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Roy Disney sees groundswell in rebellion
( 2003-12-04 11:11) (Agencies)

Roy Disney's rebellion against the management of Walt Disney Co. has found fertile ground among small shareholders and average "folks," the former director said on Wednesday.

However, three days after resigning in protest from the Disney board and vowing to bring down Chief Executive and Chairman Michael Eisner, Roy Disney did not offer a specific plan when asked what would convince institutional shareholders to back him.

"There is a kind of a groundswell out there," Disney said, describing an outpouring of support from small investors and employees at the company, where he was the last founding family member in senior management.

"The response from folks is astonishing. I am absolutely boggled by it," he said.

Roy Disney and ally, Stanley Gold, recruited Eisner in 1984 but have fallen out with him in recent years. In a letter to some Disney employees on Wednesday, Roy Disney said, "Michael Eisner has lost sight of the vision upon which this company was founded."

Roy Disney and Gold resigned from the board this week after a nominating committee decided to force Roy Disney into retirement. Disney, who stepped down as vice-chairman of the board and head of animation, said departing was painful, but in some ways a relief given the atmosphere at work.

"It was like the mafia. You couldn't say 'good morning' without somebody saying you are talking out of turn," Disney said, arguing that the current board squelched dissent.


Eisner, he argues, has not invested in theme parks as he should, and the board of directors was ineffective.

"The upkeep down in Disneyland is sickening," he said, adding that the company under Eisner had built "half a park" but charged full-park prices at California Adventure, the theme park opened next to Disneyland in Southern California.

The park opened to mediocre reviews in 2001, but the company has added a number of new attractions that have proved popular, especially with younger children.

In the Wednesday letter, made available to Reuters, Disney added that under Eisner "the focus has shifted to the chase for a quick buck."

Eisner has not commented, but the independent members of the board in a statement have said that they had discussed and deliberated on all the issues Gold, in particular, had raised and had rejected the recommendation to change management.

The directors called the rebellion a "destructive course" for employees and shareholders.

Some Wall Street investors and analysts have said that the company needs new ways to grow, but a number of fund managers have said that the open rebellion, which has been simmering for more than a year, was too late, with Disney stock rising.

One former critic of management said Roy Disney did not have a chance to succeed. "He's howling in the wind -- the stock's up and now there are two voices (of dissent) who have left," said Herbert Denton, president of Providence Capital, which pushed Eisner last year to improve operating performance. Denton said he no longer owned Disney shares.

Roy Disney referred to average folks, however, such as smaller investors who had held Disney for years or decades. "I think they are the ones who will be the most vociferous" in support, he said.

Disney said he wanted to "present the idea that there is a better future." He and Gold say it is too early to talk specifics.

Disney concluded that those who said he could not succeed reminded him of doubters in 1984, when he resigned from the board to force a change in management. Six months later he succeeded in getting Eisner named CEO and chairman.

"The things that need to happen tend to happen," he said.

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