Michael Eisner 2.0 Will See You Now

The former Disney chief has reinvented himself as a New Media mogul

By Ronald Grover

It didn't take Kathleen Grace long to realize that Michael Eisner had become a New Media mogul. In Los Angeles with her business partner last spring to pitch an online series to the former Walt Disney Co. (DIS ) chief executive, Grace was surprised when Eisner whipped out a notebook filled with suggestions to improve an existing sitcom that the duo were already showing online. Within weeks, Grace's Dinosaur Diorama Productions Inc. had signed with Eisner's five-month old Vuguru studio to produce The All-For-Nots, an online series centered around musicians on tour. "It's kind of like The Monkees," says Grace. "I think that struck a chord with Michael."

Can a 65-year-old former Old Media lion recast himself as an online power player? He can if he's got 40 years of entertainment contacts, collected more than $1 billion from cashed-in Disney options, and, most important, still has the hunger to prove wrong the critics who hounded him out of his job in 2005. It didn't take long for Eisner to back a bona fide Internet hit: the teen angst drama Prom Queen. Premiering last April, the Web series is made up of 80, two-minute-long episodes that Eisner loaded with advertisements and product placements.

Eisner's still smallish media empire could grow sizably on Aug. 30. That's when shareholders of baseball card maker Topps Co. (TOPP ) are scheduled to vote on a $385 million takeover bid Eisner is making with private equity firm Madison Dearborn Partners. It's hardly a slam dunk: Even though rival bidder Upper Deck Co. has dropped out, some dissident shareholders continue a stop-Eisner campaign, claiming that he is underpaying for the company. If Eisner prevails, he'd have access not only to baseball cards and stats, but also trading cards and stickers for other Topps titles such as Star Wars, The Lord of the Rings, and Teenage Mutant Ninja Turtles.


Eisner hasn't been talking about his plans for Topps. But it would join a hodgepodge of properties that Eisner has bought, including Team Baby Entertainment, which makes sports videos for toddlers. Content from both Team Baby and Topps are likely fodder for online shows that Eisner's Vuguru studio could make. And those shows could eventually find their way to Veoh.com, a fast-growing video site in which Eisner has invested. Does this start to look a little like Disney, with a studio, kiddie videos, and Veoh standing in for ABC? "He's taking what he experienced and bringing it into the 21st century," says Dmitry Shapiro, Veoh's founder.

Of course, no one would ever confuse Eisner's operations today with Disney in size and glitz. Eisner operates with fewer than a dozen executives from a two-story Beverly Hills building that houses a Coffee Bean shop. Famously tightfisted, Eisner was drawn by the low cost of entry to the Internet business. He paid only $200,000 for the rights to Prom Queen, says one of its creators, Ryan Wise.

It would be hard for anyone in New Media to match Eisner's Rolodex, but his business contacts also became a hot-button issue in the bid for Topps. Dissident shareholders have claimed--accusations that a Delaware judge later rejected--that the card company didn't get the best deal because Eisner negotiated with board member Steve Greenberg, who started the Classic Sports Network that Disney's ESPN bought in 1997.

Even if the Topps deal goes south for Eisner, he could still end up a winner: according to filings, he stands to get a chunk of a $12 million breakup fee. That kind of savvy could very well be why people still want to hear what Eisner has to say and why he is drawing six-figure fees on the lecture circuit. One recent topic: "Leadership: Success by Failing and Other Paradoxes."

Grover is Los Angeles bureau chief for BusinessWeek

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