Mr. Eisner vs. Reality

Published June 30, 2005

By C. W. Oberleitner

Apple Computer CEO Steve Jobs may be well known for his occasional reality distorting keynote addresses; Michael Eisner, on the other hand, appears to prefer carrying his own reality with him. After reviewing his recent conversation with PBS talk show host Charlie Rose, it's becoming increasingly easy to understand why it's so often said that no one at Disney will take a one-on-one meeting with the Big Cheese.

Never Say Never

On June 13, outgoing Walt Disney Company CEO Michael Eisner appeared on PBS Television's Charlie Rose Show. Ostensibly there to promote his latest book, camp, the subject of Eisner's leadership of Disney, his problems with personal and professional relationships and legal problems with former directors Roy Disney and Stanley Gold soon came to dominate the nearly 51-minute conversation.

[There are a links to all referenced files and sites at the end of this column.—Editor]

Once again dismissing criticism of his leadership of the company, by extolling its achievements, and by extension his own, during recent months and the preceding 21 years, Eisner continually asserted that the company had not taken a "write-off."

"We're the only company…we are the only company that hasn't taken a write-off. We haven't taken a write-off for programming, for sports, for radio, for AOL. We're the only company that hasn't taken a write-off," Eisner proudly told the show's namesake host, Charlie Rose.

"As far as I know, Disney has taken write-downs…GO.com comes immediately to mind," an entertainment industry executive who serves as an advisor and contributes to o-meon.com under the pseudonym Dixon Ticonderoga told o-meon.com in an e-mail response to a request for comment for Tuesday's column, Mr. Eisner for the Defense.

And he was right. According to the Walt Disney Company's 2001 Annual Report to Shareholders, the company reported "Restructuring and Impairment Charges" of nearly $1 billion for "GO.com intangible assets impairment" and "GO.com severance, fixed-asset write-offs, and other."

Then there's the matter of $64 million in "Restructuring and Impairment Charges" the Disney Company reported just last year for the sale of its chain of Disney Stores to The Children's Place.

In addition, sources familiar with the history of the Disney Company report that Eisner has a long-standing association with write-offs while at the Disney Company. According to these sources, one of the first things Eisner and then Disney President Frank Wells did in the spring of 1985 was to take hundreds of millions of dollars worth of write-downs to fend off any further attempts by outside forces to either take over or greenmail the company.

Curiously, Eisner never used the word "never" when talking about the Mouse House having avoided the need to take write-offs. Viewers were left with no context for a timeframe for his remarks, although he did mention AOL, referring to the failed merger of that company and Time Warner that several years ago had to be written off. He also told Rose he did not want "to be one of my associates that has write-offs" while talking about how he's had to say "no" many times to Harvey and Bob Weinstein going all the way back to 1991.

Therefore, it seems fair to conclude that even though he never said the Disney Company never took a write-off, he is referring to his nearly 21-year tenure at the helm of the company. Eisner was also careful to always use the expression "write-off" and not the term "write-down."

"There's absolutely no difference between the two terms." Ticonderoga said.

Disney Corporate Communications did not respond to email requests for clarification or comment regarding Eisner's remarks.

Have It Your Way…

While on the Charlie Rose Show, Eisner, as he's done during many interviews, made a point of telling Rose that he believes one should be judged by their accomplishments and not what they might have done.

Defending his decision to pass on a request from Harvey Weinstein for additional funding to make Peter Jackson's Lord of the Rings trilogy, Eisner said, "You just have to always think this when you're in business. It's not what you don't do that counts; it's what you do do."

Five minutes later, while moving the subject away from what he plans to do after leaving Disney, Eisner, again as he has done on previous occasions, took credit for two things he "didn't do" as CEO of the Disney Company. He made a point of telling his host that he thought deals with AOL and Comcast were not right for the company and good decisions on his part. Exactly the same argument he used for turning down Lord of the Rings.

Matt and Mike

Charlie Rose wasn't the only television journalist Eisner shared his personal vision of events with. The week after his appearance on the Charlie Rose Show, Eisner was a guest on NBC's Today Show and interviewed by the show's co-host Matt Lauer.

