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Chapter 156:Battle of wits
🕑 Added 2024-12-29 17:34:13 +0000 UTCAfter the death of Walt Disney, Disney went through a period of decline.
Under the leadership of Walt Disney, Disney built a content ecosystem centered on three main businesses: content production, channel distribution, and derivative peripherals.
In the early days of Hollywood, the status of directors and actors was far less important than it is now.
At most, they were just employees of the film company and were far less significant than the current partners. This led to low utilization of both personnel and assets.
To reduce costs, Hollywood's top film companies reformed into project-based operations, treating the production and distribution of each film as an independent project.
When projects were initiated, teams were temporarily assembled through outsourcing to achieve cost reductions and efficiency improvements.
However, this outsourcing operational model is a double-edged sword. While it lowered costs, it also lowered the industry's entry barriers.
This is one of the reasons why, when the internet age arrived, streaming services like Netflix and Apple could have a significant impact on traditional giants.
However, for Disney, it did not undergo a complete project-based reform. The company focused on fully implementing its corporate culture and promoting unified values and content.
So, while Disney was both nurturing employees and developing new technologies, over time, its system inevitably became rigid.
By the time Michael Eisner took over, the employees of Disney's film department had developed a lazy style. They clocked in and out on time and had long lost the drive and creativity of Walt Disney's era.
Content creation was just one of the many problems Disney faced at that time. In terms of channel distribution, adhering to the company's corporate culture and values meant that most live-action films had nothing to do with Disney.
Although Disney managed to maintain its position in the animation film business with its copyrights, the decline of its live-action film business prompted Michael Eisner to make the decision to reform.
Since 1984, Disney has continually acquired and established various subsidiaries, including Buena Vista Pictures and Touchstone Pictures, and even acquired Miramax Films earlier that year.
Michael Eisner's reform strategy had only one focus: everything should be profit-oriented. All business sectors were to be for the purpose of profit, with clear responsibilities, and professionals were responsible for professional matters.
Under a series of reforms, Disney was rejuvenated, with animated films like The Little Mermaid, Beauty and the Beast, and The Lion King all emerging during this period.
From Disney's development, Michael Eisner's contribution was undeniable.
Logically, such a distinguished leader should have been given more respect within Disney, but the reality was quite the opposite.
Perhaps because he felt that he had dedicated so much to Disney, Michael Eisner was unwilling to merely be a professional manager.
Then, seeing that the Disney he had led to the peak of the business empire was again falling into decline under the leadership of the Disney family's unworthy descendants, Michael Eisner took bold action.
He forcibly seized power, becoming the chairman of Disney while also taking on the role of CEO, consolidating his control. But this inevitably affected the Disney family's interests in Disney.
Although Michael Eisner held power, Disney did not change its name to Eisner, and a large amount of the stock was still controlled by the Disney family members.
However, the Disney family itself was disorganized and unable to unite effectively, so this did not cause much trouble for Michael Eisner.
But all of this changed when Michael Eisner stepped down as CEO and allowed his childhood friend Michael Ovitz to take the CEO position.
Michael Eisner's initial plan was for Michael Ovitz to be a puppet, allowing him to continue holding the CEO position through indirect means.
But it turned out that indirect control was less effective than direct control.
Under internal pressure, Michael Eisner's once-forceful style started to wane, and this emboldened those who opposed him on the board.
Moreover, Michael Ovitz was not acting as a puppet at all. He began to build alliances at higher levels, leading Michael Eisner to realize that the company was slowly slipping from his control.
Especially in the live-action film business, Michael Ovitz, with the support of Disney family members, seized the most popular Gilbert film project from his hands.
If Gilbert sided with Michael Ovitz in Disney's internal power struggle, he would lose an important card within the company.
Of course, this was only referring to the live-action film business.
Although Gilbert was important, he was not as crucial as other business sectors at Disney.
Ultimately, Disney's core assets were its animation copyrights, the revenue from associated peripheral products, and the globally famous Disney theme parks.
