Dear Mr. Chairman...

First published June 02, 2004

By C. W. Oberleitner

Chuck Oberleitner takes a look at the news—or lack of it—coming out of the Walt Disney Company these days and comes up with his own unique idea for promoting change at the Mouse House.

In Jay Ward's classic cartoon series, "The Adventures of Rocky and Bullwinkle," little comic vignettes often preceded commercial breaks. One such bit featured Bullwinkle as a stage magician who would emphatically say to his pal:

"Hey Rocky, watch me pull a rabbit out of my hat."

Of course he'd reach into his magician's top hat and pull out a roaring lion or enraged rhinoceros, anything but a rabbit.

If Michael Eisner were playing the part of Bullwinkle, this classic gag wouldn't even rate a small chuckle. Why? Because Eisner truly has been able to pull a rabbit out of his hat.

Mighty Morphin Power Issues

This past weekend, for what seems like the first time in a very long time, the Week in Review column of The Los Angeles Times Sunday Business section didn't reference a single story even remotely connected with either the Walt Disney Company (WDC) or Michael Eisner. No mention of Roy Disney and Stanley Gold's efforts to unseat the Mouse House CEO. No retelling, yet again, of Eisner's unprecedented 45% NO confidence vote at this year's shareholders meeting.

Heck, even the sale of Michael Moore's controversial, award-winning documentary film, Fahrenheit 9/11, to Miramax's Harvey and Bob Weinstein barely received a nod in the Saturday Business section of The Times. That same day saw a front page story about the financial and political success Hustler Magazine and First Amendment rights advocate Larry Flynt is enjoying running a gambling casino in Gardena, CA.

For more than five months there's been a steady stream of bad news for the WDC and so much withering criticism of Eisner that most analysts agree it would have driven virtually any other CEO out of a job. Not Michael Eisner.

From Roy Disney and Stanley Gold's dramatic departure from the WDC board of directors last November, to this past winter's historic—some might say epic—Disney Shareholders' meeting, to the subsequent loss of his position as Chairman of The Board, through a now withdrawn unsolicited bid to take over the company by Comcast, Eisner has remained standing and unbowed.

Despite film failures and disappointments like The Alamo and Home On The Range, and the continued dismal performance of ABC and the ABC Family Channel, the WDC earlier this month announced better than expected second quarter financial results.

After all this, and much more, the Mouse House CEO might just finally be seeing the (salt-invested) tide let up. Two weeks ago, managers from state pension funds, who hold roughly 2% of Disney's stock, met with Disney board chairman George Mitchell and members of the Disney board. Although a member of the board, Michael Eisner did not attend. The state fund managers have been vocal critics of WDC management and Eisner in particular. They asked for the meeting following the board's earlier refusal to dismiss Eisner following his disastrous NO vote at this year's shareholders' meeting.

The biggest news to come out of this meeting was that the pension funds appear to have shifted their focus. Mirroring recent remarks made by Shamrock Holdings' President and former dissident WDC board member Stanley Gold, pension fund managers asked for a greater voice in selecting future directors. Mr. Gold has recently stated that he and Roy Disney may offer their own alternative slate of directors later this year. The pension fund managers also requested the formation of an investor advisory panel to act as liaison between investors and the board.

For its part, Disney, through Chairman Mitchell, said that the pension fund managers would be invited to nominate candidates for a new independent director, to be named late this year. Nominees submitted by the managers—as well as others—will be reviewed by the board's nominating committee. Mitchell and his fellow board members also said that they would consider the idea of forming an advisory panel.

Mr. Mitchell said, "The Disney board plans to continue to hold management accountable for performance." He went on to say, "We hope these leaders (of the pension funds) now have a better understanding as to why the board remains firm in its view that the Disney management team … is executing against its strategic plan."

That was the last time the WDC made big news; and, the biggest news was that Michael Eisner wasn't the focus of the story. Ignoring his critics the Bullwinkle of Burbank has managed to pull a real rabbit out of his hat. The focus has now shifted, for the time being, to the board of directors, its plans for Eisner's eventual successor, and candidates yet to be named as possible "independent" members of the board.

A Dangerous Pastime, I Know.

