Disney is caught between a rock and a hard place.
The rock: On Jan. 29, after a slew of hits (Toy Story, Monsters Inc., Finding Nemo), Pixar Animation Studios decided to end its alliance with the Magic Kingdom when the current contract expires. There will be two more Disney/Pixar movies, The Incredibles, due for release this November, and Cars in 2005.
The hard place: In recent years, Disney has laid off many of its animators, moving away from hand-drawn animation. In 1999, there were 2,000 animators working for Disney; now there are 600 – and on Jan. 12, Disney announced it will trim the already lean staff by 258 additional animators.
Many believed the announcement was a sign of Disney and Pixar extending their agreement, which has been highly profitable to Disney since 1991.
If that’s what Disney CEO Micheal Eisner intended when he arranged the move, then the mouse may have been counting his cheese before liberating it from the traps.
Only one in-house Disney cartoon in recent years – Lilo & Stitch – has come even close to the blockbuster status of the old-school Disney movies that we grew up with (The Lion King, The Little Mermaid, and Beauty and the Beast, all of which have been re-released on DVD in recent years). In fact, many recent in-house Disney movies flopped at the box office (see Treasure Planet, The Emperor’s New Groove, and Atlantis).
Then there’s the hardest place of all: On Feb. 11, Comcast Corporation, America’s largest cable company, offered an amount reported to be between $49 and $54 billion to buy the company lock, stock, and rodent. Disney rejected the offer, and The New York Times has suggested that Comcast is working on a hostile takeover of Disney.
Just to make things more interesting, Roy Disney, nephew of Walt and former CEO of the company, is apparently working to oust Eisner from the company’s driver’s seat, citing improper management of the company. Mr. Disney has help from Stanley Gold, another former Disney CEO.
Now is not the best time for Disney to be dealing with internal struggles.
Things look bleak for the mouse – once the undisputed king of all animation.
Oh, Disney’s fighting it hard and announced its acquisition of the Jim Henson Company’s Muppets on Feb. 17. But it looks like Disney, one of the mainstays of my childhood, is on its last legs.
Disney’s fate will be decided at the annual shareholder’s meeting on March 3, or, barring that, 60 days from when Comcast began its takeover bid, as required by FTC laws.
Looks like we might get to vacation at Comcast Disney World someday soon.