The Trouble With Dixon

Published August 19, 2005

A former member of Team Disney Burbank, who asked not to be identified, wrote in to take exception to our allowing industry analyst and o-meon.com advisor Dixion Ticonderoga to write under a pseudonym. He didn't care much for Dixon's story (New Big Cheese Same Ole Mouse) either.

I am sure you don't care what I think, but I think it's wrong that you run hit pieces on people using fake names. "Dixon Toconderoga" is a company that makes pencils. This doesn't allow your readers to judge the credentials of the writer to weigh the merits of his or her argument.

We wrote back to this gentleman to thank him for the email and to explain to him that we value the opinions of all our readers.

As for our Mr. Ticonderoga, he is an entertainment industry veteran with nearly 30 years of experience. And like the contacts he's developed over the years in that industry, he can't resist a good story and prefers, like the former Disney exec who wrote to us, to keep his name out of the media.

Mr. Ticonderoga likes to joke that he prefers the sobriquet "pencil pusher" to "bean counter." The name "Dixon Ticonderoga" is a riff on a joke in Mel Brooks' musical The Producers about that particular pencil being a favorite among "pencil pushers."

Yet another former Disney exec, who also happens to be a stockholder, wrote to expand on Dixon's idea of splitting the Walt Disney Company up in much the same way Viacom chairman Sumner Redstone recently cleaved that company in two.

Interesting piece, not the first time Disney has played such financial shenanigans.

What does "Dixon" think of the idea of breaking Disney up into two or three separate companies. Essentially spinning off to the shareholders shares in each of the different companies and forcing them to stand on their own, and thus eliminating the potential of robbing other divisions to pay for mistakes.

In a follow-up email he went on to explain:

I have believed for a long time that the company should be broken up into its three separate divisions, along the lines of its supposed operating businesses.

I say supposed because one division is always covering for another's mistakes. So, no one is really accountable. Thus, the divisions operate less like businesses, then like turf protecting bureaucracies.

There are the emotional aspects of Disney owning things, but the copyright and trademark issues can be dealt with as long-term (100 years or so) contracts.

I think there should be three separate companies.....

1. Outdoor Recreation (call it Disneyland Inc.) - this would include all the theme parks around the world, and the related other things, like the hotels, etc. and online stuff related to the parks.

2. The Production Company (call it Walt Disney Productions, Inc.) - this would include all new television and film production and games. It would also be the license holder to all the copyrightable and trademark material. I think consumer products would fall under this. It would include online stuff related to the tv shows, consumer products and the films and games.

3. The networks - (Gee, let's call it ABC inc.) - this would include all the over the air broadcast networks and television stations, the cable channels and the online stuff related to them.

I think that each business could and would stand on their own. The shareholder value currently not visible would be unlocked. The financial shenanigans would not be able to continue, the parks would have to pay for themselves, the films and TV shows pay for themselves and the networks pay for themselves.

Also, it would allow the possibility of CEO's to run each company for its benefit, then have to worry about the other divisions. Synergy never really made a profit, it is a copout for poor creativity. Instead of putting on a good creative show, the networks have to run PR bullshit for the films and TV shows, particularly on the Disney Channel, and even on ABC. Instead of having to think about attractions based on dud films, or promoting a dud network, the parks could do things to really bring in guests.

Anyway, you get the gist of it.

This letter reminded us that back before the 2003 Disney Company shareholders' meeting, while Roy E. Disney and fellow former board member Stanley Gold were first firing up their Save Disney campaign, Roy advocated a similar split.

Long before Sumner Redstone got tired of the old media, radio and broadcast TV, dragging down the value of his new media assets, MTV and related cable channels, and decided to divvy up Vicacom, Roy Disney proposed that Disney get back to the business of being Disney, by divesting itself of ABC and all the "non-Disney" businesses that had bloated the company and made it impossible for shareholders to truly know which assets were performing and which weren't.

Maybe he was on to something.

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