Disney Chief Quits for Run on Broadway

TIMES STAFF WRITERS

Walt Disney Studios Chairman Peter Schneider resigned Wednesday to become a Broadway producer after a difficult 18-month tenure, continuing a long exodus of senior managers and corporate upheaval at the entertainment giant.

Chairman Michael Eisner plans to become more involved in the film operation that has seen a series of recent disappointments at the box office, notably with the rapidly slowing business for the costly epic "Pearl Harbor" and the less-than-spectacular $20-million opening of its new animated film "Atlantis."

Eisner and Schneider declined to be interviewed. But in an internal memo to employees and some industry figures addressed "Dear Gang," Schneider called his resignation a "deeply personal decision, and has not been made in haste."

"It is important for you to know that there was no blowup, or job not given, or promotion not attained, or failure to deliver on profits or good artistic results."

Quoting from Disney's animated blockbuster "The Lion King," Schneider added: "As Rafiki says, 'It is time.' "

Disney will help bankroll Schneider's theater production and investment venture. In a statement, Eisner said: "Whether Peter is producing a play on Broadway or wherever his plans take him, I will be with him in spirit. Peter's passion and purpose, however, will be missed in Burbank."

Disney has been on an aggressive cost-cutting mission at the studio and other divisions, trimming 4,000 jobs throughout the company. The entertainment concern also is retrenching its venerable animation unit, and has sent mixed signals to Hollywood about its desire to be in the big-budget, live-action movie business.

While overseeing the studio, Eisner for now will put day-to-day control of the operation in the hands of veteran marketing and distribution executive Richard Cook and production chief Nina Jacobson. Tom Schumacher will remain head of the animation division.

A 16-year Disney veteran, Schneider, 50, lacked experience in the live-action film business and openly admitted to colleagues and Hollywood figures that he was uncomfortable in the job. He frequently talked about his lack of desire to schmooze agents, stars and filmmakers, a critical part of the job. Unlike most Hollywood executives who live in places such as Brentwood and Malibu, Schneider and his family lived in suburban La Canada.

"Peter was very uncomfortable in the job," said Jim Wiatt, head of the William Morris Agency. "He was not part of the fabric of the business and was not that available to everybody."

Schneider was best known for overseeing Disney's animation success during its halcyon days when the studio had such blockbusters as "Aladdin" and "The Lion King." Schneider, who worked in live theater before Disney, also oversaw Disney's successful Broadway ventures including the musicals "Beauty and the Beast," and the Tony-winning "Lion King."

Over the last seven years, dozens of executives that include former studio chiefs Jeffrey Katzenberg and Joe Roth and Chief Financial Officer Stephen Bollenbach have left.

"As an analyst, you never like to see a lot of management turnover at the division or corporate levels and Disney has had more than its share of management changes than anyone in the industry over the last five years," said Merrill Lynch media analyst Jessica Reif Cohen.

Another media analyst, Edward Hatch with S.G. Cowen, added of Schneider's departure: "It may have just been burn-out or being tired of being yelled at. Or maybe he felt that he had enough money to retire."

The lagging success of Disney's movies both in live-action and animated films comes as its archrival, DreamWorks SKG, co-founded by former Disney studio chief and Eisner nemesis Katzenberg, has enjoyed enormous success with its animated film "Shrek" about a green ogre that takes potshots at Disney. The film has earned gross revenue of $200 million domestically.

Although "Pearl Harbor" had grossed $160 million through last weekend, the film, which cost $140 million, has slowed at the box office and will not be the biggest hit of the summer as Eisner once predicted.

"Pearl Harbor is running out of steam and there is a question over whether it will make money," Wall Street analyst Hatch said. "It's less clear [in recent weeks] how much foreign appeal that the film will have."

Disney spokesman John Dreyer said that "Pearl Harbor" is highly successful. "We're very happy with it. It's a very profitable movie."

Dreyer added that the film division under Schneider posted $316 million in operating income in the first six months of the company's fiscal year, compared with $1 million a year earlier, thanks to an improved video operation and the success of the film "Remember the Titans."

