Roy Disney slams Eisner and ex-Senator Mitchell

[The Sushi Bandit]

http://www.savedisney.com/letters/just_say_no.asp

MICHAEL EISNER (poor management): Since the death of Frank Wells in 1994, Michael Eisner has been unable to manage growth or achieve performance levels that were once commonplace at The Walt Disney Company. Since 1995, Return-on-Invested Capital has declined by 63% from 18% to 7%. Return-on-Equity has declined by 80% from 22% to 6% and Return-on-Assets has declined by 79% from 10% to 3%. While the Company's stock has improved in recent months, it is important to note that since January 1996, an initial investment of $10,000 in Disney stock would have grown to only $11,497 over the 8 years ending December 2003, as compared to an investment in Dow Jones which grew to $20,191 (or 75% greater than Disney).

Mr. Eisner has failed to formulate a viable long-term strategy. Instead of investing wisely the cash flow produced by the company over the past ten years, those resources have been squandered on many failed projects, the most recent of which is the $5.2 billion acquisition of the Fox Family Channel.

He has built theme parks using copies of rides found elsewhere and built other attractions that fail to spark the imagination and excitement our guests and customers have a right to expect from Disney. The dismal financial results at Disney's California Adventure and Disney's Studio Paris are testimony to this flawed strategy.

The revolving door of executives has also led to an enormous loss of creative talent - once the clear hallmark of Disney.

While these activities may provide a short-term (in many cases, very short) boost to revenues, they have the long-term effect of dissipating what has made The Walt Disney Company great. If this process is allowed to continue, Disney will wind up "just another entertainment company"- and will never be able to recover its hard-earned reputation for providing unparalleled quality family entertainment and exceptional value to its guests and customers.

GEORGE MITCHELL (poor governance): We believe Ex-Senator Mitchell is not capable of providing effective leadership as the Company's "Presiding Director." He has opposed our repeated efforts to separate the functions of CEO and Chairman of the Board. Instead, he supported the Company's new governance rules, which are more form than substance - and which have left him as a Presiding Director with no authority or real responsibility.

Equally troubling, in addition to his full-time career as a practicing lawyer, ex-Senator Mitchell serves on far too many other boards to permit him adequate time for his Disney commitments. (It is worth noting that many of the other companies on whose boards he has sat have experienced significant financial, legal, and governance problems - among them Xerox, U.S. Technologies, Oily Rock Group Ltd. and Staples Inc.).

Moreover, within the last several years ex-Senator Mitchell has served as a paid consultant to the Company and his law firm has received more than $1 million in fees from The Walt Disney Company.

[MurrayDelph]

1. and the bozos have lost Pixar

The top-selling movie of last year was Finding Nemo. But Eisner's
people wanted to come up with a new deal that was even more in
favor than their last one (which cheated them out of new product credit for Toy Story 2, because it was a sequel).

MurrayDelph
(stockholder for 30 years)