Eisner works charm to install his heir on magic kingdom throne

For more than 20 years, Michael Eisner has ruled Walt Disney with an iron hand that awes and offends investors and Disney faithful alike.

The board of directors again granted Eisner his wish this week, naming president and chief operating officer Bob Iger to replace him from September 30.

Eisner agreed to step down as chief executive officer a year earlier than he planned, but he got his choice in Iger, a veteran television executive and his top lieutenant since early 2000.

Eisner, 63, began creating controversy soon after he joined Disney in 1984. Aiming to improve profits, he angered the Disney faithful by issuing animation classics on home video - and made a mint.

He commented on scripts in development, followed television programme lineups and, when a new Indiana Jones ride opened at Disneyland in the mid-1990s, reportedly rode it over and over again until he was satisfied the sound effects and a "wall of rats" worked properly.

The former NBC page who worked his way up the corporate showbiz ladder has presided over significant turnover in recent years.

Two former directors who helped hire Eisner in 1984, founder Walt Disney's nephew, Roy Disney, and his business partner, Stanley Gold, have been trying to oust him for more than a year, claiming he is ruining the company he rejuvenated.

Jeffrey Katzenberg, now a DreamWorks executive and formerly head of Disney's film unit, won a bitter legal battle against the company in mid-1999 over unpaid bonuses, which became a personal spat between the two men.

Hotshot Hollywood talent agent Michael Ovitz joined Disney as president in 1995, but left just over a year later, with a severance package potentially worth US$140 million. That package is still embroiled in a legal dispute.

Disney's stagnation in the 1990s upset many investors.

The effort to remove Eisner from his job and an unsolicited buyout offer from cable giant Comcast threatened to unseat him last year, when 45 per cent of votes at the annual meeting were cast against his re-election to the board.

But he stayed quiet through most of the storm, occasionally using humour to defuse the situation, as when asked about the company's acquisition strategy the week of Comcast's bid.

"Acquisitions? Oh - we're buying Comcast!" Eisner told a meeting of analysts in early 2004.

After a turnaround in the company's financial performance and a resurgence at the once-flagging ABC television network, analysts say Eisner is handing over a company in good shape.

"This was not a broken situation," said Larry Haverty, a portfolio manager at Gabelli & Co.

"I think the board did the right thing."

Eisner, a father of three, whose looks belie his years and whose eccentricities include wearing sneakers and baseball hats with his suits, is known as a tireless worker for whom no detail is too small.

Even detractors credit him with presiding over a meteoric period of growth that saw Disney's business and stock price soar as he shook it up.

Much of the growth came internally, as Eisner built up the company's studio business and expanded its theme parks. In his biggest acquisition, he purchased ABC in a 1996 deal valued at US$19 billion.

Ever the optimist, Eisner is about to publish Camp, a memoir of his years at an all-boys summer camp in Vermont. Among the lessons he has said he learned there? Be "a good winner but an even better loser".

* Iger's promotion will not change plans by Miramax Films co-chiefs Bob Weinstein and Harvey Weinstein to leave the Disney division they co-founded, a source says. Negotiations for the Weinstein brothers to leave Miramax, which has produced Oscar-winning films such as Chicago and Shakespeare in Love, could wind up as soon as this week.

- REUTERS