After briefly discussing Eisner's book, camp, Lauer, like Rose before him, moved on to other topics.

"Three quick things before I let you go," the Today Show host said while gesturing with his notes as if to keep Eisner in his chair.

"One personal thing you regret in your time heading Disney. Not professional, personal. Is there one thing you'd like to take back that you said?"

The previous week on the Charlie Rose Show, Eisner had admitted to several mistakes and decisions he later came to regret. On the Today Show, however, he made a joke out of the question and his response and refused to answer.

Lauer pressed on, "Did you ever think the show LOST was terrible?"

"No," replied Eisner emphatically. "No, the only conversation we had about LOST was that the pilot was incredibly expensive, and there were people walking around the Disney Company saying 'has ABC lost its financial way?' By the way, nobody thought it would be a hit that it would be."

This must have come as news to the folks at Disney-owned Touchstone Television the unit of the Disney Company that produces LOST. As recently as a month before the hit ABC show's season finale, sources inside Touchstone reported that, at least around the Disney lot, Eisner was still referring to LOST as "that piece of crap show."

On September 29, 2004, Eisner had his final face-to-face meeting with writer James B. Stewart at the CEO's office at ABC headquarters in New York. Five months later, Stewart would recall that meeting in his book DisneyWar, which is an inside look at the workings of the Disney Company.

According to Stewart, at that meeting Eisner said, "LOST is terrible. The pilot was two hours; it was broken into two one-hour episodes. Then the show goes off a cliff. There's no more plane crash! Who cares about these people on a desert island?"

Eisner even had to be reminded by Charlie Rose that LOST was a hit show.

"Because Disney and Gold are no longer on the board, that's the reason Disney (the company) is doing better," Charlie Rose said at one point during his conversation with Eisner.

"No," Eisner said. "We're doing better because our movies are working; people have come back to us."

"The network has hit shows," Rose prompted.

"Desperate Housewives," Eisner responded.

"LOST?" Rose asked.

"Dancing With the Stars," Eisner continued ignoring Rose's question.

"LOST. LOST," Rose repeated enthusiastically.

"LOST," Eisner finally conceded. "Grey's Anatomy..."

The Non-Denial Denial

So concerned was the Walt Disney Company about what might be in James B. Stewart's book DisneyWar that company executives actually arranged to obtain a proof of the book prior to its publication. They later had to publicly apologize for obtaining a copy of the book without the publisher's permission and return it.

For more than a month DisneyWar was "topic A" around Hollywood. In their pending lawsuit against Eisner and members of the Disney board, Roy Disney and Stanley Gold quote liberally from the book. So it came as no surprise when Charlie Rose asked Eisner about his thoughts on the book.

"James Stewart wrote a book, and he was here; DisneyWar, I think it was called. Is that right? DisneyWar?"

"I don't know," Eisner said dismissively. "I don't know what the name of it was. I just know the name Jim Stewart."

"What did you think?" Rose continued. "I'm giving you an opportunity to respond to that…"

"The book was a fantasy," Eisner interrupted.

"It basically made a serious question," said Rose, "an accusation, which is Michael Eisner doesn't always tell the truth."

Eisner, in what has become his near trademark style of obfuscation, responded by accusing Stewart of being the one with a problem telling the truth.

"You know," Eisner began, "everybody that comes up to me, that's in the book, says that the first thing they do is…they go to the back of the book to get the page (number) that they're written on….They say they read the three pages; it's a complete fabrication about them, forget me. The whole book is a fabrication…I haven't read it all. It's just out of thin air. The book is just not accurate."

Regardless of how much of a problem Disney's head honcho may or may not have with the truth, there was one question the answer to which few are likely to disagree with.

Rose asked Eisner, "Why did you give him (Stewart) access then…access?"

Eisner responded saying it was, "Another dumb thing. Another dumb thing."

Referenced Sites

Audible.com Charlie Rose: Michael Eisner, June 13, 2005
(Fee $4.95)

Walt Disney Company 2004 Annual Report

Walt Disney Company 2001 Annual Report

this business of show

Floyd Norman

The Lord of the Purse Strings

Images copyright and courtesy of Floyd Norman from his new book How the Grinch Stole Disney. Click here for a larger image.