Chapter 8: The Proxy Battle (Cont'd)
From Dis-War Two: The Great Disney Proxy Culture War of 1998, by Taylor Johnson
Monday the 14th of September came. The various players filed in to the WDW Convention Center, many of them small shareholders, some of whom expressed their opinions, positive or negative, and support or lack thereof to Henson and the Disneys. One woman even tried an exorcism on Henson, much to his amusement. “God bless you too, ma’am,” he said with a warm smile. The Faith Faction of the Shepherds arrived as a group and entered like they were Jesus in the Temple there to cast out the money lenders, an arrival whose impact in that regard was lessened for many by having a couple of the more egregiously opulent televangelists in the group. Interestingly, Peltz and the Fiscal Faction largely entered separately from their allies, though Roger Stone, standing out in the crowd in his “Monopoly Man” get-up, was seen constantly moving back-and-forth between them. The board by this point had picked up Henson’s habit of calling him “The Penguin” based on the Batman villain.
Henson also had to chase away a couple of WDW Muppet Performers who had snuck into the mezzanine with Statler and Waldorf Muppets. “I appreciate the humor, guys, but we really need to play this one serious,” he told them. He’d had less luck with stopping Jerry Nelson from taunting Falwell on the way into the building using the
Devil Muppet[1].
Turner had yet to arrive.
Henson took up the gavel, something that he almost never did, and knocked three times on the podium. He then treated it like it was just another board meeting, not even acknowledging the existential battle about to begin. He was halfway through the reading of the minutes when Ted Turner arrived, fashionably late, with two obvious lawyers and Michael Eisner in tow. Henson stifled a chuckle when he noted that Eisner was wearing cowboy boots and a silver-and-turquoise bola tie. Even seeing the strange, almost circus-like mix of people and strange bedfellows in the room made him want to laugh at the absurdity. Like a character in a Monty Python sketch, he was going to live in the absurdity of it all and try to enjoy himself.
When the time for New Business came around, a representative for the Shepherds took the floor. They had a speech. They had a plan. It ran like a prosecution, and the charges where three: 1) that the Disney leadership (specifically Henson) had failed to properly address the concerns of its shareholders by pursuing questionable strategic goals, 2) that the leadership had allowed the good name of Walt Disney to be tarnished through immoral and unamerican productions not in keeping with the values of the founding brothers, and (in what Henson considered an openly hypocritical assertion given the overt sociopolitical aims of the Shepherds) 3) that the leadership had allowed their personal politics and beliefs to cloud them to the will of the shareholders.
The “prosecution”, as it was, presented a string of fiscal evidence for the first charge, noting in particular such past controversies as the pursuit of impractical art-driven or charity-driven projects. The Walter Elias Disney Signature Series, done overtly “for the art”, was specifically cited as a waste of resources with a negligible to negative return on investment, specifically citing that spring’s
What Dreams May Come, which received lots of critical notice, but made negligible returns on a limited Arthouse release. The underperformance of the recent Disney Animated Features compared to their lofty peak in the mid-1990s was called out time and time again, with The Shepherd’s advocate specifically calling out
Kindred Spirits not just for its “morally questionable foray into the occult”, but also for it being clearly aimed at a “periphery demographic”, an apparent reference to its predominantly black cast.
“I didn’t know that twenty percent of the population was a ‘periphery,’” a frustrated CFO Richard Nanula was overheard saying.
And in a move that caused shock to reverberate through the room, they specifically called out The Muppets as “a relic, divorced from the current public tastes,” citing them as a “marginal” property that was only being supported to “salve the ego of the Chairman.” They recommended shelving or selling the Muppets and diverting the resources to “more profitable IP”.
Even the up to that point genial Henson was seen to scowl and frown at this, and later confided that he considered it a “cheap shot”.
In a move clearly aimed at winning over the Roy side of the family, they called in to question the LA Rams stadium deal, calling it “an ego-driven decision” that they laid primarily at Henson’s feet in an effort not to alienate the Disney-Millers.
The prosecution in particular hammered on the NBC deal, again and again, in what was clearly aimed at winning over GE and possibly the Disney-Millers (who had questioned the deal when made, though ultimately voted for it) to their cause. They noted in particular how the stock price and Market Cap had stagnated since the acquisition. They alleged that Henson had mismanaged the deal from the start and failed to take full and proper advantage of the integration opportunities.
Highly-selective charts showing employee compensation and overhead compared to other studios were shown, and portrayed as wasteful. The less-than-ideal Price-to-Sales Ratio was hammered on again and again, suggesting that the share price, even given the stagnation of the last two years, was overvalued and that a “correction” was inevitable if the root causes – i.e. Henson’s leadership – were not addressed. The costs of Henson’s “healthy food options” at the parks and studios were shown to be “a waste” compared to cheaper and more popular unhealthier options. Even the medical, psychological, and educational resources that Henson put in place to protect child performers were cited as an unnecessary waste of resources. “Disney and MGM are there to make TV and movies, not babysit,” the Shepherds’ advocate declared.
