Iger to Succeed Eisner as Disney CEO

LOS ANGELES Robert Iger was officially anointed the new chief executive officer at Walt Disney on Sunday, ending months of speculation about who would follow the 20-year reign of Michael Eisner at the helm of the media giant. His selection means that about 10 years after Disney's acquisition of ABC, an executive from the TV side of the business will ascend to the top role at the company. Iger's promotion takes effect Sept. 30.Iger's ascension comes at a turbulent time for Disney. Last year the company fended off an unsolicited takeover bid from Comcast Corp. and a campaign to discredit current management and many Disney board members by dissident shareholders Roy E. Disney and Stanley Gold. Disney also has grappled publicly with the impending loss of a key business partner, Pixar Animation, and in its pending split with Harvey and Bob Weinstein, longtime heads of the company's Miramax division.Industry observers expect Disney's corporate culture to change little under Iger, who had Eisner's support, but some say the new CEO has alienated fewer business partners than Eisner and could sharpen Disney's focus on such areas as new technologies and international growth.Disney said Sunday that Eisner, who has headed up the company since 1984, has decided to leave the CEO post at the end of September, a year ahead of his previously stated plans, but the company didn't provide further explanations. In a letter to the board that Disney released Sunday, Eisner said he would not seek the chairman's post or a board seat after his departure.But Eisner's employment contract expires in September 2006, and company officials said Sunday that they would honor that contract. They didn't detail whether this will mean that Eisner, 63, will continue to receive contractual payments and benefits or whether he also could be asked to stay at the firm in some other role. Iger, 54, became Disney's second-in-command as president and chief operating officer in 2000. The board voted in his favor Saturday—after a six-month search and well ahead of a self-imposed June deadline—after reports that the only external CEO candidate left in the race, eBay CEO Meg Whitman, had withdrawn. Whitman worked at Disney from 1989 until 1992 as senior vp marketing at the consumer products unit. She has headed up eBay since March 1998. EBay officials couldn't be reached Sunday, but company sources have said Whitman had long downplayed her interest in the Disney CEO role.The Wall Street Journal reported over the weekend that Whitman had hoped for a fast decision from Disney's board to avoid publicity and distractions but bowed out late last week.It was unclear Sunday what will happen to Disney's president post when Iger takes over the CEO helm. A company statement didn't address that issue, and officials didn't provide more details on the situation Sunday.Industry observers have suggested that Disney chief financial officer Tom Staggs could be in for a promotion as a result of Iger's ascension. In a conference call with reporters Sunday afternoon, Disney chairman George Mitchell said the company would now turn its attention to two other lingering personnel issues: the search for a new chairman, which will start soon and finish before Mitchell steps down at the firm's next annual meeting in early 2006, and the addition of an independent board member by year's end. Mitchell declined comment on the chairman search beyond saying it hasn't started yet. "Naming Iger appears to maintain status quo," said Richard Greenfield, managing director of Fulcrum Global Partners, in a first Wall Street reaction. "I would not expect any major executive changes or company direction changes in the near term."But Mitchell said Sunday that Iger "represents the right brand of continuity and the recognition of necessary change."Mitchell hinted that among the changes heading Disney's way could be a stronger focus on exploring the use of new technologies to distribute content as well as continued expansion overseas, especially in China. Mitchell and industry sources said Iger has taken a keen interest in Asia, which has increasingly contributed to Disney's financials, as well as in technology issues, which critics have sometimes said Eisner ignored at times. He also touted Iger's role in supervising many operations, helping boost Disney's recent financials, as well as his integrity and knowledge of the Disney culture. Longtime Disney dissidents Roy E. Disney and Stanley Gold on Sunday claimed some credit for the developments but slammed Disney's board for its handling of the CEO search. "While it has taken three years to reach this point, our efforts to remove Michael Eisner as CEO of the Walt Disney Co. have finally succeeded," they said in a statement. But the two argued that the board had "failed in what [was] clearly one of [its] most important responsibilities." Saying there was a need for "a clean break from the prior regime and to change the leadership culture," Gold and Disney called the board "deaf and insular," its selection of Iger "yet another example of this board's breach of faith" and Mitchell's approach to good corporate governance "no better than a carny at the fair." Overall, they suggested "shareholders should seriously consider replacing this board and starting anew."Critics in recent days also have said that Disney had trouble attracting outside candidates, such as News Corp. president Peter Chernin, because of Eisner's alleged involvement in the process, including his presence in interviews. Mitchell rejected any criticism of the CEO search Sunday, saying the reports of Eisner's involvement are "totally false" and the search was "lengthy, thorough and professional." Disney's board held 11 CEO-related meetings during the past few months, which always excluded Iger and started with Eisner before going into extended sessions without him. Eisner was present in only one part of one meeting with an external candidate, Mitchell said, but he refused to detail how many outside candidates there were beyond Whitman. "We had choices, and we made the right choice" with Iger, Mitchell said."It is truly an honor to be entrusted with the responsibility of guiding this great company that occupies such an important place in the hearts and minds of millions the world over toward a very bright future," Iger said in a statement.Married to TV journalist Willow Bay, Iger has four children.Disney leadership is currently facing several high-profile challenges, whose outcome could be affected by Iger's appointment. The two main issues are the future of Disney's Miramax unit and its relationship with Pixar Animation Studios.Disney officials on Sunday didn't comment on whether Disney could save its soon-to-expire distribution partnership with Pixar under Iger. Pixar officials weren't available for comment.When it comes to Miramax, Mitchell said it wouldn't be "useful or appropriate" for him to comment on the state of talks with the Weinstein brothers, who have run the studio and who are expected to split with Disney. The process is going forward, and the company is capably represented "in the discussions," Mitchell said. Miramax co-chairman Harvey Weinstein said Sunday: "I've had a great working relationship with Bob Iger and think he's a terrific choice as CEO for the Walt Disney Co."

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Iger to Succeed Eisner as Disney CEO

Georg Szalai, The Hollywood Reporter

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Georg Szalai, The Hollywood Reporter