After Disney, Eisner Finds a Home Online
ON a Friday morning in September, Michael D. Eisner was in a television studio on the East Side of Manhattan, asking Robert L. Nardelli, the chairman of Chrysler, whether he nursed a grudge against Jack Welch for passing him over for the top job at General Electric eight years ago.
“I don’t hold any grudge against Jack,” Mr. Nardelli told his interviewer.
Mr. Eisner then delicately raised Mr. Nardelli’s fall from grace at Home Depot, where he was deposed last year after a seven-year run during which profits doubled but the stock declined, putting him in the cross hairs of the executive-pay critics. He left with a $210 million payout.
“Your performance was great,” Mr. Eisner told him, “but your style was different from the founder.”
It is a narrative of the aggrieved executive — victim of outside forces, the swells of public opinion pivoting against highly paid chieftains — that could be applied to Mr. Eisner’s own conception of his corporate life as chief executive of the Walt Disney Company and how it came to an end after a bitter public fight with the nephew of Walt Disney himself.
“I’m much happier now,” he says. “The only thing I’m disappointed with is I didn’t leave three to four years earlier.”
In the autumn of 2005, Mr. Eisner worked his last day as chief executive of Disney. His ubiquitous mug and wide grin came to embody the company almost as much as Mickey Mouse, making him a public personality in his own right.
At the end, however, he looked more like Richard Nixon, isolated atop his empire. He found himself under siege from two former board members, who sought to force him out after 20 years because they felt the company was underperforming.
Today, Mr. Eisner has settled into a comfortable post-Disney existence — deeply involved with his talk show, his investments and his experiments in new media, and quite pleased that corporate spinmeisters no longer surround him.
It all adds up to a persona that defies his once pugnacious image. The psychic burdens of life outside the spotlight aren’t apparent, and even if his assemblage of media assets isn’t raking in profits, he is staking a claim on the next media frontier by attracting an audience and buzz for programs created expressly for the Web.
He is one of the very few to do so, with shows like “Prom Queen,” which has reached more than 20 million viewers, and a newer series called “Back on Topps.” He has pulled that off even as big, established media companies — the world he formerly inhabited — have focused on packaging their shows and movies for viewing on the Web rather than making many creative inroads in original Web programming.
His success on the Web is made possible, in part, because he is not running a big media company like Disney anymore. Those companies, reliant on feature films and television programs as their major revenue streams, are gun-shy about doing anything that might threaten those big moneymakers.
Mr. Eisner’s hodgepodge of ventures includes a stake in Veoh, an online video Web site; Vuguru, a video production company that produces shows conceived by Mr. Eisner; Team Baby, a children’s entertainment company; and Topps, the baseball card company.
Barry Diller, a friend of Mr. Eisner’s who has known him since they worked together at ABC decades ago, said: “If you are a corporatist for 38 years, and one at a senior level for 30-something of those years and in a position of C.E.O. of Disney, which is a totalitarian regime, and it stops cold, it’s going to have an extraordinary effect. Most people don’t survive the contrast. It’s annihilating.”
“Michael, and it’s part of his character, he’s more than survived it,” adds Mr. Diller. “He’s emerged as an interesting, curious, engaged person.”
IN the media industry, chief executives are known for creative acumen, or their business expertise. Few are known for both. Mr. Eisner was always a creative person first, who later steeped himself in the intricacies of profit-and-loss statements and balance sheets.
John Travolta, the actor, met Mr. Eisner in 1975 when he starred in “Welcome Back, Kotter” and Mr. Eisner was head of programming at ABC. “He has genuine enthusiasm for the arts,” Mr. Travolta says. “His taste is impeccable with theater, with painting.”
Mr. Travolta recalled a former agent who could tell what a Picasso cost in 1930. “But Michael could tell you why it cost that,” Mr. Travolta adds. “And that was the difference.”
Mr. Eisner, 66, grew up a child of Park Avenue style, an upbringing that explains his sophisticated tastes, but which he says he’s always “been slightly embarrassed by.”
“My grandfather was a very wealthy man, but he would go across the Queensboro Bridge to save the 25 cents on the Triborough Bridge,” he recalls. “As a kid I would get dropped off two blocks from my apartment because I didn’t want people to see where I lived.”
When it came time for college, he shunned his father’s alma mater, Princeton, for Denison University, a liberal arts school in Ohio. After college, he briefly sought the life of a playwright before settling on the corporate media world, working his way up through ABC and Paramount. He became chief executive of Disney in 1984.
Today, without shareholders to worry about, he is driven by his creative impulses and an almost messianic belief that movies and TV shows and videos are more valuable in the long run than the pipes over which they are delivered.
“It’s always the content that defines the platform,” he says. Now the platform owners are “being arrogant and saying, ‘we’re it,’” he adds. “But eventually exclusive content wins out.”
Then he gives an important caveat: The content must be professionally produced as well as exclusive. “How many skateboarding cats can there be?” he says.
Like his counterpart, Mr. Diller, Mr. Eisner is at pains to offer a unifying vision for the different companies he has in his portfolio.
“There is a method to my madness, but it’s hard to define,” says Mr. Eisner, who explained that eventually the assets would fit together as one media company.
For now, the businesses are part of the Tornante Company, a private investment vehicle that Mr. Eisner set up with some of the vast wealth he accumulated during his career at Disney. (He chose the name after seeing the word during a bike trip in Italy; it means “hairpin turn” in Italian.) When he left Disney, he owned 14.2 million shares, valued then at close to $333 million, and options for 21 million more shares, according to a regulatory filing.
HIS right-hand man is a baby-faced, 20-something Princeton graduate named Andy Redman, who searches for deals for him. Their biggest success has been “Prom Queen,” a murder-mystery series that made its debut on MySpace, the social networking site, and will soon be in its third season.
