Michael Eisner

Topics: The Walt Disney Company, Roy E. Disney, Robert Iger Pages: 5 (1484 words) Published: August 2, 2013
Michael Eisner

It can be said that Eisner “rescued” Disney from this troubled state 1980s. After his arrival in September of 1984, he developed a formula aimed at shaking up Disney’s existing culture with his unique yet forceful management style. His unique brand of creativity and instinct brought in partnerships with exquisite talent. This change would, however, begin with the termination of 400 Disney employees over the course of his first six months on the job (UVA-BP-0339 p.3). In doing so Eisner’s management would transform Disney from a company of cartoons and amusement parks to a media giant with radio and television stations and broadcast and cable networks that produce programs in over 50 countries (Site). Disney had just $1.7 billion in revenue in 1984 when Eisner took over. No one disputes the phenomenal first decade that brought to Disney. However, he succeeded in adding $65 billion to the company’s operating units when rivals were at best treading water. Eisner’s saw value in entertainment, unlike the core of creativity Walt Disney founded the company upon back in the 1920’s. Having spent his career in television, Eisner gradually released a vault of animated classics on video cassettes and distributed in stores. This approach was in contrast to the vision of founder Walt Disney for he was known to be against the frequent showing of Disney classics (UVA-BP-0339 p.4). However, it was only a matter of time until sales of the video became the biggest contribution to the bottom line within Disney’s movie division. Prior to the arrival of Michael Eisner in 1984, a number of Disney’s operating divisions were losing significant capital. There were a number of write-offs within their movie division totaling over $60 million. The Disney Channel had lost $11 billion alone in the first quarter. Outsiders commented “They don’t know the cable business, and they don’t listen.” There was also concern over the drop in attendance across Disney’s theme parks as well. Analysts felt that the company lacked the correct marketing to needed to compete among current newlyweds. The result was a level of return less than that of the risk free rate on the market. Consumer products stood to be the only successful operating unit at the time having returned roughly 200 percent on its assets since 1979 (UVA-BP-0032 p.16-20). Eisner spent a great deal of time reenergizing Disney’s movie business as well. The company’s creativity and talent had suffered with the loss of Don Bluth and Tim Burton prior to his arrival. Michael placed primary focus on the development of new Disney characters comparable to Mickey Mouse and Donald Duck that could take spawn a new breed of animated movies. He found this success in the release of The Little Mermaid. To Eisner’s credit, this movie captured the traditional creativity Disney was founded upon. Walt Disney’s son, Roy, stated The Little Mermaid was “the kind of movie that Walt would have made” (UVA-BP-0339 p.4). There was also a great deal of emphasis placed of the future of the Disney Channel, which under previous succession was another operating unit in question. Eisner acknowledged this and viewed it in optimism commenting its current losses as “excellent long-term investments in a business that represents a cornerstone of our future” (UVA-BP-0339 p.4). Here he aimed at creating a new brand of quality entertainment for children, while closely monitoring the unit’s budget in order to maximize profits. Eisner comments on this success, “A hit live action series like That’s So Raven is produced at half the price of a network series, resulting in good returns” (http://www.slate.com/id/2094923/) Addressing Disney’s theme park division, Eisner spent considerable time visiting the attractions in order to gain a consumer’s perspective. He sampled all aspects Disney offered ranging from the amusements to restaurants and expressed strong satisfaction...
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