• by January 7, 2004

YOU DON'T NEED TO BE A WEATHERMAN TO KNOW WHICH WAY THE DISNEY BOARD BLOWS -- It's been an especially chilly fall and winter for Disney chief Michael Eisner, and that may explain his penchant for meteorological metaphors during his keynote at a Smith Barney media conference on Tuesday. After describing a recent "positive" three-day tour he took of flagship Walt Disney World, Eisner pointed out that his No. 2, Bob Iger, "was at Disneyland, where it rained." What's surprising about that isn't so much that it rarely rains in Disneyland's Anaheim, Calif. clime, but that Iger is a former TV weatherman and should have known better. Eisner went on to summon an even more powerful weather image to describe Disney's results following the Sept. 11 terrorist attacks. "Starting with 9/11, we, as a company, were confronted with something of a 'perfect storm' that hit tourism, consumer products, ad rates and - less quantifiable, but equally real - the national mood. This 'storm' impacted our results," said Eisner, adding that the company still managed to achieve respectable results despite these adversities. Meanwhile, he said the national mood - not to mention Disney's consumer base - appears to have rebounded from terrorist fears, at least as far as travel to themeparks are concerned. "Despite the nationwide security alerts, we were very pleased by the holiday performance at our parks worldwide, especially at Walt Disney World, where a number of attendance records were set ... including its best day ever, its best week ever, and Epcot set an all-time daily attendance record on New Year's Eve." And despite the relatively warm reception Eisner got from the Smith Barney crowd, some influential Disney stakeholders remain cool to his management of the mouse house.

In fact, they'd just as soon give him the big chill. Following Eisner's presentation, which included a forecast of strong profits in 2004, former Disney board members Roy Disney and Stanley Gold reasserted their call to oust Eisner. They called Disney's fiscal 2004 earnings mediocre from a historical basis and said the earnings outlook remained dubious. The rabble-rousers said they also were particularly skeptical about Disney's long-term prospects related to new media technologies being championed by Eisner. "Considering similar rhetoric in the heady days of the late 1990's and, since management did not provide specifics, it is difficult to evaluate whether 'technology' will be a significant future financial contributor. Management should provide specifics regarding several of the technology initiatives," said their statement. In fact, Eisner did elaborate on some of these initiatives at the Smith Barney event, citing such developments as MovieBeam, Toontown Online and, of course, ESPN In Motion. "At ESPN Motion, which can be found on ESPN.com, we have developed proprietary technology to provide instant TV quality images with no buffering or streaming," said Eisner. "Embedded in the programming are commercials from top advertisers. As a result, at a very low per-user cost, ESPN Motion is opening up a new and effective way to generate ad-supported revenue on the Internet, while further extending the ESPN brand. No other TV brand is as committed to applying technology to distribute more efficiently."