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Henson Bio VIII: Going Through Changes
  • Chapter 13: Next Steps and The Next Generation (Cont’d)
    Excerpt from Jim Henson: Storyteller, an authorized biography by Jay O’Brian.


    1983 had been a new and exciting time for Jim Henson after the dour, change-resistant Card Walker retired, giving him more and more of the creative freedom he sought. Between Disney Studios (for which he was now, officially, Studio President), the Disney Channel, WED’s creative efforts, and the new Hyperion label, he was constantly busy, ever moving from one project to the next. Almost all of the projects that he or his crew had touched had done well in 1983. The success of Never Cry Wolf was validating the Hyperion label. The Imagination Pavilion was the most popular attraction in EPCOT, even counting the novelty-driven interest in Horizons, which had opened that October. Waggle Rock was a smash hit. The Disney Channel was holding its own in the world of premium television despite failing to come close to meeting Miller’s wild expectations. New VHS and Betamax sales were bringing in income, a nice affirmation for his and Ron’s push for increased home video sales. Sure, the videogame market had crashed, but, all in all, it had been a promising year. 1984 promised to be even better.

    The first quarter of 1984, however, was a hectic time for Jim Henson and Disney. It would only get more hectic as the year progressed. Despite the initial success of the Imagination and Horizons Pavilions, EPCOT attendance had flattened out and started to dip in 1984. Furthermore, despite Henson’s apparent creative freedom, the Executive Committee, still dominated by Walker and Tatum, still held him back. After his trip to Japan, Henson pushed hard to start releasing Japanese anime features on the Fantasia Films label, but had been rebuffed by Walker. “No American adult is going to watch cartoons,” Walker insisted, adding, “particularly not Jap cartoons[1].” And on the subject of “Fantasia”, Jim also pursued, without success, the resurrection of the planned Fantasia sequel Musicana.

    Other disappointments included rejected distribution deals. A potential distribution deal for Monty Python’s the Meaning of Life got killed by the committee the second the “Every Sperm is Sacred” song first aired at the screening, even though the assembled employees openly cheered through the “Crimson Principle Assurance” sketch, with its literal take on corporate piracy. Also rejected was the adult animated feature Liquid Sky, whose controversial subject matter of drugs, same-sex relationships, and gender-fluidity[2] made it a non-starter with the Committee, creative liberties offered by the Fantasia and Hyperion labels notwithstanding. Henson also killed a few distribution projects himself. Despite their promising premises, the fantasy/sci-fi blend Krull and the Graham Chapman helmed absurdist comedy Yellowbeard were just plain bad movies.

    But he did score some notable successes. He finally realized his dream to produce a work based on Maurice Sendak’s Where the Wild Things Are, which he put into pre-production at Disney Animation despite some reservations from the more conservative executives, who feared that it “promoted delinquency”. He greenlit The Ghost Busters and Back to the Future for Fantasia Films at the advice of Bernie Brillstein[3] and started airing episodes of the Gerry Anderson Terrahawks series[4] on the Disney Channel, which featured innovative mix of marionettes and animatronics. Further badgered by Brillstein, who was obsessed with the script, Jim convinced Ron Miller and Tom Wilhite to move forward at Hyperion with the Hollywood-based drama Edward Ford after Brillstein and Diana Birkenfield promised to “tone down the sex”. Finally, and perhaps closest to his heart, he initiated a new musical production through Henson Associates and Fantasia Films, in collaboration with Lucasfilm, that would combine Brian Froud inspired “Creature” animatronics with live actors. It was tentatively titled The Labyrinth.

    1984 would also be a challenging time in Jim’s personal life. Jim had long had an eye for young women. While living in London without Jane in the late ‘70s he’d discretely “gone out” with other women, including with some of his female employees[5]. Jane had figured this out. When he first moved to Los Angeles in 1980, at first Jane had moved in with him. But the estrangement between them continued, caused partly by his long working hours and frequent travel, and partly from the “elephant in the room”. This was exacerbated by the continued estrangement of Jane from the very company she had co-founded, Henson Associates, as she continued to play the housewife. By the fall of 1983, Jane had returned to New York with John and Heather. By the spring of 1984, following an ill-fated attempt to restore the relationship that Christmas, the two agreed to formally separate[6].

    “Dad made every attempt to stay involved with us,” daughter Heather, 12 at the time, recalled. “Despite how busy he was, he still found the time to include all five of us [children] in his life.”

    Still, it was hard on the kids. “Mom and Dad had always just been together,” remembered son John, wistfully. “Imagining the two of them apart was…unimaginable.”

    Jim Henson suddenly found himself a virtual bachelor in the City of Angels, a trait he soon shared with Disney CEO Ron Miller, who had recently separated from his wife Diane Disney Miller[7]. The two new quasi-bachelors soon began to head out on the town together, frequenting clubs and clubhouses, or racing their sports cars down the Pacific Coast Highway, collecting speeding tickets. They were seen on occasion with young, often famous women, though Miller denied any affairs were happening.

    At one point, Jim suggested that they call up George Lucas, who’d divorced his wife Marcia the prior year and remained bitter and depressed about it. Soon three sports cars were racing down the PCH in what George started calling “American Graffiti 3: The Midlife Crisis”. The three-way friendship grew to the point that Jim soon dubbed them the “Three Mouseketeers”. It was quickly agreed that charming-but-shy Ron Miller was Mickey, sweet and lanky Jim was Goofy, and the moody, choleric George Lucas was Donald.

    Jim bought them all custom musketeer-inspired leather jackets with their respective character and matching electric blue with silver fleur-de-lis T-top Ferraris[8].

    For Jane, meanwhile, life resumed in New York with occasional visits to LA. While visiting, she continued her friendship with Dianne Disney Miller, the two bonding closer than ever over their spectacularly similar lives, having both been the wives of ambitious entertainment executives and having both largely raised their several children personally, despite being wealthy enough to hire a squad of nannies. When they weren’t commiserating over their husbands and families, they argued over politics, something that Jane found very refreshing after years of having her angers and frustrations ignored by her conflict-adverse husband.

    And yet as turbulent as things had been for everyone, they would soon get spectacularly more chaotic and stressful for all.



    [1] I have no idea if Walker was truly racist against Japanese people or not, but as Marty Sklar relates, serving in the WWII Pacific Theater, Walker’s ship the USS Bunker Hill was struck by Kamikaze attacks off of Okinawa and many of his friends and shipmates died. Sklar relates that Walker’s wartime experiences would color his interactions with the Japanese while negotiating Disneyland Tokyo and nearly sunk the deal. I assume he would use the casual slur popularized during the war either way. If I’m wrong, please correct me and I’ll edit.

    [2] Henson was, from what I understand, rather ahead of his time on LGBTQ+ issues, even pitching a project in the mid ‘60s called Moki about an androgynous man being mistaken for a female super model. I understand it was intended to be sympathetic, not exploitative, but I have never seen the pitch and can’t confirm.

    [3] Dumb luck for Disney! Bernie represented Dan Ackroyd and many other SNL players and was a chief driving force on Ghostbusters in our timeline. The Bobs brought Back to the Future to Disney in our timeline too, but were rejected because of the incest subtext.

    [4] Hat-tip to @tornadobusdriver.

    [5] This is recounted in Jim Henson: The Biography, by Brian J. Jones.

    [6] As also happened between them in our timeline.

    [7] Which also happened in our timeline; an affair is rumored to be involved.

    [8] Jim Henson was almost ludicrously generous with his friends. Gifting a sport or luxury car was par for the course. He surprised the retiring David Lazer with a black, limited-release Mercedes in this timeline and ours.
     
    Animator's Perspective VI: Three Musketeers Greenlit
  • Chapter 7: The Three Mouseketeers
    Post from the Riding with the Mouse Net-log by animator Terrell Little.


    Sometimes the cat comes back. This was certainly the case for Steve Hulett’s Three Musketeers idea. We were deep into The Black Cauldron, him touching up dialog, me rushing to fill in the gaps between set pieces, when Ron Clements called us both to his office.

    Walking through the halls past the inevitable gauntlet of “principal’s office” jokes, we met with Ron, wondering what we’d done wrong. Instead, he gave us some good news: we were getting a second opportunity to pitch the Three Musketeers idea.

    Mickey%2C_Donald%2C_Goofy_-_The_Three_Musketeers_poster.jpg


    We were flabbergasted. This never happened. Once an idea got killed, it stayed dead. Either a project got the full greenlight, like Cauldron, or it got put on life support and lived on in a vegetative zombie state, like Catfish Bend, or it was killed outright and buried in a shallow grave. Why were we given the impossible second turn at bat?

    A week later we were pitching it again, this time with me taking point. For a man of many words on paper, Steve struggled to get them out in person some days. The whole time I pitched the idea, Jim Henson and Ron Miller kept staring at each other and snickering. What in the hell was so funny? It was throwing me off my game, but I kept going forward.

    Finally, our hour was up. Ron, still sending knowing glances over at Jim, thanked us, and we left, utterly confused.

    Three days later we got the greenlight. Disney’s The Three Musketeers would be produced as a new animated series for The Disney Channel. To this day, I have no idea why it suddenly came to be, but I didn’t stop to look a gift horse in the mouth.

    Jim and Ron wanted to name it The Three Mouseketeers, but, alas, the lawyers shot that name down. It turns out that DC Comics owned the rights to that name due to an old comic book from the ‘40s, even as Disney owned the rights to the term “Mouseketeers” in association with the Mickey Mouse Club. God save us from lawyers. Disney’s The Three Musketeers it would have to be.

    Soon Mickey-as-Aramis, Donald-as-Athos, and Goofy-as-Porthos, pestered by the energetic young wannabe-Musketeer José Carioca-as-D’Artagnan, were lighting up the small screen. Our budget was limited and thus, inevitably, so was our animation, but the series proved popular enough to be replayed on CBS Saturday Mornings, where it became a minor hit and even sold some merch.

    Steve’s writing even got nominated for a Daytime Emmy for the season two episode “For Richelieu or for Poorer[1]”. Tim Burton, Steve’s eternal tormentor, congratulated him…sort of. “Steve, congrats,” said Burton, throwing an arm over his shoulder, “You’re a real modern-day Dumas.”

    Steve had no idea how to respond, other than, “um, thanks, Tim.”




    [1] The Musketeers, deeply in debt, get the chance to work for the villainous Cardinal Richelieu (Pete) for a lot of gold, but they ultimately decide that honor is more valuable than money.
     
    Dis War I: Enemy at the Gates
  • Chapter 2: Enemy at the Gates
    Excerpt from Kingdom Under Siege: The Wall Street War over Disney, by Taylor Johnson.


    In the summer of 1983, Stanley Gold began acquiring outstanding shares of Disney stock on behalf of Roy E. Disney. The share price had fallen below $90 following a lower than expected quarterly return due to a combination of shrinking attendance at EPCOT (despite the popularity of the new Imagination Pavilion), the failure of Trenchcoat earlier that year, losses associated with Disney’s poorly-timed foray into the home videogame market, and the delays and cost overruns associated with Return to Oz and other movies. Gold saw it as an opportunity to increase Roy E. Disney’s position in his father’s company.

    On September 13th, 1983, Shamrock Holdings filed a Schedule 13D with the SEC announcing that it now controlled 5.2% of Disney stock as “an investment”. The announcement shocked and terrified the Walt Disney family, with Lilly Disney proclaiming it a “coup in the making”. Gold attempted to allay fears with the board, but he also made it clear that his client, having increased his position, was due greater representation on the board. Gold demanded that the Disney board give Roy a second seat at the table, the same as they had given the other major shareholder, Jim Henson. If not, he alluded, legal action or “a stronger position” might be required.

    This sent the board into a frenzy. Walker, Tatum, and Miller openly opposed it. “We will not be blackmailed into putting you on the board, Stanley,” Walker told Gold, surmising (correctly) that Gold would take the second seat.

    Gottesman, detecting Henson’s unease in the situation, interjected himself. “Gold is right,” he said, “Roy should have a second seat. It’s only fair.” Henson nodded his approval, which pained Ron Miller.

    Chairman Ray Watson, himself a declared neutral party, seconded Gottesman’s statement. “The proper functioning of this board demands that all members and shareholders get equal treatment. Though the tone of Mr. Disney’s representative is indecorous and quarrelsome, his assertions are justified.”

    As the board argued, it became increasingly clear that they couldn’t refuse the request outright without displaying clear bias and opening themselves up to legal action. Eventually, a consensus was reached: Roy E. Disney would get a second seat. Ray Watson, reminding the board that a split decision might be taken as a sign of weakness and division, called for a vote. It was unanimous in favor of giving Shamrock Holdings a second seat on the board, though grudgingly so in many cases. Roy immediately, and unsurprisingly, chose Stanley Gold. Ray Watson formally welcomed Gold to the board.

    Gold would prove to be a formidable foil for the Disney management, openly saying what Roy had always thought but never said aloud, which occasionally caused Chairman Watson to admonish him for decorum. However, the discourse proved healthy and forced the Disney executives to be more transparent with the board.

    Though the acrimonious conflict would pain Henson, he and Gottesman would continue to act as intermediaries between the two warring sides of the Disney family, working to smooth over issues, and they soon gained a reputation with the board as honest and reliable neutral brokers.

