2006 Disney Stockholder Meeting

...or...the first Robert Iger (non Eisner) stockholder meeting EVER!

 

This is the third stockholder meeting I've attended (courtesy of my wife, who owns Disney stock.  I own none.)  It turns out to be lower-key than the others, with less razzmatazz, but it's also more relaxed.  My report:

 

8:10 -- We trudge through the parking lot of Anaheim's POND, weather brisk and windy, rain clouds, the usual array of costumed Disney characters frolicking at the Pond's entrances.  We get checked for weapons, cameras and make our way to seats above the main stage.  Video of frolicking characters inside the hall light up the big, overhead screens.

 

10:00 -- the festivities are close to starting. We spot some ex-Disney animation staffers (Stephan Zupkas and Karen Nugent) down on the floor.  I see John Lasseter sitting down, a little below us and to the right.  He wears a dark coat over a yellow Hawaiian shirt (no suit-and-tie for him.)  It's the first time I've laid eyes on him in 23 years.

 

10:05 -- Disney's Chairman of the Board George Mitchell steps to the podium and begins, talks about Diz's Board of Directors working hard "to do good governance."  Board of Directors get intro'd and stand, then Directors Emerita are introduced, one of which is Roy Disney.  They stand.  Roy gets loud applause and waves to crowd.

 

10:25 -- After a video product reel, new CEO Robert Iger strides onstage and starts talking...into a dead lapel mike.  He stops, gestures, mike gets turned on.  He makes a comment about the wonders of technology and where the company is going.  He builds his remarks around three themes:

 

1) Creativity and Innovation, 2) Application of New Technology, and 3) Global Expansion. 

 

He stresses that Disney needs to break out of the "status quo," to that end delivering product on new platforms, exploring new ways of doing business, and using a consumer-focused approach.  He notes that four million iPod purchases of Disney t.v. programming has happened since Fall '05 -- when they were introduced.  He demonstrates the new ESPN and Disney cellular phones, he touts the Disney channel and relates how "High School Musical," a t.v. movie on the Disney Channel is cleaning up in various commercial venues, with its soundtrack album topping the charts and a sequel in the works.

 

Iger details the upswing in revenues at the company's various Amusement Parks, hotels and resorts, and we watch a video overview of same.  (We are still in, after all, the 50th anniversary of the opening of Disneyland.)

 

Then he gets to what many in  the audience have come to hear about: The Disney-Pixar deal.  He says that animation is the central hub of what Disney is all about, its core business, the one that started it all (he's already talked about the Oswald Rabbit acquisition.)  He says it's a top priority and, without further ado, introduces John Lasseter.

 

11:15 -- John L. bounds onstage and gives a short bio of himself: born in Whittier, Dad a Chevy parts manager, Mom an art teacher.  Tells how he was a high-school-age devotee of "Bugs Bunny and Friends" on television, and raced home everyday to watch it (big laugh.)  He talks about his time as a Disneyland Jungle Ride tour guide. Unlike Mr. Iger, he's not reading anything off the teleprompters, but extemporizing.  He speaks well, radiates energy and high spirits.  "We want to make movies that engage people from the moment the lights go down to the moment they go up..."

 

John talks about the great culture of Pixar, talks of how the first ten years of Pixar's existence "we lost Steve Jobs a lot of money...a LOT of money..."  He talks about the great artists down at Disney Feature Animation who want to do great pictures, and how they're bringing back some of the artists who've left Disney (a reference, I think, to Disney veterans Ron Clements and John Musker.)  How quality movie-making is a passion with him and how "Quality is a GREAT business plan..."  (applause).  He talks about how he wants to keep making great films, and how, now that he's part of Disney, he's going to get to help design park rides at the same time, so that rides related to the films can open four months after the film debuts.

 

Lasseter relates how he and the rest of Pixar were nervous about becoming part of Disney, but "Robert Iger convinced us.  He's a great leader and a terrific guy..." (Maybe it's just me, but I get the feeling that there's a subtext here relating to some OTHER Disney CEO who, ahm, John might think isn't a "great leader and terrific guy."  Nah.  I'm probably projecting.)

 

Then follows a trailer for "Cars" and an unspooling of the "Tractor tipping" sequence from the movie.  Audience responds enthusiastically.  John tells how the film was inspired by a two-month cross-country trip he took with his wife and five kids (or was it four then?) in a motor-home.  Lasseter, it seems, had been working non-stop at Pixar and his wife reminded him if he didn't spend a little more time at home he would miss his brood growing up, so he took the cross-country sabbatical and "Cars" was the result.  (More applause).

 

Iger walks back on; before John Lasseter leaves he shows a trailer for "Ratatouille," Brad Bird's feature project due for release in summer '07.  More spirited applause.

 

11:45 -- Disney's CFO gives the company's financial stats.  He doesn't read as smoothly from the teleprompters as Robert Iger, but he gets through it.  The gist of it is, "Earnings are up in double digits and will continue that way through 2009."  (What happens after 2009?)  I note that Disney's robust cash flow -- $3 billion in 2005 -- is slightly less robust than it was in 2004, when it hit $3.1 billion.

 

12:00 -- George Mitchell ticks off three agenda items, then opens the floor to questions.  There are several, almost all directed to Robert Iger.  Here are the ones related to animation:

 

Q:  Has middle management grown too large?  Is it stifling creativity?

 

Iger:  I don't think middle management is too big, although we're always reviewing it.  I don't think it's a problem with creativity, or gets in the way. 

 

(Hulett:  I have no idea about the rest of the company, but I would disagree with this assessment regarding animation.)

 

Q:  Can Disney start something like a Hall of Fame for past Disney "stars?"  And keep Eisner's name out of it?  (First overt dig at Iger's predecessor.)

 

Iger:  We already have the "Disney Legend's program, which is ongoing and celebrates past Disney notables. 

 

(Hulett: Iger, wisely, stays far away from the Eisner reference.)

 

Q:  I don't think Disney should use the word "rides" for their parks.  Rides are something at Knott's Berry Farm or Magic Mountain.  They should be called "attractions" like they used to be.

 

Iger:  I thought they still were.  But point well taken.

 

Q:  Is Disney going to get into high definition DVDs?

 

Iger:  Disney will be getting into it.  The company is supporting the "blue ray" high definition format, but will publish titles in both formats.

 

Q:  Is "Rapunzel Unbraided" going to be done as a hand-drawn feature?

 

A:  Glen Keane is directing "Rapunzel," and he's been helping with development of new animation software that will enable him to hand-draw animation and then have this new software turn his drawings into 3-D animation.  This is a new approach to animation and we're excited about it.  Regarding future hand-drawn features, where the company feels that hand-drawn animation is a good way to tell a story, we'll do it.  Hand-drawn animation is a big part of our heritage."

 

Q:  Is "Song of the South" going to be re-released?  It's a great movie.  And I think you're a great CEO.

 

A:  I hope you still think that after you hear my answer.  The company isn't planning to re-release "Song of the South."  I viewed it not long ago and I think it has depictions in it that would bother a lot of sensitivities.  So we're not going to release it now, even though that might help our bottom line.  Maybe at some time in the future, but not now.

 

(Hulett:  I was impressed with Iger's straight-forward answers.  He radiates warmth, likability, and...I don't know... a kind of easy-going humility.  Eisner, in contrast, was more "on," more jocular, more stagey.  I think Iger comes across better.)

 

12:30 -- Chairman George Mitchell allows one more question.  After it's asked, there is a motion from the floor for adjournment, and Mitchell adjourns the meeting without a vote.