand Hall.

"The lines to get in remind me of the lines they have at Disney World," complained Bob Watts of Atlantic City, N.J.

Many shareholders said they were there to witness a piece of American corporate history. Robin Wiessmann brought her teenage son, Alex, from Bucks County, in southeastern Pennsylvania, so that he could see the inner workings of a huge corporation.

Other first-timers attended simply because they could easily drive to Philadelphia. The city was selected as the venue because it is home to Disney's most dominant ABC television station.

And the spectacle was too good for some non-stock-holding locals to pass up. They meandered around the convention center Wednesday hoping to get a glimpse of Eisner.

"It's been all over the radio and the newspapers," said Philadelphian Robert Beyer, who added that one station jumped on the bandwagon that morning, playing five Disney-themed songs in a row, including DaDa's "Disneyland."

As shareholders streamed into the Grand Hall, some were photographed hugging huge Mickey Mouse statues. Others posed with cast members dressed as Minnie Mouse, Donald Duck and Cinderella.

The marathon annual meeting, one of the longest in Disney history, lasted 5 1/2 hours. Many shareholders grew restless in the middle of presentations by company executives and wandered in and out.

Outside the ballroom, a small crowd gathered to drink coffee -- courtesy of Disney -- and to debate the day's events. Nearby, Disney had set up displays touting the new Winnie-the-Pooh baby merchandise line, including tiny T-shirts and bed covers. There was also a booth promoting Princess merchandise, capitalizing on the likes of Cinderella and Belle from "Beauty and the Beast." Disney also staffed a booth that described the company's volunteer and outreach efforts for environmental and charitable causes.

Ted Phillips, 58, a retired teacher from Allentown, Pa., attended with his wife, Nancy. Shareholders for a quarter century, they own 600 shares. As retirees, they depend on their Disney dividends and have been dismayed over their shares' stagnant value in the last decade.

"What was that [line from that] 'Jerry Maguire' movie?" Ted Philips asked. " 'Show me the Money.' ... The stock has been sitting there for years. You'd expect your equity to grow."

For some, the annual event is almost like a trip to Disneyland, and there is a whimsical atmosphere to the gatherings. But for many, this year's meeting wasn't about fun.

Jerry Purcell of the Pennsylvania hamlet of Bala Cynwyd said he was struck by the flashy presentations made by the parade of the executives who run key Disney divisions.

"I'm thinking about how much money is being spent to do this," Purcell said shaking his head as he scanned the room.

After the speeches by top executives from company divisions, including Walt Disney Studios, ABC and sports cable giant ESPN, the music from "When You Wish Upon a Star" filled the ballroom. The meeting was then opened up for questions from shareholders. Eisner fielded more than a dozen, ranging from the proposed sale of Disney stores to alleged bias by ABC news anchors against Israel.

One woman, who said she owned four shares of Disney stock because she wanted to hold a piece of "the Disney magic," began her comment by asking Eisner cheerily, "Hi! How are you doing today?"

"Hoarse," Eisner replied.

A 15-year-old boy, who said he's been a Disney shareholder half his life, asked the company's chairman what his plan was in the wake of the high-profile split with Pixar Animated Studios.

"What will we do exactly to compete with them?" the boy asked. Eisner said the company was "maniacally engaged to get the next generation of computer animation."

Shari Edelson, 35, from south New Jersey, found it all reassuring.

As she sat a large leather chair outside the Grand Hall feeding her 10-month-old son, Andrew, Edelson said her support was firmly behind the chief executive, who lost the title of chairman during a board gathering after the annual meeting.

"When it comes to business, I trust Eisner," she said. "I don't consider myself a fair-weather shareholder. I want to be there in the good and the bad times."

Paul Reitman of Westchester, Pa., wasn't so generous. He said nothing he saw or heard Wednesday made him doubt his decision to withhold his votes for Eisner: "Get rid of Michael."

James Bates and Richard Verrier reported from Philadelphia, and Meg James reported from Los Angeles. Times staff writer Sallie Hofmeister contributed to this report.

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