Coping With Tragedy : Disney President’s Death Leaves Huge Void at Company
At 9:30 a.m. on Monday, Walt Disney Co. Chairman Michael D. Eisner and President Frank G. Wells were to have met to formalize Wells’ new, seven-year contract, which Eisner planned to present to Disney’s directors on April 26.
But Sunday night, during dinner at his son’s home, Eisner got a call from a Disney pilot who had overheard emergency radio transmissions. Wells, 62, had been killed in a helicopter crash in a remote Nevada canyon while returning from a skiing expedition.
Losing his business partner of 10 years has left Eisner with a huge personal and professional void. The two men sat about 15 feet apart from each other at work, an arrangement that dated back to their first day on the job in 1984, when Eisner insisted that he needed a few feet of space so he could talk privately with his wife on the phone.
Eisner ran nearly every decision past Wells. When he thought of designing Disney’s new headquarters building so that the Seven Dwarfs would appear to be holding it up, Wells readily agreed to it, knowing, as Eisner did, that the 1937 film “Snow White and the Seven Dwarfs” once propped up the company financially.
“When you work together with somebody 15 feet away for 10 years, you know each other well. He was the most incredibly selfless executive without any other agenda than what was good for the Disney Company,” Eisner said.
On Monday, there was no word on Disney’s plan for replacing Wells, but the Burbank-based company said Eisner, 52, will assume Wells’ duties and take on his title of president.
The company added that there will be no change to any previously announced plan or project. Eisner indicated that he would work more closely with the heads of Disney’s units.
Analysts credited Wells with helping to build a deep and talented management team. “It was a very rare kind of intelligence that you don’t find in many companies. . . (but) the Walt Disney Co. has tremendous management depth so it’s not like they will be in any turmoil,” said Harold Vogel, an analyst for Merrill Lynch in New York.
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One executive described Wells as “the voice of calm fiscal responsibility here,” while another called him a unique problem solver who will be difficult to replace. Indeed, one of Wells’ first tasks was to settle strike at Disneyland that began the day after he and Eisner were named to their posts in 1984.
Eisner said that even though Wells had the reputation of being involved mostly in business affairs, rather than creative ones, his role was much broader than people realize.
It included “expanding the number of motion pictures we made to quality architecture, to naming the hockey team the Mighty Ducks,” which was another Eisner idea that Wells supported.
Said Eisner: “He was a lawyer who wanted to make the deal, not not make the deal. He was a closer. He encouraged excellence in whatever he did.”
Other executives cited Wells’ intangible contributions.
“The long-term impact will be great. He is as much a spiritual part of that company as anyone else,’ said 20th Century Fox President Bill Mechanic, Disney’s former president of international theatrical and worldwide video.
The mood in the hallways at the Walt Disney Co. is “one of unbearable sadness,” one executive said. Wells’ death came less than a month after another senior Disney executive, Kevin Hyson, executive vice president of theatrical marketing, died of a self-inflicted gunshot wound.
A tearful David Hoberman, president of the studio’s Touchstone and Disney Pictures banners, could say only: “As soon as I start talking about Frank, I start crying. . . . He was a great man.”
Another top Disney official said: “I’m just numb. . . . It’s just very quiet here. People are in shock; there’s not a lot of noise in the halls.”
Disney Vice Chairman Roy E. Disney, who had been friends with Wells since their days at Pomona College and helped to push Wells for the Disney post, said Wells was “so bright and quick that once in a while he could be difficult to talk to, because he was always three steps ahead of you in conversation. By the time you got to B he was on to E. He’d get bored. . . . It disconcerted people, including me, at times.”
Nonetheless, Disney said, as serious as he was, Wells also had a terrific sense of humor. The last time he saw Wells socially, at a dinner the night before Disney’s annual board meeting in Florida on Feb. 22, Roy Disney recalled that Wells “decided to read a list of the 10 worst possible questions which could be read at the meeting ( a la David Letterman). Then he expanded it to 14. . . . He had a great sense of humor.”
Mechanic said that Wells’ calming influence on younger workers will be missed.
“He continually lectured me to be more gentlemanly and more collegial. He thought it was as much a measure of how someone should be judged as their actual accomplishments,” Mechanic said.
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From the beginning, Wells was instrumental in the decisions to manage more aggressively the considerable Disney assets that many felt were not properly exploited--bolstering the theme park operations and the merchandising of Disney characters.
“The legacy of Mr. Wells is that he was able to put into place a variety of operations systems and a very bottom-line-oriented business ethic, which is completely embedded in Disney today. The management teams will continue to operate,” said analyst Christopher P. Dixon of Paine-Webber in New York.
Disney said funeral arrangements were pending for Wells, who is survived by his wife, Luanne, and sons Kevin and Briant. Investigators from the Federal Aviation Administration and the National Transportation Safety Board were to begin an investigation at the crash site, a canyon about 25 miles southeast of Elko, Nev.
Disney shares eased 37.5 cents Monday, to $41.625 on the New York Stock Exchange, as the overall stock market continued to slide.
* Times staff writer Chris Woodyard in Orange County contributed to this story.
* THE BIZ: Disney’s team was an example of stability that is rare in Hollywood. D4
The Eisner-Wells Reign
The death of Walt Disney Co. President Frank G. Wells marks the end of a management partnership that oversaw one of the most successful turnarounds in American business history. Wells and Chief Executive Michael D. Eisner took a moribund theme park and film studio and transformed it into one of the nation’s biggest and most profitable corporations--the envy of boardrooms around the world.
Under the nearly 10-year stewardship of the Eisner and Wells, Disney has seen its revenues soar to $8.5 billion from $1.5 billion and its stock value jump 1,500%. Revenues at its theme parks tripled, consumer products jumped 13-fold, and its film studio increased 15 times. The major highlights of the Eisner-Wells management regime include:
THEME PARK EXPANSION Although usually thought of as an film company, the theme parks are in fact the financial engine behind Disney. Revenue totaled $3.4 billion last year and operating income was $747 million. Euro Disney has been buffeted by the cultural resistance and the worldwide recession, but that has not stopped Disney from spreading its net further. Next up on the drawing boards is an American history theme park in northern Viginia.
FILM AND TELEVISION While the other Hollywood studios are looking for ways to get onto the information superhighway, Disney has remained faithful to the core business of producing theatrical films and TV shows. The studio releases more than 50 movies annually, and is the second largest supplier of TV programming. Revenue totaled $3.7 billion last year and operating income jumped 22% to $622 million. Under the Eisner-Wells regime, Disney also launched the Disney Channel, now the fastest-growing pay cable TV channel in the industry.
CONSUMER PRODUCTS Disney licenses everything, from T-shirts to tableware. The Disney Store retail chain has mushroomed from 37 stores in 1989 to 239 in 1993 while revenues totaled $1.4 billion.
DISNEY STOCK PRICE (quarterly, except latest) Monday: $41.625, down 37.5 cents
DISNEY PROFIT (millions of dollars) ‘93: $299.8
Sources: Dow Jones; Bloomberg Business News
