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Iger Puts On a Show for Disney’s Investors

Times Staff Writer

Since he took over last fall as chief executive, it’s pretty much been the Bob Iger Show at Walt Disney Co.

Dashing concerns that he’d be slow to step out of the formidable shadow of his predecessor, Michael Eisner, Iger quickly moved to center stage. He reeled in dissident shareholders, dismantled the company’s unpopular strategic planning group and orchestrated a $7.4-billion acquisition to bring Pixar Animation Studios into the Disney family for good.

He even managed a light-hearted mention in a computer-animated skit at Sunday’s Oscar telecast, when Chicken Little friend Abbey Mallard implored him to let ducks wear pants in future Disney movies.

Today, Iger literally will take the stage when he holds Disney’s annual shareholder meeting at the Arrowhead Pond in Anaheim, an event that promises none of the fireworks of earlier gatherings, including one in 2004 that sealed Eisner’s departure.

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“I think Iger is still in the honeymoon phase,” said Greg Taxin, chief executive of the proxy advisory firm Glass, Lewis & Co. in San Francisco.

The length of that honeymoon with shareholders probably will depend largely on how well the company’s stock does.

Disney shares closed Thursday at $28.09, up 4 cents for the day and about $4 higher than when Iger became chief executive Oct. 1.

But that’s still below what shares traded at nearly one year ago, and far off from their all-time peak of $43.63 in April 2000.

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Analysts and portfolio managers say it’s too early to expect Iger to be able to move the price up sharply. Among other things, they note, investor interest in media stocks has waned for a year or more.

“I don’t think Iger should feel or does feel a lot of pressure at this point,” Taxin said. “I think shareholders are reasonably happy that things have changed and there are some new, fresh ideas, and they will give him some time to see how it all works out.”

Iger will have plenty to tout at today’s meeting, which is expected to draw as many as 10,000 shareholders to the arena, a short drive from Disneyland.

The Burbank entertainment giant’s theme parks are flourishing, boosted in part by the continuing celebration of Disneyland’s 50th anniversary. Consumer products and television operations -- including the ABC and ESPN networks -- also have done well, contributing to a 7% increase in profit for the fiscal quarter ended Dec. 31.

Disney also has benefited from its innovative and much-ballyhooed venture with Apple Computer Inc., in which some of ABC’s most popular television shows are offered for downloading at iTunes Music Store.

Although he might have to reassure shareholders that it was worth it, Iger also can take credit for Disney’s pending acquisition of Emeryville, Calif.-based Pixar. The deal, which is scheduled to close this summer, underscores his pledge to refocus the company on its creative core.

“It looks like somebody woke up and said ‘That’s our stock in trade’ as opposed to just wheeling and dealing and doing clever marketing schemes,” said Henry Caroselli, a former Disney marketing executive and author of “Cult of the Mouse: Can We Stop Corporate Greed from Killing Innovation in America?”

The wild card is the studio operation, which saw its profit slide last quarter to $128 million, down 60% from a year earlier, despite strong box-office returns for “The Chronicles of Narnia: The Lion, the Witch and the Wardrobe” and “Chicken Little.”

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Iger and many analysts predict the studio will fare better this year, thanks to the summer release of “Pirates of the Caribbean: Dead Man’s Chest” and Pixar’s “Cars,” which could have been the last Disney-Pixar film.

Disney agreed to buy Pixar in January to quickly revive its venerable animation business. In doing so, Disney gets not only the company that made such hits as “Finding Nemo” but also its executive talent, including creative guru John Lasseter.

“Shoring up the animation studio is what Iger needs to do to get the stock back to those record high prices,” said Janna Sampson, portfolio manager for Lisle, Ill.-based OakBrook Investments, which owns 700,000 Disney shares.

“It will be a huge disappointment for the stock if that deal doesn’t go through,” she said.

If the deal does close as scheduled, and if Pixar continues its unbroken string of blockbusters, then the $7.4-billion price tag will be justified, analysts said.

“If he continues to make the smart tactical and strategic decisions he’s been making,” said Laura Martin, senior media analyst at Soleil-Media Metrics, “the stock will take care of itself.”


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