Our undercover spy crashes Disney's Animal Kingdom analyst meeting
If you could anonymously attend an analyst meeting or investor field trip to see how the pros do it, you would get an earful. And the ears are always bigger at the Magic Kingdom.
The opening of Animal Kingdom at Walt Disney World provided an opportunity for the Walt Disney Co to host analysts and investors at the 'happiest place on earth.' Say what you will about Disney, no other company in the world can organize a production like the Mouse. When it comes to analyst meetings, this was the hottest ticket of the season; and the company didn't disappoint.
'It's the Titanic of analyst meetings,' said one enthusiastic attendee. 'The schedule's jam-packed with adventure. If awards were given for analyst meetings, this presentation would take best direction, best costuming, best script, and best use of interactive media.'
The cast of corporate stars included CEO Michael Eisner along with Roy Disney. ABC's Peter Jennings beamed in via satellite to address analysts from behind his news desk. Supporting players included a score of senior executives such as Disney COO Sandy Litvack, ABC president Bob Iger and Steve Bornstein, president of ABC Sports and CEO of ESPN. Even chief animator Glen Keane was on hand. The heads of Disneyland, Disney World and Disneyland Paris made presentations. In all, 25 executives either spoke or contributed video clips, dispelling any worries that Disney has a dearth of executive talent.
While the event began on Monday evening, the marathon of formal presentations was squeezed between noon and 6 pm on Wednesday, April 23, prompting one attendee to voice a complaint unprecedented for an analyst: 'It's total information overload.'
'We showcased our largest and fastest growing businesses,' says Wendy Markus Webb, VP of investor relations at Disney. 'If we went through every single part of the company, it might have been three times as long.'
Behind the scenes - or 'backstage' - Sonja Beals, IR manager and speech-writer for the show, was fine-tuning late into the morning on the day of the meeting. 'Partly because of the nature of the event,' says Beals, 'it was like making last minute changes before the premiere of a show.'
Complicating matters, however, Richard Nanula, the company's CFO, had announced a week earlier that he would leave Disney to become CEO of Starwood. Because Nanula had been slated as the master of ceremonies for the event, at the eleventh hour Disney's IR department had to reshape the meeting - a meeting which had been in the planning stages for four months.
Instead, Michael Eisner and Sandy Litvack guided the meeting. Referring to Nanula's departure, Eisner quipped, 'I just put a call into Bill Marriott to ask him who he wanted me to choose as our next CFO.' (Disney had been the training ground for another hotel industry CEO in addition to Nanula: Steve Bollenbach left Disney's CFO position in early 1996 to run Hilton.)
With analysts staying at on-site resorts, Disney spent the first day-and-a-half showcasing Animal Kingdom, this summer's new animated feature, Mulan, and an interactive, indoor theme park, DisneyQuest (see over).
'We had the analysts in our world, and we wanted to let them experience some of our newest products,' says Webb. 'We also knew investors wanted to see the leaders of each of the divisions. Therefore, we chose to conduct extensive management presentations in a meeting on Wednesday afternoon.'
Variety show
So much for the 30-minute attention span rule, a rule rarely broken by Disney imagineers when designing attractions for the parks. To add variety to the meeting, the live presentations were intermingled with clips of new films, commercials, the Jennings satellite interview, and a demonstration by animators of new techniques in the company's core creative driver.
The meeting's backstage 'team' included lighting specialists, music technicians, computer graphic artists, and set designers. 'We have some of the most fabulous entertainment resources in the world,' says Webb, 'so of course we were going to use them.'
As management announced earnings up 22 percent over the previous year's quarter, a new share buy-back authorization, and a much-anticipated three-for-one stock split at the climax of the meeting, Disney's quarterly results threatened to overshadow the opening of its newest park. Still, Disney's IR team succeeded in keeping analyst attention focused. 'They gave more information than ever before,' said one analyst. 'It's the best they've ever done.'
Disney addressed many analysts' concerns, including the integration of ABC, the turnaround at Disneyland Paris, and the succession issue. 'More than anything, they showed us that they have plenty of savvy managers,' said a large holder. Disney also identified key drivers of future growth.
'This was our chance to really let the analysts kick the tires,' says Webb. Kick they did, with passes to the parks and performances at adult-oriented Downtown Disney by Pat Benatar (who sang Hell is for Children) as well as Stevie Wonder.
Big rig
The investor relations department also brought in a 'Big Rig' containing Disney's vast array of consumer products: Mickey Mouse, Winnie the Pooh, Simba and the upcoming Mulan characters. Inside the 18-wheeler, it was easy to see what makes Disney the world's third largest toy producer (behind Mattel and Hasbro, which both own licenses for Disney character toys) and the fourth largest apparel company in the world.
And, of course, there was the new Animal Kingdom park. 'It's the most beautiful park they've built to date,' pronounced an enthusiastic analyst spouse, adding, 'We're exhausted.' Disney is betting that, over time, Animal Kingdom will add another half day to its guest visits, generating more revenue at the resort.
Eisner even got an ovation at the end of the conference - a rarity for analyst meetings. And after he made the case for a higher multiple, analysts and investors went home and ran up the stock the next day. Like the climactic scene in Peter Pan, where applause brings Tinkerbell back to life, the analysts seemed to have been taken in with the production. 'As long as they keep earnings strong,' said one young analyst, 'then I believe.'