As Iger Gets No. 2 Spot at Disney, Another Exec Quits

Walt Disney Chairman Michael Eisner reshuffled his executive deck on Monday, naming ABC chief Robert Iger as his second-in-command.

At the same time, Eisner got unexpected bad news that Rob Moore, the top financial executive at Walt Disney Studios, resigned, underscoring concerns about Eisner’s ability to keep top executives. Less than two weeks ago, Eisner referred to Moore in the press as “the best business executive I’ve ever had.”

The Iger announcement involved a series of accompanying promotions and a convoluted reporting structure aimed at soothing high-level executives and raising questions about Iger’s true authority as Disney’s president and chief operating officer. It also underscores concerns about Eisner’s historical resistance to empowering top people.

Iger, who said in an interview that Eisner has discussed the promotion with him for two years, downplayed those concerns.

“The only thing I can tell you about this is I am completely comfortable with it. Although I understand how others on the outside might suffer from a lack of understanding. I don’t, and neither does Michael,” Iger said.

Moore’s surprise resignation comes on the heels of studio chief Joe Roth’s decision to quit to start his own movie company, which reignited Wall Street’s concerns about Eisner’s management skills. His departure also calls into question Disney’s attempt to limit the number of executives with contracts--an initiative put in place last year to cut costs. Like many executives at Disney, Moore, 37, a rising star, didn’t have a contract, although his counterparts at other studios do.

It is widely speculated that Moore may join Roth in his new venture.

Iger’s appointment comes as Disney released preliminary results for the first quarter ended Dec. 31 showing stronger than expected earnings at ABC, thanks largely to the hit game show “Who Wants to Be a Millionaire” and the stronger advertising environment. Disney said that, excluding its Internet business, earnings per share for the quarter rose 9% from a year earlier, with operating income up 8% to $1.1 billion on $6.8 billion in revenue.

For Iger, the new reporting structure is shaped so that no executives answer exclusively to him and some not at all. Vice Chairmen Roy E. Disney and Sanford Litvack, along with Staggs, continue to report directly to Eisner. Chief strategist Peter Murphy, along with Disney’s powerful business heads, who will form a new “executive management committee,” report jointly to Eisner and Iger.

Staggs and Murphy were also promoted to executive vice president.

That kind of bifurcated reporting structure, along with having select executives report just to Eisner, is reminiscent of the confusing chain of command that plagued Disney when Eisner named Michael Ovitz as president in 1995. That ill-fated move lasted a little more than a year, with some of the problems traced to Ovitz’s vague role.

But Iger said he has forged close ties to the company’s division heads, especially since he was named to oversee the company’s international operations last year. One criticism of Ovitz was that he failed to do that.

Disney officials are privately downplaying whether Iger should be considered Eisner’s heir apparent. “I’m assuming one job only,” Iger said. “I’ve got enough to focus on in this one position.”

Iger has been the favorite for the job for some time. He joined the company in 1996 when Disney acquired Capital Cities/ABC, where he had climbed through the ranks to become president. He is well liked by Eisner, and was also given a seat on the board of directors on Monday. Unlike with Ovitz, Iger was given the additional title of chief operating officer.

Iger is considered a highly polished, loyal executive who is a quick study and is fast on his feet. Eisner and Staggs praised him in the conference call for ABC’s turnaround amid widespread cost cutting, and also lauded him for reorganizing Disney’s international operations.

But detractors believe he’s overly political and is sometimes too preoccupied about being second-guessed by Eisner. Analysts question whether he will be willing to go toe-to-toe with Eisner on tough issues.

But Iger said he has worked with Eisner for 4 1/2 years, and “we know each other extremely well . . . we agree on numerous things, and we disagree on numerous things.”

Disney has had a huge void in its No. 2 spot since the death of Frank Wells in a 1994 helicopter crash. Despite Eisner’s position as chief executive, he and Wells were considered nearly equals. Ovitz, at the time Eisner’s best friend, was supposed to fill that role when he was named to the job in 1995. But he was forced out in 1996 amid clashes with Eisner and other top Disney executives.

Iger said that executives will be named to replace him in both the ABC and international roles.

Eisner has been under pressure because Disney’s earnings have been soft, especially in its consumer products group and in its video division. Although up lately, the company’s stock has been lagging the past couple of years.

Two other deals this month by competitor Time Warner Inc.--its proposed fusion with America Online and its music merger announced Monday with the EMI music group--have raised concerns about Disney’s Internet and music strategy and whether the company is in takeover play.

During the conference call, Eisner emphasized that the company plans to remain independent, although he didn’t rule out possible strategic alliances.