Michael Eisner
1942–

Chief executive officer, The Walt Disney Company

Nationality: American.

Born: March 7, 1942, in Mt. Kisco, New York.

Education: Denison University, BA, 1964.

Family: Son of Lester Eisner and Margaret Dammann; married Jane Breckenridge; children: three.

Career: NBC, 1963, page; 1964, FCC logging clerk; CBS, 1964–1966, commercial slotter for programming department; ABC, 1966–1968, assistant to the national programming director; 1968–1969, manager of specials and talent; 1969–1971, director of program development for the East Coast; 1971–1975, vice president of daytime programming; 1975, vice president for program planning and development; 1976, senior vice president for prime-time production and development; Paramount Pictures, 1976–1984, president and COO; The Walt Disney Company, 1984–2004, chairman and CEO; 2004–, CEO.

Publications: Work in Progress (with Tony Schwartz), 1998.

Address: The Walt Disney Company, 500 South Buena Vista Street, Burbank, California 91521; http://www.disney.com.

■ With an entertainment career spanning three decades, Michael Eisner had a tremendous impact on popular culture. As one of the most powerful people in the media industry, he was the target of both lavish praise and intense criticism, as Disney first defied and later fell short of expectations under his reign. His leadership was so significantly polarizing that the executive once credited with breathing new life into Disney might ultimately be remembered as a mercurial manager who robbed it of its magic.

LITERATURE, NOT THE LION KING

Michael Eisner was raised in affluence. His maternal grandfather was the cofounder of the American Safety Razor Company,

and the family amassed a fortune selling military uniforms and razor blades. As was consistent with the family business, Eisner's childhood was filled with much discipline. His parents strictly rationed the children's visual consumption of both television and movies, requiring two hours of reading for every hour of TV watching.

ENTERTAINMENT COMES CALLING

Eisner enrolled in Ohio's Denison University as a premed student but quickly found that his true interests lay in English literature and the theater. In a 1998 interview with Larry King he said, "I just stumbled from one thing to another. I had a kind of a general feeling that I loved the entertainment business; I loved the creative business; I loved the fun of doing things, but I didn't grow up saying, 'I am going to be a movie executive'" (October 10, 1998).

After trying to woo a girl in his college's theater department by writing a play for her, Eisner was hooked. He worked his first industry job during the summers of his college years as a page at NBC studios in New York. He answered phones for Johnny Carson and gave out the restaurant gift certificates that Carson awarded to contestants.

A BREAK IN THE TV BUSINESS

After graduating in 1964 Eisner returned to New York to work at NBC as an FCC logging clerk—by his own admission merely a fancy way of saying that he wrote down the times the commercials came on. Within six weeks he had moved to the programming department at CBS, where he was responsible for placing commercials in the most appropriate slots during children's programs. Dissatisfied with this work, he mailed out hundreds of résumés, receiving exactly one response—from Barry Diller in the programming department at ABC, himself a mogul in training. Diller lobbied for Eisner to be hired as assistant to ABC's national programming director, a post which Eisner held from 1966 to 1968. While he and Eisner were of the same age, Barry Diller's career started sooner, and as such he was a boss, rival, and friend to Eisner ever since they met.

Eisner produced his first television special, Feelin' Groovy at Marine World, in 1967. In 1968 he was promoted to manager of specials and talent and within a year became director of program development for the East Coast. In this capacity the young executive was responsible for Saturday-morning children's programming. Among other projects he oversaw the production of animated programs based on the popular singing groups The Jackson Five and The Osmond Brothers.

In 1971 Eisner became ABC's vice president of daytime programming, where he helped sell the popular soap operas All My Children and One Life To Live. In 1975 he became ABC's vice president for program planning and development and was next made senior vice president in Prime Time Production and Development in 1976. In these posts he fostered programs such as Happy Days, Welcome Back Kotter, Barney Miller, and Starsky and Hutch. During Eisner's years in the programming department, ABC moved from a perennial third place to first place among the three major television networks.

HIS MENTOR CREATES AN OPPORTUNITY

In 1974 Barry Diller moved on to become chairman of Paramount Pictures. In 1976 Eisner's mentor offered Eisner the post of president and chief operating officer at Paramount, giving him an opportunity to learn the movie business. At Paramount, Diller and Eisner applied the lessons they had learned in network television to keep the studio's costs down. During Eisner's tenure as COO the average Paramount film cost only $8.5 million to produce, while the industry average was $12 million. Paramount soon moved from last to first place among the six major movie-production studios.

In October 1978 half of the top 10 box office attractions belonged to Paramount. Films produced at the studio during Eisner's reign included Raiders of the Lost Ark, Saturday Night Fever, Grease, Heaven Can Wait, Ordinary People, Terms of Endearment, An Officer and a Gentleman, The Elephant Man, Reds, Flashdance, Footloose, Trading Places, Beverly Hills Cop, Airplane, and the first three installments of the Star Trek series.

A PRINCE AWAKENS SLEEPING BEAUTY

Charles G. Bluhdorn, the chairman of Paramount's parent company, died and his successor Martin Davis disliked Eisner. Eisner told Larry King, "I was on the way out" (October 10, 1998). Fortunately, around the same time Roy Disney, Walt Disney's nephew, asked Eisner to run his family's company. Since Walt Disney's death in 1966, the studio had enjoyed periodic box-office successes and continued to earn profits from theme parks and merchandising, but many in the industry felt the company was suffering from a lack of direction. In September 1984 Eisner left Paramount to become the chairman and CEO of The Walt Disney Company.

Within a few years Eisner transformed Disney into the industry leader. In rapid succession, the studio turned out a new cycle of animated features such as The Little Mermaid, Beauty and the Beast, Aladdin, The Lion King, and Pocahontas. Each proved to be a box-office blockbuster and a merchandising bonanza. At the same time Disney diversified, releasing films for a wider audience through its Hollywood Pictures subsidiary and acquiring the independent Miramax to produce more offbeat films for the specialized urban market. As the value of Disney stock soared, market watchers described Eisner as the prince who had awakened Sleeping Beauty.

As quoted in the Philadelphia Inquirer, Nell Minow, the editor of The Corporate Library, an independent investment research firm in Portland, Maine, said of Eisner, "He thinks about things in a richly textured, multilayered way. He's extremely smart" (March 1, 2004). Barry Diller noted in London's Guardian, "Michael has a genuine creative sense and is a genuinely great businessman. You could count the number of people with that combination on one hand. I don't care who you put him in a room with—his ideas, his judgment, are pure pitch" (April 10, 1999).

A TRAGIC DEVELOPMENT

In 1994, after a decade of contributions to the company, Disney's second in command Frank Wells was killed in a helicopter crash. Wells was known for handling the details of Disney's day-to-day operations but was often overshadowed in the public eye by the colorful Eisner. From 1984 to 1994 Wells and Eisner helped to increase annual revenues from $1.5 billion to $8.5 billion, and the company's market capitalization leapt from $2 billion to $22 billion, as revenue from theme parks and resorts tripled. Wells and Eisner had together reestablished Disney's dominance in animated feature films with a series of hits. Not only had Wells been instrumental to Eisner's success, but the two had been personally close. In his autobiography Eisner said: "If I was the rudder, he was the keel. For 10 years we never had a fight or a disagreement. I never once felt angry at him—not until he died instantly. Even then I felt angry only because Frank was not around to help me out with a very difficult situation, as he had so many times before. But mostly what I felt was an overwhelming sense of sadness and loss" (1998).

Wells's death marked the beginning of a decade of misfortune for Eisner and the Magic Kingdom. Less than 36 hours after losing his number-two man, Eisner found himself being aggressively lobbied by the head of Disney's film studio, Jeffrey Katzenberg, who felt he was next in line to head Disney's day-to-day operations. Katzenberg was in fact fired six months later, and five years of lawsuits began. The settlements were complicated by the long and controversial professional and personal relationship between Katzenberg and Eisner. Hearings brought to the surface years of animosity on both sides, culminating in embarrassing testimony by a visibly shaken Eisner in which he was confronted with disparaging statements he had made about Katzenberg to Tony Schwartz, the coauthor of his autobiography; as reported by Time magazine, one of the statements was, "I hate the little midget" (July 19, 1999).

In 1994 Eisner discovered he had severe cardiac disease and underwent bypass surgery. In a letter to the Pulitzer Prize–winning author Larry McMurtry, which was reproduced in his autobiography, Eisner called the experience a formative one: "Something happened to me that was a big deal. My life has a finite sense to it, and there is certainly a hollowness that comes with such realizations. Although I fear the ceiling of death, at the same time I accept death for the first time and even look at it without fear" (1998).