The painful and costly failure of Disneytown St. Louis was brought up as solid evidence of pursuing projects based on “feel good” decision making rather than sound fiscal consideration, which they again worked to shift onto Henson in order not to alienate either Disney faction, suggesting that he’d manipulated the Disney’s love for Walt’s vision. The new, $300 million Disneytown in Ontario, which had a similar situation to the St. Louis Disneytown, was brought up as an example of Henson failing to learn from this costly mistake. The massive debt acquired in the 1990s and the unplanned deal with Pearson was cited as an example of poor planning, as were the massive cost overruns for both Disneyland Valencia and Port Disney, with the cost-benefit ratios played directly against the optimistic initial promises that they made to the shareholders to justify both projects.
The Song of Susan was brought up again and again, not just for the loss of profits but for the target of the largesse: research into AIDS, which was “not the purpose of the Entertainment Company”.
While they never flat-out said that it was primarily benefiting gay men, and that this alone was a strike against the leadership in their view, they let that hang out there like a dog whistle. In this way, they also alluded to the second and third charges, and then overtly stated them when the subject of
Toys came up, Henson’s out-of-touch left wing “hippie” peacenik values placed out in sharp contrast to the patriotic beliefs of the American people.
In direct contradiction to their attacks on Disney’s expenses building a protective and supporting network for their child actors, they attacked Disney’s reputation as a safe place for children, parroting attacks in the media surrounding producer R. Kelly’s relationship with the then-underage singer Aaliyah. They dove into Geraldo exposés about Kevin Spacey and Bryan Singer and even tried to tie Disney animated features into these accusations, which over the years had taken on an edge of conspiracy theory amid the echo chambers of the far-right internet.
The “prosecution” spent several hours bringing in witnesses. They brought up Henson’s political and even spiritual beliefs as evidence of the second and third accusations, reading out passages from his interviews following the release of
Hocus Pocus. They called out his “radical feminist witch hunt” where accusations of sexual harassment or assault led to a “purge” of talent (Turner reportedly squirmed in his seat while this happened). They called him out on rumored relationships with younger women despite being still married, in particular to the “socialist agitator” Daryl Hannah. They questioned his devotion to capitalism and profit and brought in extremely optimistic projected grown charts and profits had Disney followed a more “shareholder-centric” approach by their measure. They downplayed every success and put a spotlight on every failure. They specifically called out Frank Wells having gone to work for the Gore Administration as an example of “undue political influence”. They appealed directly to nostalgia for the “Good, old traditional America of Main Street” that Walt’s vision highlighted, with the explicit accusation that Henson’s leadership had moved away from this and instead supported “immoral, anti-Christian, and unamerican” values.
In short: they built a case that since Jim Henson ascended to the Disney board, determined to push a “demonic” and underperforming film (
The Dark Crystal), that the Walt Disney company had been on a downward, fiscally unsupportable, morally and politically repugnant pathway that sullied the name of the great Walt Disney.
“Don’t let the share prices fool you,” said their representative, “Disney under Henson is a house of cards of ill repute!”
Henson notably was seen trying to stifle a laugh during their “closing statements”. “They just sounded so much like an old Sam the Eagle skit,” he said later.
The Shepherds rested their case, calling for the removal of Henson and Kinsey from their leadership positions and the formation of a new Standards Subcommittee to ensure that all creative decisions were “properly vetted” to remove “unacceptable subject matter or undue political influence.”
Al Checchi called for a recess, which Henson granted.
Henson took the time to talk to all of the various stakeholders, in particular Jack Welch, Bill Marriott, Sid Bass, and most critically both Roy Disney and Diane Miller. He even attempted to meet with the Shepherds, but was publicly rebuked. He shook hands with Turner, who held a poker face the whole time, but he did mention how much he liked
Kindred Spirits (“That’s New Orleans to a ‘T’!”). Eisner was more friendly, and even hinted that Henson could come work for them if the whole thing “went south”.
Most of the stakeholders tried to reassure him, but the fact was that the Shepherds had clearly hit some nerves and reopened a lot of old wounds. Henson knew that a lot of the points had struck home, and could see it in the faces of the board. Bass was shaken. GE’s executives and representatives were animatedly talking amongst themselves. Diane Disney Miller was talking animatedly with Ron and her mother Lillian. Roy was looking scared and Stanley Gold wasn’t maintaining eye contact.
The disparate Disney factions kept sending suspicious stares each other’s way.
Still, Henson knew that it was the “defense’s turn” next.
[1] Devil Muppet: Hey, Jerry! Keep up the great work! I appreciate what you’ve done for me all these years!
Falwell: (annoyed) Get thee behind me!
Devil Muppet: You kidding? I’ve been behind you this whole time, Jerry!