Chapter 1: Unrest in the Kingdom
Excerpt from Kingdom Under Siege: The Wall Street War over Disney, by Taylor Johnson.
By the spring of 1983 Roy E. Disney and his Shamrock partner Stanley Gold were perplexed. On one hand, the company was doing well. Stocks were approaching the levels that they had reached in the early ‘70s. Disney products were holding their own on television and on the silver screen. The Disney Channel, bolstered by
Waggle Rock, was gaining subscribers, though fewer than Ron Miller had promised.
And yet a sense of ennui had settled over Roy. His talks with Henson were slowly getting some of his ideas into the company, but he was still an outsider in the company that his father had cofounded.
“I’m considering selling my stock [in Disney],” he told Stanley Gold. Gold told him that it would be very profitable to sell at the time with stocks over $100 per share. Roy considered it. He talked with his wife Patty and his brother-in-law Peter Dailey. They told him it was, of course, up to him, though Patty warned him that he’d be completely abandoning his birthright and that he’d need to not just step away from the board, but need to end all contact with the company.
“You’re either all-in or all-out,” she said[1].
This line seemed to galvanize him. He wanted back in, and he wanted real influence. This meant driving out Tatum, Walker, and Miller. Gold told him that this would require brute strength via a leveraged buyout or proxy fight, or else would require subterfuge. The former option would be hard and difficult, particularly with stocks trading near record highs. The latter option meant taking his concerns to the one member of the company that seemed to actually respect him and value his opinions: Jim Henson.
In the end, they decided on a hybrid approach. First, he and Gold would approach Henson and his associates. Next, depending on the value of the stock prices, they would try to improve their position in the company through stock purchases. After all, isn’t that the very path Henson had used to gain influence?
Roy met with Jim for brunch that Sunday, only this time, after a couple of rounds of Bloody Mary cocktails, he asked Jim about what he thought of Disney management. Jim went silent for a bit. Bernie Brillstein and Al Gottesman had both warned him that this day might come. Still, Henson had been deeply saddened to hear about the Walt-Roy split and considered it truly disheartening to see the feud live on in the next generation.
Jim Henson chose his words carefully. He and Ron Miller were friends, he said, just as he was with Roy. His wife Jane was also starting to become close with Dianne Disney Miller. Dinner parties between the Millers and Hensons were a common thing now. Henson declared his neutrality in the intrafamily dispute, though he offered to mediate if Roy was willing to talk with the Walt side of the family.
Roy politely turned him down, saying “maybe later.” He also made it clear that he wasn’t talking about the Disney-Miller-Lund side of the family, but the company management which, yes, included Ron Miller. He asked Jim about Card Walker and Donn Tatum in particular.
Henson hesitated. In truth, Walker and Tatum, though retired from the company, had used their positions in the Executive Committee to stifle or water down many of his creative efforts. And yet he was the type of person that always tried to see the good in people. He also didn’t want to make waves. So, he expressed to Roy that he and Walker and Tatum had some differences of creative opinion, but that he respected them and their long-held guardianship of the company. He expressed that the two loved his father and his Uncle Walt and also loved the company and had its best interests at heart[2].
Roy nodded, and then began to tell Jim the
whole story of his work at Disney. He’d talked to Henson in the past about the documentaries he’d made, but had left out the ugly details. Now he presented Henson with the full, dreadful saga, including all of the abuse that he received, particularly at the hands of Walker. He related the “idiot nephew” smear, which he blamed on Walker. He related the time he approached Walker and Miller with production ideas only to be dismissively asked if he intended to make “Deep Throat”.
Jim Henson sat in horror, visibly cringing at every painful detail or abusive remark. He finally asked Roy to stop, saying, “Ok, I understand now.” He made no promises, but said that he considered such bully-like actions to be unacceptable at any time, in particular on the job. Henson had always striven to create an environment of love, respect, and decency, both on the job and off. “If you ever rejoin the company, I’ll make sure you never get treated like that,” he said.
“You’ll need to clear that with Ron [Miller] first, Jim,” Roy replied, bitterly, which made Henson cringe.
The brunch ended on that uncomfortable note.
Later that week, Ron Miller noticed that Henson was acting uncomfortable. He asked him about it. Henson relayed that he’d heard some pretty upsetting stories from Roy about his treatment. Miller went silent for a while, and then asked Henson to meet him for dinner that evening.