It could be said that even if the live-action film projects completely failed, as long as the animation copyrights, peripheral products, and theme park projects were preserved, Disney would remain Disney.
But times had changed. The Disney theme park projects faced significant problems, which provided an opportunity for Michael Ovitz.
He seized the chance at the board meeting to challenge Michael Eisner, aiming to take more power from him and insert himself into Disney's core business sectors.
"Last year, our theme park projects faced significant problems. Peripheral product revenues dropped by 4.3% compared to 1994.
The theme park revenue decreased by 5%, especially the Paris Disneyland, which lost 3.5 million dollars.
This is unacceptable for Disney. There are major internal problems in our company that urgently need reform."
Michael Ovitz spoke passionately at the Disney board meeting, as if he were back in his days at CAA, controlling everything.
But unlike the CAA days, he now had Michael Eisner above him.
Board members quietly listened to Michael Ovitz's speech, with some shareholders glancing at Michael Eisner, and a few with gloating expressions.
Michael Eisner appeared calm on the surface, as if the decline in Disney's performance had nothing to do with him.
But from the clenched fist he was hiding, it was clear that his inner calm was only a facade.
Robert Iger, as the head of a Disney subsidiary, was naturally qualified to attend the board meeting. As a trusted ally of Michael Eisner, he had no choice but to speak up.
"Mr. Ovitz, please note that the decline in Disney's profits is more due to objective factors. It's not just us, Warner, Fox, and Paramount also saw a decline in their peripheral business last year."
Michael Ovitz seemed to anticipate this problem. He banged his fist on the table to assert his authority as CEO: "Bob, as a Disney executive, don't you know these businesses are our core sectors?"
"I do know, but Mr. Ovitz…" Robert Iger was cut off by Michael Ovitz.
"As I understand it, the Paris Disneyland project was originally opposed by the board but was forcibly approved and built in Paris.
Now, this project is generating losses, and someone must take responsibility for it."
All the board members turned to look at Michael Eisner, as the Paris Disneyland was his brainchild.
Robert Iger was quiet, as he was in charge of the live-action film business and had no authority over the theme park or peripheral products.
He couldn't shoulder this blame, so he remained silent and waited to see how Michael Eisner would respond.
Although Michael Ovitz's sudden challenge was a bit unexpected, Michael Eisner had weathered many storms and was still capable of handling this situation.
He tapped his fingers on the table, a habit of his.
Hearing the tapping sound, many shareholders straightened up, like respectful subordinates, listening carefully to Michael Eisner's response.
This was a phenomenon created by Michael Eisner's years of authoritarian rule, making shareholders instinctively adopt this attitude toward him.
However, today, his tapping felt somewhat hollow, as if the situation was slipping out of his control.
When all the board members' eyes were on him, Michael Eisner said, "Paris Disneyland was built for Disney's development in Europe.
Profit was never the priority; the primary goal was to promote our brand and seek long-term growth."
Despite some losses, the amount was trivial and Disney could afford it. The savvy board members knew this couldn't be used as a reason to attack Michael Eisner.
But the matter now depended on how it was handled.
In the past, Michael Eisner had no rivals, and no one contested his authority. But now, the situation had changed drastically.
Without needing Michael Ovitz to speak, a member of the Disney family immediately said, "Mr. Eisner, remember when the board opposed the Paris Disneyland project?
You forcibly approved it and built the Paris Disneyland.
Do you remember what you said? That through Paris Disneyland, Disney's culture would be promoted across Europe.
But now, Europeans aren't buying it. Not only are we losing money, but we've also seen protests since opening.
This hasn't promoted the brand at all and has instead made Europeans dislike Disney more."
This was indeed the truth, and Michael Eisner couldn't refute it, so he fell silent.
In the past, a single glance from him would have made anyone tremble, but now his gaze had lost its power.
Was this the end? Seeing that Michael Eisner wasn't reacting, Michael Ovitz's expression brightened. Finally, Michael Eisner was going to back down.
He pressed on, "I suggest we push for reforms at Paris Disneyland and collaborate with the French government and cultural sectors to bring new development opportunities to the park."