ANOTHER KEY RELATIONSHIP FAILS

After facing his own vulnerability and having become concerned about his lack of a successor, in 1995 Eisner orchestrated the hiring of the Hollywood super agent Mike Ovitz as Disney's president. Hoping to push Disney's assets even further into the entertainment landscape, Eisner announced in 1996 that the company would acquire Capital Cities, the owners of the ESPN and ABC television networks—the latter being Eisner's old employer.

Ovitz's management got the ABC merger off to a dismal start, however, and his 16-month tenure scarred the company. Just five weeks after hiring Ovitz, Eisner believed that his friend needed to be fired. Yet he hesitated out of the fear that Ovitz would commit suicide. A little more than a year after joining Disney, Ovitz left with a severance package that included a $38.9 million cash payout and stock options valued at more than $100 million.

While temporarily hurting profits, the $19 billion merger with Capital Cities appeared strategically sound. The principle of the deal was to marry typical Disney content with ABC's broadcast and cable distribution; the challenge lay in the execution. While ESPN and other cable properties grew, no unit of the company was as besieged as ABC, which lost money for the first time in a decade in spite of a fantastic advertising marketplace because audiences were splintering and programming costs kept climbing. Under competitive pressure Disney agreed to spend a whopping $9.2 billion for the rights to televise National Football League games on ABC and ESPN through 2008. In one particularly bad year following the acquisition, operating income for the company's broadcasting segment—which included ABC, 80 percent of ESPN, the Disney Channel, ABC Radio, and stakes in Lifetime, A&E, the History Channel, and E! Entertainment—grew by just 3 percent.

ABSORBING A MERGER

Throughout the rest of the 1990s Disney seemed less able than ever to cope with adversity. Some analysts said that the company had grown so big and its problems so far-reaching that they could not be counteracted by a couple of hit movies or TV shows or additional Disney stores. Some were troubled by Eisner's persistent failure to designate a clear successor to himself as the head of the company.

While Disney's 1998 net income surpassed that of its three major competitors combined, all other key indicators were down—some shockingly so. For the first nine months of fiscal 1999, excluding a one-time gain from an asset sale, Disney reported declines in operating income of 17 percent, net income of 26 percent, and earnings per share of 27 percent. Some Wall Street analysts cut their fiscal 1999 earnings estimates as many as five times, and 13 of 25 analysts issued a "hold" on the stock, according to Zacks Investment Research. The company had simply stopped growing, and the stall was not merely a momentary dip: Disney was not expected to match its fiscal 1997 earnings until 2001 at the earliest—a major setback for a company that for the decade after Eisner took over in 1984 had delivered annual increases in both profit and returns on equity of 20 percent.

In Fortune magazine Eisner defended what he saw as a premature burial of his company: "We're in a transition period.

I would rather have every quarter be up. It was for 13 years. Everybody loves you. But you can't manage a company like ours quarter to quarter, maniacally, so that the media will write good things about you. I don't think our problems are in the fabric of our company. And I don't have my head in the sand. The criticisms of me and Disney today are as shortsighted as were the praises of me and Disney in the high economic times" (September 6, 1999). In 1999 Jeffrey Katzenberg and Disney finally settled a bitter breach-of-contract lawsuit which analysts estimated paid Katzenberg $250–275 million, including the $117.5 million that he had received in late 1997 when the case had been partially settled.

RULING THE MAGIC KINGDOM WITH AN IRON FIST

Eisner's critics contended that for all his creativity, charisma, and grand plans, he presided over an insular and arrogant corporate culture where the acting authority was hierarchical, centralized, and slow. According to popular wisdom Eisner insisted on making too many decisions himself, clogging the decision-making process. Working with Disney was notoriously difficult—so much so that a group of partners, including Coca-Cola, AT&T, Delta, and Kodak, used to meet informally to trade tips on how to cope.

Yet Eisner had a powerful defense. As he told Fortune, "If there's an area where I think I can add value, I dive in. I heard from a friend that the cast members at Disneyland Paris weren't as helpful as those at Walt Disney World; he recommended better training. Is that meddling or is that insisting on a high standard of excellence? Yes, at certain times I paralyze people. I'm never satisfied. It gets people crazy, I know that. But I leave my best executives alone. There's no brain drain. We have unbelievably strong management" (September 6, 1999).

As the lions circled, Eisner's fellow mogul and longtime peer Barry Diller stood firm. Diller told the Guardian, "He's developed into the most potent executive of them all. The deeper you dig with Michael Eisner, the better it gets. On the way there he will drive you crazy, though. Why? He's a complex character. He's paranoid. Michael is very suspicious of motives" (April 10, 1999).

Another Eisner criticism was that he did not truly value other people and ousted anyone who gained too much power, as with Katzenberg and Ovitz. Other strong executives left the Disney fold of their own volition, among them the former CFOs Stephen Bollenbach and Richard Nanula, the Internet guru Jake Winebaum, and the former ABC executives Geraldine Laybourne and Steve Burke. Still, to Eisner's credit, as of early 2004 many talented executives remained, including the ESPN president George Bodenheimer and the consumerproducts chairman Andy Mooney.

A PLUMMETING APPROVAL RATING

Three years after the terrorist attacks of 2001 Disney's theme parks were still recovering, offering discounted prices in order to keep attendance figures up. The $5.2 billion purchase of Fox Family Channel in 2001, which became ABC Family, was proving to be a failure. During the recession, when advertisers tightened belts, ABC stumbled to last place in ratings among the four major broadcast networks. While Disney films generated a record $3 billion at the box office in 2003, the company could only take part of the credit for the star performer Finding Nemo, which had been coproduced by Pixar. Critics said that the fabled Disney theme parks were losing their luster.

The knocks against Eisner's survival tactics were plentiful. He was accused of undermining the company's creativity by dismembering much of its vaunted feature-film animation unit. Critics said he had manipulated a board that had been constantly reshuffled to remain beholden to him. In a final blow the last link to the company founder Walt Disney—his nephew Roy—resigned from the Disney board in 2004 to voice his displeasure with Eisner. As quoted in the New York Times, in his resignation Roy Disney blamed Eisner for creating among employees, shareholders, and customers alike a "perception that the company is rapacious, soulless, and always looking for a quick buck rather than creating long-term value, which is leading to a loss of public trust" (February 15, 2004).

THE MOUSE THAT ROARED

The grumbling over Eisner's mismanagement came to a boiling point at a March 2004 shareholder meeting in Philadelphia. In front of three hundred livid shareholders, Eisner gave a ninth-inning plea regarding his personal turnaround and commitment to the company: as reported by Newsweek, he said, quite simply, "I love this company" (March 15, 2004). Investors did not care. In an unprecedented showing 43 percent voted against his reelection as chairman. Although the former Senator George Mitchell was named nonexecutive chairman and the vote was clear evidence of public opinion against him, Eisner vowed to stay on at Disney until his contract ended in 2006 and not be forced out.

Considering that Disney had just started to regain some of its magic—stock value and profits were rebounding, and the company anticipated double-digit earnings growth through 2007—the shareholder meeting showed just how low Eisner's standing had sunk. Disney diehards believed Eisner had sacrificed the company's soul for synergies and profits; for example, to cut costs Eisner had eliminated the street sweepers at Disney Land. In Newsweek the shareholder Roxann Grzetich of Chicago said, "The deterioration in the appearance of the parks is awful" (March 15, 2004).

The week after the fateful meeting Eisner turned 62; still, he had yet to name a successor. Eisner insisted on staying while everyone else wondered when the chief Mouseketeer would finally lose the keys to the kingdom.

See also entry on Walt Disney Company in International Directory of Company Histories.

sources for further information

Bates, James, and Michael Cieply, "As Spender, Ovitz Was $6 Million Man," Los Angeles Times, February 28, 2004.

Berenson, Alex, "The Wonderful World of (Roy) Disney," New York Times, February 15, 2004.

Corliss, Richard, "Enough Is Enough!" Time, July 19, 1999, p. 76.

Eisner, Michael, Work in Progress, with Tony Schwartz, New York, N.Y.: Random House, 1998.

Gunther, Marc, "Eisner's Mousetrap," Fortune, September 6, 1999, p. 106.

Hattenstone, Simon, "Michael Eisner: Master of the Mouse," Guardian (London), April 10, 1999, p. 6.

