The mouse that roars

Sporting News, The, Dec 30, 1996 by Steve Marantz

When you wish upon a star, Disney takes your credit card Michael Eisner's dreams come true Thanks to VISA. me and you.

A scene early in The Lion King reveals more about The Walt Disney Company, producer of the animated film, than about large cats. Mufasa, the father lion, and Simba, his son, gaze upon vast plains drenched in golden light.

Mufasa: "Look, Simba. Everything the light touches is our kingdom."

Simba: "Wow ... and this will all be mine?"

Mufasa: "Everything."

Simba: "Everything the light touches. What about that shadowy place?"

Mufasa: "That's beyond our borders. You must never go there, Simba."

Simba: "But I thought a king could do whatever he wants."

In the post-modern economy, one cartel will own everything, including us. Moguls representing energy, food, transportation, health care, communications, entertainment and media will sit at a table the shape of an outstretched palm. The concept of "monopoly" will cease to exist because the cartel will strike it from language, which it will own.

It's premature to predict who will own the world, but among a dozen contenders is Walt Disney Co., the hungry predator drooling behind a Mickey Mouse mask.

Gaze for a moment upon the length and breadth of Disney's $44 billion holdings: filmed entertainment, music recording theme parks and resorts, live theater, hotels retail stores, consumer goods, interactive services and software, and media (television, radio and publishing).

Oh, yes, sports. Disney's cuddly shadow is creeping over sports. In purchasing media conglomerate Cap Cities last year, Disney gained control of ESPN and ABC. Now, when you turn on SportsCenter or Monday Night Football, Disney is in your home. Through ESPN International, Disney is in 160 countries in 19 languages.

Disney not only owns sports media, but it is a producer, in industry jargon, of sports content, too. It owns the NHL's Mighty Ducks, one-fourth of baseball's Angels (eventually to be 100 percent) and Walt Disney World Sports Complex, a 32-acre, indoor-outdoor facility scheduled for completion in Nay. The Orlando complex will play host to amateur events, as well as provide a spring-training site for the Braves. Pro golf, tennis and auto racing will be staples.

Speculation is that Disney also might acquire the NBA Clippers, a sad-sack Los Angeles franchise obscured by the glamorous Lakers. That would leave Disney shy of only an NFL franchise to complete the first ownership grand slam.

Disney's move into sports media and content mirrors other media-entertainment-communications mergers and expansions. Time Warner and Turner Broadcasting, Rupert Murdoch's Fox film and TV, Viacom and Paramount, Westinghouse and CBS, General Electric and NBC, Sony and Columbia Pictures--unions based on the same principle: entertainment and technology need a guaranteed distribution system, and vice versa.

Because sporting events provide a dependable, continuing source of entertainment and stories, Disney ownership may be seen as a harbinger of who will wield the power in sports in the 21st century. Small ownership groups of wealthy individuals increasingly will be displaced by corporate giants with specific needs for providing content. It can't be long before Disney, Time Warner (Braves and Hawks), Tribune Co. (Cubs) and ITT/Cablevision (Knicks and Rangers) are joined by other media-entertainment conglomerates in sports ownership.

Guiding Disney's expansion is the fairest executive of them all--CEO Michael Eisner, 54. When Eisner took command in 1984, Disney was a minor force in film production and revenues from its legendary theme parks were slipping. The company had lost its creative impetus with the death of founder Walt Disney in 1966. But Eisner revived the film unit with a string of animated hits, re-energized the theme parks and broke lucrative new ground with merchandising and retail stores. Sports content and media are part of Disney's recent evolution. The $19.5 billion purchase of Cap Cities in 1995 was Eisner's most dramatic stroke, the result being Disney stock reaching record highs. In 1984, Disney's revenues were $1.7 billion, in 1996, they'll reach $16.5 billion.

Today, Eisner is among a handful of moguls with a household name. Eisner's approach--for which he is paid more than $8 million--is to delegate wisely, spend cautiously and create cleverly. His style is controlling, litigious, starched and unsentimental--traits permeating Disney management. Labor unions are spared no quarter. Female employees at theme parks are monitored for skirt lengths, visitors for unacceptable T-shirt slogans. Disney ideology celebrates family, multiculturalism and moral restraint. The formula appeals to a wide audience.

Yet Eisner has stumbled. He experienced a debacle with huge losses sustained by Disneyland Paris and is struggling with prime-time television and music recording. His abortive attempt to build a theme park in northern Virginia offended a cultural elite, including The Washington Post. Most recently, his second-in-command, Michael Ovitz, former head of Hollywood's top talent agency, stepped down. Ovitz blundered in committing Disney to a film on the exiled Tibetan religious leader, the Dalai Lama, alienating Red China's arthritic hierarchy, jeopardizing marketing goals with one billion untapped consumers. The upside is that Disney is being lauded by human-rights advocates.