Storming the Magic Kingdom

Some may be surprised to learn that the highly rated situation comedy GOLDEN GIRLS is a Disney production. Even more surprising is that films such as DOWN AND OUT IN BEVERLY HILLS, RUTHLESS PEOPLE, and the R-rated OUTRAGEOUS FORTUNE are also Disney productions. STORMING THE MAGIC KINGDOM provides insight into the corporate battle that ultimately resulted in these unlikely offerings from the creators of BAMBI.

Disney’s profits and creativity had been stagnating since Walt Disney’s death in 1966. In 1984 it came to the attention of corporate raiders such as Saul Steinberg, Ivan Boesky, and Irwin Jacobs that the company had vast underused and even unused assets. As they had done with many companies before, these men began buying up Disney stock; to finance his assault, Steinberg formed a company called MM Acquisition Corporation--"MM” for “Mickey Mouse.”

The difference between this and other takeover battles was that defending Disney was like defending the honor of Snow White. Disney executives were innocent of the ways of Wall Street. Relying on the advice of defense strategists at such firms as Morgan Stanley, Disney considered every option, and finally had no other choice but the most distasteful of defenses: greenmail, the repurchase of its own stock from the raiders at a price far above that paid by them.

This battle also brought about the resolution of a longstanding feud between the “Walt side” and the “Roy side” of the company--two factions representing Walt Disney and his brother Roy O. Disney, the company’s co-founders, that seemingly arose out of sibling rivalry over how the company could best be run. The “Roy side” finally won, installing Michael Eisner from Paramount Pictures and Frank Wells from Warner Bros. as Disney’s new leaders. Since 1984, Eisner and Wells have tripled Disney’s profits and have rejuvenated its spirit in a way some say, that would have pleased Walt Disney.