Jefferson, David J., and Johnnie L. Roberts, "The Magic Is Gone," Newsweek, March 15, 2004, p. 52.

King, Larry, "Work in Progress : Michael Eisner on His Life at the Helm of Disney," CNN Larry King Weekend, October 10, 1998.

Tanaka, Wendy, "Eisner Put Stamp on U.S. Pop Culture," Philadelphia Inquirer, March 1, 2004.

—Tim Halpern

Eisner, Michael

(1942-)
Walt Disney Company

Overview

Entertainment executive Michael Eisner is the chief executive officer (CEO) of the Walt Disney Company. He began as an usher at NBC and eventually rose to such positions as head of prime time programming at ABC and president of Paramount Pictures before assuming control of Disney in 1984. Under his leadership, Disney became an entertainment superpower with record profits. Considered a great judge of talent and a shrewd businessman in a tough industry, Eisner is also known as a devoted family man.

Personal Life

Michael Dammann Eisner was born in Mt. Kisco, New York, the son of a well–to–do lawyer, and was raised in luxurious surroundings in his parents' spacious Park Avenue apartment in New York City. His early life was characterized by strict discipline and etiquette, which included wearing a jacket and tie for family dinners. Although raised in wealth, he learned early to treat money seriously. Eisner's father, Lester, was a Harvard graduate and a lawyer who successfully invested the existing family fortune in New York real estate. Lester Eisner also served as a top housing official in the Eisenhower administration.

Eisner and his sister were taught self–discipline early. Among other lessons, they were required to read each day for two hours for every one hour of television they watched. Eisner enjoyed reading "Hardy Boys" mysteries and the works of Jack London, and his television favorites included Hopalong Cassidy, Ozzie and Harriet, and Leave It to Beaver. Entertainment for the Eisners often included Broadway, and Eisner marked every special occasion with a visit to the theater.

Eisner attended Lawrenceville School, an expensive New Jersey boarding school, where he was a good student. He tried sports but was largely unsuccessful. He belonged to the Periwig theatrical club and won a lead role in The Caine Mutiny as a senior, but illness forced him to withdraw.

After Lawrenceville School, Eisner enrolled in Denison University, a small liberal arts college in Granville, Ohio. His intention was to prepare for a medical career, but by his junior year, he was back in the theater. Shy and not particularly driven to be an actor, Eisner began writing plays. He is known to have completed two plays, one of which was produced by the school's thespian club. Eisner graduated from Denison in 1964.

Eisner and Jane Breckenridge were married in 1967. They have three sons, Breck, Eric, and Anders. Eisner is a well–known family man and prefers pictures of his family in business publications where others will use political shots with public figures. In the critical days leading to his election as chairman of Walt Disney Productions, he delayed meetings because of commitments to his sons.

Career Details

After college, Eisner made a trip to Paris, thinking he would be a writer. He returned home, however, in less than two weeks. Back in New York, he went to work at NBC where he took a job as a clerk who kept track of the number of times a commercial aired. He also worked weekends at an NBC radio station, giving out traffic reports. Not long afterward, Eisner moved to CBS, where he inserted commercials into their slots for children's programs, the Ed Sullivan Show and Jeopardy.

Somewhat dissatisfied with his career, Eisner sent out hundreds of resumes, looking for a break in the television business. That break came in 1966 when a young executive named Barry Diller called. Diller was only 24 years old but was already a vice president at ABC. At the time ABC was a small network, only about 10 years old and with only 24 affiliates around the country.

Eisner moved to ABC and worked with Diller on ABC's programming. Together, their innovations included the movie–of–the–week and the miniseries. Eisner genuinely enjoyed even the simple forms of popular programming such as sitcoms and cartoon shows. Thus, when he took over Saturday morning programming in 1969, he did not guess at what would sell, he just looked for what he liked to watch.

Eisner's first push for Saturday morning programming was a cartoon series based on the popular singing group, the Jackson Five. Soon, he added another, featuring the singing Osmond Brothers. Within three years, ABC was the top–rated network on Saturday mornings. Within five years, Eisner was put in charge of ABC's prime time schedule, where he was responsible for such hits as Happy Days and Welcome Back Kotter. Even though the critics complained, the shows were successful and the ratings improved. Eisner understood that the core elements that worked for Saturday morning programming were universal: the importance of the story line, character development, and conflict.

He also was responsible for some serious work at ABC such as the miniseries Roots and Rich Man/Poor Man. ABC emerged while Eisner was head of programming at the top–rated network, but Eisner had already left for greener pastures.

In 1976 Eisner joined Paramount Pictures, where Diller was the chairman and Eisner became president. Paramount was not a strong company, which is why the parent, Gulf Western, brought in the two successful ABC executives. Paramount had not had a hit movie for several years and lost money. Within a year, Paramount produced Saturday Night Fever, and a string of successful movies were to follow that included Raiders of the Lost Ark, Bad News Bears, Grease, Heaven Can Wait, and Beverly Hills Cop. Two years after Eisner joined Paramount, the studio led the "big seven" studios with nearly one quarter of national box office proceeds.

Chronology: Michael Eisner

1942: Born in Mt. Kisco, New York.

1964: Graduated from Denison University.

1966: Hired by Barry Diller at ABC.

1976: Named president of Paramount Pictures.

1984: Became chairman of the Walt Disney Company.

1986: Created international division of Disney.

1996: Disney acquired Capitol Cities/ABC company.

1998: Eisner's autobiography, Work in Progress, is published.

1999: Purchased InfoSeek and created Go.com.

2001: Number of Disney Channel subscribers reached 70 million.

For six years, Paramount never fell below second in market share. However, two events in 1984 changed Eisner's career direction in a dramatic way. First, his mentor and supporter at Paramount, Gulf Western's chairman Charlie Bluhdorn, died. Bluhdorn's successor, Martin Davis, did not think as highly of Diller and Eisner. Davis has been quoted as complaining that Eisner was not "serious" enough and was "like a kid." Diller had his problems with Davis, too, and left to become chairman at 20th Century Fox.

The second event of 1984 was the culmination of two decades of problems and drift at Walt Disney Productions. Walt Disney had started the company in the late 1920s and, after a few false starts, had found success with the animated character Mickey Mouse. Together with his brother Roy, Disney had built an entertainment giant. Walt Disney's sudden death in 1966 had deprived the company of not only its chairman but of its heart and soul. Using Walt's creative genius and his brother Roy's business acumen, the company had been successful. Yet, like many family–operated businesses, there had been little effort made to groom executives to succeed the founders.

The aftermath of Disney's death was a slowing of growth and, eventually, stagnation in the Disney empire. Attendance dropped in the company's theme parks, and movie production faltered. Earnings dropped, and constant fighting between the "Walt" and "Roy" factions paralyzed the company. While the conflict was visibly between the two arms of the Disney family, the fight was actually between the creative people (Walt) and the administrators (Roy). This fighting actually paralleled conflicts that had existed between the two brothers for years, only now it threatened to destroy their dream.

Disney of the early 1980s was ripe for corporate raiders and take–overs. In the Wall Street climate of the time, it was not uncommon for companies in Disney's condition to be taken over by speculators who would then break up the company and sell the parts for huge profits. Several such profiteers were buying up Disney stock or making overtures to the company and its major stockholders. Disney insiders, including Roy Disney's son, also named Roy, were intent on saving the company.

A group that became known as the "brain trust" was formed. The members of the trust were Roy Disney, Frank Wells, a consultant to Warner Brothers, and Stanley Gold, a Disney board member who ran Roy's company, Shamrock Holdings. The three set out to find a new manager for the company who would restore it to a position of strength, if not to its past glory. Eisner was a leading candidate from the beginning and was seen as articulate, imaginative, enthusiastic, and with values complementary to the company's family identity. It was thought that Walt Disney himself would have loved him.

A protracted battle ensued and, ultimately, then–current chief executive Ron Miller, who was Walt Disney's son–in–law, was fired. Frank Wells was considered a candidate for the top spot, but he recommended Eisner. Finally, with the intervention of major stockholder Sid Bass, a compromise team of Eisner as chairman and CEO and Wells as president was proposed.

Stanley Gold, who was point man for the "brain trust," pushed this team hard. According to Gold, Eisner's reputation as a creative person and a "big kid" was perfect for the head of Disney. Gold said that the problem with Disney since Walt died was that the place had not been run by "crazies." It "needed to be run by crazies again," and Eisner was the man for the job. With the strong businessman Wells as Eisner's partner, Gold was promoting the same type of team that had built Disney in the first place: Walt (Eisner) as the creative "crazy" that drove the company forward while Roy (Wells) applied the common sense and occasional braking that was necessary to satisfy the bankers and Wall Street. Gold's efforts, with Sid Bass's vocal support, proved to be very successful.