    When Jim Henson suggested that Roy be given a position at Disney, perhaps in production, he was shot down by both sides of the Disney family. However, all agreed that Ron Miller and Roy E. Disney should be seen having lunch together at the Disney commissary as a show of unity, which they did, just before Christmas in 1983, much to the delight of the Disney employees.

    The show of unity couldn’t have come at a better time. Starting in February 1984, the frequency of trades in Disney stock began increasing dramatically. Gold and Roy denied it was them.

    Danger was coming to the Magic Kingdom.



    * * *​

    Stocks at a Glance: Walt Disney Productions (DIS)
    February 14th, 1984
    Stock price: $84.24
    Major Shareholders: Henson family (9.4%), Unknown Buyer (4.3%), Roy E. Disney (5.2%), Disney-Miller family (11%), Suspected Arbitrageurs: 3.4%, Other (61.7%)
    Outstanding shares: 34.5 million

    hqdefault.jpg

    (Image source “youtube.com”)



    * * *​

    The Board of Directors for the Walt Disney Productions Company, February 1984:
    Ray Watson, Chairman (former head of the Irvine Company)
    E. Cardon “Card” Walker, Chairman Emeritus
    Donn Tatum, Chairman Emeritus
    Ronald “Ron” Miller, CEO, President, and COO
    James M. “Jim” Henson, CCO, President, Disney Studios, & Creative Director (founder and head of Henson Associates)
    Richard “Dick” Nunis, President, Disney’s Outdoor Entertainment
    Roy E. Disney (head of Shamrock Holdings)
    Stanley Gold (Shamrock Holdings)
    Al Gottesman (Henson Associates)
    Philip Hawley (Carter Hawley Hale)
    Samuel Williamson (senior partner, Hufstedler, Miller, Carson, & Beardsley)
    Caroline Ahmanson (head and founder of Caroline Leonetti Ltd.; Chairman of the Federal Reserve Bank of San Francisco)



    The Disney Executive Committee:
    E. Cardon Walker, Chairman Emeritus
    Donn Tatum, Chairman Emeritus
    Ronald “Ron” Miller, CEO, President, and COO
    James M. “Jim” Henson, CCO and President, Disney Studios
    Richard “Dick” Nunis, President, Disney Outdoor Entertainment
    Thomas “Tom” Wilhite, President, Hyperion Pictures

    - ∞ -
     
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    Dis War II: ACC Makes its Move - Part IV
  • Part IV: Countdown…

    “Time was meaningless, except each moment was a countdown to the end.” ― Lisa Henry, Dark Space


    Chapter 3: The Siege
    Excerpt from Kingdom Under Siege: The Wall Street War over Disney, by Taylor Johnson.


    Robert Holmes à Court has always maintained that it was never anything personal with Disney. Despite the unflattering portrayal of his doppelganger “Bobby Caracas” in A Muppet Mystery! or the lingering sense of missed opportunity from losing the profitable Muppets rights to Disney, Holmes à Court insists to this day that his interest in Disney was always about business rather than revenge. If anything, the “Bobby Caracas” incident merely served to draw his attention to the struggling studio. “You don’t last long in this industry if you can’t separate [business from personal],” he later told the Wall Street Journal.

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    Robert Holmes à Court c.1984 (Image source “theaustralian.com.au”)

    Simply put, Disney was vulnerable, and their studios, TV station, classic film library, and distribution rights would be huge assets to add to his growing communications enterprise. “A footprint in the States,” he called it. The theme parks held no interest to him, and neither did the land in Florida. Those could be stripped away and sold off to fund the takeover.

    In February of 1984 he contacted some likely investors, leveraged some junk bonds for funds, and began acquiring outstanding Disney shares. The share price had dropped below $85 and, Holmes à Court’s analysts assured him, the company’s asset-value was easily 50% more than the value of the outstanding shares at that price. By March he had acquired 4.2% of outstanding shares.

    Soon others began to acquire Disney stock, a class of opportunistic investors known as arbitrageurs, or “arbs”, who buy up stocks during hostile takeover attempts, hoping to either claim their share of the spoils if the takeover succeeds, or ride the inevitable price war and sell high to whichever side agrees to pay the most at the end. Several of the usual names in the arb and hostile takeover community began to acquire Disney stock: Irwin Jacobs, Saul Steinberg, Kirk Kerkorian, and Ivan Boesky. Boesky in particular was believed to have ultimately acquired up to 4.9% of the outstanding shares, just below the SEC-reportable threshold.

    Walt Disney Productions was officially “in play”.

    The Board of Directors for Walt Disney Productions were sent into a panic at the news. They’d already noticed the menacing uptick in stock trades, something they’d seen before with Jim Henson in 1980 and with Roy E. Disney the previous year. Both denied it was them, though the Disney-Miller side of the family remained suspicious of their cousin. Chairman Ray Watson urged calm.

    One of the first fears raised was the effect that this would have on employee morale. Most Disney workers did not have contracts and, fearing imminent layoffs should new management come in, they might just take preemptive action and leave the company. This would show weakness and could encourage the raiders. New contracts were proposed, as well as new pay raises. However, company bylaws tied all salaries to some percentage of the CEO’s salary. To give the board more room to expand company salaries, the Disney board proposed increasing executive salaries first.

    Henson called in former agent and manager Bernie Brillstein to the meeting as an expert on employee contracts. In addition to knowing employee contracts for both performers and for behind-the-scenes people like set workers[1], Brillstein also knew the importance of public image, and interjected himself into the discussion. “Are you kidding? Raise the CEO’s salary now? How do you think that’ll look?”

    The board reiterated that company rules mandated that all salaries be tied to the CEO’s.

    Henson said, “Aren’t we the board? Don’t we set the rules?”

    The board agreed to temporarily suspend the salary caps for the duration of the crisis and raised employee, but not executive, salaries, avoiding a potential PR nightmare[2].

    As a precaution, they also raised the limit on their line of credit with Bank of America from $300 million up to $1.3 billion. They set up meetings with Morgan Stanley and other financial and legal partners and prepared for a long, hard fight.

    Their precautions proved justified when Robert Holmes à Court filed a Schedule 13D with the SEC claiming a 6.8% stake and stating his intent to acquire up to 25% of Disney shares as “an investment[3]”.

    The War for Disney had begun.



    [1] Brillstein, unlike most agents, went after the behind-the-camera folks in addition to the performers, seeing them as an untapped market. It proved an excellent business decision for him.

    [2] In our timeline they raised executive salaries in order to open up lower-level pay raises. The newspapers soon unfairly branded this a “golden parachute” for the executives, which hurt Disney’s public image at a critical time. Here, simply having an outsider’s perspective allows for a “third option” to be considered.

    [3] The most banal and most menacing justification you will ever see on a Schedule 13D.
     
    Dis War III: Considering Options
  • Chapter 3: The Siege (Cont'd)
    Excerpt from Kingdom Under Siege: The Wall Street War over Disney, by Taylor Johnson.


    Of the many strategies that the Morgan Stanley advisors had recommended, the most palatable one for the Disney board was to buy back stocks themselves and take the company private. This, the board felt, would free the company from being beholden to shareholders or at risk of takeover. However, CFO Mike Bagnall estimated that it would require nearly $3 billion to accomplish such a goal[1]. The next most palatable option was a stock dilution strategy: acquire assets through the issuing of new stock in order to dilute the stock of the raider and thereby, hopefully, chase him away. This strategy carried some risk, however. For one, it would dilute all shareholder’s stock levels, which could anger shareholders and risk a lawsuit or proxy fight. Also, if the buy wasn’t obviously in the best interests of the shareholders (i.e. a company that was a natural “fit” for Disney) then they’d almost certainly open themselves up to shareholder lawsuits. Major shareholder Jim Henson gave this strategy his blessing, but Stanley Gold, representing the second highest shareholder, Roy E. Disney, openly opposed it, since it would also dilute his client’s holdings.

    Gold, in turn favored the White Knight strategy, wherein friendly outside investors were recruited to come to the company’s defense. Gold reported that he knew several people on Wall Street that they could trust, having been through takeover battles himself. Ron Miller all but accused Gold of attempting to engineer a coup himself, fearing that Gold’s “White Knights” would instead be Trojan Horses.
    All other strategies were unpalatable. The “Crown Jewels” strategy, whereby the company’s most valuable assets were sold off, the “Poison Pill” strategy, whereby crippling amounts of debt were taken on to make the company undesirable, and the “Self-tender” buyback, where massive debt was taken on to buy back shares at an inflated price, all resulted in the same thing that Holmes à Court’s takeover would mean: the dismemberment of the Walt Disney Productions company. Another option was to attempt to appeal to the shareholders in advance of a likely proxy fight – one advisor, Dick Cheney[2], even suggested a mail-in offer for shareholders to get a free Donald Duck toy in order to gather shareholder names – but this strategy was limited by the fact that most of the outstanding shares were owned by institutional investment companies, who had a loyalty to their investor’s financial interests and not to the management of Disney.

    The last option would be to pay “greenmail” to Holmes à Court: basically, to buy back his shares at an exorbitant share price, effectively paying him off. This ran the risk of enraging shareholders, who didn’t get the same opportunity to sell their shares at the inflated price, and further ran the risk of inviting future greenmail attacks. All agreed they wanted to avoid this option.

    Jim Henson advised a novel strategy: publicly appeal to the many fans of Disney to buy Disney stocks themselves before Holmes à Court could. “An army of Knights Errant,” he called it. This idea, like Cheney’s toy giveaway ploy, was quickly dismissed as naïve and smacking of desperation.

    Ultimately, despite open opposition from Roy and Gold, the board came to a consensus to look at acquisition opportunities and voted to investigate options.

    After a few weeks of research, a few opportunities presented themselves. ABC broadcasting offered a possibility, but the price was high. Binney & Smith, the makers of Crayola Crayons, was considered, but rejected as not a good or obvious fit. The Wrather Corporation, owned by Walt Disney’s old friend John D. Wrather, Jr., was strongly considered. Wrather owned, among other things, the Spruce Goose, the SS Queen Mary, the rights to Lassie, and most importantly the Disneyland Hotel in Anaheim, which Walt Disney had always hoped to bring into the company. Henson declared that he “Wrather liked” that option, mostly because he was fascinated by the Spruce Goose.

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    Richard Rainwater c. 1984 (Image source “katytrailweekly.com”)

    Then Ray Watson announced another option. Richard Rainwater, a representative of the Bass Brothers corporation, was proposing the sale of a real estate development company they’d recently acquired named Arvida. He proposed a simple deal: Disney could acquire Arvida and all of its assets for $250 million in newly-issued stock[3]. Walt Disney World had 17,000 acres of undeveloped land. Arvida developed land. It even owned 22,000 acres in Florida itself. Watson, a land developer in his former career, saw it as perfect and tried to sell the idea to the board.

    The Arvida deal, however, hit an immediate roadblock: Stanley Gold. Gold was blunt. “Ray, we need another few thousand acres of Florida swamp like we need another asshole[4].” The board tabled the discussion. Gold’s accountants ran their own numbers on Arvida and determined that it was worth less than $180 million. He was determined to kill the Arvida deal, seeing it as a bad deal both for his client Roy and for the company itself.

    When the board next met, Gold launched a full-blown offensive against the Arvida deal. Richard Rainwater gave a presentation on why the Arvida deal was perfect for Disney, but Gold continued to poke holes in it. Finally, after Rainwater left, the board debated the issue. On the verge of a vote, Gold openly threatened to leave the company and take Roy with him, and dump all their stock if the deal went through. Watson was enraged, but could do nothing about it. The threat worked. The board unanimously voted down the Arvida deal.

    After a long silence following the contentious vote, Henson turned to Gold and said, “Another fine mess you’ve gotten us into, Stanley.” There was a nervous chuckle in the room, momentarily diffusing the tension, before another silence drifted in.

    Watson broke the new silence. “We need another option.” He glared at Gold. “You have anything, Stan?” Gold reminded him that he and Roy opposed the new stock buy strategy to begin with. Henson brought up Wrather again. Tom Wilhite favored going after ABC. Ron Miller mentioned a new option: the Gibson Greetings card company, which consumer products VP Barton “Bo” Boyd had assured him was a perfect fit.

    Suddenly, the voice of Caroline Ahmanson, calling in from Israel, came over the speaker. “Gentlemen,” she said, “Isn’t it obvious? There’s a company that’s a perfect fit. They have existing IP that’s a seamless match for Disney’s brand. We’ve even been working with them for years now: Henson Associates.”

    A murmur went through the room. Henson himself, who’d been leaning way back in his customary fashion, suddenly sat straight up, a shocked look on his face. Gottesman turned to look at Henson, concerned. Phil Hawley proposed the match ideal. Miller also enthusiastically supported it.

    Gold did not: “So we dilute all of our own stock by giving more to Henson?”

    Watson said, “She’s right, Stan. Jim’s been here for years and made no overt play for the company. It’s a win-win.”

    “Are you kidding me?” yelled Gold. “We all lose! Everyone but him!” He pointed to Henson and then turned to stare. “What do you lose, Jim? Tell me, what do you lose on this deal?”

