Who's Running in the Disney Derby?

By Ronald Grover

NBC Universal (GE ) Chairman Robert Wright joked after hearing the news that "it's Eisner's job that I'm after." Wright was kidding, but for plenty of other media heavyweights, Disney's bombshell that its longtime CEO Michael Eisner will retire when his contract expires in 2006 is serious business.

The surprise announcement will make the Hollywood parlor game of "who's on the rise" a little more interesting than usual. Indeed, the news was barely out before the Tinseltown rumor mill started buzzing about who would be a good choice to run the $30 billion-a-year media giant.

Eisner himself has weighed in by telling The Los Angeles Times that current Disney President Robert Iger is his "preferred choice" and that Iger "would be an excellent guardian of the Disney assets." Those words won't necessarily sway the Disney board, which has been criticized for years for its cozy relationship with the CEO, but it certainly makes Iger the front-runner in the Disney Derby.


  Who else is in the running? The board has been meeting for months on who might make the short list but has made no announcements of its plans. Still, it's almost certain to be taking a good look at some folks. Here's BusinessWeek Online's rundown on some of the likely candidates:

The lead outsider is almost certainly Viacom (VIA ) Co-president Leslie Moonves. He's a genius of the same ilk as Eisner and even Walt Disney himself, all visionaries dedicated to creating world-class entertainment. Moonves brought CBS back from the network graveyard when he jumped there from Warner Bros. in 1995, where he oversaw the creation of such small hits as ER and Friends.

At CBS, he has guided such hits as Everybody Loves Raymond and CSI. Now, he's giving CBS's lowly rated sister network UPN a boost with shows like America's Next Top Model, which features Tyra Banks. Moonves has his hands full, running Viacom's Infinity radio group as well as the networks, but he works for CEO Sumner Redstone, who seems to make sport of driving off his top executives.


  Time Warner's (TWX ) Jeff Bewkes, who oversees Warner Brothers, the WB network, and the company's brace of cable channels, is another top contender. His great strength: a near endless stream of hits at HBO, including The Sopranos, Sex and the City, and Six Feet Under. With ABC a seemingly constant problem for Disney, someone with Bewkes' ability to nurture talent and pick material would be a great choice.

So would News Corp.'s (NWS ) Peter Chernin. He's president of the Fox Entertainment unit, which includes the Fox network, its studio, and its growing stable of cable channels.

Bewkes and Chernin recently signed new contracts, each of which is rumored to contain clauses that would allow an exit to take another high-ranking media job. And with News Corp.'s controlling shareholder Rupert Murdoch already grooming one of his two sons to take over the family business, the top spot at Disney might look pretty appealing for Chernin.


  A more intriguing choice would be Apple (AAPL ) President Steve Jobs, who's also the majority shareholder of Pixar (PIXR ). The computer-animation powerhouse, which made such megahits as the Toy Story flicks and Monsters, Inc. in partnership with Disney, has said it wants to sever its ties with the Mouse House when its 13-year-old distribution arrangement ends. That could happen as soon as next year, after Pixar delivers the final film under the contract.

But Disney controls the rights to sequels of Pixar's early hits, and Jobs could lose millions if Pixar and Disney go their separate ways. Plus, you can bet that control-crazy Jobs wants to be involved in making those sequels. Having the top job at Disney might be packaged with Disney acquiring Pixar, say sources close to both companies.

Former Disneyites Paul Pressler, CEO of Gap (GPS ), and Meg Whitman, CEO of eBay (EBAY ), also merit a look. Both are well-versed in Disney culture and have fans on the board. Pressler, a marketing maven, is in the middle of a difficult turnaround at Gap, while Whitman presides over a company that embodies a level of creativity and vision that the Disney board would no doubt love. Still, neither has the kind of experience in creating entertainment that many of the other potential candidates have.


  So who will the board turn to? That decision will be Disney Chairman George Mitchell's, who said earlier this year that the board was looking into the issue of succession. Iger's fate may well be tied to ratings at ABC, which he has overseen in recent years. With Jobs, it could come down to a renegotiation of the Pixar contract. And lawyers for Bewkes and Chernin have to be reading the fine print of their clients' contracts.

Even so, the board is under pressure to speed up the succession process. The California Public Employees' Retirement System, a longtime Eisner critic, said in a letter "it is not clear to us how a two-year lame duck CEO will benefit shareholders" and encouraged the board to make its succession planning public.

And none of this takes into account the almost certain efforts by dissident former board members Stanley Gold and Roy Disney to mount yet another attempt to topple Eisner before his contract expires. Although Eisner's unexpected plan to step down in 2006 may have taken some steam out of their efforts, it's still likely they'll move ahead with naming their own slate of board member for Disney's annual meeting in early 2005.

Eisner's announcement will clearly spur the kind of buzzing, back-biting, and intrigue that's vintage Hollywood, proving once again that the best entertainment isn't always on the screen.

Grover is BusinessWeek's Los Angeles bureau chief

Edited by Patricia O'Connell