At the dinner, Jim relayed the stories[3]. Ron didn’t deny them, though he said that there was another side to the story. He spoke about Roy’s “weak performance” and “ineffectual leadership”, but agreed that Walker hadn’t needed to be so rude about it. Ron also made clear that he didn’t hate Roy, despite what Roy seemed to think, though he expressed how hurt he had been when Roy left the company, which felt to him like a betrayal. He shared Roy’s concerns about the creative slump in Disney under Tatum and Walker – didn’t his recent efforts demonstrate this? – but he mentioned that Roy should have come to him if he had complaints. He also dropped a bomb: nobody at Disney respected Roy E. Disney because Walt Disney hadn’t respected his nephew Roy, once telling Walker that Roy would “never amount to anything
[4].”
Jim was, of course, upset to hear this. But rather than take sides he extended the same offer to mediate that he’d extended to Roy. Ron said he’d consider it, whenever Roy was ready, but only if Roy truly wanted to make amends and not just take revenge. Jim agreed to talk to Roy about it, and the dinner ended on just as uncomfortable a note as the prior brunch with Roy had.
Henson called Bernie Brillstein that evening and relayed the events. Brillstein’s response to Jim was blunt and succinct: “Jim, you schmuck, I told you to stay out of it.”
While Henson talked with Roy and Ron, Stanley Gold worked a parallel approach. He called Al Gottesman, Henson’s legal advisor and business manager and “second seat” on the Disney board, and arranged a business dinner. Gottesman quickly surmised the purpose of this meeting.
At dinner, they skipped the small talk. “Al,” said Gold, “Roy wants back in. But on his terms.”
Gottesman nodded. “Jim and I support his return in principle, but we’ll need to hear the terms before we commit to anything.”
“What does Jim think of Card and Donn?” who, despite their retirements, still served on both the Board of Directors and the Executive Committee.
Gottesman kept a straight face. “He’ll never say so in public, but they’re a real pain in his ass.”
“Roy wants them gone. Miller too.”
“I can sympathize, but we’re remaining neutral on this one,” said Gottesman. “Jim has become friends with Ron, same as he has with Roy, and I doubt that he’d ever support removing him. Furthermore, this is a family dispute almost as old as Disney [Productions]. We’re staying out of it. But we can facilitate communications.”
Gold smiled and nodded. He ordered them a couple drinks of grappa. “So, elephant in the room: what’s Jim’s play [on Disney]?”
“He has what he wants,” Gottesman replied.
“Everyone wants more.”
“Not Jim. Not in this case. Jim’s a good man, one of the best I’ve ever known, and I’ll stand by him to the end[5],” Gottesman said. “And if you and Roy go after Jim, you’ll need to go through me. Don’t hurt him, Stan. Don’t you dare hurt him.”
Gold nodded, solemnly. “The same goes with me and Roy. Card fucked him, Al. Fucked him bad. And Tatum and Miller let it happen.”
“Revenge, then?”
“I’d call it justice,” Gold laughed, “but yea, Roy wants payback.”
“I might be able to get him back pay,” Gottesman said with a chuckle. It seemed Henson’s love for bad puns had rubbed off on him too.
Gottesman leaned in now. “Stan, it needs to end. Three decades of feuding is enough. It’s benefiting neither side and hurting the company. I’ve gathered up some shares in this company myself,” this was news to Gold, “so it’s also hurting
me[6]. It’s time to bury the hatchet, if not for themselves, then for the company. We’ll back Roy’s welcome, unconditional return, but we won’t back a revolt.”
Gold nodded. “We’re considering taking a larger position [on Disney]. I’m telling you this in confidence. Don’t even tell Jim. You and Jim have played straight with us and Jim’s been a great friend to Roy, one of the first real friends he’s had on the board in years. Regardless of what happens, we won’t directly threaten Jim or his interests and we won’t ask him, or you, to take sides.”
“Agreed,” said Gottesman, extending a hand. They shook. “And the offer to mediate remains on the table. Tell Roy it’s time for the feud to end.”
“I will,” said Gold, raising his glass of grappa. “Now, a toast to the future of Disney.”
Gottesman raised his glass with a wry smile. “Yes, and to a peaceful and amicable future at that.”
[1] She made a similar statement in our timeline in early 1984 when Roy was considering his takeover attempt.
[2] Jim Henson was almost naively sincere at times, and probably would have given Walker and Tatum the benefit of the doubt even as he struggled under their yoke.
[3] Jim is actually putting himself into the middle of an uncomfortable interpersonal conflict, something he struggled with all of his life. Jim is changing Disney, but Disney is also changing Jim.
[4] This quote is cited in both
Storming the Magic Kingdom and
Disney War. Ouch.
[5] There are very few quotes attributed to the private Gottesman, but the one I found in the Henson Biography and on the “Red Book” blog displays his utter joy at getting to work for Jim and his fierce love for the man himself.
[6] He bought them in this timeline as a vote of confidence in Henson.