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The battle over the house of mouse

In “DisneyWar,” author James B. Stewart details the struggle for control at one of America’s best-known entertainment empires. Read an excerpt.
/ Source: TODAY

"When You Wish Upon a Star," "Whistle While You Work," "The Happiest Place on Earth" — these are lyrics indelibly linked to Disney, one of the most admired and best-known companies in the world. So when Roy Disney, chairman of Walt Disney Animation and nephew of founder Walt Disney, abruptly resigned in November 2003 and declared war on chairman and chief executive Michael Eisner, he sent shock waves everywhere Disney does business and its products are cherished. Author James B. Stewart was invited on the "Today" show to discuss his book “DisneyWar,” which details the turmoil at the company, how Eisner lost his chairmanship, and why he felt obliged to resign as CEO. Here's an excerpt:

On Monday morning, September 24, 1984, Michael Eisner woke up feeling a little nervous. It was his first day as chairman and chief executive of the Walt Disney Company. Tall, with dark curly hair, at age forty-two Eisner still had something of the boyish look of the prep school student he once was. Anxious to make a good first impression, he dressed carefully in a suit and tie and got in his car for the trip to Disney. He planned to drive from his home in Bel Air to Interstate 405 North, then onto the Ventura Freeway. The Disney studio was so far out of the Hollywood mainstream that Eisner had only a vague idea where it was — somewhere in Burbank. Soon he realized he was deep into the San Fernando Valley. He called his lawyer, Irwin Russell, from the car to get directions.

When Eisner pulled into the Disney lot, he saw a collection of unassuming, low-rise buildings surrounded by neatly clipped hedges and lawns in a modest four-acre campus. It was nothing like the imposing gated entry to Paramount, where Eisner had been president for the past seven years. Several bushes had been clipped into topiary shapes of Disney animated characters. The animation building that had housed Walt Disney’s office was at the intersection of Mickey Avenue and Dopey Drive. Around the corner stood the fading Western set for “Zorro,” a Disney-produced television show that hadn’t been on the air for twenty-three years. Judging from the nearly empty parking area, he was one of the first to arrive.

As he pulled in, Eisner realized he had no idea where to go. Everything had happened so suddenly. Just that Saturday, the board had voted to appoint him chairman and chief executive, along with Frank Wells, a lawyer and former head of Warner Bros., as president and chief operating officer.

A boardroom coup led by Roy Disney had ousted Walt’s son-in-law, Ron Miller. The weekend had been filled with meetings with investment bankers and lawyers talking about takeover threats and bandying around financial terms that were unfamiliar to Eisner, such as “book value” and “return on equity.”

Eisner introduced himself to a guard, who summoned Disney’s head of public relations, Erwin Okun. Okun led him to Walt’s old office on the third floor of the animation building. Lining the corridors were original “cels,” hand-drawn and colored frames from the classic Disney animated features: Snow White, Pinocchio, Sleeping Beauty, Fantasia. Lucille Martin, Walt’s former secretary, was sitting just outside the office. Somewhat apprehensively, Eisner settled into Walt’s chair behind the desk.

Then Frank Wells walked in, and sat down across from him. Wells, age fifty-two, looked as if he’d been sent from central casting for the role of studio executive: tall, ruggedly handsome, wearing glasses, graying at the temples. Their new partnership was something of a shotgun marriage, hastily forged in the months leading up to the board vote. Eisner didn’t know him well, but Wells’s willingness to take the number two position, ceding the top spot to Eisner, had made a deep impression. They chatted briefly as Wells scanned their new surroundings. But Wells showed no sign of getting up from his chair. “Are we going to sit here together?” Eisner finally asked.

Wells shrugged. “I thought we would.”

“I can’t work that way,” Eisner said. So Wells moved to a conference room next door.

Like much at Disney, Eisner’s new office hadn’t changed much since Walt died in 1966. The pace at Disney was so leisurely that by lunchtime, the workday was pretty much over, at least for top executives and senior producers. They played cards every day after lunch in a small room off the executive dining room. Afterward, they often had massages from Bob Hope’s masseur, who was kept on staff, followed by visits to the steam room and Walt’s custom-made thirty-nozzle shower. Employees stopped work early to play softball every Tuesday evening. When a newly hired executive persisted in working evenings and weekends, it was considered so unorthodox that security launched an investigation.

Almost no one was fired. At most studios, numerous employees were hired for the run of a production, then let go when shooting wrapped. At Disney, they stayed indefinitely, awaiting new assignments. Instead of using outside producers, Disney kept them in-house. Disney released a new animated feature every four years, and had produced just three live-action films the year before Eisner’s arrival. Typical overhead on a Disney film was twice that of rival studios.

Eisner and Wells had already decided that this was going to change, but on their first afternoon at the company, they tried to reassure nervous employees, speaking from a bandstand that had been built for the film “Something Wicked This Way Comes.” It helped that Roy was with them. Then they toured the lot, meeting every employee they could and shaking hands. Eisner asked one young woman where she worked. “BVI,” she replied.

“I didn’t know Disney owned an underwear company,” he said.

“No,” she laughed. “BVI is Buena Vista International,” Disney’s movie distribution arm.

Much to Eisner’s relief, in the many interviews leading up to the board vote, no one had asked him much about Disney, either the company or its products. As he later wrote in a draft of his autobiography, “To be honest, I knew little about Disney, little about the culture or even the actual films. If Disney had not been under siege and under real risk of being acquired and sold off in pieces, I would not have passed the interview process. If Disney Production had not faltered creatively, I would not have passed the interview process. If Roy Disney had not just had blind faith in me, for reasons I will never understand, I would not have passed the interview process. And if Sid Bass had not backed this blind faith, I would not have passed the interview process.”

Excerpted from “DisneyWar” by James B. Stewart. Copyright © 2005 by James B. Stewart. Published by All rights reserved. No part of this excerpt can be used without permission of the publisher.