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12/7/2003

Trouble in the House of Mouse

By Meg James, Claudia Eller and Kimi Yoshino
Los Angeles Times

What’s Disney without a Disney?

For denizens of the Magic Kingdom, Walt Disney Co. was stripped of its DNA when Roy E. Disney quit the board of directors. Before his angry resignation last Sunday, he was the on-site symbol of the company’s rich heritage, the last family member on the board of the empire started by his famous uncle. When he attended pitch meetings or gave informal tours at the headquarters in Burbank, Calif., people couldn’t help but notice that he even looked a little like Walt himself.

“Roy is old school. He’s very down to earth, dresses very casually and hangs out with the people on the bottom floor,” said David Spafford, who worked as a Disney animator for more than a decade. Spafford was an 18-year-old errand boy at the studio when he first met Disney.

“He was the last one connected to the family. Now it’s a super-corporation — and only a corporation,” Spafford said.

The 73-year-old Disney’s surprise resignation and blistering critique of Chairman Michael Eisner failed to make a splash on Wall Street. The markets didn’t blink even after Disney’s ally, Stanley Gold, followed suit and stepped down Monday, saying the company’s leadership had lost its way in its pursuit of short-term profit.

But shockwaves rippled through the entertainment empire as employees, theme-park visitors and loyalists absorbed the news.

Many concurred with Roy Disney’s scathing assessment that the company had “lost its focus, its creative energy and its heritage.” Former employees and longtime fans have voiced similar complaints for years, and on some Internet message boards Monday, disgruntled fans lauded Disney’s resignation letter, saying that it read like a laundry list of their concerns about Disney losing its magic under Eisner and his lieutenants.

“They are like vultures right now, tearing off every bit of flesh,” said David Koenig, who wrote “Mouse Tales: A Behind-the-Ears Look at Disneyland.” Koenig and others complained about the lack of charm at the newest Disney theme parks, including Walt Disney Studios Park outside Paris, and about park accidents during the past five years. There was a fatal crash in September on Disneyland’s Big Thunder Mountain Railroad that state investigators blamed on sloppy maintenance.

“These are the symptoms, and Roy Disney is going after the disease,” Koenig said.

The company released a statement Monday downplaying the resignations and condemning the statements.

“It is a disservice to shareholders and to employees that the company faces this distraction at a time when its performance is improving as a result of growth plans and initiatives being implemented by management with board approval,” the company said.

Roy Disney wasn’t always a rabble-rouser. In his early career, he made nature films, among them, “Pancho, Dog of the Plains,” “The Owl That Didn’t Give a Hoot” and an Oscar-nominated short subject, “Mysteries of the Deep.” By his 40th birthday, he was neither well known nor viewed as particularly accomplished. After the deaths in 1968 of his uncle, Walt, and in 1971 of his father, Roy O. Disney — the empire’s business brain — Roy Disney was spurned in his efforts to take a larger role with the company.

He quit in 1977, although he stayed on the board. By 1984, he had grown increasingly frustrated with Walt Disney Co., which he likened to a real-estate company that happened to be in the movie business. The company had let its feature-animation film business, once its cornerstone, deteriorate. So he and Gold at that time decided to orchestrate a shakeup: Roy Disney resigned from the board, sending a signal to investors and Wall Street that something was amiss. The turmoil he ignited eventually swept aside the old regime, paving the way for a new team led by Michael Eisner. Roy Disney returned to the board a few months later.

His second resignation reverberated Monday in the company’s top corporate suites. Even though Roy Disney’s role at the studio had been marginalized in recent years and he had been less active than he had been in past decades, a senior executive said there was no question he would be missed.

“There is such a thing as institutional history,” said the executive, who asked not to be identified. “Roy had a connection to the DNA of the place. And that’s hard to replace.”

Roy Disney was particularly beloved by Disney animators: He rescued the animation division from extinction after Eisner and Paramount Pictures colleague Jeffrey Katzenberg first took over.

“They were going to get rid of the animation department,” said Tom Sito, president emeritus of the animation guild. “They said it was dysfunctional, but Roy put his foot down and said, ‘You can’t do that, that’s the heart of this company.’”

Roy Disney persuaded the Eisner team to invest $10 million in computer-animation equipment, a seemingly minor decision that proved to be a turning point in the company’s fortunes. Within a few years, the company turned out a remarkable string of animated hits, including “The Little Mermaid,” “Beauty and the Beast,” “Aladdin” and “The Lion King.”

“He went to bat for animation, both in terms of financial and creative support,” said veteran Disney animation producer Don Hahn, whose credits include “The Lion King” and “Beauty and the Beast” and his live-action debut, “The Haunted Mansion,” which was the No. 1 movie at U.S. box offices when it opened two weekends ago.

“For me, his leaving has an emotional significance — having a guy walking around who has the family connection to the culture of the company,” Hahn said. The company “is one of those unusual American institutions, where the guy whose name is on the door was still walking the hallways.”

Executives who worked on direct-to-video animated movies would run projects featuring Mickey Mouse, Donald Duck, Goofy and other original characters by Roy Disney to seek his input and make sure the characters were true to his uncle Walt’s vision.

Many visitors at the Disneyland Resort in Anaheim, Calif., expressed disappointment Monday at the news of the resignation, although they added that it was unlikely to deter them from visiting the parks, buying merchandise or watching Disney movies.

“It’s all part of big business,” said Mike Simpson, 35, of San Diego, who was visiting California Adventure with his family. “And in any big business, you’re going to have turmoil.”

Some said they viewed Roy Disney’s departure as part of Disney’s transformation from a family-run, magical company to a mega-corporation.

“I definitely think it’s strayed from what Walt wanted it to be,” said Jeff Cope, 40, of Minneapolis. “I think he was really into the family thing and children.

Without a Disney family member on the board, Cope said, “How can you even call it Disney anymore? Now it’s just a name, a corporation.”

Several tourists took the opportunity to complain about Disneyland’s prices.

“Walt wouldn’t be charging $47 for admission,” said Don Jukich, 64, of El Cajon, Calif. “It costs a small fortune to take a family here.”

Times staff writers James Bates and Richard Verrier contributed to this report.