Eisner was appointed chairman and CEO of Walt Disney Productions on September 22, 1984. Wells became president, and the new team was off and running to reestablish the Walt Disney Company as the premier entertainment company in America. New blood was brought into the management team, many from Eisner's old company, Paramount. The Disney film archives were utilized to their fullest capacity, the theme parks were restored to profitability with attendance again rising annually, the animation division of Disney returned to making feature–length films, and the stock value rose dramatically.

Over the first decade of Eisner's term as chairman and CEO, Disney produced a string of movie hits including Down and Out in Beverly Hills in 1986, Who Framed Roger Rabbit in 1988, The Little Mermaid in 1989, and Beauty and the Beast in 1991. Aladdin, the first animated feature to be nominated for an Academy Award for best picture, was released in 1992. Disney has produced a major animated feature nearly every year and got back into television with the hit show The Golden Girls and a revised feature, the Disney Sunday Movie.

Eisner spearheaded other ventures including a new amusement park, Euro Disney, which opened outside of Paris, although it has never brought in the expected revenues since its opening day in 1993. Disney also acquired independent film company Miramax to produce more offbeat films, and in 1996 Disney purchased Capital Cities, which owned ABC Television and the cable sports network ESPN. Almost 20 years after heading ABC's prime time programming, Eisner now headed the company that owned the network.

Eisner assumed added responsibilities at Disney in 1994 when Wells died tragically in a helicopter crash. For a time, Eisner replaced him with entertainment executive Michael Ovitz, but Ovitz spent just 16 ill–fated months at the network before leaving; many top Disney executives departed as well. Eisner also fought a rather vicious public battle with Jeffrey Katzenberg, a top Disney executive since the early 1980s. Katzenberg departed to become a founding partner in DreamWorks SKG, a studio and multimedia venture with Steven Spielberg and David Geffen. He later filed a lawsuit against Disney, requesting $580 million in compensation. The figure was based on future earnings promised to him by the late Wells for Disney films and other projects that he had developed; the suit was reportedly settled for $250 million.

Under Eisner's direction, greater emphasis has been placed on the construction and operation of company hotels at the theme parks and a cruise ship line is in operation. Merchandising and licensing agreements also brought in steady revenues, with over 700 Disney retail stores on three continents. Disney now owns a professional hockey team named after a modest Disney movie hit, the Mighty Ducks, and it has acquired the Anaheim Angels baseball team.

In 2001, with 15 years as chairman and CEO of Walt Disney behind him, Eisner continued to think of Disney as a small family company—though the term family had more to do with the type of entertainment it produced than with who owned the company. And it was not small. In the five years previous, penetration of The Disney Channel rose from 12 million to 70 million US households.

Nevertheless, in 1999, Disney's unbroken record of double–digit annual growth was interrupted as net income dropped from $1.85 billion a year earlier to $1.3 billion. Disney's internet business had suffered increased losses, the consumer products division was stalled, and the film business was struggling with high costs and a saturated market.

In 2000 it was only the company's theme parks/resorts and media networks that were making money. In response to the bad news, Eisner attempted to improve communications, scheduled regular earnings teleconferences, and gave the press greater access. Still, Disney's net profits for 2000 managed to rise by 30 percent. With a new theme park poised to open in California, another near completion in Tokyo, and projects under way in France and Hong Kong, Eisner felt that predictions of more bad news for the company were overdrawn. But in the spring of 2001, Eisner sent out pink slips to 4,000 of his 120,000 full–time employees in an effort to eliminate between $500 million to $850 million from Disney's annual cost structure by fiscal year 2003.

After the terrorist attacks on the World Trade Center and the Pentagon on September 11, 2001, Eisner's company took a major hit on two fronts. First, ABC's advertising dollars decreased because of the stalled economy and because the network maintained many hours of continuous coverage without running commercials. In an interview with the Financial Times, Eisner commented: "You don't have to be a genius to figure out that getting zero is not as good as getting something." However, he did note that in the month after the tragedies, advertising dollars were starting to firm up. Second, after the terrorist attacks, the tourism industry fell over drastically, significantly impacting profits at Disneyland and Disney World. By October 2001, Disney had announced that it would cut the hours of some 7,400 employees. Eisner is working hard to maintain the confidence of big investors; nonetheless, stock prices have fallen since September 11. Eisner must also reevaluate the feasibility of purchasing the Fox Family network, a deal first struck in July 2001, which Eisner has since reconsidered due to the sluggish economy.

Social and Economic Impact

Eisner's style is at once casual and friendly, but he is also hardworking, driven, and tough. His creative talent is unquestioned and has served him well, yet there are many stories around the entertainment industry of shrewd deals he has struck to make a movie and attention to detail in the financial end of the business. Eisner understands the need to let the creative juices flow, but he tempers this with the realization that the business must make a profit. In Hollywood, this has turned out to be a very successful formula, and his successes were detailed in his 1998 autobiography, Work In Progress.

Eisner is willing to pay the necessary salaries and fees to make use of top talent in Hollywood. This was a radical departure from the older Disney practice of being quite lean in the compensation department. Eisner understood the need to pay top dollar for the services of the likes of George Lucas, but at the same time he looks for promising newcomers that will become the next wave of creative talent in Hollywood.

The strategy has been to make maximum use of the company's strengths in name recognition, reputation, and assets while diversifying into other aspects of the entertainment industry. The growing number of hotel rooms under the Disney name, the cruise ship line, and the sports franchises are examples of this expansion into related areas upon which the Disney name can be capitalized.

For Disney in the twenty–first century, Eisner predicts great revenue potential in DVD sales—just as the launch of its stable of animated classics on Disney Home Video had coincided with the boom in VCR sales in the 1980s—and was eagerly expanding the company's Internet presence. After the purchase of search engine InfoSeek in the summer of 1999, Disney then merged its Internet holdings, which included ABCNews.com, into Go.com, a "portal" in competition to America Online and the Microsoft Network.

Eisner looked forward to a new era for Disney's Internet presence as more households became wired with high–speed Internet connections. "You must have sports and news and entertainment, or you are going to be a Western Union messenger in a fax world," he told Gunther. Consumers would be able to bring Disney content into their homes directly through the site, making premium cable channels and video rental and retail outlets obsolete. "I believe the entire company's product will mostly be distributed through the Internet," Eisner said in the Fortune interview with Gunther. New Disney theme parks in Tokyo and Hong Kong were in the works, and many were surprised by Disney's unusual foray into yet another medium: Broadway. The musical version of the Lion King was a surprise hit of the 1999 season.

Sources of Information

Contact at: Walt Disney Company
1500 S. Buena Vista St.
Burbank, CA 91521–0001
Business Phone: (818) 560–1000
URL: http://www.disney.com

Bibliography

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Grimes, Christopher, and Robert Thomson. "Disney's Eisner Sees U.S. Television Ad Recovery." The Financial Times, 16 October 2001. Available at http://www.ft.com.

Gunther, Marc. Fortune, 6 September 1999.

Harding, James. "Disney to Pay Less for Fox Family." The Financial Times, 23 October 2001. Available at http://www.ft.com.

"An Interview with Michael D. Eisner." American Academy of Achievement, 17 June 1994. Available at http://www.achievement.org.

La Franco, Robert. "Eisner's Bumpy Ride." Forbes, 5 July 1999.

Lockwood, Lisa. "Disney Gets Stake In Us Weekly." WWD, 28 February 2001.

Mermigas, Diane, and Michelle Greppi. "Disney to cut staff, costs." Electronic Media, 2 April 2001.

"Michael D. Eisner: Biography." American Academy of Achievement, 1998. Available at http://www.achievement.org.

"Michael D. Eisner, Entertainment Executive." American Academy of Achievement, 1998. Available at http://www.achievement.org.

Orwall, Bruce. "Disney's Eisner Seeks to Revive Magic in His Kingdom—He Aims to Assure Employees, Investors Company Will Weather Tough Conditions." Wall Street Journal, 5 October 2001.

Parkes, Christopher, and James Harding. "Eisner's Odyssey." The Financial Times, 29 January 2001.

Poole, Oliver. "Disney Parks Suffer as Scared Tourists Stay Away." The Daily Telegraph, 26 October 2001.

Rublin, Lauren. "Mouse Momentum." Barron's, 15 November 1999.

