Disney Corporate History Quiz
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Questions and Answers

Why did some observers initially dismiss Roy Disney's concerns about the company?

  • Because he was known for his close personal relationship with Michael Eisner.
  • Because he lacked financial expertise and understanding of market dynamics.
  • Because Disney's financial performance appeared to be improving at the time. (correct)
  • Because he had a long history of successful executive leadership within Disney.
  • How was Roy Disney generally perceived within the company, as suggested by the phrase 'Walt's idiot nephew'?

  • As a brilliant strategist with innovative ideas.
  • As a lightweight heir with questionable judgment. (correct)
  • As a dedicated and hardworking executive.
  • As a powerful figure whose opinions were highly valued.
  • What marketing initiative, initially criticized by Roy Disney, ultimately became a successful venture for Disney?

  • The introduction of Pixar characters into Disney theme parks.
  • The development of new animated films based on classic fairy tales.
  • The marketing of princess characters, such as Cinderella and Snow White, as a group. (correct)
  • The expansion of Disney stores into international markets.
  • What inspired Roy Disney and Stan Gold to utilize the Internet to voice their concerns regarding the company's leadership?

    <p>Howard Dean's success in using the Internet to raise campaign funds and attract supporters. (D)</p> Signup and view all the answers

    What was the primary objective of launching the SaveDisney.com website?

    <p>To energize a base that wants an outlet to voice dissatisfaction with the company. (D)</p> Signup and view all the answers

    How did the Disney corporate offices react to the launch of the SaveDisney.com website?

    <p>With total paranoia, blocking access to the site for employees. (C)</p> Signup and view all the answers

    What actions did Disney artists take in response to the SaveDisney.com website?

    <p>They volunteered to draw anti-Eisner cartoons, some of which were posted on the site. (A)</p> Signup and view all the answers

    What actions were taken by the Disney Company to prevent communication between its employees and Shamrock Holdings?

    <p>Emails sent from Disney offices to email addresses at Shamrock were bounced back. (C)</p> Signup and view all the answers

    Which business segment had the highest total revenue in 2003?

    <p>Media Networks (D)</p> Signup and view all the answers

    What was the operating income for the Filmed Entertainment segment in 1995?

    <p>$1,074 (D)</p> Signup and view all the answers

    In which year did Parks and Resorts segment experience an operating income below $1 billion for the first time?

    <p>2002 (D)</p> Signup and view all the answers

    Which segment showed a revenue decrease from 2002 to 2003?

    <p>Consumer Products (D)</p> Signup and view all the answers

    What was the total operating income for Walt Disney Company in 2003?

    <p>$4,005 (C)</p> Signup and view all the answers

    Which segment had the highest operating income in 1994?

    <p>Media Networks (A)</p> Signup and view all the answers

    Which year saw the lowest total revenues among the years presented?

    <p>1993 (C)</p> Signup and view all the answers

    What was the revenue for the Broadcasting segment in 1997?

    <p>$6,522 (A)</p> Signup and view all the answers

    What is the primary concern expressed by the Disney employees and fans regarding the company?

    <p>The decline in product quality and service (C)</p> Signup and view all the answers

    What type of support did Gold mention receiving from Disney supporters?

    <p>Letters of encouragement and energy (B)</p> Signup and view all the answers

    What was a common theme in the letters written to Roy Disney?

    <p>Expanding the 'Disney magic' experience (C)</p> Signup and view all the answers

    How did one supporter describe the negative impact of Michael Eisner on the company?

    <p>He prioritized profits at the expense of quality (B)</p> Signup and view all the answers

    What was the primary action taken by Gold and Disney in response to the issues raised?

    <p>Creating a website to encourage shareholder action (A)</p> Signup and view all the answers

    What was a significant method of participation mentioned by a shareholder in support of the 'Save Disney' campaign?

    <p>Voting their shares against Eisner's re-election (A)</p> Signup and view all the answers

    How did one letter's writer express their view on the board of directors?

    <p>The board lacks the courage to challenge corporate problems (C)</p> Signup and view all the answers

    What was one consequence of Eisner's actions as described in the supporters' letters?

    <p>Deterioration of the company's brand reputation (A)</p> Signup and view all the answers

    What was Disney's net income for the first quarter of 2004?

    <p>$688 million (B)</p> Signup and view all the answers

    Which Disney business segment showed the largest increase in revenue in the first quarter of 2004?

    <p>Studio revenues (B)</p> Signup and view all the answers

    What trend did Disney's CEO, Michael Eisner, note regarding the company's performance?

    <p>An expected earning increase of 30% in fiscal 2004 (B)</p> Signup and view all the answers

    What was the revenue increase percentage for the consumer products segment in the first quarter of 2004?

    <p>7% (C)</p> Signup and view all the answers

    Which two films contributed significantly to the studio revenues in 2004?

