Eisner gets quiet approval from Disney board

Posted Friday, December 12, 2003 10:49 AM | Contributed by Jeff

Just over one week after Disney board member Roy Disney resigned, with a slightly brighter outlook for 2004, Wall Street sees no reason to oust the 19-year CEO when the company seems to have retuned its growth engine after years of sluggishness. Disney on Wednesday said profits could grow 30 percent or more in fiscal 2004 ending in September, implying a half-penny share more than it forecast in late November, and Disney projected its beleaguered ABC TV network would profit in 2005.

Read more from Reuters.

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Friday, December 12, 2003 11:13 AM
There is no doubt that today things are looking better for Disney. But Roy's point, and I have to agree, is that what are things going to look like 10 years from now?

They cite the explosion in DVD sales as a plus for Disney. Sure, but when everyone owns a copy of The Lion King on DVD they own it, right? I bet their sales of Cinderella II on DVD aren't going to be quite as impressive.

DCA was built on the cheap but I do give the company the benefit of the doubt that they will improve things as they did at DMGM and as they are now doing at Animal Kingdom (not built on the cheap but lacking in attractions originally). I am not as critical of the new parks but I sure as hell am critical of what is happening at the existing parks. Tomorrowland is a ghost town at the two American parks. 20K Leagues has been an upscale meet and greet at WDW for a few years now. The Dinorama addition at AK, while cute, certainly doesn't scream Disney.

If the new ABC programming ("Doing It"...about 16 year olds contemplating sex, and a rehash of "The Parent Trap") is any idication of where the company is going then I certainly reserve judgment on Eisner's feelings that they will become profitable.

Short sightedness should be left to the Six Flags folks. Disney needs to get back on track and investors shouldn't be counting their chickens just yet.

Friday, December 12, 2003 12:00 PM
Jeff's avatar Roy's points have everything to do with the biggest problem in public company: All of the emphasis is on short-term stock price. That attitude got my former employer into so much trouble that they eventually were de-listed.
Friday, December 12, 2003 2:49 PM
And like others have pointed out, while the company is now doing better in the eyes of Wall Street, under better leadership, Disney has all the potential to be doing ALOT better.
Friday, December 12, 2003 5:06 PM
janfrederick's avatar It's one thing for a small company to learn from the stock pumping fiasco and change. It's another thing for a giant company to turn things around. I think the investors have wisened up...now the large companies should follow suit. I just think the response is slower for large old companies.

I think (hope) they'll come around.

Sunday, December 14, 2003 11:51 AM
I think wall street is only concerned with money, while there are still people out there that like a nice, quality product. Just because it says Disney doesnt mean its high quality anymore, which is sort of depressing. But this will reflect in sales eventually, because people expect disney to produce very good things. If consumers see this is going away, they will be less than amused.
Sunday, December 14, 2003 1:52 PM
Jeff's avatar Wall Street is only concerned about money? Say it isn't so! What kind of world do we live in where people want a return on their investment?

Anyway... It's a business, not a charity. The company must make money. The disagreement comes in how they go about that. Roy and Co. feel that a lot of emphasis on short-term gains and stock price is bad in the long run, and I totally agree. I worked for such a company once, and they devalued themselves so badly after getting "quick fixes" that they got delisted off of the NYSE.


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