    Henson, who’d sat in a shocked silence throughout the entire discussion over his company, hesitated and said, “My company, Stan. I lose my whole company.”



    * * *​

    Stocks at a Glance: Walt Disney Productions (DIS)
    March 14th, 1984
    Stock price: $84.24
    Major Shareholders: Henson family (9.4%), Robert Holmes à Court (6.8%), Roy E. Disney (5.2%), Disney-Miller family (11%), Suspected Arbitrageurs: 3.4%, Other (61.7%)
    Outstanding shares: 34.5 million





    [1] Just under $2.8 billion at $82 per share.

    [2] Yes, that Dick Cheney. This consultation and the giveaway suggestion happened in our timeline too. Disney management considered it a cheap ploy and rejected it out of hand.

    [3] This was the buy they made in our timeline when trying to scare off Saul Steinberg, ultimately negotiated down to $200 million in an all-new-stock buy. It enraged Steinberg, rather than scaring him off.

    [4] Gold made the same quote, publicly, in our timeline. Newspapers censored it down to “like a hole in the head”.
     
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    Meta-Discussion: 1984
  • Meta Commentary: Setting the Stage 3: Take on Me


    1984: Peak ‘80s. Ronald Reagan wins reelection in an absolute landslide. Movies like Ghostbusters, Gremlins, Footloose, 16 Candles, and an Indiana Jones sequel become inseparably associated with the decade. MTV dominates youth and teen culture and debuts its own awards show. Videos play on an endless loop: Prince’s Raspberry Beret, Madonna’s Like a Virgin, and the Official Song of the 1980s according to posterity, A’ha’s Take on Me with its clever “sketch world” video and ear worm of a synth line. Weird Al Yankovic performs Eat It, a parody of the Michael Jackson phenomenal hit Beat It. He’ll soon follow it up with Like a Surgeon. Queen’s I Want to Break Free is an incredibly popular video everywhere in the world except the US, where audiences are unfamiliar with the British soap opera Coronation Street that it was parodying and are having a hard time dealing with the whole Freddy Mercury in drag thing (“you don’t think he’s an actual…you know…queen, do you?”).

    The_A-Team_season_1.jpg


    The last of the venerable 1970s series like Diff’rent Strokes, M*A*S*H, and Happy Days end their long runs. The A Team with George Peppard and Mr. T has been blowing up the screen both figuratively and literally. The Cosby Show debuts and becomes a dominant force in pop culture that transcends demographics.

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    (Image source: pintrest.com from Vogue)

    Fashions become progressively more androgynous, with women wearing men’s pants and jackets with ever-growing shoulder pads. This works well with women’s shorter but increasingly wider hair and with men’s hair getting longer and more feathered, particularly within the growing Glam Metal scene, led by Mötley Crüe.


    The year 1984 can’t help but remind people of George Orwell’s dystopian classic 1984. Endless jokes and references abound, almost none of them clever. One standout is an Apple Macintosh Computer ad that debuts during the Super Bowl that year.

    A Wendy’s ad also becomes a pop culture breakout when an old lady asks, simply, “Where’s the Beef?”

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    (Image source “gizmodo.com”)

    The 1984 Summer Olympics come to Los Angeles. McDonalds develops a clever promotional for the event: scratch off the ticket to see the name of an Olympic event, and if the US wins gold, silver, or bronze in that event, you win a free food item! After the US boycotted the Moscow Olympics in 1980 following the Soviet invasion of Afghanistan, the Soviet Bloc, in turn, boycotts these games. The US will pretty much dominate the Olympics. McDonalds will lose a metric crap-ton of money from the ill-considered promotional.

    On a darker note, there is a mass shooting at a McDonalds in California. At the time it is the worst one yet with 21 dead.

    Crack cocaine appears on America’s streets, with devastating consequences.

    The HIV virus is identified as the cause of the mysterious and deadly new disease AIDS, but the growing deadly pandemic is not getting the public attention and funding support it needs. Instead, it’s far easier just to blame “the gays” for it all and pretend that “it can’t effect me.”

    The UK agrees to return Hong Kong to China in 1997. Indira Gandhi is assassinated in India. The US accuses Iraq of using chemical weapons against Iran.

    And US President Ronald Reagan, doing a voice check prior to a radio broadcast, hot-broadcasts the “amusing” little line: "My fellow Americans, I'm pleased to tell you today that I've signed legislation that will outlaw Russia forever. We begin bombing in five minutes".

    "Weeee'll meet agaaaiinnnnn...." (from 1983’s The Day After)

    Ah, those simpler, happier times.
     
    Last edited:
    Movie Reviews Spring 1984
  • Fantasia’s Ladyhawke Struggles to Find an Audience
    The Hollywood Reporter, March 3rd, 1984


    After a long string of hits, it’s only natural that there will be strike-outs. Fantasia Films’ latest release, the Richard Donner helmed Ladyhawke, is struggling to find an audience and will be lucky to break even against its $20 million budget[1]. Despite good reviews and favorable reactions from those who have seen it, the fantasy epic staring Kurt Russell, Michelle Pfeiffer, and Mathew Broderick, with an original score by Elmer Bernstein, has not been putting people into seats. Perhaps the borderline-self-aware script is clashing with the high fantasy setting? Perhaps after a long string of post-Conan fantasies audiences are just apathetic to the genre? Whatever the cause, it marks a rare miss for the resurgent Walt Disney Studios. And with ACC looking to take over the venerable studio in a hostile bid, any box office bad news couldn’t have come at a worse time.

    Ladyhawke_ver1.jpg


    * * *​

    Critics Love Beverly Hills Cop, but Audiences are Anemic
    From Hollywood Reporter, March 24th, 1984

    This spring one name is on every critic’s lips: Axel Foley. Critics almost universally love the police comedy Beverly Hills Cop starring Mickey Roarke as a Detroit Cop who ends up in Beverly Hills, California, attempting to solve the murder of his former partner. Between Roarke’s subtle depth and a whimsical script, the film has received near universal praise from critics. However, it has failed to connect with audiences. Attendance has been anemic and the film looks set to underperform[2]. Few will fault the acting or directing and the concept is enjoyable, so it’s hard to point a finger at exactly why the film is failing to connect to audiences. “Early movies are hard to sell,” said producer Don Simpson, offering one possibility, but others aren’t buying it. “Our Police Academy is killing them,” said producer Alan Ladd. “Seriously, what do audiences want to see, a fish out of water story loaded with social satire, or a zany, sexy, romp?” Beverly Hills Cop also faces stiff competition from another venue, Hyperion’s new Splash starring Tom Hanks and Daryl Hannah. “It appears audiences just want mindless escapism, not charming performances from talented actors,” said co-producer Jerry Bruckheimer with a sigh.


    * * *​

    Little Mermaid, Big Box Office, Too Late?
    From Hollywood Reporter, April 14th, 1984


    It’s fun, it’s sexy, it’s funny…and for its studio it may be too late. Hyperion Pictures’ second outing, Splash, is performing exceptionally well at the box office, validating CEO Ron Miller’s decision to launch the adult-oriented label for Disney. Tom Hanks, Daryl Hannah, John Candy, and Eugene Levy are putting out stellar performances and director Marvin Chomsky has crafted a tight and light picture that is resonating with audiences and critics alike. And yet, for all of its success, Splash may have come too late to save the struggling studio. Walt Disney Productions, with stock prices languishing after over a decade of decline, despite the infusion of new blood via Jim Henson, has been caught straight in the crosshairs of investor Robert Holes à Court, who hopes to add Disney’s name, studios, and film library to his growing media empire in a leveraged buyout. Oddsmakers aren’t too confident that the venerable studio will make it through. Could Splash be the swan song for Walt’s once-beloved company? Only time will tell. And whether Splash marks the triumphant beginning of a new era in Walt Disney or simply the last gasp of an Old Hollywood icon remains to be seen.

    Splash_ver2.jpg




    [1] Released a year earlier than in our timeline. Richard Donner had been attempting to make this movie for years. In our timeline he finally got Warner and Fox to take it on in 1985. Here he gets Disney to produce it a year earlier.

    [2] It will make about $26 million against a $15 million budget, but go on to perform well on home video. It is largely seen today as an underappreciated gem. In an odd butterfly, since they manage to keep Roarke they will never pitch the idea to Sylvester Stallone, so Stallone will never feel the need to rewrite the screenplay to better “fit” his casting, meaning that Cobra (1986) will never exist in this timeline.
     
    Henson Bio IXa: Mouse Eats Frog?
  • Chapter 14: The War for Disney (Cont’d)
    Excerpt from Jim Henson: Storyteller, an authorized biography by Jay O’Brian.


    On April 2nd, 1984, Jim Henson was at a crossroads. Just the day before – April Fool’s Day, Jim wryly noticed – the Disney board had formally offered to enter negotiations over the all-stock acquisition of Henson Associates, or HA! as he had always styled it. He’d started out this journey wondering if he’d be able to acquire Disney. Now, it looked like the opposite could happen.

    “HA!” indeed.

    Jim wandered the trails around the Hollywood Hills, doing his best to acknowledge the happy fans who stopped him, even as he struggled to stay positive. The minutes ticked past, a thousand thoughts running through his head. The sun rose in the sky, reached a zenith, and started to set. He thought about what others had said: the board members, his coworkers, his friends.

    Bernie Brillstein had told him to go for it. “It’s what we set out to do in the first place!”

    Al Gottesman was more reticent. “It’s your choice, Jim. Don’t make a decision under duress. Take a few days to think about it.”

    David Lazer, now living full time in the Hamptons, echoed Gottesman when Jim called. “Jim, think this one out. It’s got to be your choice.”

    Jim realized that it wasn’t his choice, not really. Technically, he owned 55% of HA and could legally do whatever he wanted, but he always cleared big decisions with his family, particularly Jane, who owned the other 45%. He also needed to ask his children.

    There was also far more to think about than just his needs. This would actually make him and his family extremely wealthy, even if Holmes à Court won. Al Gottesman assured him that they could write a buy-back clause into the contract if he wanted, though he warned that Holmes à Court might try to challenge it in court. Even if he lost Kermit and Piggy, he’d still have his mind. But he worried about his employees. Whether Holmes à Court became their new boss or not, Henson feared that they’d be lost in the massive Disney corporate empire, cogs turning in the clockwork.

    With the sun setting, he went home, had a drink, meditated, and went to sleep.

    The next morning, after a fitful night of amorphous dreams, Jim called Jane and told her the story. Jane, who’d long felt somewhat pushed out of the company, wanted to yell at him and his Quixotic run on Disney, but she couldn’t bring herself to. She knew the tone in his voice. This was killing him. He just needed someone to support him, whichever way he went. Even estranged, the two had a close bond built on long, shared lives together.

    “Jim,” she told him, “Just trust your instincts. I’ll stand by you on this, either way.”

    Their children largely echoed this sentiment when Jim spoke individually with each.

    Jim agonized through the next few days. The clocks all seemed to tick louder, each one casting cruel judgement over him and the choices he’d made over the past several years.

    On one hand, he could potentially save Disney. On the other hand, he was potentially risking everything that he’d ever created. Either road carried risks and rewards. Either way felt like a betrayal, one a betrayal of his HA employees, the other a betrayal of his Disney colleagues.

    Either way, the clock was ticking. He’d need to decide fast.
     
    Henson Bio IXb: Another Fine Mess
  • Chapter 14: The War for Disney (Cont’d)
    Excerpt from Jim Henson: Storyteller, an authorized biography by Jay O’Brian


    By the end of the week, Jim had an answer.

    The board met. He would agree to merge the two companies, but with three non-negotiable conditions. First, the Sesame Street Muppets were not a part of the deal. They were sacrosanct[1]. Second, all of his current employees would be given very generous contracts that he and Gottesman would draft for them. Third, there would be a clause that would allow Jim, or his family in the event of his death, to unilaterally buy back HA at any time in exchange for the very shares he received or their monetary equivalent at the time of the buyback.

    The board would consider it for one week. In the meantime, negotiations would begin in order to set the full terms of the proposed acquisition. It would be a marathon negotiation session[2], but time was short and the clock continued to tick.

    Gold despised the plan. The whole thing stunk to him, particularly the retention of the Sesame Street Muppets, which reminded him far too much of Retlaw. He and Roy vowed to sink it the same way that they sank the Arvida buy. After yelling at Henson and Gottesman and Watson and Miller, Gold was asked by Gottesman to talk in the other room.

    “Stan,” said Gottesman, “We need to talk. You, me, Jim, and Roy. We’ll meet you for dinner. You can name the location.”

    Gold, honestly enjoying himself by this point, agreed to the meeting. Roy Disney’s house would serve as the location. “I’ll even bring in a neutral arbiter,” he said. “His name is Frank Wells, and he’s an old friend of mine.[3]”

    The dinner began amicably with cocktails. Jim and Al met Frank Wells and were impressed with his quiet charm. Wells announced up front that not only was Gold a friend and a former employee of his, but that Roy E. Disney had been a client of his while at Gang, Tyre, & Brown before Gold took over the account. Still, he announced that he would attempt to remain a neutral third party in the discussions.