Schurr, Amanda. "A free man in Paris, and a mighty mouse." Sarasota Herald Tribune, 28 April 2000.

Streisand, Betty. "Shareholders Smell a Rat." U.S. News and World Report, 3 March 1997.

"Walt Disney Company." Hoover's Online, 2001. Available at http://www.hoovers.com.

Wetlaufer, Suzy. "Common Sense and Conflict." Harvard Business Review, January/February 2000.

Eisner, Michael

March 7, 1942 • Mt. Kisco, New York

CEO of Walt Disney Company

When Michael Eisner came on board as Disney's chairman of the board of directors and chief executive officer, or CEO, in 1984, many observers wondered if he could handle the business end of running an entertainment company. In his previous jobs as an executive at ABC and as president and CEO of Paramount Pictures, a major Hollywood film studio, Eisner had developed a reputation as a creative genius, an idea man. As the leader of the legendary Walt Disney Company, Eisner proved that he could balance creativity with sound business sense. He revitalized the company's animated films division, expanded and improved the Disney theme parks, acquired major television networks and cable stations, and made the Disney brand an almost universal presence, found everywhere from fast-food restaurants to toy stores to cruise ships.

In a 2000 interview with the Harvard Business Review, Eisner spoke of the need to weigh creative ideas against business demands, to create magic but at the same time keep within a strict budget. "In a creative person, just as in a creative company," he stated, "you have to have ... a creative outlook and one that embodies common sense, side by side, inseparable. If you don't, then you get neither art nor commerce." After Eisner had spent nearly twenty years at Disney, many of the company's investors began to feel that he was no longer maintaining that delicate balance between art and business, and that he had sacrificed some of Disney's special qualities for the sake of improving profits. Eisner came under attack from many on Disney's board of directors as well as members of the public who owned stock in the company, and in early 2004, he was ousted as chairman of the board. He kept his position as CEO, but many in the industry wondered how long he could continue at the helm of Disney.

"A leader, in my opinion, really has four roles. You've got to be an example. You've got to be there. You've got to be a nudge, which is another word for motivator, really. And you've got to show creative leadership—you have to be an idea generator, all the time, day and night."

Starting at the bottom

Michael Dammann Eisner was born in Mt. Kisco, a small town north of New York City, in 1942. His father, Lester Eisner Jr., was a Harvard-educated lawyer and an investor in real estate, and the family was quite wealthy. Eisner's parents placed a strong emphasis on social graces—Eisner wore a sport jacket and tie at family dinners—as well as on education and culture. They encouraged their children to read often, and the family frequently attended the theater. Eisner's interest in theater continued during his years at Lawrenceville School, an expensive boarding school in New Jersey, where he was in a theatrical club and pursued acting. During his college years, at Denison University in Ohio, Eisner again found himself drawn to the theater. Deciding that he did not want to be an actor, he began writing plays, one of which was produced by the school's drama club. During the summer between his junior and senior years of college, Eisner had a job as a page, or assistant, at NBC, a job he obtained through his father's friendship with the television network's then CEO, Robert Sarnoff. The job was neither glamorous nor important, but it laid the foundation for Eisner's long and celebrated career in the entertainment industry.

After he graduated from Denison in 1964, Eisner returned to NBC, working as a Federal Communications Commission (FCC) logging clerk, keeping track of the times that commercials aired. He then moved to CBS, where he was responsible for placing commercials during children's programs as well as such shows as The Ed Sullivan Show and Jeopardy. Feeling restless and eager for a more important job in television, Eisner sent out hundreds of resumes. He received one reply, from a twenty-four-year-old executive at ABC named Barry Diller. Diller hired Eisner, and in the fall of 1966, Eisner began working for ABC, where he would spend a significant part of his career. The following year he married Jane Breckenridge, a computer programmer; they would go on to have three sons together.

Express lane to the top

Eisner rose quickly through the ranks at ABC, becoming the head of daytime and children's programming by 1971. He created two long-running soap operas during that time, One Life to Live and All My Children, as well as launching the cult-favorite educational series Schoolhouse Rock. During that time, ABC became the top-rated network on Saturday mornings, when their children's cartoons aired. As an executive developing prime-time shows a few years later, Eisner had a critical role in delivering the long-running hit show Happy Days as well as such 1970s classics as Starsky and Hutch, Barney Miller, and Welcome Back, Kotter. During his time at ABC, Eisner helped bring the network from its third-place ratings slump to the first-place position.

In the spring of 1976, Paramount Pictures, one of the major film studios in the United States, hired Eisner as president and CEO; his former coworker at ABC, Barry Diller, was chairman of Paramount's board of directors. Paramount was struggling at the time, in last place among the studios, but it took Eisner just two years to reverse the company's fortunes, bringing it to the top of the list. He distinguished himself there as a studio head who skillfully controlled costs while also contributing to the creative end of filmmaking, overseeing script development and other aspects of film production. Under Eisner's guidance, the studio released such hits as Saturday Night Fever, Raiders of the Lost Ark, The Bad News Bears, Grease, and Beverly Hills Cop.

Walt Disney: The Man behind the Mouse House

Although Walt Disney died in 1966, his presence is still felt both within the walls of the Walt Disney Company and in the hearts of fans worldwide. He invented the concept of movie-length cartoons, in the process bringing to life such fairy tales as Snow White and the Seven Dwarfs, Sleeping Beauty, and Cinderella. He was also responsible for some of American popular culture's most enduring characters, including Mickey Mouse, Donald Duck, and Goofy. Disney established the theme parks Walt Disney World and Disneyland, which have endured as popular vacation destinations for tourists from all over the world.

Born in Chicago, Illinois, in 1901, Disney grew up on a farm in Missouri, later moving to Kansas City. He began drawing at a young age, incorporating into his creations the many animals on the family farm. He learned basic drawing skills from a course he completed by mail and from classes he took at local museums. After volunteering with the Red Cross during World War I, Disney began his career drawing illustrations and creating primitive animated cartoons for an advertising agency. He moved to Hollywood in 1923, with few possessions and no prospects. His brother, Roy, already living in California, supported Walt emotionally and financially, and the two set up shop together. With the new company struggling and desperate for a break, Walt developed a cartoon character named Mortimer Mouse; his wife, Lillian, suggested he change the name to Mickey, and thus, a legend was born.

Mickey Mouse's first appearance was in a 1928 cartoon short called Steamboat Willie, notable for being the first fully synchronized sound cartoon, meaning that the sound aligned with the actions of the characters. Walt Disney himself provided the voice of Mickey, with drawings by Ub Iwerks. Mickey Mouse was an immediate sensation, and the Disney company could stay afloat. Walt displayed a tireless drive for technical innovation, constantly seeking out ways to improve his cartoon shorts. He also proved to be a creative powerhouse, contributing his own ideas and shaping others' storylines as well.

Disney expanded his company's operations with the opening of a studio where a crew of animators could train and work. In 1937 Disney released Snow White and the Seven Dwarfs, the first feature-length cartoon. Taking several years and costing nearly $1.5 million to make—an unheard-of sum in those days—Snow White retains its status as a film classic today. Disney followed the success of this film with other such animated classics as Pinocchio, Dumbo, and Bambi. Disney also achieved tremendous success with live-action family films, with his greatest success being the 1964 masterpiece Mary Poppins. In the mid-1950s, Disney began producing cartoons and live-action programs for television, including The Mickey Mouse Club and Zorro.

After attending an amusement park with his children, Disney began to dream of creating a Disney theme park that would appeal to children and adults alike. He opened Disneyland in Anaheim, California, in 1957. In just a decade, the park attracted nearly seven million visitors. Years later, Disney made plans for a second theme park in Orlando, Florida; Walt Disney World opened in 1971, five years after his death. His dream of developing a city of the future was realized in 1982 with the opening of the Epcot Center (Epcot stands for Experimental Prototype Community of Tomorrow).

In Disney's assessment, his greatest contribution to future generations was the establishment of the California Institute of the Arts, known as Cal Arts, a college-level school designed to train students in the visual and performing arts. In Disney's biography at the company's Web site, he is quoted as saying of Cal Arts, "It's the principal thing I hope to leave when I move on to greener pastures. If I can help provide a place to develop the talent of the future, I think I will have accomplished something." As Disney fans will attest, his legacy goes far beyond Cal Arts. Disney has been described as a legend and a folk hero, and his name has become synonymous with the concepts of creativity, imagination, and enterprise.