At a conference last summer hosted by Fortune, Peter A. Chernin, the president of the News Corporation, called “Prom Queen” “the first pitch of the first inning in what is going to be an evolution of different kinds of content.”
The companies inside Tornante are already interacting in small ways. Team Baby will be integrated with Topps, and Vuguru has produced the “Back on Topps” series, a fictionalized comedy about what happens to two brothers, former heirs to the card company, when it falls under new management.
Mr. Eisner, who once ran ABC, sees the traffic statistics for Veoh, which distributes online video much the way YouTube does, and predicts the demise of broadcast television. At a meeting in Los Angeles with Veoh management, he is shown statistics that say Veoh gets 44 percent of its viewers during early evening and prime-time television hours.
“If you are Les Moonves, this makes you very nervous,” he says, referring to the chief executive of CBS.
To Mr. Eisner, the numbers clearly show that people are watching online video beyond their time-wasting hours at the office. And that excites him even more. “Veoh or some other online video aggregator is going to be more important than NBC in 10 years,” he boasts.
While the future may be entertainment on the Web, the bulk of money to be made is still from traditional means. (Veoh, for all Mr. Eisner’s faith in it, is not yet profitable.) So, at a meeting in August at Tornante’s offices in Los Angeles, Mr. Eisner and his team discussed turning “Prom Queen” into a film. “It would be an event, taking an Internet property and turning it into a theatrical movie,” he said in the meeting. “I think we have to do it.”
Tornante also sold Nickelodeon 20 episodes of a stop-motion animated comedy called “Glenn Martin DDS,” and Mr. Eisner has been intricately involved in the storytelling and writing.
And at Topps, finding ways to make the brand valuable online — for example, with a virtual trading card collecting game for children — is important, but so is selling physical goodies.
“It’s like movies and theaters,” he says. “The theatrical movie is still the main distribution. You can put it on the iPod, et cetera, but movies in theaters are still the core.”
And these baseball cards would hardly be recognized by previous generations. After a boom in the 1980s and 1990s, when collectors overtook children as the target customers and companies flooded the market with newfangled varieties of cards, the baseball card industry has been in decline. “We’ve got to get the kids back,” Mr. Eisner says.
After a meeting last summer about Topps’s digital strategy at the company’s offices in Lower Manhattan, Mr. Eisner found himself in a closet-sized room draped with laundry. Babe Ruth’s and Lou Gehrig’s laundry. The uniforms were bought at auction — Mr. Ruth’s pants cost $90,000 and Mr. Gehrig’s $60,000 — and will be sliced into tiny pieces and embedded into cards.
Mr. Eisner, a serious art collector, is openly uneasy about the endeavor, but Scott Silverstein, the chief executive of Topps, explains that this gimmick is a big moneymaker.
Several weeks ago, after interviewing Mr. Nardelli, Mr. Eisner was having a chat in the green room when a producer ducked his head in and asked if the group would move down the hall to a room that could pass for a closet. The room needed to be prepared for lunch.
Mr. Eisner genially walked down the hall. It’s hard to see him as the corporate tyrant he was portrayed as in “Disney War,” James B. Stewart’s 2005 book.
STRIPPED of the corporate image-crafters and lawyers that surrounded him in his last days at Disney, and with the benefit of distance — three years, to be exact — Mr. Eisner appears mellowed, happier, different.
“I think there was somewhat of a caricature of him as being unpleasant and difficult to deal with,” says George J. Mitchell, an ex-chairman of Disney and former senator from Maine. “He had a lot of major negotiations and major decisions to make that not everyone liked.”
Cyma Zarghami, the president of Nickelodeon, recalled receiving a call from Mr. Eisner earlier this year when he was pitching “Glenn Martin DDS.” She knew of Mr. Eisner’s reputation as a micromanager and being difficult to work with, so she was initially hesitant. “I wasn’t sure what to expect when he brought the show in,” she said. “I would have expected the deal-making process to be more difficult.”
Mr. Eisner says the big “error” of his last years at Disney, when he was fighting with Roy Disney and Stanley Gold, the two former board members who waged a proxy fight against him, was how he handled public relations.
“The way the company handled it, and the way I was advised to handle it, was to stonewall it,” he says. “I got very, very busy, and I got isolated. I went against my normal instincts in terms of dealing with the press. And then all the internal people, the lawyers, are telling you to be careful.”
Mr. Eisner’s tenure at Disney was so long — 21 years — that his persona became synonymous with the brand, even though he was a hired gun, not a founder.
“I always felt, up until the somewhat difficult ending, that I was the owner,” he says. “I felt like I was the owner. I tried to act in the long-term interest, like Rupert” — referring to Rupert Murdoch, the chairman of the News Corporation — “and not focus on meeting the quarter.”
But now, away from that world, Mr. Eisner is having more visible fun than his corporate friends — people like Mr. Nardelli, who last week went before Congress to ask for a bailout for the auto industry, and his former colleagues in the media industry, who are dealing with a financial crisis and swooning stock prices.
Robert A. Iger, Mr. Eisner’s successor at Disney, says his former boss is serious about his new business ventures but doesn’t take himself too seriously. “He’s not crowning himself as some new media mogul,” Mr. Iger says.
“He seems comfortable with both his place in the world and his place in business.”
1 comment:
I think that this article shows how Eisner's principles and work ethic have allowed him to maintain his success even after leaving Disney. He has several of the qualities we read about in Good to Great and he isn't afraid of taking risks. I believe that it's only a matter of time before he becomes more successful than he was at Disney. He certainly has the drive and determination to do it.
Post a Comment