    The discussions began civilly, but they didn’t stay so for long. After a couple of pear brandies, Gold was charged up and confrontational. He attacked the Sesame Street clause in particular. “Perhaps you can call your Sesame Street holding company ‘Semaj Enterprises’, Jim,” he said, in obvious reference to the hated Retlaw.

    “I was thinking ‘Sesame Inc.’, actually,” said Jim. Gold wasn’t entirely sure if Jim was oblivious to the snipe, or simply ignoring it.

    “Either way,” interjected Gottesman, “Sesame Street is off the table. This isn’t a money thing, Stan, it’s about the kids. Don’t look at me like that. I’m serious.”

    “When I started the Muppets,” Jim said, “our biggest source of revenue was advertising. When Sesame Street came along, I stopped. It cost me a fortune, but it’s not about the money. Children were watching Bert and Ernie and Kermit. To them, they are real. I couldn’t imagine them then turning on the TV to see Kermit hocking Timex watches or Chevrolets. It felt cheap and manipulative. Sesame Street is, for me, about the purity and innocence of childhood. It’s not for sale. I’ll give it all to Children’s Television Workshop if I have to.”

    “Fine,” Gold conceded, “Big Bird is off the table. But we’re still fighting the deal.”

    The arguments persisted into dinner, despite Wells’ attempts to mediate. Gold flat out accused Jim of manipulating the board, and that the whole affair was simply a cynical plot to take over the company himself, bit by bit. Jim winced at this, since to some degree it was true, even though the motivation was not the cynical wealth and power grab that Gold was suggesting. By this point in the conversation, even Roy looked pained.

    Things degenerated further. Gold made a snide comment (now lost) and Jim got up to leave, only stopping when Gottesman grabbed his arm. Jim sat down, but he was obviously fighting to not say something. “What is it, Jim?” yelled Gold, “You have something to say to me?”

    Jim exploded. He exploded like Kermit on the set of the Muppet Show when everything was going awry. Gottesman, even years later, expressed his shock at the moment. “Jim never yelled or lost his temper…ever. To see it happen, there at Roy’s house, was…I can’t express it in words.”

    Jim yelled at Gold, yelled about his rudeness, yelled about his cynicism, yelled about his greed. He cursed, which he rarely ever did. He was midway through a diatribe about Gold’s obsession with “that disgusting ‘crappa’ you make us drink” when Gold threw a piece of the peach he was eating. It hit Jim in the face, stopping him cold. Gold, who was on one of his strange diets at the time and eating only fruit, threw another piece. Jim scooped a spoonful of peas and flung it at Gold. Gold retaliated with a cherry. Soon an all-out food fight began. While Frank Wells and Patty Disney retreated to the kitchen, the latter complaining about Gold and his “damned food fights[4],” Roy joined in the melee, laughing like a fool as he began flinging mashed potatoes.

    “Help me, Al, you’re my only hope!” yelled Jim, compelling Gottesman to launch a salvo of chicken pieces.

    By the time it was over, everyone was laughing hysterically at the inane juvenility of it all. Well, all except for Patty, who lit a cigarette and sighed, figuring that she’d have to be the one to clean it all up.

    Laughing and covered in that night’s dinner, Jim extended a hand. “Peace?” Roy and Gold took it. The conversation resumed on a more amicable note.

    Sitting in the literal mess they’d made, the two parties agreed in principle to support one another’s actions to save Disney if they were done in obvious good faith. Roy and Gold agreed to not oppose the HA buy, but would not support it either. Jim and Gottesman agreed to back Roy and Gold’s White Knight strategy if the HA buy failed to scare off Holmes à Court.

    But Jim wasn’t finished. “Roy,” he said, “I want you back in the company. If I’m all-in, then you need to be all-in. I’ll insist that you take over HA as Vice President. It will be a fourth non-negotiable clause in the deal.”

    Roy said nothing. Patty, looking on, said, “All in or all out, dear.”

    Roy rose from his chair and walked back into the house. He emerged after a few seconds carrying what looked like a calumet pipe, complete with feather, on a plaque. “When my father and uncle agreed to end their feud in the ‘50s, Walt gave him this peace pipe. I inherited it when dad died. I look at it a lot. Sometimes I want to make one for aunt Lilly and cousin Dianne. But then I remember how I was treated and how dad was treated.”

    “I’d be honored to make a new pipe,” said Jim, “But only if you present it to Ron too.”

    Roy stared at the pipe in silence. “I want ‘Animation’, not the Muppets” he said. “Animation was always the heart of the company. I think it could be again.”

    “Agreed,” said Jim.

    “Give me time to consider it,” said Roy.

    The two shook hands in silence, the gravitas of the moment only slightly undercut by the food stains on everything.

    “Are you two done?” said Patty, “Because that mess you kids made needs to get cleaned up before it stains the carpet.”

    “You’re right,” said Jim, “And we made it, so we can clean it up while you have a rest.”

    “Only after you clean up yourself first, Jim,” she said. “And all of you. You’ll just make a bigger mess the way you are now. Roy, go get Jim and Al and Stan a change of clothes. And then everyone cleans up.”

    “Well,” said Gold, “After this mess, cleaning up the mess that Card left us at Disney should be pretty easy, right?”




    [1] This was a condition of the sale of the Muppets to Disney in our timeline both when it actually happened in 2004 and when Jim Henson tried to sell the Muppets in 1989. Part of what sunk the latter deal was how Michael Eisner kept bringing up the Sesame Street Muppets again and again. Eisner allegedly surmised, incorrectly, that it was some sort of complicated negotiation ploy. That Henson wouldn’t consider selling something, that it was considered too special to commercialize, was perhaps impossible for Eisner (or indeed a lot of executives) to understand at the time.

    [2] In our timeline the Disney legal team kept nitpicking every single clause in the 1989 contract to the point that Jim nearly killed the deal out of shear frustration. Here, Jim has the upper hand because Disney is desperate.

    [3] The two went running together every morning prior to Wells joining Disney.

    [4] Stanley Gold had some strange habits that went far beyond his particular love for Italian grappa and pear brandy. He would alternate between binging on unhealthy foods without limitation and going on strict, bizarre fad diets, such as all-fruit diets. He also had a habit of starting food fights as some sort of weird power-play thing. I am seriously not making any of this up!
     
    Henson Bio IXc: Miss Mousie will you Marry Me?
  • Chapter 14: The War for Disney (Cont’d)
    Excerpt from Jim Henson: Storyteller, an authorized biography by Jay O’Brian


    In the end, the board unanimously approved the all-stock buy of Henson Associates, openly agreeing to the original three terms. Roy remained on the fence about rejoining the company, but he and Gold reluctantly supported the buy as a show of unity. Only Henson and Gottesman abstained, having left the room during the deliberations and vote to avoid any perceived conflict of interest.

    When the contract was finally signed, Jim Henson sold Henson Associates and all of its assets and creative IP, save for the Sesame Street Muppets, for $250 million, all in newly-issued stock, amounting to roughly 3.1 million shares and giving the Henson family a commanding 18.3% stake in Walt Disney Productions.

    Phil Hawley suggested that, at that stake, Jim should assume a new role at Disney. Ron Miller offered Jim the position of President and Chief Operating Officer. To his and everyone’s surprise, Jim turned him down. “I’m happy where I am,” he said. Dick Nunis suggested not so subtly that he could assume those offices, but backed down when Watson gave him a look.

    Ultimately, Jim was given the largely symbolic title of “Vice Chairman of the Board”, and became the Chairman of Walt Disney Studios, another largely symbolic title since he was already the President of the studios and the title came with no real new authority or powers. Watson and Miller also agreed to give Nunis and Wilhite the Chairmanship over their respective departments, mostly to avoid any lingering resentments or infighting.

    Jim also took care of his people in the deal. When he announced the buy, he also announced that every employee was getting rock-solid contracts, that they’d keep their generous HA benefits, and that they’d all receive large bonuses. He gave each employee their bonus in person, even flying out to New York. Some, like David Lazer and Bernie Brillstein, received millions of dollars in bonuses[1].

    He also assured them all that a buyback clause was included in the contract and, if he used it, they were all welcome to come back with him or stay at Disney as they saw fit.

    A few days later, at Jim’s urging, Roy presented a new peace pipe, made by the HA designers, to Ron Miller and the Disney-Miller-Lunds and officially declared his intent to restore goodwill in the Disney family. He also declared his intent to return to the company himself, if possible. Though they remained suspicious, Ray Watson convinced the Disney-Miller-Lund side of the family to accept the peace and the deal in good faith. Jim soon named Roy as his Vice President for Animation. The full Disney family met that Friday for lunch, all together, at the Disney commissary in a public show of unity. The Disney employees openly celebrated seeing them all together again.

    “It was like seeing mom and dad getting back together after a long divorce,” said one long-time animator.

    The announcement of the HA buy was made on the 9th of April. By that point, Robert Holmes à Court had amassed around 9.3% of outstanding shares. The all-stock buy diluted his stake down to 8.2%. The board expectantly watched the stock price, the old fashioned ticker-tape clicking like a counting doomsday clock[2]. If Holmes à Court sold his shares, the stock price should drop.

    Instead, the price started trending upwards, a sure sign that he and perhaps others were buying more. This suspicion became known fact when, on April 13th, Holmes à Court submitted a 13D announcing that he now owned 12.7% of outstanding Disney shares. More ominously, Phil Hawley reported that his contacts at the SEC had informed him that Holmes à Court had also registered a new limited liability corporation.

    The company’s foreboding name: Kingdom Acquisitions.

    * * *​

    Stocks at a Glance: Walt Disney Productions (DIS)
    April 14th, 1984
    Stock price: $84.64
    Major Shareholders: Henson family (18.3%), Robert Holmes à Court (12.7%) Roy E. Disney (5.2%), Disney-Miller family (11%), Ivan Boesky (suspected 4.9%), Other Suspected Arbitrageurs: 8.8%, Other (42%)
    Outstanding shares: 37.6 million




    [1] He did something similar in our timeline during the 1989 Disney deal.

    [2] I have no idea if Disney had such a tool, but Rule of Symbolism, damnit!
     
    Last edited:
    Meta-Discussion: Steinberg v. Disney
  • Meta-Commentary: Disney’s Battle with Steinberg

    In our timeline it was, of course, notorious corporate raider and greenmailer Saul Steinberg, head of the Reliance Group, who made a run on Disney in 1984, not Robert Holmes à Court. In a case of disastrous timing, Roy E. Disney would announce his resignation from the board just two weeks after Steinberg formulated (but had yet to initiate) his plan, leaving Disney divided and more vulnerable. In the end, Disney would pay millions in greenmail to Steinberg and Roy, via Gold, would lead a boardroom coup, ultimately leading to the ouster of Miller and the installment of Eisner and Wells. As a reference, and to provide context for the alternate timeline, I’ve included a short “wavetops” timeline of the events of the Steinberg greenmail and ensuing shakeup. Principal source here is John Taylor’s Storming the Magic Kingdom, of course.

    By the dawn of 1984, due to a poor movie year (only 3 movies released, none of them hits) and dwindling attendance at EPCOT, Disney’s Stock had dropped from $63.25 per share in January of 1983 to $52.625 per share (a 27% drop!). For context, this stock drop happened over a period of time where the Dow Jones Industrial Average (DJIA) increased over 20% (from 1046.54 to 1258.64[1]). Roy Disney personally saw his shares’ value drop from $80 million to $50 million. He was advised by Stanley Gold that he had a choice to either a) drop his shares and cut his losses or b) attempt a larger stake and launch a boardroom coup or takeover attempt (“all out or all in,” as Roy’s wife Patty put it). Meanwhile, it wasn’t just Gold and Roy noticing the shockingly low stock price. By this point, various asset analyses showed numerous potential interested parties that the buy-out price of the 34.5 million outstanding shares (~$2 billion) was far less that the total value of the assets controlled by Disney ($2 billion for the theme parks alone, $0.5-1 billion for the studios and film library, hundreds of millions for Buena Vista Distribution, hundreds of millions in undeveloped real estate). Disney was ripe for a takeover or greenmail attempt. An attempt was practically inevitable at this point (even Jim Henson was considering it!). It would be Steinberg who tried it first.

