If Eisner Goes, Who Takes His Job?

At News Corp., some people already are envisioning the jobs they might snag at Walt Disney Co. should their boss, Peter Chernin, wind up succeeding Michael Eisner.

They’re sheepish, but they can’t resist. “I have to admit,” said one person who works for Chernin, the media’s conglomerate’s chief operating officer, “I’ve thought about it.”

Chernin is widely viewed by people in the industry, and by investors and headhunters, as the most logical candidate for Eisner’s job, which hangs in the balance this week.

Disney shareholders will reelect directors at the company’s annual meeting in Philadelphia on Wednesday, and the Disney board might be forced to make a management change if more than 20% oppose Eisner’s reelection as chairman and chief executive.

In fact, Disney is prepared for Eisner to be on the losing side of up to 30% of the votes, considering that several of the nation’s largest state pension funds said last week that they would oppose his reelection. New York’s state comptroller even called for Eisner’s immediate removal.

“If the vote is as significant as people suggest, the status quo cannot remain,” said Charles M. Elson, director of the Center for Corporate Governance at the University of Delaware. “Some shareholders would be disappointed if he stayed on.”

The Burbank entertainment company’s shares have appreciated little over the last decade of Eisner’s leadership, though the stock price has rebounded this year. Two major Disney shareholders, including Walt Disney’s nephew Roy, are campaigning vigorously to unseat Eisner.

Fund managers say that at the least, Disney’s board should separate the roles of chairman and chief executive. Some say Eisner, who turns 62 this week, could remain as chairman if Disney were to bring in a new chief executive.

“The way out of this mess is for the board to bring in a CEO and allow Eisner to quietly retire when he’s 65,” said one leading executive recruiter.

Such a scenario was discussed with Chernin, according to sources, but those talks disintegrated because Eisner refused to set a retirement date.

Finding a chief executive for Disney may not be easy. “There’s not a long list,” said Bill Simon, head of the media and entertainment practice at Korn/Ferry International, a leading executive recruiter. “This is a highly consolidated industry faced with a myriad of challenges. There’s not a lot of talent who has managed this scale and breadth of businesses.”

What’s more, candidates would be throwing their hats into the ring at an uncertain time: Comcast Corp. has made an unsolicited bid to buy Disney. The Disney board rejected it as too low. But should the nation’s leading cable TV provider end up landing Disney, the president of its cable operations, former Disney executive Stephen B. Burke, probably would oversee the entertainment giant for Comcast, leaving any new chief executive out of a job.

Here’s a look at some of the people the industry is buzzing about and who might, or might not, make a headhunter’s list:

Peter Chernin: Like Eisner, Chernin rose through the ranks as a creative executive. Because he oversees a broad portfolio that includes a movie studio, the Fox broadcast network and a group of cable channels, Chernin is considered among the best-qualified to run Disney.

And the 52-year-old has been eyeing the Disney post for the last year, according to people close to him, eager to report to a board rather than to a boss he never will succeed. At News Corp., Chernin is No. 2 to chief Rupert Murdoch, who controls the company and plans to turn it over to his two sons, who now are in their early 30s.

Despite months of negotiations, Chernin has yet to sign a new employment contract with News Corp. But his current agreement, which expires this fall, allows him to exit at any time to run a rival company.

Bob Daly: The former chairman of Time Warner Inc.’s Warner Bros. studios is winding down his role as chairman of the Los Angeles Dodgers since the team changed hands last month. But people close to Daly say he has little interest in taking a major industry role and at 67 is hardly a viable long-term solution for Disney.

Steve Jobs: Wall Street has speculated for some time that the co-founder of Apple Computer Inc. could sell his vaunted Pixar Animation Studios to Disney and end up succeeding Eisner as CEO. Such talk intensified when Pixar failed in January to renew a lucrative alliance with Disney that has led to blockbusters such as “Toy Story” and “Finding Nemo.”

On the other hand, Pixar’s success doesn’t mean Jobs is ready to run an entertainment giant seven times its size. “He’s got the vision thing and leadership skills, but it’s a big leap,” said a leading recruiter.

Mel Karmazin: The Viacom Inc. president is well regarded on Wall Street for his bottom-line orientation and probably would be set free of his current contract, which expires in 2006, because of his ongoing rivalry with his boss Sumner Redstone, who controls the entertainment conglomerate.

Yet Karmazin’s lack of creative instincts could be seen as a negative by Disney’s board, and his popularity on Wall Street has waned recently, along with Viacom’s stock price.

Tom Freston: The head of Viacom’s MTV Networks cable group is considered one of the best and most creative executives in the entertainment business. His group not only is the biggest profit center for Viacom but also has the highest margins in all of television. Freston, however, seems uninterested in running a diversified entertainment company -- although he probably would get the chance at Viacom if Karmazin left.

And some say Freston’s record was stained by MTV’s role in producing the recent Super Bowl halftime show in which Janet Jackson bared her breast. “He may not be seen as the best cultural fit,” one headhunter said.

Jeff Bewkes: A former financial type, he earned his stripes as a creative executive by expanding Time Warner’s HBO beyond original movies into series such as “The Sopranos” and “Sex in the City.”

But he’s unlikely to leave Time Warner, where he’s considered heir apparent to Chief Executive Richard Parsons. Besides, even though he now oversees HBO, Warner Bros. and the company’s Turner cable networks, he’s relatively new to the job and has never run an operation the size of Disney.

Stephen B. Burke: As a rising star at Disney, Burke was considered a potential successor to Eisner before leaving in 1998 to join Comcast. He’s a year ahead of schedule in turning around the troubled AT&T; Broadband cable systems bought by Comcast two years ago.

A charismatic and capable manager, Burke would be charged with fixing Disney if Comcast prevails in its takeover bid. Though he has run several Disney divisions, Burke is not a creative executive. Nor has he run a company close to Disney’s size.

Bob Iger: The Disney president isn’t considered a viable replacement for Eisner largely because of his failure to revive the company’s ABC network, which ranks fourth among the major broadcasters.

Steven Heyer: Rumors last summer had the president and COO of Coca-Cola Co. joining Disney as either president or CEO. They were unfounded, but headhunters say Heyer is qualified to run Disney -- and soon could be out of a job. The former advertising executive ran Time Warner’s cable group before joining Coke. Last month Coke chief Douglas Daft announced his retirement, but the board’s search for a successor signals that Heyer is no shoo-in for the job.

He’s a long shot for Disney too. “All things being equal, they’d probably prefer someone in the industry,” one headhunter said.

Terry Semel: The chief of Yahoo Inc. has done a masterful job turning around the Internet company despite his lack of experience in the online world. The former head of Warner Bros. probably would prefer commuting to Burbank than to Silicon Valley from Los Angeles every week.

But Yahoo’s stock would sink if he left, devaluing Semel’s options. And last week he said he wouldn’t take Eisner’s job if it were offered to him. “I’m having the time of my life” at Yahoo, he said.