COMPANY TOWN : Here’s the Scoop on Bollenbach
The first time Steve Bollenbach worked at a Walt Disney operation, he ended up with a sore wrist, just enough money to buy a surfboard and what he still rates as his worst-ever job.
That was 35 years ago. Bollenbach, just out of Lakewood High School, scooped ice cream at Disneyland’s Carnation pavilion for $1.23 an hour.
A stiff wrist from a summer of dishing vanilla and chocolate wasn’t what Bollenbach had in mind; he preferred watching the waves at Huntington Beach to dealing with endless lines of tourists waiting for cones. So he and a buddy quit when they had saved enough to buy surfboards--much to the displeasure of his father, a Carnation milkman.
If Bollenbach gets a sore wrist today, it’ll probably be from signing checks to buy things. As Walt Disney’s chief financial officer, Bollenbach is the pivotal money man in Disney’s $19-billion acquisition of Capital Cities/ABC. Next up may be a major record company such as EMI if the price is right.
Five months ago, Bollenbach, 53, joined Disney and returned to his native Southern California from Washington, D.C., where he was chief executive of Host Marriott, which owned 100 hotels and operated concessions for toll roads and airports. For Bollenbach, leaving a job where he was the boss to take a job where he isn’t turns out to have been an easy call.
“The Walt Disney Co. in terms of its total value is a $50-billion company after our [Cap Cities/ABC] acquisition. The company I ran is a $2-billion company. It’s worlds apart,” Bollenbach says.
Now the affable Bollenbach has what he calls the best job he’s ever held, joking that the pay is considerably better than it was when he worked at Disneyland. Although Bollenbach’s compensation won’t be made public until Disney issues its next proxy statement in about four months, corporate-level pay history for the company suggests he probably gets about $500,000 a year and enough in potential bonuses and stock options to buy a surfboard factory.
Bollenbach is the second executive this year to leave a job as head of a company to go to work for Disney Chief Executive Michael Eisner, join the company’s board of directors and presumably have a major voice in years to come on the company’s destiny. The other guy is Michael Ovitz. Needless to say, Bollenbach’s arrival didn’t rate the press the new Disney president’s hiring did. Still, Bollenbach’s relative anonymity belies the impact he has already had.
An effusive Eisner on the day of the Cap Cities/ABC deal all but credited Bollenbach with single-handedly making the transaction possible. He said Bollenbach persuaded him to load up more debt on a company that historically has been lightly leveraged. Bollenbach downplays his role, saying that he merely pointed out that interest rates for Disney were as favorable as any he could remember, and argued that from a financial point of view, there wasn’t a better time to do a nearly $20-billion deal.
Eisner acknowledges that he wasn’t exactly ignorant of Disney’s ability to take on more debt, something that some financial analysts had been urging the company to do for some time. Nonetheless, he says, Bollenbach crystallized the reasons that it made sense.
“I would say I was educated about debt in 12 days and then went and did something for $19 billion,” Eisner says.
Eisner says he chose Bollenbach after an extensive search that included interviewing him at a Mighty Ducks hockey game. “You must have a very strong financial strategist, a very strong economist and a very strong investment banker. And it’s great when you have them in the same person,” Eisner says.
Bollenbach grew up in post-war Southern California in what he describes as “the California equivalent of ‘Happy Days.’ ” Bollenbach also grew up developing a taste for action movies. He readily admits he prefers movies such as “Die Hard” over ones such as the Disney animated musical “Pocahontas.” Among his all-time favorites is Sam Peckinpah’s violent Western classic “The Wild Bunch.” At Host Marriott, Bollenbach displayed a poster from the film in his office, although he doesn’t at Disney.
Standing in the shadows of better known executives isn’t new for Bollenbach. His past jobs include working as a top executive with the late billionaire shipbuilder Daniel Ludwig, working for J. W. Marriott Jr. and, in his highest profile position to date, helping New York real estate and gaming tycoon Donald Trump get out of a financial mess in the early 1990s.
“Steve was with me at a period that was very critical,” Trump says. “In the early ‘90s, we had the nationwide and worldwide collapse in real estate. We worked closely together, and he’s a terrific talent.”
Bollenbach once thought he was destined to perform financial turnarounds of troubled companies in what is known in financial circles as the workout business, but he quickly tired of it. For one thing, it’s easy to attract the wrath of investors, as Bollenbach did when Marriott bondholders alleged he took advantage of them in a plan he designed to split the company.
Bollenbach says that no one ends up entirely happy in a financial restructuring. “Normally, whenever you do a major transaction, you have these great closing parties. You never have great closing parties in a workout situation.”
Bollenbach’s status at Disney was cemented when it was noted in the announcement of Ovitz’s hiring that he and Disney’s operations chief, Sandy Litvack, will continue to report directly to Eisner. Both Eisner and Bollenbach note that it’s traditional in companies for CFOs to report directly to CEOs. Some Hollywood executives also speculated that executives surrounding Eisner--including Bollenbach--may have been disappointed with the Ovitz hiring because it clearly puts Ovitz first in line should Eisner leave.
Bollenbach says he’s amused by that kind of talk. “He’s going to be here longer than me. His job is a part of his life. Talk about succession is always silly because he’s not going anywhere,” Bollenbach says.