    The timeline (critical events noted by italics):
    January 1984
    : Roy Disney and Stanley Gold realize that Roy’s shares in Disney are badly undervalued. They plan an “all-in” strategy to change the management
    24 February: Saul Steinberg researches Disney, and finds them vulnerable. He develops a plan for making a run at Disney
    9 March: Roy leaves board; Roy E. Disney announces his plans to leave the Disney Board of Directors
    Mid-March: trades of Disney stock, normally around 200,000 per day, have climbed to over 900,000 per day, a clear indication that someone was “taking a position” on Disney
    27 March: As a precaution in case a stock war is necessary, Disney extends their line of credit with Bank of America to $1.3 billion
    29 March: Steinberg appears; Steinberg’s Reliance Financial Services Company, a division of Reliance Group Holdings, files a Schedule 13D announcing that it has acquired 6.3% of Disney stock; Disney attempts to contact Steinberg to determine his true intentions, but he plays hard to get
    1 April: Disney meets with Morgan Stanley and other financial experts about possible defenses against Steinberg. They are presented with the following defensive options:
    • Stock Buyback: Disney buys back a controlling share of their own stock; Disney liked this idea, but lacked the resources; this would require a leveraged buyout that would either saddle Disney with extreme debt or force a sell-off of assets that would break up the company anyway
    • Acquisitions Strategy: Disney would buy up other companies using newly issued stock, thereby diluting Steinberg’s share, increasing his costs for takeover; Morgan Stanley cautioned that the buy had to obviously fit into the Disney company’s business model and be in their best business advantage, or else they’d enrage their shareholders and risk lawsuits
    • Find a “White Knight”: find wealthy investors willing to buy up stock in Disney to prevent the buy-out, and hope that they a) are not “wolves in sheep’s clothing” (i.e. raiders pretending to be White Knights) or b) going to insist on major management changes, claim company assets for themselves, or require other special considerations
    • Appeal to Shareholders: use public relations to try to get investors to back Disney; since most of the outstanding Disney stock was held by big investment firms with short-term financial goals and no “brand loyalty”, they were unlikely to gain much traction with them
    • Crown Jewels Strategy: selling off assets that the raider (Steinberg) presumably wanted, making the company a less desirable target; this also dismembers Disney
    • Poison Pill Strategy: perform or threaten self-destructive measures (e.g. assume crippling debt) to make the company undesirable to the raider; this would be a virtual Kamikaze maneuver
    • Proxy War Preparations: use giveaways or gimmicks to get the names of individual shareholders as contacts for launching a proxy fight with Steinberg
    • Pay “Greenmail”: buy back the stock from the raider for more than it’s worth, allowing the raider to make a profit; this will not only enrage other stakeholders, who are not getting the same deal, but can encourage other greenmail attempts
    11 April: Steinberg now controls 9.3% of outstanding Disney stock
    20 April: Bass Brothers Enterprises sells its stake in Texaco, yielding liquid assets that can be used as a prospective White Knight; among Bass Brothers’ holdings is a real estate holding and development company called Arvida, which owns over 20 thousand acres of Florida land
    25 April: Steinberg files a 13D announcing plans to acquire 25% of Disney as an “Investment”. When asked why a mostly financial company that had never worked in or expressed interest in the entertainment industry would make the buy, Steinberg replied sardonically “I have a special fondness for children”
    30 April: In an attempt to raise salaries across the company to prevent talent flight, the Disney board votes to increase salaries; since these were tied to the executive salary, this began with sharp raises in executive pay (Miller’s pay went from $350,000/year to $500,000, which was still low for the time); the press unfairly labeled these “golden parachutes”, costing Disney some public relations points
    16 May: Arvida acquired; Disney buys Arvida from the Bass Brothers for $200 million in an all-stock buy, diluting Steinberg’s holdings, but also Roy’s, infuriating both. Huge questions remain on whether a) Disney paid too much (the Bass Brothers earned a ludicrous 2000% profit on their Arvida investment) and b) whether there was any legitimate reason for Disney to acquire the company when they already had 17,000 undeveloped acres in Kissimmee and had existing land development experience[2]. Steinberg, enraged, grows his group, and creates special commemorative sweatshirts featuring Mickey Mouse on the front and the quote “I have a special fondness for children” on the back.
    21 May: Disney meets with Gibson Greetings, a greeting card company, and plans another all-stock acquisition of the company, in this case a 2-for-1 stock swap
    25 May: Steinberg files a lawsuit to block the Arvida acquisition, claiming that Disney is operating against shareholder’s interests and that the buy offers no “proper or valid corporate purpose”
    29 May: Stanley Gold meets with Steinberg, offers for Shamrock (Roy) to join the Reliance bid in exchange for Reliance selling Disney Studios and the Film Library to Shamrock for $350 million. Reliance is not impressed with “low” offer.
    8 June: Steinberg makes his raid; Reliance, up to an 18% stake in Disney at this point, creates the MM Acquisition Corporation shell company (MM, of course, standing for “Mickey Mouse”) along with Fisher Brothers Financial and Tracinda Corp. MM announces plan to acquire 49.9% of Disney stock, offering $67.5 per share effective on the 11th. Disney threatens a “self-tender” buyup of stock at $80 per share as a “poison pill”
    10 June: Roy, Gold, and Frank Wells (as arbiter) meet with Watson and Miller to discuss a plan to join forces for a leveraged buyout of Disney stock. Alas, it’s too late. There’s only 1 day left until Reliance begins its overt takeover attempt. The meeting ends with no agreement. Meanwhile, Disney (via representatives from Skadden, Arps) offers to pay $325.5 million to Steinberg ($77.5 per share) to buy back his 18% of stock
    11 June: Greenmail paid; with the reluctant approval of the full Board of Directors, Disney pays Steinberg $325.5 million for his 18% of shares, resulting in $31.7 million in profit for Steinberg; Disney stock drops by $3.78 per share; Gold starts buying Disney Stock on behalf of Roy
    21 June: Roy and Gold join the Disney Board after they pressure Watson into removing Card Walker and Donn Tatum from the Executive Committee
    22 June: Gold files a 13D announcing that Roy now has over 5% of outstanding shares
    26-29 June: Gold meets with Sid Bass; both agree in their opposition to the Gibson deal
    16 July: Jacobs begins his run; Irwin Jacobs files a 13D announcing he has 5.9% of Disney shares; contentious Disney board meeting as members angrily debate Gibson deal
    23 July: Jacobs and Watson talk; Jacobs announces his opposition to the Gibson deal; afterwards he calls Gold and announces a plan to launch a proxy fight over Gibson; Gold expresses support, but doesn’t join
    26 July: Jacobs talks with Arbitrageur Ivan Boesky, who still has just under 5% of Disney stock from the Steinberg takeover attempt; Boesky expresses support but won’t join
    27 July: Jacobs sends letter to Disney board threatening a proxy fight over the Gibson deal
    28 July: Watson starts doubting Miller’s leadership
    30 July: Jacobs launches suit to stop Gibson deal; a majority of stock holders support him
    17 August: Disney board cancels Gibson deal; Ron Miller discovers he has lost the confidence of the board; exploratory committee founded to investigate management options
    6 September: Disney Board votes unanimously to remove Miller as President and CEO; Watson promises Michael Eisner the position, but the board is not ready to commit
    September: Disney board debates new leadership with three candidates emerging: Michael Eisner, Frank Wells, and Dennis Stanfill, with the board mostly supporting Stanfill, Roy wanting Eisner, and Gold pushing hard for an Eisner/Wells team-up; Gold eventually wins over Walker and Tatum by promising to leave the Board in favor of Dianne Disney Miller, which gains the rest of the board’s support
    22 September: Eisner and Wells elected; the Disney Board, though still divided, unanimously elects Michael Eisner as Chairman & CEO and Frank Wells as President & COO of Walt Disney Productions

    What happened next is, of course, history. Disney’s stock would skyrocket in the coming years, in part due to the changes Eisner and Wells made, in part because of the changes Miller had already made (e.g. Touchstone, Disney Channel, video sales) coming to fruition, in part because of simple timing (the children who grew up on Disney and eschewed it as teens in the ‘70s now had kids of their own), and in part because Wall Street is fickle and often built on perceptions rather than reality.

    There’s little question in my mind that Ron Miller was scapegoated. Most of the controversial decisions that led to his downfall (Arvida, greenmail, the Gibson flip-flop) were primarily made by Ray Watson as Chairman. Watson, meanwhile, showed little to no hesitation or regret in throwing Miller under the bus. Ron Miller’s run at Disney was better than he’s often given credit for. He initiated many of the structural and cultural changes in Disney that Eisner and Wells would follow through with. Many of the issues that led to the takeover attempt were simple bad luck and bad timing that left Disney, like many venerable old companies in the era, vulnerable right at the moment when Wall Street takeover culture was ramping up into full swing. It’s hardly fair that he took all the blame, for there’s plenty to go around.

    Yet Miller does not escape blame. Not at all. Part of the problem throughout the Steinberg saga was that he failed to take charge, or at least be seen looking like he was taking charge. The perception on Wall Street that Disney was a “rudderless boat in a raging storm” was based on a kernel of truth. Miller was at his heart a shy and self-effacing man who was terrified of public speeches. He had little understanding of business or finance. He was where he was because that’s what Card Walker believed Walt Disney wanted. The “Peter Principle” was certainly at play. Ultimately, by delegating the hard decisions during the Steinberg assault to Watson he delegated his own fate as well.

    Analysis: The Disney Greenmail Saga; Inevitable?

    The poor stock showing at the end of 1983 was possibly avoidable had the movies performed better, had the Disney Channel performed better, or had EPCOT provided a better initial return on investment. However, none of this happened. With only 3 movies put out in ’83, at least one of them would have had to be a major blockbuster to turn a good profit for the studio. Furthermore, with The Disney Channel just being launched that year there was a lot of short-term debt from the buildup, and with it gaining fewer than the predicted subscribers[3], the returns were much lower than predicted. EPCOT and its outdated “perpetual World’s Fair” concept[4] was likely doomed to underperform compared to the more traditional Magic Kingdom type parks. Furthermore, the company severely limited the parks’ profit margins by dogmatically refusing to build new hotels despite high demand for them and refusing to raise ticket or parking prices despite inflation and drastic increases in operating costs.

    Ultimately, the same lack of creativity and risk taking that limited Disney in the ‘70s likely screwed it here too. The years 1978-1983 had been bad years for the studio, which meant that Disney was in poor shape going in to ’83 with little room for error. Unwillingness to change the status quo in company operations due to myopic adherence to “the way things are done” limited both the parks and the studios. As such, some sort of stock dip was likely in 1983 regardless of other events. Once stocks dipped below $55 per share (roughly half the value of the company’s combined assets) the likelihood of a hostile takeover attempt started to approach 100%. Roy Disney leaving when he did further doomed the company by preventing the two sides of the family from joining forces against Steinberg.

    Soooo…What Happens Here?

    This, of course, all begs the question of what happens in this timeline, where Henson has breathed some new life into the studio side of the company. The “Waggles” are boosting Disney Channel subscriptions, The World of Magic is successful as both a show and a promotional vehicle, the number and success of movies is up, and VHS/Betamax sales are boosting revenues compared to our timeline. However, EPCOT is still petering out even with Henson & Fazakas’ “improvements”. Disney still hasn’t diversified its portfolio. Hotels are still too few and ticket prices too low. The same management is there for the most part, save for Henson (who is more creative-focused) and Gottesman (who is not an executive and who had, to the best of my knowledge, no experience in takeovers).

    Stocks are trading in the $85 range rather than the $52 range and are still undervalued, but are still better for limiting buy-out potential; however, they will also limit Disney buy-back and White Knight potential. Combined, the Disneys and Jim have a full 31.6% of stocks compared to the under 20% that the Disneys had in our timeline, putting them in a much better starting position. Roy has made a move earlier, having a larger stake and avoiding the bad timing of our timeline and meaning that he (and Gold, who critically does have takeover experience) can offer assistance…but will he?

    Will any of it be enough, particularly when it’s, in part, personal with Holmes à Court?

    Will any White Knights appear in time?

    And even if they do, will they be able to stop Kingdom Acquisitions and their dastardly plans?

    [cue melodramatic organ music]

    Find out next week on another disappointing episode of…A Hippie in the House of Mouse, when you’ll hear Miss. Piggy say, “Listen, pal, there’s only room for one ‘Piggy’ in this outfit! And that's moi.




    [1] The DJIA only broke 2000 in 1987. It had only broken 1000 in 1971. Kind of puts our 20,000-30,000 averages in an interesting context, doesn’t it?

    [2] To quote Stanley Gold, “Disney needs those twenty thousand acres of Arvida land like they need another asshole.” The press changed this to “…a hole in the head”.

    [3] 10 million subscribers predicted vs. just over 900,000 in reality; HBO had ~12 million subscribers at this point, for reference.

    [4] Even in their heyday of the 1930s-1960s, World’s Fairs almost inevitably lost money and, like the equally expensive and unprofitable Olympics and World’s Cup, are usually pursued more for national and metropolitan pride than for any real economic advantage.
     
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    Dis War IV: Two Piggies
  • Chapter 4: A Tale of Two Piggies
    Excerpt from Kingdom Under Siege: The Wall Street War over Disney, by Taylor Johnson.


    If the Corporate Raider is the shark of Wall Street, then the arbitrageur, or “arb”, is its remora. Like the clingy fish that attaches itself to a shark, seeking a free meal, the arb will latch himself onto a corporate buyout battle, seeking to turn a quick profit amid the chaos. And perhaps the most notorious of the arbs in 1984 was Ivan Boesky, a tall, gaunt, white haired, dark-suited man who styled himself a vampire. Boesky’s “gluttonous” consumption of stocks and properties earned him the Wall Street moniker “Piggy”. His infamous antics during the 1980s would be the inspiration for many of the “greed-driven Wall Street men” portrayed in Hollywood over the years[1].