The bottom line to all this is that, after months of being high drama and front page news, the story of Michael Eisner's trials and tribulations at the helm of The Mouse House are about as exciting as ABC's new fall lineup. The only thing to come out of the Disney board of directors' meeting with pension fund managers that anybody could get a handle on was Mr. Mitchell's somewhat awkward statement that Disney management was, "executing against its strategic plan."

On his SaveDisney.com website, Roy Disney did a wonderful job of deconstructing strategic planning as it has been instituted by the company his father and Uncle Walt built. Even so, many of SaveDisney's most ardent supporters are privately saying they don't believe either Roy or his partner Stanley Gold will be able to do much to remove Eisner before the WDC's next shareholders' meeting in 2005.

In the meantime, those small WDC shareholders and Disneyanamaniacs who haven't grown weary of the struggle to replace Michael Eisner still openly wonder if there isn't something more they can do to help speed along the process.

This got me thinking. Mr. Mitchell has said that the WDC board of directors will accept nominations for a new "independent" director from investors. The nominating committee will consider such nominees, along with others.

I'm an investor, I thought to myself. I own shares of a mutual fund that includes shares of the WDC in its holdings. Who's more independent than me? Just ask the guy who publishes this website!

I could be an independent director. I'd be the perfect candidate. I've owned and operated my own business for more than a decade. I'm an avid student of Disney family and corporate history. Even so, I'm not bound by the past. I work with emerging new technologies and have to embrace progress and change on a near daily basis.

Unlike most of the current board, I have experienced Disney theme parks and resorts first hand by standing in line as a paying customer. I've stood in line for Disney movies, bought DVDs and a host of other products. I tuned out ABC and ABC Family because they suck, and I've screamed and cheered for Disney stage plays because they're wonderful. Best of all, over the course of the past several years, I've probably chatted online and talked face to face with more Disney customers, guests, cast members, and shareholders from every walk of life than the current board of directors combined. Who better to independently look after investor interests than someone like me?

So, I decided to write the following letter:

June 2, 2004

The Honorable George J. Mitchell
Chairman of the Board of Directors
The Walt Disney Company
500 S. Buena Vista St.
Burbank, California 91521

Dear Mr. Mitchell:

I read with great interest your comments, following the meeting with the managers of several state pension funds, regarding the nomination and eventual selection this year of a new independent member of the Walt Disney Company Board of Directors. Following the meeting, you were quoted as saying the board would accept nominations for the position from investors.

As a customer, guest, and investor in The Walt Disney Company, I have a keen interest in the continued growth and success of the company. I am a self-employed businessperson for over ten years, and have been responsible for the bottom line of my own business. I am an ardent fan of the Disney family and corporate history, and my work in high technology information systems provides me with a deep appreciation of the need generated in today's business climate to embrace change and explore new methods for business growth.

As a writer, I have had the pleasure of speaking with thousands of Disney customers, guests, cast members, and investors from all walks of life. I believe all this, along with my other skills, leaves me uniquely qualified to provide insight and suggest positive direction to the board and look after the best interests of everyone who chooses to invest in The Walt Disney Company.

Therefore, I hereby submit my name for consideration by the nominating committee for the position of member of the board of directors of The Walt Disney Company.

I look forward to hearing from you.

Sincerely yours,

Charles W. Oberleitner
President
dbit Consulting

Please Mr. Postman

Of course, I'm not alone in this. If my inbox is any indication at all, I'm sure a great many WDC shareholders have quite a few ideas of their own as to who would make a good candidate to be an independent member of the WDC board of directors.

What about you? Whether you're a small investor or just a big fan of most things Disney, do you want to see a truly independent director named to the WDC board of directors?

If your answer is YES then keep this in mind, numbers count. By all means talk this up on the JHM discussion boards, but don't stop there. Go to every board you can think of and post this same question. Begin a dialog with your fellow Disney fans and investors. Consider your choices for independent director; write them down and mail them to Chairman Mitchell at the above address. Can't think of anyone? I'd welcome your support!

This has to be done in writing, not e-mail. Remember, even if none of the candidates you put forward are selected, the greater the number of letters you send the greater the impact you will have had on the board's ultimate decision.

I'll keep you posted regarding any response(s) I receive. Please keep me posted about your results as well.

C'ya real soon!