Disney boss

In the fall of 1984, Eisner left Paramount to become the CEO of Disney at the request of founder Walt Disney's nephew, Roy Disney. At the time of Eisner's arrival at the Mouse House, the entertainment giant was struggling. Most of Disney's profits came from its theme parks, and even the parks were not doing as well as they once had. The company's films were not successful, and it did not have a strong presence on television. Eisner quickly set about to change Disney's fortunes, and he was tremendously successful: within less than twenty years, Eisner increased the company's annual revenues from less than $2 billion to more than $25 billion. He began by expanding Disney's television programming, approving the sale of old cartoons, films, and television shows to TV networks. He initiated substantial additions and improvements to the company's U.S. theme parks, Disneyland Resort in California and Walt Disney World in Florida. Eisner also approved the construction of two theme parks outside the United States, Euro Disney in France and Tokyo Disneyland in Japan. While Euro Disney initially performed relatively poorly, the Disney parks in the United States became far more successful than in years past. Disney even took to the seas, establishing the Disney Cruise Line with ships acting as floating miniature theme parks.

Disney saw huge profits once it began releasing videotapes—and later, DVDs—of its popular films and flooding the market with toys, clothing, and other products that tied in to the films. The natural next step was to open retail stores to sell these products, and the Disney Store became a staple at shopping malls all across the United States.

Under Eisner's leadership, Disney became a major player in television, purchasing Capital Cities, the company that owned Eisner's former employer, ABC, in 1996. Disney thus also became the owner of another Capital Cities property, the cable sports network ESPN. Disney also owns the cable networks Lifetime, E! Entertainment Television, and others. Eisner established the company's own cable network, the Disney Channel. With hit shows like That's So Raven, Lizzie McGuire, and Kim Possible, the Disney Channel has earned a huge following among kids of all ages.

During Eisner's years on the job, Disney also made a comeback in the film department, creating movies for adults as well as scoring new hits with their traditional animated fare for children. In addition to owning such film studios as Touchstone Pictures, Dimension Films, and Hollywood Pictures, Disney acquired the independent production company Miramax, which went on to create numerous critical and popular successes, including Shakespeare in Love, Chicago, and the Spy Kids series. For several years, it seemed Disney could not miss with its children's fare, releasing one animated smash after another: The Little Mermaid in 1989, Beauty and the Beast in 1991, Aladdin in 1992, and The Lion King in 1994. In the mid-1990s, animated films created on computers began to edge out the traditional two-dimensional animation of the Disney classics, but Eisner had ensured that Disney had a piece of that pie as well. Disney had formed a partnership with Pixar Animation Studios, the innovative company responsible for the computer-animated Toy Story movies, A Bug's Life, Monster's Inc., and Finding Nemo. Disney found new life for its animated classics on the Broadway stage, achieving huge success with the theatrical versions of Beauty and the Beast and The Lion King.

Trouble in paradise

During 1994, Disney's president and Eisner's trusted partner, Frank Wells, died in a helicopter crash. In the years following, highly public battles between Eisner and such top Disney executives as Michael Ovitz and Jeffrey Katzenberg played out in the press. By the beginning of the twenty-first century, Disney was struggling on many fronts, returning to the pre-Eisner days of relying on the theme parks for a significant portion of its profits. After the terrorist attacks in New York City and Washington, D.C., on September 11, 2001, tourism fell off drastically, and even the theme parks' earnings began to dip.

During 2004, Disney's relationships with Pixar and Miramax soured. Pixar, demanding a greater share of earnings from the Pixar/Disney film partnership, refused to sign a new distribution contract with Disney and set about finding another partner. When Disney sought to prevent Miramax from distributing a politically charged documentary, Fahrenheit 9/11, by controversial filmmaker Michael Moore, Miramax's founders, Bob and Harvey Weinstein, found a way to sidestep parent company Disney for the film's distribution. The scuffle over Fahrenheit 9/11 was just one in a series of disputes between Eisner and the Weinsteins, and speculation grew that Disney might be willing to sell Miramax.

Also during 2004, Eisner found himself doing battle with his company's board of directors, some of whom questioned whether he was the right man to lead Disney in the twenty-first century. Chief among his detractors was Roy Disney, nephew of Walt, the same man who had pushed for Eisner's hire back in 1984. Roy Disney, as well as many people who own Disney stock, had begun to feel that Eisner's aggressive selling strategies had robbed the company of much of its magic. Eisner's enthusiasm for "branding"—tirelessly promoting the Disney brand through the creation of sequels for nearly every Disney film or by emphasizing a film's product tie-ins as much as the film itself—had angered devoted Disney fans. At the annual shareholders' meeting in March 2004, thousands gathered to express their displeasure. Roy Disney spoke to the audience, summing up the feelings of many, as quoted in Newsweek: "Branding is something you do to cows. Branding is what you do when there's nothing original about your product. But there is something original about our products. Or at least there used to be." Applause erupted from the crowd. When it came time to vote, 43 percent of the shareholders refused to vote for Eisner's reelection to Disney's board of directors. This vote of no confidence resulted in his being removed as chairman. Eisner remained as the CEO, though many in the industry speculated that his grasp on the company had weakened and he would not remain at Disney for long.

When Disney encountered difficulties at the turn of the twenty-first century, Eisner expressed his confidence that the company would rebound. In an interview with the Harvard Business Review, Eisner stated that while Disney might occasionally miss the mark, the company has never lost the ability to entertain. Speaking of Disney's various theme parks, he told interviewer Suzy Wetlaufer: "If you look at people's faces, you'll see that Disney still knows how to sweep people off their feet, out of their busy or stress-filled lives, and into experiences filled with wonder and excitement. We sell fun and—not to sound arrogant, really just to sound proud—we still do that better than anyone." The problem, according to many investors and Disney insiders, is that Eisner places too much emphasis on the "sell" part of that formula, and not enough on the "fun." Whatever Eisner's future at Disney, few could argue that he has failed to leave his mark. In the years since he took over, Disney has gone from a beloved but struggling company to a media powerhouse with a significant presence in film, television, radio, publishing, and on the Internet—not to mention the more than seven hundred Disney stores and the hugely successful theme parks. Under Eisner's guidance, the company has gone far beyond Mickey Mouse and Snow White. Not every fan appreciates Eisner's influence on the company, but his powerful leadership style has ensured a lasting future for Disney.

For More Information

Books

Eisner, Michael, with Tony Schwartz. Work in Progress. New York: Random House, 1998.

Periodicals

Bart, Peter. "The Ultimate Survivor Mobilizes New Tactics." Daily Variety (March 15, 2004): p. 4.

"Eisner's Resume: A Rapid Rise." Newsweek (September 28, 1998): p. 54.

Jefferson, David J., and Johnnie L. Roberts. "The Magic Is Gone." Newsweek (March 15, 2004): p. 52.

Wetlaufer, Suzy. "Common Sense and Conflict: An Interview with Disney's Michael Eisner." Harvard Business Review (January 2000): p. 115.

Web Sites

"Michael D. Eisner." Disney Online. http://psc.disney.go.com/corporate/communications/bios/Eisner.html (accessed August 1, 2004).

"Walt Disney: A Biography." Disney Online. http://disney.go.com/vault/read/walt/index.html (accessed August 1, 2004).

Eisner, Michael

(1942-)
Walt Disney Company

Overview

Entertainment executive Michael Eisner is the chief executive officer of the Walt Disney Company. He began as an usher at NBC and eventually rose to such positions as head of prime time programming at ABC and president of Paramount Pictures before assuming control of Disney in 1984. Considered a great judge of talent and a shrewd businessman in a tough industry, Eisner is also known as a devoted family man.

Personal Life

Michael Dammann Eisner was born in Mt. Kisco, New York, the son of a well-to-do lawyer, and was raised in luxurious surroundings in his parents' spacious Park Avenue apartment in New York City. His early life was characterized by discipline and strict etiquette that included wearing a jacket and tie for family dinners. Although raised in wealth, he learned early to treat money seriously. Eisner's father, Lester, was a Harvard graduate and a lawyer who successfully invested an existing family fortune in New York real estate. Lester Eisner also served as a top housing official in the Eisenhower administration.

Eisner and his sister were taught self-discipline early. Among other lessons, they were required to read each day for two hours for every one hour of television they watched. Eisner enjoyed reading "Hardy Boys" mysteries and the works of Jack London, and his television favorites included Hopalong Cassidy, Ozzie and Harriet, and Leave It to Beaver. Entertainment for the Eisners often included Broadway, and Eisner marked every special occasion with a visit to the theater.