    Ivan-Boesky-world-top-investors.jpg

    “What good is the moon? You can’t buy it or sell it[2].” (Image source “worldtopinvestors.com”)


    Early into the Holmes à Court takeover run, Boesky began accumulating Disney stock, hoping to sell it quickly for a profit as the price inevitably rose during the expected price war, or to potentially tease out concessions from the winner. He quickly accumulated just under the reportable level of 5% of outstanding shares using funds he raised through the sale of risky, high interest “junk bonds”.

    One of the first actions he took upon accumulating the stock was to call Disney Chairman Ray Watson and CEO Ron Miller and offer his “advice” while fishing for inside information. After several such calls, Watson and Miller ordered their staff to ignore him. It was during one of these dodges that the director and Muppet performer Frank Oz walked by, on his way to see Jim Henson. He heard Lucille Martin, who’d been the lead secretary since the days of Walt, sigh after putting the phone on hold, saying “it’s Piggy [calling] again.”

    Intrigued, Oz asked what she meant. She explained the situation. “Let me take the call,” he said. What happened next was, thankfully, being secretly recorded by Mr. Boesky and came to light during his 1986 insider trading trial:

    Frank Oz (as Miss Piggy): Bon jour, Mr. Watson’s office!

    Ivan Boesky: Yes, this is Ivan Boesky, a major shareholder. Put me through to Mr. Watson. I have important business to discuss.

    FO/MP: Ahh, Mr. Bow-EH-skee! Enchenté, of course! Just an eensy weensy minute! He’s just finishing up a meeting!

    IB: Make it quick.

    FO/MP: But of course, dearie! Ha! (beat) Would you like a bottle of Pair-yee-yay while you wait?

    IB: (irritated) No…thank you.

    FO/MP: Bon-bon?

    IB: (irritated) I’m on the phone, you twit.

    FO/MP: HMMP! (angry) No need to be rude, bub! (cheery) Just one more minute, please!

    IB: (sighs audibly)

    FO/MP: Soooo….is there a Mrs. Bow-EH-skee?

    IB: (irritated) Yes.

    FO/MP: Oh, what a shame! (beat, then conspiratorial) You wouldn’t happen to like just-under-plus-sized ladies, would you?

    IB: (beat) My wife and I are very happy.

    FO/MP: (cheery) Oh…I’m sooo happy for vous two, of course! And…excuse moi (voice quieter, as if removed from the receiver) Not now, Cheryl! This guy’s loaded!! (Loud again) So…as I was saying…

    IB: Can you just put me on hold, please?

    FO/MP: Why, sure, sweetieeee, ha-ha-ha! But first, have you ever been to Payr-ee? I’ve always wanted to go to Payr-eeee. Perhaps moi et toi could…

    Laughter can start to be heard in the background.

    IB: Wait a minute, is this the pig?

    FO/MP: (beat) WHAT DID YOU SAY?!?

    More background laughter, louder now.

    IB: It’s the damned pig, isn’t it?

    FO/MP: (angry) Watch it, shrimp.

    IB: Enough with the games! Put me through to Watson right now!

    FO/MP: Listen, pal, there’s only room for one ‘Piggy’ in this outfit! And that’s moi. So, beat it!

    Oz then slammed the phone with a “Hai-yah!” as the room erupted into manic laughter built upon the sudden release of weeks of tension. Stanley Gold, who’d walked into the room in the middle of the conversation, was laughing uproariously, barely able to stand. After finally catching his breath, he added, “Ok, we’re going to suffer for that one, but we’ll just have to deal with that later. But hey, great job, Frank!”

    Boesky was, of course, far less amused.





    [1] He is cited as one of the principle influences in our timeline for the character of Gordon Gekko from 1987’s Wall Street, in particular due to his May 1986 speech at the University of California, Berkeley School of Business commencement ceremony, where he said "I think greed is healthy. You can be greedy and still feel good about yourself".

    [2] An actual Boesky quote.
     
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    News Interlude
  • Mayday for Disney?
    Wall Street Journal, May 1st, 1984


    Disney may be in trouble. Recently, Australian entrepreneur and noted takeover artist Robert Holmes à Court initiated a hostile takeover attempt of the classic American entertainment firm. With stock prices below $85 a share, the company is largely considered undervalued by Wall Street and is certainly vulnerable. Many in the Wall Street arbitrageur community are already rumored to be buying up stock, with Ivan Boesky reportedly gobbling up all the shares that he can.

    WSJ analysts predict that, if his bid is successful, Holmes à Court will keep the studio assets, but largely strip away the rest, making many Disney fans nervous for the future of the company. But is this a bad thing? Holmes à Court and his coalition of investors (rumored to include Irwin Jacobs, hotel giant J. Willard Marriott, Jr., Kirk Kerkorian’s Tracinda group, and Bally Technologies CEO C. Richard Iannone, whose holdings include the competing Six Flags theme park chain) promise major structural and management reforms. “Walt and Roy O. Disney were outstanding and visionary businessmen,” Holmes à Court told WSJ, “It is too bad that their successors have squandered the company that they built.”

    But Disney isn’t going down without a fight. They recently acquired Jim Henson’s Henson Associates company, which includes the Muppets and Sesame Street[1], in an all-stock purchase rumored to be valued at $250 million. But this stock-dilution strategy appears to have backfired. When asked if the Henson buy gave him pause, Holmes à Court told WSJ, “To the contrary. It has sweetened the pot. I’ve been hoping to bring the Muppets back to ACC ever since my predecessor [Lord Lew Grade] rashly sold [the rights] to Disney.”

    It remains to be seen whether Holmes à Court will triumph, or whether Disney management can hold on. Rumors of raucous board meetings and a green and indecisive CEO bode poorly for the latter, however. Holmes à Court’s newly created Kingdom Acquisitions, LLC, has recently reported a 22.3% stake in Disney to the SEC, and is reported to be growing by the day.



    [1] Does NOT include Sesame Street.
     
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    Dis War V: The Round Table
  • Chapter 5: The Round Table
    Excerpt from Kingdom Under Siege: The Wall Street War over Disney, by Taylor Johnson.


    “We’re holding out for a hero,” Jim Henson told his son Brian late that May, echoing the recent Bonnie Tyler song. Henson by this point was all-in on Disney, having merged his company into Disney the previous month. It was a stock dilution strategy intended to frighten away Holmes à Court, but had the opposite effect, simply “sweeten[ing] the pot” for Holmes à Court, according to his words.

    Discussions by the Disney board to attempt other stock-based acquisitions hit a roadblock in the form of Stanley Gold and Roy Disney, who were not going to support another new-stock buy. Gold pointed out that the HA buy brought with it over $85 million in debt[1], remainders of the line of credit that Henson had, ironically, used to buy Disney stock. Now Disney would be assuming debt used to buy Disney stock in a buy made using more Disney stock! Gold was not having any more of that nonsense!
    “You tried it your way,” Gold told the board, “Now we’re doing it my way.”

    Gold again proposed a White Knight strategy. “You don’t even need to take my guys,” Gold said, referring to his Wall Street contacts, which Ron Miller feared were a Trojan Horse for a Roy E. Disney takeover. “We’ll get White Knights we can all agree on.”

    Al Gottesman, Henson’s “second seat” on the board, seconded the motion. “It is too late for delaying tactics,” said Gottesman. “Holmes à Court has over 20% [of outstanding stock].”

    Jim Henson asked who they’d bring to the “Round Table”. Gold said, “What about that Rainwater guy?”

    This suggestion sent a stir through the board. Hadn’t Gold just torn apart Richard Rainwater during the earlier discussions over acquiring Arvida? “Seriously,” said Gold, “he’s a smart cookie. Call him up and let’s see if the Basses are willing to come to the Round Table.”

    After discussions with Rainwater, Disney set up a meeting with Bass Brothers CEO Sid Bass. The Texas oil tycoon was one of the Dallas-based multi-millionaires of the type made famous by the popular TV soap opera Dallas. A soft-spoken man with a love for fine art, Bass’s calm and genteel exterior concealed a man who was aggressive in business. Although disappointed that the Arvida deal hadn’t gone through, Bass expressed a fondness for Disney and pledged his support. He brought with him a lieutenant who lived locally in California, Alfred Attilio “Al” Checchi.

    sid-bass-and-mercedes-kellogg-picture-id75469274

    Sid Bass 1988 with new wife Mercedes Kellogg (Image source “wireimage.com”)

    public-eye-9814.jpg

    Al Checchi (Image source “metroactive.com”)

    Watson thanked him, and also noted that Arvida could still have a role to play in developing Walt Disney World, something sure not to happen if the park went to Bally/Six Flags, who was rumored to be a part of the Kingdom Acquisitions group.

    Bass smiled. He also had a surprise for the board. Al Checchi had gotten ahold of J. Willard “Bill” Marriott, Jr., head of the Marriott International hotel chain, and rumored in the Wall Street Journal to be an investor in Kingdom Acquisitions, LLC. It turned out that Marriott had indeed considered acquiring Disney at one point[2], but the good news was that the Wall Street Journal rumors were incorrect. To the contrary, Marriott was willing to support Disney[3]. Marriott was flush with liquid funds after receiving a down payment on the sale of the Great America theme park to the City of Santa Clara, and they now saw the opportunity to take a stake in the ultimate theme parks. Marriott now had the opportunity to profit off of theme parks without the expense or hassle of managing them. It was too good of an opportunity to pass up.
    TheMarriotts.jpg

    Bill Marriott Jr. (L) and Sr. (R) (Image from “hotel-online.com”)

    Watson mentioned to Bass that Disney might reconsider the hotel partnership that Marriott had proposed a couple of years earlier. Perhaps Arvida could help with the site planning. Card Walker and Dick Nunis noticeably winced when Watson said this.

    The Disney board then thanked Bass, secretly hoping that he wasn’t a wolf in sheep’s clothing, or part of a complex gambit by Roy and Gold.

    Either way, they had little choice. Time was running out. Not only had Holmes à Court’s stake increased to above 20%, but feared arbitrageur Ivan “Piggy” Boesky had just filed a schedule 13D announcing that he had accumulated an 8.4% stake. His stated goal of “short term investment” was a blaring signal to anyone paying attention that he intended to sell quickly to whomever paid him the most.

    * * *​

    Stocks at a Glance: Walt Disney Productions (DIS)
    June 5th, 1984
    Stock price: $86.36
    Major Shareholders: Henson family (18.3%), Kingdom Acquisitions (Robert Holmes à Court, 24.2%) Roy E. Disney (4.4%), Disney-Miller family (10%), Ivan Boesky (8.4%), Sid Bass (suspected 0.8%), Bill Marriott (suspected 0.6%), Suspected Arbitrageurs: 12.2%, Other (20.7%)
    Outstanding shares: 37.6 million




    [1] My (very) rough estimate of how much debt Henson Associates might still have after a few years of Jim studiously paying it down. He would have originally taken on somewhere between $100-$130 million in debt (also having paid roughly $10-15 million in cash) to acquire 8.3% in 1980 (~2.78 million shares). An acquiring company assumes the debts of the acquired company. Disney acquired a lot of debt from Arvida in our timeline.

    [2] The real purpose of their meeting with Card Walker a couple of years earlier (in our timeline and this one) was to scout out Disney for possible acquisition.

    [3] They stayed neutral in our timeline.
     
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    Henson Bio X: Goin' Quackers
  • Chapter 14: The War for Disney (Cont’d)
    Excerpt from Jim Henson: Storyteller, an authorized biography by Jay O’Brian.


    The summer of 1984 dragged on for Jim. The stress of the hostile takeover bid was like a slow-burning match in his gut. He swore that he could watch his hair turning gray in real time! It was the constancy of it all that was the worst part, like the hanging stress of the late second act where the big event was coming soon, but you just had to wait…only here it went on for weeks, not minutes.

    Worrying couldn’t help him or the situation, though. The world didn’t stop turning just because it was possibly about to end. He still had a job to do, and burying himself in his work and the fantasies-made-real that it offered would prove to be just the distraction he needed.

    250px-Donald50logo.jpg


    First off was Donald Duck’s 50th birthday celebration. The irascible waterfowl had made his first appearance on June 9th, 1934, in The Little Wise Hen. This meant, of course, a huge, Disney birthday celebration: a tickertape parade through Disneyland, free commemorative Goin’ Quackers records for children under 12, and an official declaration of “Donald Duck Day” by Anaheim Mayor Don Roth. Ray Watson and Ron Miller were too busy dealing with “the events” to attend[1], so Henson, delegating his vote to Gottesman, attended the event as the “Face of Disney”.

    He did his best to keep a jovial smile as he presented Donald with a giant birthday cake. As (walkaround) Donald went to blow out the candles, Pluto the dog exploded out from it, licking the flustered Donald in the face. This elicited a huge laugh from the kids, even letting Jim laugh and temporarily forget the tensions of the moment.

    Plenty of work was waiting for him back at the office too. Not only did he need to do his actual job, but he also found himself constantly addressing questions from nervous employees about the takeover. As he had with the kids at Donald’s birthday, he put on his happy face[2] and moved forward. There was plenty to do and time still insisted on going forward.