Indeed, according to analysts, the film division is the only one showing strong growth, with the company's broadcasting, consumer products and theme park operations softening.

Producers don't expect significant changes with Schneider gone.

"I don't think there will be a change," said Gary Barber, co-chair and chief executive of Spyglass Entertainment, which made the films "Sixth Sense" and "The Insider" with Disney. "We are an independent company so we just collaborated together. We had no problems. We got along very well. He expected us to make mainstream live-action films which were not in the Disney brand mold. We just did that and we got along well. This doesn't change our status or relationship at the company."

Times staff writers Meg James and Lorenza Munoz contributed to this report.

* HERE BEGINS ORIGINAL TEXT:

SEE CORRECTION APPENDED

Thursday, June 21, 2001

Company Town

Disney Chief Quits for Run on Broadway

Hollywood: Peter Schneider resigns after 18 months, as the exodus of executives continues.

BY JAMES BATES, CLAUDIA ELLER and RICHARD VERRIER,

TIMES STAFF WRITERS

Walt Disney Studios Chairman Peter Schneider resigned Wednesday to become a Broadway producer after a difficult 18-month tenure, continuing a long exodus of senior managers and corporate upheaval at the entertainment giant.

Chairman Michael Eisner plans to become more involved in the film operation that has seen a series of recent disappointments at the box office, notably with the rapidly slowing business for the costly epic "Pearl Harbor" and the less-than-spectacular $20-million opening of its new animated film "Atlantis."

Eisner declined to be interviewed.

Schneider declined an interview request. But in an internal memo to employees and some industry figures addressed "Dear Gang," Schneider called his resignation a "deeply personal decision, and has not been made in haste."

"It is important for you to know that there was no blowup, or job not given, or promotion not attained, or failure to deliver on profits or good artistic results."

Quoting from Disney's animated blockbuster "The Lion King," Schneider added: "As Rafiki says, 'It is time.' "

Disney will help bankroll Schneider's theater production and investment venture. In a statement, Eisner said: "Whether Peter is producing a play on Broadway or wherever his plans take him, I will be with him in spirit. Peter's passion and purpose, however, will be missed in Burbank."

Disney has been on an aggressive cost-cutting mission at the studio and other divisions, trimming 4,000 jobs throughout the company. The entertainment concern also is retrenching its venerable animation unit, and has sent mixed signals to Hollywood about its desire to be in the big-budget, live-action movie business.

While overseeing the studio, Eisner for now will put day-to-day control of the operation in the hands of veteran marketing and distribution executive Richard Cook and production chief Nina Jacobson. Tom Schumacher will remain head of the animation division.

Eisner is known to have talked to at least one outsider to take over as head of the entire studio, approaching producer Brian Grazer, who turned him down, sources said.

A 16-year Disney veteran, Schneider, 50, lacked experience in the live-action film business and openly admitted to colleagues and Hollywood figures that he was uncomfortable in the job.

He frequently talked about his lack of desire to schmooze agents, stars and filmmakers, a critical part of the job. Unlike most Hollywood executives who live in places such as Brentwood and Malibu, Schneider and his family lived in suburban La Canada.

"Peter was very uncomfortable in the job," said Jim Wiatt, head of the William Morris Agency. "He was not part of the fabric of the business and was not that available to everybody."

Schneider was best known for overseeing Disney's animation success during its halcyon days when the studio had such blockbusters as "Aladdin" and "The Lion King." Schneider, who worked in live theater before Disney, also oversaw Disney's successful Broadway ventures including the musicals "Beauty and the Beast," and the Tony-winning "Lion King."

Disney critics view Schneider's ill-fated tenure, which began when he was named to replace Joe Roth in January 2000, as another misstep by Eisner. Similar Eisner appointments that misfired included naming former top agent Michael Ovitz as president of the company, and an inexperienced Dennis Hightower as head of Disney's television. Like Schneider's tenure as studio chief, Ovitz and Hightower each lasted less than two years in their jobs.