    <p>Finding Nemo and Pirates of the Caribbean (D)</p> Signup and view all the answers

    What was the increase in attendance at Disney parks from 1984 to 1987?

    <p>6 million (B)</p> Signup and view all the answers

    What new theme park did Disney build during Eisner's tenure?

    <p>Disney MGM Studios (D)</p> Signup and view all the answers

    Which of the following attractions was added in 1987?

    <p>Captain EO (A)</p> Signup and view all the answers

    By 1990, how many Disney Stores were there in the U.S.?

    <p>70 (D)</p> Signup and view all the answers

    What was Disney's annual cash flow during the time of Eisner's leadership?

    <p>$1.1 billion (D)</p> Signup and view all the answers

    What was the stock price increase percentage during Eisner's first ten years as CEO?

    <p>1300% (C)</p> Signup and view all the answers

    In what year did Disney spend over $280 million upgrading the parks?

    <p>1987 (C)</p> Signup and view all the answers

    What was the operating margin of Disney parks at the end of Eisner's initial tenure?

    <p>30% (D)</p> Signup and view all the answers

    What was the main reason given for Roy Disney not being put up for reelection?

    <p>His age exceeded the board's limit (C)</p> Signup and view all the answers

    What did Gold claim happened to Bowers?

    <p>She was removed for voting against Eisner (C)</p> Signup and view all the answers

    What concern did some press commentators have regarding corporate governance changes?

    <p>They considered it a public relations stunt (C)</p> Signup and view all the answers

    What action did Roy Disney ultimately take in response to his situation?

    <p>He submitted his resignation letter (D)</p> Signup and view all the answers

    How did Eisner allegedly use corporate governance in relation to Van de Kamp?

    <p>She was ousted under the guise of governance (C)</p> Signup and view all the answers

    What justification did Eisner provide for Gold's exclusion from the compensation committee?

    <p>He had a conflict of interest due to family ties (B)</p> Signup and view all the answers

    What was the board's policy regarding director age limits?

    <p>Directors over age 72 were ineligible for reelection (C)</p> Signup and view all the answers

    What was a consequence of Eisner's powerful personality as noted in the content?

    <p>It led to questionable decision-making (C)</p> Signup and view all the answers

    Flashcards

    Admission Price Increase

    Disney raised admission prices by $5 in the 1980s.

    New Attractions

    Captain EO and Star Tours were added to Disney parks in 1987.

    Attendance Growth

    Disney's park attendance rose from 31 million in 1984 to 36 million in 1987.

    Operating Margins Increase

    Disney's park operating margins grew from 18% to 30%.

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    Annual Cash Flow

    Disney had an annual cash flow of $1.1 billion, enabling expansion.

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    Television Advertising

    Michael Eisner initiated television advertising for Disney.

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    Eisner's Tenure Impact

    Under Eisner, Disney's annual profits jumped from $291 million to $1.11 billion.

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    Shareholder Value

    Disney's stock price increased by 1300% during Eisner's first decade.

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    Corporate Governance

    The framework of rules, practices, and processes by which a company is directed and controlled.

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    Eisner's Influence

    Michael Eisner's dominant personality affected Disney's board decisions.

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    Conflict of Interest

    A situation where personal interests could potentially influence professional actions.

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    Age Restriction Policy

    A board policy that disqualifies directors over the age of 72 from reelection.

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    Roy Disney's Resignation

    Roy Disney left the board due to perceived forced ouster masked by age restrictions.

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    Sarbanes-Oxley Legislation

    U.S. legislation enacted to protect investors from fraudulent financial reporting.

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    Pressure from Execs

    Board decisions highly influenced by executives' personal interests.

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    Board Members' Independence

    The degree to which board members can make unbiased decisions without outside influences.

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    Roy Disney

    A Disney heir and dissident director who wanted to remove Eisner.

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    Eisner

    Michael Eisner, the CEO of Disney targeted for removal by dissidents.

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    Age restriction

    A policy that required board members to retire at a certain age.

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    SaveDisney.com

    A website launched by Roy Disney to organize dissent against Eisner.

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    Howard Dean

    Democratic Presidential Candidate known for using the Internet in campaigning.

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    Marketing the Princess Line

    Disney's strategy to promote its princess characters collectively.

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    Total paranoia

    The extreme reaction from Disney corporate to the SaveDisney campaign.

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    Anti-Eisner cartoons

    Satirical artwork created by Disney artists opposing Eisner.

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    Disney Q1 2004 Net Income

    Disney's net income for the first quarter of 2004 was $688 million, up from $36 million the previous year.

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    Quarterly Revenue 2004

    Disney reported quarterly revenue of $8.55 billion, an increase from $7.7 billion.

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    Theme Parks Revenue Increase

    Theme park and resort revenue increased by 5% to $1.6 billion during Q1 2004.

