- The Washington Times - Thursday, February 9, 2006

LOS ANGELES — One day last week, Robert A. Iger stood outside the Walt Disney Co.’s executive office building and watched as it was renamed in honor of his predecessor, Michael D. Eisner.

The next day, Mr. Iger made his own mark in Disney history by announcing the purchase of longtime partner Pixar Animation Studios Inc. for $7.4 billion in stock.

In one bold move, Mr. Iger showed that he has his own vision for Disney and that he could do what Mr. Eisner could not — get along with the mercurial Steve Jobs, Pixar’s chief executive officer. The feud nearly scuttled the profitable relationship between the two companies.

It was Disney’s biggest deal since Mr. Eisner’s purchase 11 years ago of Capital Cities/ABC. The $19 billion acquisition brought Mr. Iger, then president and chief operating officer of Capital Cities/ABC, to Disney.

This week, Mr. Iger engineered another bold move by merging Disney’s ABC Radio network and 22 stations with Citadel Broadcasting Corp. The $2.7 billion deal created the nation’s third-largest radio group.

Mr. Iger spent 20 years sharing power with such strong executives as Mr. Eisner and Capital Cities/ABC Chairman Tom Murphy. When he ascended to the top spot at Disney last October, some questioned how he would handle being in charge. The Pixar and Citadel deals served notice that he is not afraid to make big moves.

“There are very few executives who can be a No. 2 guy for 20 years and then suddenly be comfortable making big, empire-changing decisions five months later, and this is one of those guys,” said Laura Martin, an analyst with Soleil-Media Metrics.

Mr. Iger displayed his independence soon after taking over. He dismantled Mr. Eisner’s strategic planning department that had frustrated many Disney department heads by centralizing decision-making. The move put authority back into the hands of executives, improving morale.

Mr. Iger also reached a truce with dissident ex-board members Roy E. Disney and Stanley Gold, who had led a fight to oust Mr. Eisner and objected to Mr. Iger as his hand-picked successor.

Just 12 days after becoming CEO, Mr. Iger strode onto a San Jose, Calif., stage and stood with Mr. Jobs to announce that Disney would sell episodes of its hit ABC shows for use on Apple Computer’s new video IPod.

But it was buying Pixar that most clearly drew the line between Mr. Iger and his predecessor.

Analysts praised the move as a way to restore Disney’s luster. While Pixar has had six box office hits since “Toy Story” was released in 1995, Disney has struggled, producing some modest successes and a number of flops.

The Pixar acquisition immediately vaults Disney to the pre-eminent position in animated film, Deutsche Bank analyst Doug Mitchelson wrote recently.

Mr. Iger also gets credit for not turning his back on Mr. Eisner. In his first letter to shareholders issued earlier this month, Mr. Iger praised Mr. Eisner for his 21 years of leadership.

“He’s done it in the right way,” media analyst Harold Vogel said of Mr. Iger’s transition to power. “He’s smoothed all the ruffled feathers.”

Mr. Iger still faces challenges, including the daunting task of maintaining Pixar’s unique corporate culture while injecting some of that culture into Disney’s own animation unit.

Analysts say Mr. Iger could excel, given his experience working at two companies that were taken over by larger entities.

A close examination of the purchase agreement showed just how careful the companies were being in the handling of Pixar’s character. A special committee will be formed to meet at Pixar headquarters in Emeryville, Calif., for a full day at least every other month to discuss cultural issues.

“Disney in a way is a blend of many cultures,” Mr. Iger said after the Pixar deal was announced.

The sports cable network ESPN, for instance, has maintained its headquarters and management in Connecticut long after being acquired as part of the Capital Cities/ABC deal.

Pixar will keep following its quirky compensation practice — including not having contracts for its employees — for at least five years following the acquisition, according to the documents.

Another untouchable was the arch that marks the entrance to Pixar’s campus. A clause in the deal states, “The Pixar sign at the gate shall not be altered.”

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