Man Without Qualities

Monday, July 28, 2003

Pump Head Runs Dry

The once-mighty Walt Disney Company is so weakened that it is not even attempting to compete in the once-in-a-corporate-lifetime auction of Vivendi's American entertainment assets.

The Economist has an interesting article describing just why Disney's pump head in chief simply must go now.

While the article is good, the Economist also displayes some confusion, as can be seen by comparing these two curious excerpts:

ABC must go: The thorniest strategic problem facing Mr Eisner is how to stop the ABC television network losing millions of dollars each year. ... In the long run, though, says a former senior executive at Disney, the network is an “albatross” around the firm's neck and should be sold. As cable and satellite channels draw audiences away from broadcast networks that have only one source of revenue—advertising—only the strongest will survive the squeeze, he says. ABC has been out of the top league for too long.

But Disney should probably be sold: The likeliest suitor is Comcast, which could marry Disney's content with its distribution power. Comcast's executive vice-president, Stephen Burke, knows Disney's assets well, since he was president of ABC Broadcasting until 1998. The return of the lost leader; now there is a plot Disney should be able to understand.

So let's see if I've got this right. Disney needs to jettison ABC, but Comcast should buy Disney because Stephen Burke knows a lot about the ABC assets that have to go. If that's a plot Disney should be able to understand, then Disney is in even more trouble than the Economist understands.

But it's a good article, anyway. And it does suggest why Michael Eisner's mess is now getting so big, so fast, that if the Disney board doesn't act more quickly than it is probably going to do to get rid of him, the company may really go the way of the House of Usher - or Eisner - in not too much time.

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