John Disney had already secretly aligned with Michael Ovitz.
He immediately stood up and said, "I suggest Mr. Ovitz take charge of the Paris Disneyland project and drive its development in Europe."
This was a clever suggestion. Instead of demanding control over all Disney theme park projects, he only asked to manage one park, avoiding strong backlash from Michael Eisner.
But Paris Disneyland was of great significance. It was the second Disney park outside the U.S., and the first in Europe.
The first one is Tokyo Disneyland, which developed after World War II with the economic aid from the United States, and there is a widespread sense of admiration for America among the younger generation in Japan, with a strong identification with American culture.
As a result, when Tokyo Disneyland opened, it immediately became popular among the Japanese, especially the youth. According to statistics, 97% of the visitors to Tokyo Disneyland were locals.
However, this park project was led by Disney's former president, Miller, and had little to do with Michael Eisner. The one truly promoted by Michael Eisner was Paris Disneyland.
Unlike Japan, the French have a deep contempt for the Americans from North America, and in addition to the fact that the United States was helped to be established by the French, this gives the French even more of a psychological advantage.
In the eyes of the French, Americans are the representatives of uncultured barbarians.
Paris is not only the capital of France but also the birthplace and gathering place of modern European culture. For American culture, which is relatively new, to break into Europe's traditional ideological culture and establish itself in Paris was indeed very difficult.
During the construction of Paris Disneyland, some intellectuals in France strongly opposed Disney, calling it a cultural nuclear leak from America.
In October 1989, Disney stock was listed in Europe, and at the ceremony, some young people held anti-American slogans, throwing rotten eggs and tomatoes at Disney's executives.
In this context, Michael Eisner strongly pushed for the opening of Paris Disneyland.
With such a background, it's not surprising that Paris Disneyland incurred losses.
In fact, during the initial site selection, London or Rome were considered.
But Michael Eisner was personally obsessed with art and believed that Paris was the world's capital of art. Building the park here could greatly enhance Disney's cultural value.
Had it been built in London, it might have been a bit better, since it's a cousin country, and opposition wouldn't have been as strong.
Although the United Kingdom also has a long history in Europe, the glory of the British Empire is long gone, and it's far from the Gaul rooster that has insisted on independence after De Gaulle.
Rome was ruled out from the start due to Italy's economic downturn, and the project's effect would probably be worse than in Paris.
After the board meeting, Michael Ovitz, with the support of most of the shareholders, took strong control of Paris Disneyland.
Michael Eisner seemed to be retreating step by step, as if he were about to lose in this power struggle.
But was the situation really as it seemed in the board meeting? Not necessarily.
Michael Eisner had been in charge of Disney for more than ten years, weathering many storms, and his influence on Disney was profound. It could not be erased overnight.
Although Michael Ovitz now had the upper hand, just as Robert Iger and Gilbert said, Michael Ovitz's abilities were insufficient, and he still couldn't outmaneuver Michael Eisner.
So, what does this have to do with Gilbert? He's just a filmmaker, and Disney's core business has little to do with him.
Actually, it has a lot to do with him.
Even though his movies are currently handled by Disney's subsidiary, Touchstone Pictures, along with Warner Bros. and 20th Century Fox, Touchstone Pictures undoubtedly takes the lead.
Personally, Gilbert prefers to work with Touchstone Pictures.
The reason is simple: Warner Bros. and 20th Century Fox each have their own branding, and without Gilbert, they can still operate.
But Disney's live-action film business cannot do without him. He is the top figure in Disney's live-action film sector, and whoever takes the reins will need to court him.
Thus, after the board meeting ended, both Michael Eisner and Michael Ovitz reacted the same way—they both sought Gilbert's opinion.
At that moment, Gilbert was living freely in the UK, planning to return to North America in a few days to do post-production work for Saving Private Ryan.
To take the initiative, Robert Iger made a preemptive move and spoke with Gilbert before his return to North America. When Gilbert returned, Robert Iger would personally go to Melon Manor to communicate with Gilbert.