Eisner attended Lawrenceville School, an expensive New Jersey boarding school, where he was a good student. He tried sports but was largely unsuccessful. He belonged to the Periwig theatrical club and won a lead role in The Caine Mutiny as a senior, but illness forced him to withdraw.

After Lawrenceville School, Eisner enrolled in Denison University, a small liberal arts college in Granville, Ohio. His intention was to prepare for a medical career, but by his junior year, he was back in the theater. Shy and not particularly driven to be an actor, Eisner began writing plays. He is known to have completed two plays, one of which was produced by the school's thespian club. Eisner graduated from Denison in 1964.

Eisner and Jane Breckenridge were married in 1967. They have three sons, Breck, Eric, and Anders. Eisner is well known as a family man and prefers pictures of his family in business publications where others will use political shots with public figures. In the critical days leading to his election as chairman of Walt Disney Productions, he delayed meetings because of commitments to his sons. This quality of Eisner's was likely not lost on those searching for Walt Disney's replacement.

Career Details

After college, Eisner made a trip to Paris, thinking he would be a writer. He returned home, however, in less than two weeks. Back in New York, he went to work at NBC where he took a job as a clerk who kept track of the number of times a commercial aired. He also worked weekends at an NBC radio station, giving out traffic reports. Not long afterward, Eisner moved to CBS, where he inserted commercials into their slots for children's programs, the Ed Sullivan Show and Jeopardy.

Somewhat dissatisfied with his career, Eisner sent out hundreds of resumes, looking for a break in the television business. That break came in 1966 when a young executive named Barry Diller called. Diller was only 24 years old but was already a vice-president at ABC. At the time ABC was a small network, only about ten years old, and with only a couple of dozen affiliates around the country.

Eisner moved to ABC and worked with Diller on ABC's programming. Together, their innovations included the movie-of-the-week and the miniseries. Eisner genuinely enjoyed even the simple forms of popular programming such as sitcoms and cartoon shows. Thus, when he took over Saturday morning programming in 1969, he did not guess at what would sell, he just looked for what he liked to watch.

Eisner's first push for Saturday morning programming was a cartoon series based on the popular singing group, the Jackson Five. Soon, he added another featuring the singing Osmond Brothers. Within three years, ABC was the top-rated network on Saturday mornings. Within five years, Eisner was put in charge of ABC's prime time schedule, where he was responsible for such hits as Happy Days and Welcome Back Kotter. Even though the critics complained, the shows were successful and the ratings improved. Eisner understood that the core elements that worked for Saturday morning programming were universal: the importance of the story line, character development, and conflict.

He also was responsible for some serious work at ABC such as the miniseries Roots and Rich Man/Poor Man. ABC emerged from Eisner's time as head of programming as the top-rated network on the air, but Eisner had already left for greener pastures.

In 1976 Eisner joined Paramount Pictures, where Diller was the chairman and Eisner became president. Paramount was not a strong company, which is why the parent, Gulf Western, brought in the two successful ABC executives. Paramount had not had a hit movie for several years and had lost money. Within a year, Paramount produced Saturday Night Fever, and a string of successful movies were to follow that included Raiders of the Lost Ark, Bad News Bears, Grease, Heaven Can Wait, and Beverly Hills Cop. Two years after Eisner joined Paramount, the studio led the "big seven" studios with nearly one quarter of national box office proceeds.

For six years, Paramount never fell below second in market share. However, two events in 1984 changed Eisner's career direction in a dramatic way. First, his mentor and supporter at Paramount, Gulf Western's chairman Charlie Bluhdorn, died. Bluhdorn's successor, Martin Davis, did not think as highly of Diller and Eisner. Davis has been quoted as complaining that Eisner was not "serious" enough and was "like a kid." Diller had his problems with Davis, also, and left to become chairman at 20th Century Fox.

The second event of 1984 was the culmination of two decades of problems and drift at Walt Disney Productions. Walt Disney had started the company in the late-1920s and after a couple of false starts had found success with the animated character Mickey Mouse. Together with his brother Roy, Disney had built an entertainment giant. Walt Disney's sudden death in 1966 had deprived the company of not only its chairman, but of its heart and soul. Using Walt's creative genius and his brother Roy's business acumen, the company had been successful. Yet, like many family operated businesses, there had been little effort made to groom executives to succeed the founders.

The aftermath of Disney's death was a slowing of growth and, eventually, stagnation in the Disney empire. Attendance dropped in the company's theme parks, and movie production faltered. Earnings dropped and constant fighting between the "Walt" and "Roy" factions paralyzed the company. While the conflict was visibly between the two arms of the Disney family, the fight was actually between the creative people (Walt) and the administrators (Roy). This fighting actually paralleled conflicts that had existed between the two brothers for years, only now it threatened to destroy their dream.

Disney of the early 1980s was ripe for corporate raiders and take-overs. In the Wall Street climate of the time, it was not uncommon for companies in Disney's condition to be taken over by speculators who would then break up the company and sell the parts for huge profits. Several such profiteers were buying up Disney stock or making overtures to the company and its major stockholders. Disney insiders, including Roy Disney's son, also named Roy, were intent on saving the company.

A group that became known as the "brain trust" was formed. The members of the trust were Roy Disney, Frank Wells, a consultant to Warner Brothers, and Stanley Gold, a Disney board member who ran Roy's company, Shamrock Holdings. The three set out to find a new manager for the company who would restore it to a position of strength, if not past glory. Eisner was a leading candidate from the beginning and was seen as articulate, imaginative, enthusiastic, and with values complementary to the company's family identity. It was thought that Walt Disney himself would have loved him.

A protracted battle ensued and ultimately, then-current chief executive Ron Miller, who was Walt Disney's son-in-law, was fired. Frank Wells was considered a candidate for the top spot, but he recommended Eisner. Finally, with the intervention of major stockholder Sid Bass, a compromise team of Eisner as chairman and CEO and Wells as president was proposed.

Chronology: Michael Eisner

1942: Born in Mt. Kisco, New York.

1964: Graduated from Denison University.

1966: Hired by Barry Diller at ABC.

1976: Named president of Paramount Pictures.

1984: Becomes chairman of the Walt Disney Company.

1986: Created international division of Disney.

1996: Disney acquired Captiol Cities company.

Stanley Gold, who was point man for the "brain trust," pushed this team hard. According to Gold, Eisner's reputation as a creative person and a "big kid" was perfect for the head of Disney. Gold said that the problem with Disney since Walt died was that the place had not been run by "crazies." It "needed to be run by crazies again," and Eisner was the man for the job. With the strong businessman Wells as Eisner's partner, Gold was promoting the same type of team that had built Disney in the first place: Walt (Eisner) as the creative "crazy" that drove the company forward while Roy (Wells) applied the common sense and occasional braking that was necessary to satisfy the bankers and Wall Street. Gold's efforts, with Sid Bass's vocal support, proved to be very successful.

Eisner was appointed chairman and CEO of Walt Disney Productions on September 22, 1984. Wells became president, and the new team was off and running to reestablish the Walt Disney Company as the premier entertainment company in America. New blood was brought into the management team, many from Eisner's old company, Paramount. The Disney film archives were utilized to their fullest capacity, the theme parks were restored to profitability with attendance again rising annually, the animation division of Disney returned to making feature-length films, and the stock value rose dramatically.

Over the first decade of Eisner's term as chairman and CEO, Disney produced a string of movie hits including Down and Out in Beverly Hills in 1986, Who Framed Roger Rabbit in 1988, The Little Mermaid in 1989, and Beauty and the Beast in 1991. Alladin, the first animated feature to be nominated for an Academy Award for Best Picture, was released in 1992. Disney has produced a major animated feature nearly every year and got back into television with the hit show The Golden Girls and a revised feature, the Disney Sunday Movie.

Eisner spearheaded other ventures including a new amusement park, Euro Disney, which opened outside of Paris, although its initial returns were disappointing. Disney also acquired independent film company Miramax to produce more offbeat films, and in 1996, Disney acquired Capital Cities, which owned ABC television and the cable sports network ESPN. Almost 20 years after heading ABC's prime time programming, Eisner headed the company that owned the network.

Under Eisner's direction, greater emphasis has been placed on the construction and operation of company hotels at the theme parks and a cruise ship line is in operation. Disney now owns a professional hockey team named after a modest Disney movie hit, the Mighty Ducks, and it has acquired the Anaheim Angels baseball team.

