Wednesday, April 13, 2011

Disney Synergy: The Secret Origin

Most people who follow the Walt Disney Company will point to 1984 as the year when the company began to change from what it always had been-a uniquely creative company that had its troubles (example: most of the Disney films of the 1970s) but was still ambitious enough to build something like EPCOT Center-into what it is today. Under Eisner’s tenure, the story goes, Disney morphed into a soulless multimedia conglomerate that thought nothing of slacking off on park maintenance or churning out terrible direct-to-DVD sequels of classics like Cinderella and Bambi just to make a few bucks.

The truth, though, is that the roots of Disney’s transformation into a company that’s not all that different from Pepsi or General Electric go back much further than 1984. Actually, they go all the way back to 1966. True, that’s the year of Walt Disney’s untimely death, but it’s also the year that Paramount Pictures was acquired by the industrial conglomerate Gulf and Western. The next year, 1967, Gulf and Western also acquired Lucille Ball’s tiny Desilu Studios, home of productions like Mission: Impossible and the original Star Trek. Gulf and Western’s executives paid little heed to the idea that show business was a unique thing. They believed you could run a studio like, say, a refrigerator company.

In the book Inside Star Trek: The Real Story, former Desilu and Paramount executive Herb Solow referred to the new executive thinking that Gulf and Western brought to Paramount as “an ideological disease called MBA.” When he showed a buzzword-laden memo from their new bosses to Star Trek Co-Producer Bob Justman, Justman replied in disbelief “We don’t manufacture widgets here. Don’t they know this is show business?” Later, in a meeting with a committee of these new executives, one of them declared his confidence that his previous stint as Director of Advertising for the American Safety Razor Company taught him all he needed to know about television production. Earlier, Gulf and Western chairman Charles Bludhorn had visited the Star Trek set and was unable to understand why a director would need to shoot more than one take of a scene. “It’s just not cost-effective. I want it to stop.” He decreed.

It was this very same Gulf and Western-run Paramount Pictures, thoroughly infected with the “disease called MBA”, that made one Michael Eisner President and CEO of their movie studio in 1976. Eisner was not the originator of the philosophy that said a company that makes movies and theme parks can and should be run like a company that makes refrigerators or breakfast cereal. He was a product of that philosophy, and that system.

By 1984, although Disney was still run by the people who had been closely associated with Walt, it was in trouble. If Disney had not embarked on the path that led to its mushrooming into a multimedia behemoth, it likely would have been absorbed by a corporate conglomerate, much like Desilu Studios in 1967. When you think about it, it’s kind of impressive that the company’s old guard was able to stave off the MBA disease long enough to build EPCOT Center.

So complain all you want about Eisner’s legacy or Bob Iger’s stewardship of the company. But know that things could have been much, much worse.


  1. Great post. Agree completely. It's just sort of the nature of the beast these days.

  2. I think the book Storming the Magic Kingdom about sums it up. It's probably fair to say that, but for the work of Disney and Gold bringing on Eisner and Wells, Disney as a corporate entity probably wouldn't exist today.

  3. I'm not sure if it could be worse actually... what happened was Disney Co was eaten from the inside instead of from the outside. If Disney had been bought, they could still be a cohesive unit, a strong core group of people fighting for Walt's principles, the soul of the company, against the corporate owners who would always be seen as outsiders.

    A corporate owner doesn't want to screw up a new aquisition. Two modern examples, Skype: just bought by Microsoft - they aren't going to make huge fundamental changes and alienate all their users. On the other hand, Digg: one man (Kevin Rose) fundamentally changed & destroyed Digg, and even with him gone, there has been no recovery.

    Eisner drove out the soul of the company from the inside, when he announced it was time to "harvest the brand", and all we're left with is the shell of what was, a company that hasn't done much great in the last 25 years. The upper ranks that used to be manned by the highest talent are now manned by buffoons with MBA's. What Walt built from scratch can't be rebuilt, I'm afraid. What's gone is gone. It takes a great man with a lot of power to build a machine like that, and no corporation would risk their profits by giving one man that much power.

    Note to future Walt's out there: don't go public, ever!


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