"Peter wasn't cut out for the job when he came in the door. This is yet another example of bad judgment by Eisner," said one key Disney investor.

Eisner is notoriously difficult to work for. Over the last seven years, dozens of executives that include former studio chiefs Jeffrey Katzenberg and Roth and Chief Financial Officer Stephen Bollenbach have left.

"As an analyst, you never like to see a lot of management turnover at the division or corporate levels and Disney has had more than its share of management changes than anyone in the industry over the last five years," said Merrill Lynch media analyst Jessica Reif Cohen.

Another media analyst, Edward Hatch with S.G. Cowen, added of Schneider's departure: "It may have just been burn-out or being tired of being yelled at. Or maybe he felt that he had enough money to retire."

Known for a hot temper and abrasive style, Schneider also alienated colleagues, with several of his top executives leaving shortly after he was named to the post. Both production executive Todd Garner and co-marketing chief Geoff Ammer, left to work for Roth's new Revolution Studios.

The lagging success of Disney's movies both in live-action and animated films comes as its archrival, DreamWorks SKG, co-founded by former Disney studio chief and Eisner nemesis Katzenberg, has enjoyed enormous success with its animated film "Shrek" about a green ogre that takes potshots at Disney. The film has earned gross revenue of $200 million domestically.

Although "Pearl Harbor" had grossed $160 million through last weekend, the film, which cost $140 million, has slowed at the box office and will not be the biggest hit of the summer as Eisner once predicted.

"Pearl Harbor is running out of steam and there is a question over whether it will make money," Wall Street analyst Hatch said. "It's less clear [in recent weeks] how much foreign appeal that the film will have."

Disney spokesman John Dreyer said that "Pearl Harbor" is highly successful.

Dreyer added that the film division under Schneider posted $316 million in operating income in the first six months of the company's fiscal year, compared with $1 million a year earlier, thanks to an improved video operation and the success of the film "Remember the Titans."

Indeed, according to analysts, the film division is the only one showing strong growth, with the company's broadcasting, consumer products and theme park operations softening.

Producers don't expect significant changes with Schneider gone.

"I don't think there will be a change," said Gary Barber, co-chair and chief executive of Spyglass Entertainment, which made the films "Sixth Sense" and "The Insider" with Disney. "We are an independent company so we just collaborated together. We had no problems. We got along very well. He expected us to make mainstream live-action films which were not in the Disney brand mold. We just did that and we got along well. This doesn't change our status or relationship at the company."

*

Times staff writers Meg James and Lorenza Munoz contributed to this report.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Theater Roots

Peter Schneider has been with Disney since 1985. His roots are in live theater:

* Chairman, Walt Disney Studios, January 2000 to present.

* President, Walt Disney Studios, 1999-2000.

* Head of Disney's Feature Animation Division, 1985-1999.

* With Thomas Schumacher, produced the Broadway stage production of "The Lion King"

* Theatrical credits include managing the St. Nicholas Theater in Chicago, directing in London and New York, and associate-directing the 1984 L.A. Olympic Arts Festival.

Source: Times files

FOR THE RECORD Los Angeles Times Friday June 22, 2001 Home Edition, Part A Page 2 A2 Desk 4 inches; 136 words Type of Material: Correction^H Editor's note--An incomplete version of a Business article on the resignation of Walt Disney Studios Chairman Peter Schneider appeared in some editions of Thursday's paper. The article contained some characterizations about Schneider and Walt Disney Co. Chairman Michael Eisner that were not sufficiently supported by information in the story. These included a description of Schneider as 'wrong for an important job,' a claim that Eisner 'is notoriously difficult to work for' and an unattributed quotation that Schneider 'wasn't cut out for the job' and his hiring 'is yet another example of bad judgment by Eisner.' The Times avoids whenever possible the use of critical, unsubstantiated quotations by anonymous sources. In addition, because of a production error, some paragraphs were inadvertently dropped from the story, and one sentence was garbled. A complete version of the story can be found on The Times Web site, http://www.latimes.com/schneider.
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