Disney suit is dropped

Mark R. Madler

If not the happiest place on earth, Walt Disney Co.’s headquarters is

at least a lot less acrimonious these days.

The company and two of its most vocal critics, Roy E. Disney,

nephew of company founder Walt Disney, and Stanley Gold, announced

Friday that they were setting aside differences about the direction

of the entertainment giant.

Disney and Gold agreed to drop a lawsuit challenging the selection

of Robert Iger as the incoming chief executive officer to replace

Michael Eisner while the company named Disney as director emeritus

and consultant.

In a joint statement released Friday, Disney and Gold expressed

confidence in Iger’s leadership when he takes the company’s reigns in

September and acknowledged Eisner’s contributions to the company

since 1984.

No additional comment will be made, said Clifford Miller, a

managing director of Shamrock Holdings, the investment company for

Roy Disney, where Gold is a president and chief executive.

Independent Disney historian Jim Hill called the timing of the

announcement choreographed, with consideration to the 50th

anniversary of Disneyland, taking place Sunday, and Roy Disney’s

absence to participate in the Transpacific, a boat race to Honolulu,

which causes him to be unable to be contacted by the media. The pair

resigned from the Disney board in November 2003 and have since led a

high-profile campaign questioning the business practices of Eisner

and the board. Their SaveDisney.com website became a clearinghouse of

information for their supporters among Disney shareholders.

In February 2005, Roy Disney and Gold were ready to run an

alternative slate of Disney board candidates at the company’s annual

stockholders’ meeting but held off, taking the board’s word that it

would conduct a comprehensive search for a new chief executive,

according to their lawsuit.

Their challenge to company leadership took a downturn at the March

2004 shareholders meeting when 43% withheld their votes for Eisner to

continue on the Disney board, said Hill, the webmaster of a site on

Disney-related issues.

“They didn’t have a plan in place if Eisner chose to ignore the

vote,” Hill said. “They lost momentum and never recovered.”

One month after the shareholders’ meeting, Iger was announced as

Eisner’s replacement, a move that Roy Disney and Gold contend was a

foregone conclusion because no external candidates were considered,

and company resources were used to promote Iger’s candidacy, the suit

said.

As part of their deal with the Disney Co. last week, the pair have

agreed not to run an alternate slate of candidates for the Disney

Board or submit shareholder resolutions for five years, the statement

said.

Tying up loose ends prior to Iger replacing Eisner have been

behind Friday’s move, said Dennis McAlpine, a media analyst.

“They want to get [the lawsuit] resolved. They want to get Pixar

resolved,” McAlpine said, referring to negotiations between Disney

and Pixar Animation Studios to continue making films together. “They

seem to be working through things. Is it all Eisner or all Iger? I

don’t know. It’s probably a combination of both.”

The move does make Iger look successful in that he brought peace

to a situation that had been acrimonious, said Gigi Johnson,

executive director of the entertainment and media management

institute at UCLA’s Anderson School of Management.