By 1997, Disney's annual sales had grown to $21.1 billion. Disney's share price has grown 19-fold. The success story of Disney now even exceeded that of its creators, Walt and Roy Disney. Eisner had profited handsomely, earning millions in bonuses and stock options. While there has been some criticism of his compensation package and the amount of money he has earned, there is no question about the success of his ventures and the resulting strength of the company.

Social and Economic Impact

Eisner's style is at once casual and friendly, but he is also hard-working, driven, and tough. His creative talent is unquestioned and has served him well, yet there are many stories around the entertainment industry of shrewd deals he has struck to make a movie and attention to detail in the financial end of the business. Eisner understands the need to let the creative juices flow, but he tempers this with the realization that the business must make a profit. In Hollywood, this has turned out to be a very successful formula.

Eisner is willing to pay the necessary salaries and fees to make use of top talent in Hollywood. This was a radical departure from the older Disney practice of being quite lean in the compensation department. Eisner understood the need to pay top dollar for the services of the likes of George Lucas, but at the same time, he looks for promising newcomers that will become the next wave of creative talent in Hollywood.

The strategy has been to make maximum use of the company's strengths in name recognition, reputation, and assets while diversifying into other aspects of the entertainment industry. The growing number of hotel rooms under the Disney name, the cruise ship line, and the sports franchises are examples of this expansion into related areas upon which the Disney name can be capitalized.

Sources of Information

Contact at: Walt Disney Company
500 South Buena Vista St.
Burbank, CA 91521-0001
Business Phone: (818)560-1000
URL: http://www.disney.com

Bibliography

"An Interview with Michael D. Eisner" American Academy of Achievement, 17 June 1994. Available from http://www.achievement.org.

Grover, Ron. The Disney Touch. Homewood: Richard D. Irwin, Inc., 1991.

"Michael D. Eisner: Biography." American Academy of Achievement, 1998. Available from http://www.achievement.org.

"Michael D. Eisner, Entertainment Executive." American Academy of Achievement, 1998. Availalbe from http://www.achievement.org.

Streisand, Betty. "Shareholders Smell a Rat." U.S. News and World Report, 3 March 1997.

Taylor, John. Storming the Magic Kingdom. New York: Alfred A. Knopf, 1987.

Who's Who in America, 47th Edition, New Providence: Marquis Who's Who, 1992.

Michael Eisner

As chairman and chief executive officer of the multi-billion dollar Walt Disney Productions, Michael Eisner (born 1942) is one of the most highly visible business leaders in the United States. With his impressive management skills, Eisner has become the leader of a vast communications and entertainment empire.

Eisner was born in Mount Kisco, New York on March 7, 1942. His father, Lester Eisner, was a lawyer and administrator for the U.S. Department of Housing and Urban Development. His mother, Margaret Eisner, was a co-founder of the American Safety Razor Company. Young Michael grew up in the family's apartment on Fifth Avenue in New York City. Although his surroundings were luxurious, Eisner was required to read two hours for every hour of television he watched. His television viewing was strictly rationed and carefully controlled. His was not a pampered childhood. Eisner attended Denison University in Granville, Ohio. He began his college career with an interest in medicine but eventually switched to English literature and theater. During his summer vacation, Eisner worked as a page at the NBC television network in New York.

After graduation Eisner returned to NBC as a logging clerk, keeping track of television programs. Within a few weeks, he moved to the programming department at CBS, where he was responsible for placing commercials in the right places in children's programs. He didn't enjoy this work, so he mailed out hundreds of job resumes to various entertainment companies, including Walt Disney. He received one response.

Diller was Impressed

ABC's Barry Diller was impressed with Eisner's resume. He knew his company needed bright young executives like Eisner, and he wanted to bring him on board. Diller convinced his board that Eisner should be the assistant to the national programming director at ABC, and Eisner jumped at the chance. He held the ABC job from 1966 to 1968.

During his time at ABC, Eisner married his wife, Jane, also known as "Tasty." Meanwhile, he began to show his real skills by producing a television special called "Feelin' Groovy at Marine World." The show was a success and in 1968 Eisner was promoted to manager of specials and talent, a job he held for less than a year before he was promoted to director of program development for the East Coast. This job made him responsible for Saturday morning children's programming, including animated programs based on the popular singing groups, the Jackson Five and the Osmond Brothers.

Advancement at ABC

Eisner continued to climb in the entertainment business. In 1971, he became ABC's vice president for daytime programming. He promoted the vastly popular soap operas, All My Children and One Life to Live. Three years later, Eisner was promoted to vice president for program planning and development, and then became senior vice president for prime time production and development. It was Eisner who created such programs as Happy Days, Welcome Back Kotter, Barney Miller, and Starsky and Hutch. Thanks to the contribution of Eisner, ABC was able to move into first place in the network ratings, surpassing both CBS and NBC.

Paramount Pictures

Eisner was on his way to the top. His old mentor from ABC, Barry Diller, had moved to Paramount Pictures as chairman of the board. In 1976, Diller offered Eisner the position of president and chief operating officer at Paramount. Eisner accepted and brought to his new job some of the cost-cutting lessons he had learned in network television. At that time, the average cost of making a motion picture was about twelve million dollars. Eisner's average cost at Paramount was only eight million. Despite reduced costs, Paramount moved from last to first place among the six major studios. Half of the top ten box office hits were Paramount pictures, including Raiders of the Lost Ark, Saturday Night Fever, Grease, Heaven Can Wait, Ordinary People, Terms of Endearment, An Officer and a Gentleman, The Elephant Man, Reds, Flashdance, Footloose, Trading Places, Beverly Hills Cop, Airplane, and three of the Star Trek motion pictures. It would be difficult to create a list of motion pictures with more power, entertainment value, and audience attraction.

Walt Disney Company

In 1966, Walt Disney died. It was a loss of epic proportions for the entertainment world. An award-winning editorial cartoon that appeared in many newspapers was a drawing of the earth, with mouse ears and a tear running down. Audiences who had grown to love the work of Disney wondered what would happen to his pleasant, G-rated films and the theme parks he created. After the death of Walt, many in the industry felt that the Disney Company lacked leadership and direction.

Eisner left Paramount Pictures to become chairman and chief executive officer of the Walt Disney Company in September 1984. He replaced Hollywood super agent Michael Ovitz, who received a severance package worth about $90 million. Eisner signed a seven year contract extension worth about $250 million. Stockholders felt he was worth it. In only a few years, he was able to transform the company from an organization that lacked direction into an industry leader. Eisner also exercised stock options worth more than $229 million, with more options available to him. The studio quickly turned out several new animated features including The Little Mermaid, Beauty and the Beast, Aladdin, The Lion King, and Pocahontas. Every one of them was a huge success and earned millions of dollars for the Disney Company.

Eisner was considered to be the savior of Disney-the Prince who had awakened the Sleeping Beauty. Disney stock soared. Eisner had revived the Magic Kingdom. During that time, perhaps in part due to Eisner's love of hockey, Disney made the decision to join the National Hockey League by launching "The Mighty Ducks," named after a well known Disney motion picture. In May 1966, Disney acquired an interest in and became the general partner of major league baseball's "California Angels" later renamed the "Anaheim Angels." It was common to see Eisner wearing either a Mighty Ducks' or an Angels' baseball cap, and to be seen at the rink or the baseball stadium. Disney increased its participation in several other sports under Eisner's leadership. Golf, big time motor racing, soccer, marathon races and other sports were soon under the Disney umbrella, and in many cases were sponsored by Disney.

Work in Progress

In his book Work in Progress, Eisner said, "At a certain level, what we do at Disney is very simple. We set our goals, we aim for perfection, inevitably fall short, try to learn from our mistakes, and hope that our successes will continue to outnumber our failures. Above all, we tell stories, in the hope that they will entertain, inform, and engage."

The Disney Company continued to market its various theme parks, including Disneyland in California and Disney World in Florida, and even built a massive new park near Paris called Euro Disney. But initial returns from the European park were disappointing. Low attendance brought a nearly one billion dollar loss in the first year. Plans to construct a huge historical park outside Washington, DC, were suddenly canceled. As if to counter these disappointments, he announced that Disney was acquiring his old company, Capital Cities, owners of the ABC television network. As CEO of Disney, Eisner had become the leader of a communications and entertainment empire without equal.

Further Reading

Eisner, Michael. Work in Progress.

Michael Eisner Interview, http://www.achievement.org/autodoc/page/eis0int-1

Message from Michael Eisner, http://www.penguin.co.uk/readme/bookaut/Eisner/message.html □