Man Without Qualities

Thursday, December 04, 2003

Corporate Governance In Disneyland: A Sad Chapter III

More rumors - these from the New York Post - that Michael Eisner will try to lure Steve Jobs onto the Disney board.

It certainly makes sense for Mr. Eisner to try to do that - for exactly the same reasons that make such a move so completely senseless for Mr. Jobs.

To begin, as the Post article notes: "For one thing, Eisner apparently doesn't much like Jobs, either."

From what I read, that is a massive understatement. Steven Paul Jobs heads both Apple Computer and Pixar - and the endlessly hostile Disney/Pixar negotiation of an extension to their distribution contract have come to resemble the talks to end the Vietnam War.

Jobs would be crazy to take the Disney seat. He would have no real influence on the Disney board beyond what he already has from Pixar, and would pick up a whole network of conflicting fiduciary duties to the public shareholders of three companies. Michael Eisner has already accused him of facilitating piracy of Disney's products - how would Mr. Jobs like to be on the receiving end of conflicting fiduciary obligations arising from his Disney, Apple and Pixar board seats on that account?

Life is too short. And Mr. Jobs is smart enough to know that.

Maybe this will happen, but I'll believe it when I see it.

On the other hand, I have heard that Jobs and other Pixar officials are pretty good buddies with Roy Disney - who seems to be pretty easy to like. Could Roy persuade Jobs to head Roy's alternative-director proxy-contest list? Or even a hostile takeover plan? Of course, Mr. Jobs can't do any of that if Mr. Eisner puts him on the Disney board.

If the Pixar/Disney talks go badly enough, maybe Jobs and Roy could set up a merger proposal between Disney and Pixar, with Pixar management taking over the combined entity and a business plan to get rid of Eisner and his lapdogs on the Disney board and ABC - or at least Peter Jennings?

Any sensible Disney shareholder should take that deal if it were reasonably structured. There's huge unexploited and misapplied value at Disney. Steve Jobs has made quite a respectable turn-around at Apple and he's got a long track record of brilliant, multi-faceted thinking in many areas. Pixar is hugely profitable.

Why not get rid of the superfluous Eisner and let Jobs have a turn running a combined Pixar/Disney? Why, the huge investment banking fees alone should be making scads of those young New York investment bankers and analysts toil through the night structuring proposed deals right now! Hey, boys, it's better than true - it's a GOOD STORY!

Go for it!

UPDATE: Jim Hill Media has lots more.

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