    First there was Splash. He worked with Tom Wilhite to develop the latest press release and interview guidance for the stars Tom Hanks and Daryl Hannah. The movie was now the second release from fledgling Hyperion Pictures, and was leaving its predecessor Never Cry Wolf in the dust. Splash was on the verge of becoming a phenomenon[3]. It had already more than doubled its $11 million investment and would go on to nearly break $70 million at the box office. Ghostbusters had just released but was having a smashing opening weekend and was already looking to be a hit.

    Then there was Muppets on Broadway, which was performing at about the same level as A Muppet Mystery!, but which was produced for only $8 million (it would ultimately make $25 million total). Working on the promotion and distribution ahead of its May release proved a great distraction from the ongoing events. While the film performed well and received positive reviews, the Muppet Babies, introduced in the film, would go on to become a phenomenon[4] of their own, spawning a Muppet-based series and a Saturday morning cartoon.

    More distractions awaited. Immediately after production ended on Muppets on Broadway, production began in Studio 2 for the Sesame Street based CTW co-production Follow That Bird! The hard lessons learned from A Muppet Mystery! were implemented and the film would, like Muppets on Broadway, have a constrained $9 million budget in anticipation of around $20 million in sales. Other projects were having a harder time. Return to Oz was stuck in an endless loop of overruns and delays and its novice director, still protected by the big names of New Hollywood, clung on to his position. Still, it offered plenty of opportunities for the Creature Shop to further hone its talents.

    Meanwhile, principal filming had begun on Terry Gilliam’s new movie, done in collaboration with George Harrison’s HandMade Films. Beginning with the working title of “1984 & ½”, it was quickly decided that they didn’t want it to be thought of as just an Orwell spoof, but as its own movie. Jim, Tom, Terry, Bernie and the production team brainstormed new names, with Terry briefly suggesting “The Ministry”, though this was considered “too British” by Tom. Jim jokingly suggested “Orwell that Ends Well”, which got a pained laugh and was eventually turned into a tagline. They considered “Brazil”, based on the Ary Barroso song "Aquarela do Brasil", which served as a leitmotif in the movie, but they feared this would confuse audiences. Finally, the team settled on the name “The Bureau”, framed by the tagline “Orwell that Ends Well”, which they felt gave it the right mix of menace, mundanity, and madcap that properly fit with the surreal dark adult comedy.

    Neverendingstoryposter.jpg


    Jim also managed to finally get another foreign film through the roadblocks of the Executive Committee, a West German fantasy film named The NeverEnding Story, based upon the first half of a children’s novel of the same name. Henson was openly impressed by the puppetry and practical effects (which pleased the makers to no end) and appreciated its themes of imagination and individuality. Though there was some resistance on the Committee due to the “naked Sphynx breasts” on the living oracle statues, the film was accepted for distribution under, naturally, the Fantasia Films[5] label. The movie would be a major international blockbuster hit, earning over $100 million in the US and Canada alone. Just as with Time Bandits, Jim would use the success to justify an immediate partnership with Constantin Films AG to produce a sequel that covered the second half of the novel. They decided to start production immediately while the child actors were still young[6].

    The_Dark_Crystal_Game_Cover.png
    The_Dark_Crystal_Screenshot.png


    Henson also worked a deal on the videogames front, which had recovered somewhat from the 1983 “crash”. He and Ron Miller signed a deal with Roberta Williams of Sierra Online to create videogames for home computer platforms based upon The Dark Crystal, The Black Cauldron, Pigs In Space, and a new game called Mickey’s Space Adventure. The games would sell well and help to rehabilitate the videogame market in the eyes of the Disney board.

    And yet, over it all, the countdown timer of the impending takeover continued to tick. Kingdom Acquisitions broke the 30% mark of stock acquired, placing it within sight of the needed 49.9%. If they got it, all of Jim’s work on rehabilitating the studio could be for naught. The newly formed Round Table Group was racing to keep up, and Jim prayed that they could.

    As Jim returned to his home, he considered what future lie ahead. What would his place be in an ACC-run Disney, and would he and his staff even have a place? Assuming that they did, would he even want it? The words of Lord Lew Grade continued to echo in his mind: “You seriously don’t ever want to work for Homes à Court.”

    Meanwhile, infamous “arb” Ivan Boesky was quietly sitting on his 8.4% stake, his plans as yet unknown.




    [1] They sat it out in our timeline too.

    [2] In an interview he later cited this moment as the genesis of the Muppet sketch “Put on a Happy Face” where a faceless monster Muppet slowly steals the hair, eyes, nose, and ears from a shivering “anything Muppet” while singing the eponymous song, and then goes on to steal the poor Muppet’s life as well. “Honey, I’m home!” It later got recycled in an ad for anti-identity theft services.

    [3] Do-doo-da-do-do!

    [4] Do-do-da-doo!

    [5] The fantasy “book world” of the movie is also named “Fantasia” in the English version.

    [6] In our timeline, despite the roaring success of the film, the sequel took years to produce, resulting in the actors “aging out” of their roles. One of the biggest complaints with the sequel was the new actors.
     
    Muppets on Broadway
  • Mad About Muppets on Broadway (1984)
    From Mad About Muppets with Mad Molly Moolah Netsite, August 20th, 2002


    Hi again, it’s Molly, I’m Mad for Muppets, and you are too or why would you be here? And today I’m going to talk about the third Muppets Movie (and my personal fav thanks to the Muppet Babies and the Muppet Marriage…squeee!!!), Muppets on Broadway! MoB came out at a tough time for Disney. They were in the middle of a massive corporate battle with the fate of, like, everything in the balance, which I talked about in another post (link below) and everyone reading this obviously knows what happened there (eek!) so I won’t talk about that now.

    Instead, let’s talk about Muppets on Broadway!

    The film follows the Muppets immediately after the events of A Muppet Mystery!, now without a job since their Hollywood gig fell through with the arrest of their former studio head Bobby Caracas in the prior movie. They are largely considered has-beens by Hollywood by this point, so they sing “Well, What Now?” Then they get lured to New York with the promise of a Broadway Musical by producer Abner Plotz-D’Vice played by Dabney Coleman, and thus they set out across the US in the Electric Mayhem’s bus singing “Broadway Dreams” along the way. But Plotz-D’Vice turns out to be the con artist Meyer “Red” Haring, and thus the Muppets suddenly find themselves stuck in New York City, broke, and struggling to get a show made. After some hijinks at Sardi’s, where Kermit’s attempts to scam producer “Laser” Dave Dunlop (played by Eric Idle) into thinking he’s a big-name director fall through, the disappointed Muppets go their separate ways.

    themuppetstakemanhattan11.jpg

    (Image source “onthesetofnewyork.com”)

    So, Kermit, still struggling to get a show greenlit out of a sense of duty to his fellow Muppets, starts working a series of progressively more demeaning jobs while struggling on the side (without luck) to get the show going. This manifests at one point in a restaurant dishwashing gig where the whole kitchen is run by the Swedish Chef, naturally, along with Rizzo and the rats (“our specialty is ratatouille!”), who sing “Let’s Cook Up some Magic” as they skate across the griddle on butter pats and other crazy Muppet effects.

    20-years-before-ratatouille.png

    (Image source “70srichard.wordpress.com”)

    Kermit finally takes a cubicle job where he is actually quite successful and well-respected. Soon he’s a suit-wearing creative executive at Inne-Decann Marketing on Madison Avenue, making bank, but various events conspire in ludicrously serendipitous ways (as they always do) to remind him of his Broadway dreams and thus Kermit doth sing “Dreams as Fleeting as Rainbows”.

    kermit2.jpg

    (Image source “theroarbots.com”)

    Meanwhile, the other Muppets go on to find success themselves. Scooter gets a job as a bellhop at the Waldorf Astoria, remaining chipper despite the harassment of guests Statler and Waldorf. Fozzie constantly fails at standup gigs, heckled by Statler and Waldorf of course, only to get a job on Coney Island in a dunk tank…where Statler and Waldorf have bought $200 in balls, leading the boss (Eddie Murphy) to exclaim “he’s tripled income overnight!” Gonzo is doing surreal performance art in Times Square only to be discovered by Andy Warhol and become a hit in Greenwich Village (Statler and Waldorf are there too, providing snark). The Electric Mayhem are opening for Van Halen (Statler and Waldorf are in attendance, saying “Does this rock?” “You’d need a head full of rocks to enjoy it!”).

    Best of all, Piggy auditions for a musical by singing a cover of Leonard Cohen's “Bird on a Wire”[1], where she gets a standing ovation from Cohen himself (the other judges, Statler and Waldorf, of course, are less appreciative). Naturally, Cohen falls for her and soon sweeps her off her feet in a romantic montage using all of his deep-voiced Cohen charm, but though she swoons, she soon realizes that she misses Kermit. This manifests in my second favorite scene: a dream sequence where the Muppets are all babies, her singing “Only Wanna’ Be with You” to Baby Kermie who is sooo adorable!!

    340

    (Image source “muppet.fandom.com”)

    So it appears that the Muppets will disband and go their separate ways, but after a soul-searching crossover musical number “Apart and Yet Together” sung by each of the separate Muppets in split-screen, each of them decides that their Broadway dreams are bigger than their immediate job needs, but all still feel trapped in golden handcuffs.

    And Statler and Waldorf, riding a horse-drawn carriage through Central park that night, comment on what a great vacation they’re having so far.

    Finally, due to a conspicuously serendipitous set of circumstances commended upon by Kermit, all of the Muppets arrive at the same time at Inne-Decann for various promotional shoots and Kermit convinces all of the Muppets’ new star cameo bosses to all fund the Muppet’s new Broadway show once the Muppets amaze them all by performing “Together Again”. All of the big-name cameos thus agree to fund the production and the movie transitions to a “show within a show” performance of “Broadway Dreams”, with the Muppets performing a reprise of the song.

    The show is a success and, in my totally fav scene, Kermit and Piggy celebrate by getting married in an elaborate ceremony! Leonard Cohen sheds a manly tear and Gonzo catches the bouquet, causing Camila to bat her eyes, as the movie ends[2].

    Wedding.mtm_.jpeg

    (Image source “themarysue.com”)

    Ye gods, I love this movie! Can you tell?

    So, this film did well, but not spectacular, but it’s remembered well. It spawned the popular Muppet Babies Muppet series and cartoon and even a Disney live Muppet show turned travelling show, even though it’s non-canon and an imagine sequence, but whatever. And then the marriage scene, which is still a running gag between Kermit and Piggy where she says it was real and he says it was Hollywood. I say it happened and they’re married and I challenge you to tell me otherwise.

    And yea, Muppets on Broadway is not everyone’s fav, but I love it. But I love everything Muppets. I think I have a problem. Perhaps I should seek help?

    300

    (Image source “muppet.fandom.com”)

    NO WAY, BUB!!!





    [1] To @Kalvan, I really wanted to make this song “First we Take Manhattan” per your request, but was written in 1986, 2 years after this movie debuts. I decided to at least honor the request through a Leonard Cohen cameo.

    [2] This synopsis brought to you at the insistence of @Garrett_Cartoonist.
     
    Dis War VI: "Save Disney!"
  • Chapter 7: “Save Disney!”

    Excerpt from Kingdom Under Siege: The Wall Street War over Disney, by Taylor Johnson.


    By June of 1984, Kingdom Acquisitions had gone into high gear. Several major arbs had sold their stake to Holmes à Court, bringing him to within striking distance of taking over Disney.

    The White Knights needed to act quickly and decisively. Any misstep could be disastrous for the company. The newly formed shell company The Round Table Group, LLC, made up of Disney, Bass, Marriott, and a few minor shareholders, went into overdrive, gobbling up stock like a Cookie Monster in shining armor. It was a race against the clock.

    When Kingdom Acquisitions announced a 38% stake on the 6th, Jim Henson again advised a public campaign. With little left to lose at this point, the board of The Round Table Group gave their reluctant blessing.

    Henson called in Bernie Brillstein. “We need stars,” he told the former agent. “We need publicity. We need public relations.”

    “Jim, my dear,” said Bernstein, “You came to the right man. Even if this fails, the publicity will be dynamite!” Bernstein called up his daughter at his old agency. They convinced every star they could to publicly back the upcoming campaign. Many of the stars were former Muppet Show guests and wholeheartedly agreed[1]. Many started buying shares themselves.

    The “Save Disney” campaign was launched. Henson, the Muppet performers, and the animators all created short, catchy commercials to play on prime time. Soon the commercials were flooding the airwaves and big stars were publicly announcing their support for Disney.

    Celebrity CEOs and Hollywood moguls soon joined the campaign. Steve Jobs of Apple Computers. Steven Spielberg of Amblin Entertainment. George Lucas of Lucasfilm, Ltd., who regretted that his financial difficulties limited his ability to help[2]. Even Lord Lew Grade, though still not financially recovered following his ouster from ACC, took a small position on Disney[3]. It became “a thing” on both the political left and the political right to support the “wholesome little company” from the “soulless Wall Street raiders.” Even US President Ronald Reagan had a say when asked by reporters. “Well,” he said[4], “While I always support the right to free enterprise, it’s hard not to root for good ol’ Mickey Mouse!”