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    Studio Revenue Surge

    Studio revenues increased by 57% to $3 billion due to successful DVD sales, notably 'Finding Nemo' and 'Pirates of the Caribbean'.

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    Eisner's Earnings Expectation

    Eisner expected earnings to increase by 30% in fiscal 2004, citing strong recent performance as evidence.

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    Save Disney Campaign

    A movement led by Disney employees and fans advocating for changes in company leadership.

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    Disney Magic

    The unique charm and quality that customers associate with Disney products and experiences.

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    Shareholder Voice

    The influence shareholders have in company decisions through their voting power.

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    Board of Directors Responsibility

    The duty of the board to protect and maintain the company's values and quality.

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    Michael Eisner

    The CEO criticized for prioritizing profit over quality at Disney during his tenure.

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    Health Benefits Cuts

    Reductions in employee health benefits that were a concern for Disney workers.

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    Corporate Greed

    The excessive pursuit of profit, often at the expense of quality and employee welfare.

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    Shareholders Withholding Support

    The strategy employed by shareholders to express disapproval by not backing current leadership.

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    Walt Disney Segment Revenues

    Revenues generated by different business segments of Disney from 1993 to 2003.

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    Media Networks Revenue 2003

    Revenue from Media Networks segment in 2003 was 10,941 million.

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    Parks and Resorts Revenue Trend

    Parks and Resorts revenue fluctuated in the late 1990s, showing a peak followed by a slight decline.

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    Filmed Entertainment Growth

    Filmed Entertainment revenues increased from 3,673 million in 1993 to over 6,000 million by 1995.

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    Total Revenues Expansion

    Disney's total revenues increased from 8,529 million in 1993 to 27,061 million in 2003.

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    Total Operating Income 2003

    Disney's total operating income was 3,174 million in 2003.

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    Consumer Products Revenue 1993

    Consumer Products generated 1,415 million in revenue in 1993.

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    Operating Income Variability

    Operating income varied across segments, with Media Networks showing the highest income in 2003.

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    Study Notes

    Saving Disney

    • In March 2004, Walt Disney Company (WDC) annual shareholder meeting, shareholders publicly expressed immense distrust in CEO Michael D. Eisner
    • Shareholders criticized Eisner's leadership, citing declining financial performance (net income had fallen for five consecutive years) and perceived lack of board independence
    • Two directors, Roy E. Disney and Stanley P. Gold, resigned in protest against Eisner and other directors, urging shareholders to withhold votes, as a tactic for change
    • Comcast made a $48 billion unsolicited bid for Disney in February 2004, citing poor management as a reason
    • Several major U.S. pension funds, including California, Florida, New York, and Ohio, withheld votes from Eisner
    • At the shareholder meeting, an unprecedented 43% of outstanding shares were withheld from Eisner, despite his guaranteed reelection
    • Eisner and board members were re-elected, though this signaled a major loss of confidence in WDC's current management

    The Walt Disney Company

    • Founded in 1923, initially a small cartoon studio.
    • Became a global media and entertainment giant with successful theme parks (Disneyland, Walt Disney World), animated films (Mickey Mouse, Snow White), movie production studios, and ESPN
    • Faced internal power struggles after Walt Disney's death, focusing on maintaining the legacy
    • Eisner succeeded Miller as CEO in 1984, implementing strategic changes to revive the company's financial health and revitalized animation
    • Company saw significant financial success, but also challenges regarding poor performance, high executive compensation, and governance concerns, and management conflict led to significant departures, and poor financial performance in retail divisions and parks

    Tragedy Strikes

    • 1994: Frank Wells, an influential Disney executive, died in a helicopter crash
    • 1994: Jeff Katzenberg, a prominent executive, resigned
    • Late 1990s: Disney acquisitions (Capital Cities/ABC) were questioned with respect to financial performance

    Save Disney Campaign

    • Activism from shareholders like Gold and Roy Disney, who criticized Eisner and board practices
    • Created saveDisney.com, a website for shareholder dissent and advocacy
    • Tour to meet with institutional shareholders to garner support
    • Eisner and other board members were re-elected despite shareholder opposition

    The Comcast Bid

    • Comcast's bid for Disney reinforced the perception of internal strife and poor management
    • Disney board rejected Comcast's offer despite the pressure of institutional investors

    Shareholder Meeting (Philadelphia)

    • In early 2004, the shareholder meeting raised concerns about weak performance, poor corporate governance, and potential succession planning
    • Multiple institutional investors withheld support from Eisner, voicing concerns
    • The 43% withhold vote reflected significant shareholder opposition, despite Eisner's reelection

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    Test your knowledge on the pivotal moments and key figures in Disney's corporate history, focusing on Roy Disney's influence and the company's marketing strategies. Explore the internal reactions to critical initiatives like SaveDisney.com and understand the broader impact on the Disney brand overall.

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