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Roy Disney Drives Get Out Eisner Voter Campaign

A mouse displaced out of the Disney house is roaring. Roy E. Disney and Stanley P. Gold have been busy in the past week stirring up supporters and media attention in their efforts to oust Michael Eisner, chairman of The Walt Disney Co.

Roy Disney and Gold invited Disney shareholders to a briefing and reception in Philadelphia on March 2, the day before Disney's annual meeting is to be held in that city. The meeting will be held at the Loews Hotel, 1200 Market St., from 4:00 6:00 pm. A press briefing is being scheduled for earlier that day.

In a letter to shareholders posted on their Website, the two former Disney Co. directors said, We intend to tell those who attend why we believe they should join us in Voting No on the election of Michael Eisner, George Mitchell, John Bryson and Judith Estrin as Disney directors. We will also discuss why we resigned from the Disney board and why we are seeking to replace ceo Michael Eisner. We think it is important that the facts be put in perspective. For example:

In 1994, Disneys operating income was $3.1 billion. Despite investing more than $25 billion in Company operations since, Disneys operating income in fiscal year 2003 was only $3.2 billion.

Assuming the company achieves its forecasts for Fiscal 2004, earnings will only approximate those achieved six years ago.

In 1995, the market showed confidence in the Disney name and rewarded the company with an average price-to-book ratio of nearly 6x. In 2003, Disneys average price-to-book ratio was under 2x.

While Disney stock has had a good recovery recently, $10,000 invested on Jan. 1, 1996 would have grown to only $11,497 by Dec. 31, 2003. This same amount, $10,000, invested in a Dow Jones index fund on Jan. 1, 1996, would have grown to $20,191 by Dec. 31, 2003.

They said it would be an open forum and offer special discount travel arrangements specifically for Disney shareholders to attend the meeting.

On Feb. 3, Roy Disney filed a document with the U.S. Securities and Exchange Commission that blamed Disney's top execs for a dozen years of "failed ventures" and "schemes that recycle rather than innovate."

The document argued: "The daring, dynamic, creative and businesslike management of the post-1984 years has given way to a staid and inbred group under the singular imperial rule of an Emperor (Michael Eisner) and his enabling Court (the board of directors). The once lean organization has become top heavy with intelligent and well-intentioned schemers, who rather than supporting the creative soul, dictate to the artists what must be done (and won't tolerate differing views)."

The document also notes that the company's top five executives were paid more than $68 million in total compensation during the past three years, while the company's share price fell by about 50%.

The critique of Eisner's tenure on Roy Disney's Website, describes such corporate initiatives as EuroDisney,, Disneys California Adventure, Disney Studios Paris and the ABC Family channel as "failed ventures" and "schemes that recycle rather than innovate."

It cites several high-profile events in the mid-1990s that changed the company's culture. It mentions the unexpected death of Frank Wells, president of WDC, and the subsequent departure of production chief Jeffrey Katzenberg; the ill-fated hiring of Michael Ovitz, which "foreshadowed the current 'poor governance' culture;" and the acquisition of CapCities/ABC, which "changed the essential nature of the company."

Analyzing the disappointing returns from the California Adventure park, the document says, "it was destined to failure before the ground was broken." Claiming that "the numbers guys," rather than park innovators, were in charge of the project, it says it was designed "from the top down based on what the spreadsheets said was required to hit a return figure that has never materialized."

Using "off-the-shelf" rides rather than creating unique attractions and resorting to "excessive discounting," failed to excite consumers "not willing to pay the same admission price for a smaller and subjectively less-special park."

Roy Disney's plea to the shareholders argues that WDC has become so marketing-driven it has lost sight of quality. "The product is no longer what matters most, just how you sell it," it says.