    Meanwhile, Stan Kinsey and Jack Lindquist, acting on Dick Cheney’s formerly rejected advice, launched a set of “rewards” for new and loyal shareholders, with giveaways based upon the level of shares owned. Awards ranged from small things for minor shareholders, like free passes to theme parks, free home videos or movie tickets, or free nights at a Disney hotel, to big things for major shareholders, like free visits from a Disney character of your choice, lifetime passes for the parks, or even a free stay in the exclusive “Princess Suite” inside Cinderella’s Castle at the Magic Kingdom in Disney World. Each shareholder who claimed their prize by mail even got a free 50th anniversary Donald Duck as a White Knight high quality die-cast figurine, which would later become a highly sought collector’s item.

    If the Knights of the Round Table failed in their quest, at least they’d have the names and addresses of shareholders and a wave of public support as ammunition for the inevitable proxy war.

    And in the middle of all of this was Frank B. Wells. Stanley Gold had brought his friend and business associate to the Round Table to act as a coordinator, and Wells more than proved his worth. He coordinated with Bass and Marriott through Checchi. He coordinated with Jobs, Spielberg, and Lucas through Henson and Brillstein. He communicated to the Disney board through Watson. He coordinated with shareholders through Kinsey and Lindquist. He seemed to be in every room, savvy on every discussion, and able to predict what each stakeholder wanted even before they asked for it. He impressed everyone with his calm, professional, and unassuming manner as much as he did with his impeccable work ethic. Al Checchi later reported that Sid Bass said to him, “If Disney is too stupid to hire that man [Wells], then I want him.”

    But time was almost out. “We expect to own a controlling stake in Disney by the 4th [of July],” Holmes à Court told reporters. The symbolic date was taken by many as an implicit British “Reconquista” of a symbol of Americana (despite Holmes à Court being Australian), which further angered many Americans, inadvertently aiding the Save Disney cause.

    By mid-June, the clock had all but run out. Nearly all outstanding Disney shares had been gobbled up by one side or the other. Kingdom Acquisitions held a slight edge over The Round Table Group. The public largely supported Disney thanks to the publicity campaign, which Holmes à Court dismissed as a “silly stunt”, but in the end it came down to the numbers. Whoever had the majority of shares owned the company. Toppling them, even with a strong proxy presence, would be nearly impossible.

    Roughly 13% of shares were not claimed by either of the two warring factions, and of them roughly 3.3% of the total shares were believed to be in the hands of holdout arbs or private “Knights Errant”. The lion’s share of the uncommitted shares, 8.4% of the total, belonged to the Ivan F. Boesky Company.

    Ivan “Piggy” Boesky, the man Frank Oz had mocked over the phone, now held the fate of Disney in his hands.




    [1] Henson went out of his way to make his guests feel special. Many of them fondly recalled their time on the Muppet Show and fondly remembered Jim. I imagine many would want to support the campaign simply to support Jim, whom they expressed public affection for.

    [2] He lost a lot in the divorce and had blown much of his Star Wars fortune on his Quixotic quest to turn Skywalker Ranch into the ultimate filmmaker’s Mecca, an American Zoetrope on Steroids.

    [3] Hat tip to @tornadobusdriver for this call (which I can’t believe I didn’t think of on my own), and hat-tips to those who predicted Lucas and Spielberg and the Knights Errant!

    [4] Given that many on the Disney board were prominent California Republicans and had served with or for him over the years, Reagan’s support is likely as much about their loyalty as anything else.
     
    Knights Errant
  • [Commercial begins]

    Black Screen. The opening bass notes of John Williams’ iconic theme song from Jaws start to play[1].

    Fade in. Jaws theme continues to play.

    Exterior – The Magic Kingdom – Daytime
    We see the iconic Cinderella’s Castle in the background (chromakey). JIM HENSON walks up in front and stands just off of center-left, facing slightly to the right.

    Henson
    Hi, I’m Jim Henson, Chief Creative Officer for Walt Disney Productions. And we need your help.​

    Suddenly we see MICKEY MOUSE, in Muppet form (top half only; bottom half “below” the TV screen), “running” screen-left to screen-right in front of Henson. He’s screaming “Ah! Help!” Behind him, BUSINESS SHARK, a cigar-chomping, shark-headed Muppet wearing a business suit and carrying a martini, chases after him going “Nyum nyum! Nyum nyum!” in time with the music.

    340

    Not exactly this… (Image source “muppet.fandom.com”)

    Henson
    A coalition of corporations is attempting a takeover of the company that Walt and Roy Disney founded. The Wall Street Journal reports that they plan to break up the company and sell off the assets. If this happens, Disney as you know it will be gone forever[2].​

    MICKEY, still screaming, runs back from screen-right to screen-left, BUSINESS SHARK in pursuit.

    Henson
    But you can help. Every stock you buy is one more stock out of their hands. And Disney shareholders, in addition to being heroes, can claim special Disney rewards available only to them.​

    MICKEY and BUSINESS SHARK run past again as someone off camera hands JIM two things: a shield emblazoned with the image of The Sword in the Stone from the animated classic, and a large, spiked mace.

    Henson
    You too can be a Knight Errant for Disney! Together…​

    MICKEY and BUSINESS SHARK run past again, but this time Jim Henson nonchalantly swings down the mace. It hits BUSINESS SHARK in the head with a “clang” noise, stopping him in his tracks. The Jaws theme stops mid-note. BUSINESS SHARK falls below the screen.

    Henson
    Together we can save the Magic Kingdom. Buy Disney stocks today and become a part of the magic.​

    MICKEY joins JIM. DONALD (Muppet) walks up to them too. Henson crouches down to MICKEY & DONALD’S level.

    Henson, Mickey, & Donald Together
    It’s all for one, and one for all!​

    The logo for Save Disney appears as a Title Card along with an address and phone number, quickly repeated aloud twice by a Narrator.

    Fade out.

    [Commercial ends]



    * * *​

    Stocks at a Glance: Walt Disney Productions (DIS)
    June 19th, 1984
    Stock price: $88.22
    Major Shareholders: Kingdom Acquisitions (43.8%), Round Table Group (42.7%), Ivan Boesky (8.4%), Suspected “Knights Errant” and Arbitrageurs: 3.3%, Others (1.8%)
    Outstanding shares: 37.6

    200.gif

    (Image source “giphy.com”)




    [1] Rights provided free of charge by Spielberg.
    [2] Henson wanted to say more, but this was the most that Disney’s lawyers were willing to allow, the words chosen carefully to minimize the threat of a libel lawsuit. No names were mentioned. Everything here is either a) an undisputed fact (the first two statements) or b) an opinion protected under free speech (third statement). Any potentially inflammatory adjectives (e.g. “hostile”, “greedy”, “wicked”) have been dutifully avoided.

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    Last edited:
    An American Tragedy
  • A New American Epic Tragedy
    Excerpt, New York Times Movie Reviews, June 23rd, 1984


    This is how empires are built, and how they fall. They start with the dreams of the young, blossom into action, get tainted with greed and regret, and then end in tragedy. And none of these events happens in isolation, none is divorced from another, and every moment is a dark reflection of the next. Such is the story of Sergio Leone’s new crime drama Once Upon a Time in America, a sweeping epic that was the buzz of Cannes and is sure to be the buzz of the Oscars. The 229 minute epic[1], with its non-linear plot, follows the life of “Noodles” (Robert DeNiro) as he grows up in the slums of Hell’s Kitchen, faces the trials and opportunities of Prohibition, gets rich, gets arrested, deals with opium addiction, and deals with a long, complex, and ultimately tragic relationship with his childhood crush Deborah (Elizabeth McGovern). This surprisingly complex drama is already getting compared to The Godfather, but in reality, Coppola could have taken some cues from Leone. If this doesn’t take home Best Picture there is no justice in Hollywood.

    Once Upon a Time in America; Rated R for violence, profanity, sexuality, and drug use ⭐⭐⭐⭐


    Once_Upon_A_Time_In_America1.jpg



    * * *​

    The Last Days of Disney?
    Wall Street Journal, July 2nd, 1984


    Donald Duck is celebrating his 50th birthday, but he may not have a home for very long. In a very public takeover drama that has seen airplay with both Johnny Carson and David Letterman, Kingdom Acquisitions, LLC, a holding company helmed by Associated Communications Corporation chief Robert Holmes à Court, has acquired a near-majority stake in Walt Disney Productions, just a few million shares shy of the 49.9% threshold needed to claim victory. And with the balance of the shares in the hands of arbitrageur Ivan Boesky, many are proclaiming the imminent end of the classic American entertainment company.

    But if Disney is going down, then it’s going down swinging. The White Knight investment group “Round Table”, led by Sid Bass and Bill Marriott, Jr., plus some Hollywood heavyweights, has acquired a near match in shares. And Disney has even taken the fight public in a massive publicity campaign that Holmes à Court has challenged in court, citing the commercials and advertisements as “inflammatory, misleading, and damaging to our brands[2].” A Judge for the Southern District of California has issued a temporary injunction on the ads as the case progresses in court. Even with the injunction, brokerages are reporting record numbers of private investors seeking Disney stocks, indicating that the campaign is working to some degree. The bidding wars and growing interest have been driving up the Disney stock price, which has broken $90 a share in recent days.

    And yet, whatever comes out of the lawsuits, public campaigns, and late-night talk, the fate of Disney, and where Donald will sleep at night, remains up to one man: Ivan Boesky. So far, the would-be kingmaker has remained taciturn on his intentions. He seems content instead to let the share price creep up and has reportedly ignored calls from either faction. The one thing that appears certain is that Boesky will extract a maximum return for his now-golden shares.




    [1] Due to a chance meeting (random butterflies), Bernie Brillstein intervened with Alan Ladd, Jr., and avoided our timeline’s infamous “Ladd cut” that slashed the picture to 139 minutes and put everything in linear order, ruining everything that made the film great in most reviewers’ opinions. The film was a hit everywhere but the US due to this poor decision. I butterflied it because I could.

    [2] Whether the suit has merit or not I leave to the reader (I’m certainly no lawyer), but either way I have little doubt that a lawsuit would be launched if only for short-term tactical purposes.

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    Dis War VIIa: An Alliance of Swine
  • Chapter 9: An Alliance of Swine
    Excerpt from Kingdom Under Siege: The Wall Street War over Disney, by Taylor Johnson.


    In July of 1984, time seemed to drag on for the employees of Walt Disney Productions. The ticker-tape ticked away the hours, the Disney price numbers plateauing at around $92 per share as the final, straggling buyers solidified their positions. Ivan Boesky, ever aloof, sat on his kingmaking 8.4% share of stock, his plans unknown, perhaps even to himself. The Disney executives and managers did their best to put a positive spin on the situation, but the tension was palpable. Everyone knew about the time when Frank Oz mocked Boesky using Miss Piggy’s voice. Everyone was sure that it was only a matter of time before Boesky took his revenge.

    All around the company, the rumors flew. One rumor suggested that the management was planning to sell out to Holmes à Court to save their own skin. Another suggested that Bill Marriott or Sid Bass or even Roy Disney or Jim Henson were about to throw in their lot with Holmes à Court. Another suggested that Ron Miller was going to burn the company to the ground rather than let Holmes à Court break it apart. Little did they know that there was some truth to this latter rumor.

    At a contentious Board of Directors meeting, the directors discussed their dwindling options. Perhaps they could pay greenmail to Holmes à Court or one of his collaborators. However unpalatable, greenmail was better than death. Card Walker suggested a darker path: a “poison pill” in the form of a self-tender. They would put out an open call for shares at $120 per share. This would certainly break the Kingdom Acquisitions coalition, but it would saddle the company with crippling debt.

    “It’s suicide,” said Stanley Gold. “Please tell me that this is a bluff to set up a buy from someone.”

    “In ancient Rome a general would fall on his sword rather than be captured by barbarians,” said Walker.

    “You can throw yourself on your sword, Card,” said Gold, “But this isn’t some Viking funeral where we all jump on the pyre with you.” The mixed metaphor, however awkward, hit home with the board.

    The meeting ended without any consensus. Afterwards, Gold took Gottesman aside. “Al, this is insane. I’m advising Roy that if the board supports the self-tender, then he takes them up on it. Cash in his chips at 120 [dollars a share].”

    Gottesman told Gold that he and Henson had discussed such a strategy. “Jim would walk away with over half a billion [dollars], enough to build his own studio from the ground up, Muppets or not. He’s also considering just taking the buyback.”

    “Let us know his plan when he makes it, Al,” said Gold. “Roy and I may just become investors in whatever he’s doing next.”

    The two shook hands.

    But back at the boardroom, the arguments went on, and all through the company, the rumors continued to fly, grow, multiply, and mutate.

    Still, the tickertape clicked away the hours.

    Finally, they received a call from Ivan Boesky’s business manager. Ominously, the infamous arb wanted to talk to the full board. A call was arranged for Friday, the 13th of July. More ominously, the manager added: “Mr. Boesky wants to talk to the pig. Make sure that the pig is there.”

    This sent a new buzz through the halls of Disney. Why did he want to talk to Oz? Was this some bizarre power play? A threat? Was he planning to gloat as he declared his sale to Holmes à Court?

    They would have no choice but to wait and see[1].




    [1] As will you, my lovely audience! Last cliffhanger. It all comes to a definitive answer next time one way or another, I promise.
     
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