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Last Updated: Wednesday, 3 March, 2004, 08:32 GMT
Disney boss fights his corner
Analysis
By Stephen Evans
BBC North America Business Correspondent

Michael Eisner
Can Mickey help the embattled Michael Eisner through the AGM?

The huge entertainment group Walt Disney is facing a challenge to leadership on Wednesday at its AGM and the further threat of a takeover by rival Comcast. But the company should survive, at least for now.

On the bald arithmetic, Michael Eisner is as safe in his job, or rather jobs (he's chairman and chief executive of Disney) as Mickey Mouse is in the rodent Hall of Fame.

The votes are stacking against him at the company's annual board meeting this week, but technically they don't add up to a sacking.

Nor can they.

With no successor proposed by the dissidents, the rules say that Mr Eisner can't be deposed simply through a vote of no confidence, which is basically what the campaign led by Roy Disney, Walt Disney's unhappy nephew amounts to.

The best estimate now is that perhaps 30% of Disney shareholders will withhold their support from Mr Eisner in the vote on Wednesday, though these calculations of voting intentions are invariably unreliable because both sides talk up or down the potential dissent.

Serious opposition

All the same, there's no doubt of some serious opposition. A string of state pension funds have said they will not be supporting the embattled head of the company.

Michael Eisner
The board is standing behind Mr Eisner
It's hard to put a finger on the exact cause of the discontent beyond saying that discontent breeds discontent.

The argument is that an unhappy company is a company that needs change; Mr Eisner is the man in charge of this particular unhappy company; ergo, Mr Eisner must go.

Others don't want his departure, but do want him brought into line.

The argument is that the board needs to "hold his feet closer to the fire" so he is more responsive to the thoughts of others around him.

For these, too, a sizable show against Mr Eisner would be helpful. But a sizable show is unlikely to turn into a farewell party.

Fighting back

Mr Eisner, and the Disney board which has backed their man, resolutely plan fireworks in his defence.

Disney store
The company will reveal a raft of new products as well as old favourites
The three thousand investors who will take part in the meeting at the Philadelphia Convention Centre will be treated to a corporate presentation worthy of Broadway or, well, Disney.

It will feature razzmatazz to end all corporate razzmatazz, with displays of recent film successes and glimpses of future hopes, including the upcoming cartoon action hero, Mr Incredible, a somewhat rotund, red-suited, tongue-in-cheek animated star.

And the board will emphasise that Disney's stock price rose 43% last year.

The message will be: forget the fancy website and the publicity campaign of the disgruntled former director, Roy Disney, and look at the numbers instead.

The company has taken out adverts in papers around the United States saying: "Our future is in good hands. Our momentum is real and growing. Our legacy inspires all we do".

It is illustrated with all the old and new Disney characters, including Kermit the Frog whom Disney bought barely a month ago.

The subtext will be "we remember the past but we build on it not live in it".

Murky future

So Mr Eisner is unlikely to be sacked.

But, even if the rules say he can't be removed, rules aren't everything.

The Disney board meets after the vote, and if dissent is rife with a big anti-Eisner ballot, then some changes may be made.

It may be that the role of chief executive and chairman will be separated, or there may be some indication that a successor will be chosen for the period after Mr Eisner's contract ends in two years time.

And even if there's no immediate change, one other group will be watching.

Comcast has got its takeover bid in and it may be emboldened to increase the price if large-scale dissent is obvious.

It might then look like more of a white knight than a predator.

An unhappy Magic Kingdom is a Magic Kingdom ripe for invasion.


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