Iger to Report On Initial Progress
By MERISSA MARR
March 4, 2006; Page A2
After five months on the job, Walt Disney Co. Chief Executive Bob Iger will preside Friday at the company's annual meeting for the first time -- and with a better story to tell than his predecessor, Michael Eisner, could manage in recent years.
Since taking the reins from 20-year-veteran Mr. Eisner, Mr. Iger has been busy fixing many of the longstanding problems that fueled criticism at past annual meetings. He patched up relations with Disney family member Roy Disney, who led a shareholder revolt against Mr. Eisner at the 2004 annual meeting. He also kept the company's earnings turnaround on track and recently auctioned off Disney's noncore radio business.
He put his biggest stamp on the Burbank, Calif., company with the acquisition of Pixar Animation Studios. The uncertain future of that lucrative partnership had long dangled over Disney, as Mr. Eisner locked horns with Pixar chief Steve Jobs. Just months after Mr. Eisner's departure, Mr. Jobs has sold his animation company to Mr. Iger and secured a board seat and a major stake in Disney.
Despite the fast start, Mr. Iger still faces challenges as he tries to move the entertainment giant forward. One question is whether Pixar is really worth the $7.4 billion Disney is paying for it. The answer will depend on Pixar maintaining its stellar run of movies and the company being successfully integrated into Disney. Mr. Iger has argued that animation is vital to Disney's future because it drives so many parts of the company.
The next question is whether Mr. Iger has brought the fox into the henhouse by welcoming Mr. Jobs, an aggressive executive who is likely to want a strong voice at the company. The hope is that Mr. Jobs will bring his technology genius to the table in helping to crack the biggest problem facing Disney -- how to navigate a fast-evolving media landscape where traditional business models are under siege and "old" media face an uncertain future.
There is also a question of leadership in the chairman's position. Disney extended the term of George Mitchell until the end of the year to give the company more time to find a successor. The most likely scenario involves picking someone from inside the current board. But that may depend on how Disney's two new independent board members -- Procter & Gamble chief John Pepper and former Starbucks Corp. chief Orin Smith -- perform in the coming months.
Longer term, there is the question of where the next "big idea" will come from to propel the company's growth into a digital future. Mr. Iger has highlighted three areas of strategic focus: creating quality content, expanding globally and tapping new technology. His busy first few months have helped drive Disney shares up around 17% since he formally took over in October, though the stock remains just below its 52-week high.
Write to Merissa Marr at merissa.marr@wsj.com
