More than 1,000 shareholders and their guests will view clips from upcoming Disney movies, watch the quirky, funny commercials used to advertise sports network ESPN and be greeted as they enter the Hartford Civic Center by Mickey, Minnie and other Disney characters.
But the well-planned Disney magic will likely not be enough to soothe shareholders, who have seen their stock languish in recent years and want to know what their company plans to do about it.
Disney chief executive Michael Eisner and other executives know the questions will be tough and are prepared to answer them.
"Are the shareholders better off today? Yes. Are they richer? No. Will they be richer going forward? Yes," said Disney spokesman John Dreyer, summarizing the comments Eisner intends to deliver.
Eisner touched on those same themes in his annual letter to shareholders, when he called the recent performance of the company's stock "disappointing."
"It doesn't work to point out the tremendous value creation during most of the years since 1984 nor the enormous growth of Disney to become a worldwide media company," wrote Eisner, who joined the company in 1984.
The company has also been the subject of rumors about Eisner's leadership and Disney's status as a possible takeover target, given its lagging share price.
Both Eisner and President Robert Iger did not receive bonuses this year because the company failed to reach certain financial targets.
Still, analysts say the current management team still has time to turn the company around before Eisner's job is called into question.
Meanwhile, Disney rejects those rumors and says management is focused on creating assets that will generate future profits.
Analysts say that while Disney will have a tough time in 2002, it should be poised for profit growth next year if the economy continues to rebound.
"I think (Eisner's) going to get up there and say, 'We're addressing the problem,' and they are," said Stuart Linde, an analyst at Lehman Brothers.
Over the past year, Disney has cut its work force by 4,000 people, reduced operating hours and costs at its theme parks and taken other steps to control costs.
Like most media companies, Disney has suffered during the economic recession that cut advertising during the year. But Disney also saw its ABC Television Network, which only a year ago was riding the success of the game show "Who Wants to Be a Millionaire," slip badly in the ratings.
The terrorist attacks of Sept. 11 also severely curtailed tourism. Disney saw attendance at its Walt Disney World Resort in Orlando, Fla., fall 20 percent during the last three months of the year. This year, it remains 13 percent to 15 percent lower than last year's level.
While attendance was up at the Disneyland Resort in Anaheim, Calif., due to the addition of Disney's California Adventure, per capita spending was down about 10 percent.
For fiscal 2001, the company reported a net loss of $158 million, compared with net income of $920 million the previous year. The loss was largely due to a $1.45 billion one-time charge the company took for the closing of its failed Internet portal Go.com, layoffs and the shuttering of some of its Disney Stores.
"We have grown after-tax cash flow by roughly 20 percent a year for the past five years," Dreyer said. "We have completed our large capital expenditures."
The company has also made key acquisitions over the past year. Last July, it bought Fox Family Worldwide for $5.3 billion. The purchase gave it the Fox Family Channel, which it renamed ABC Family, and an interest in Fox Kids Europe.
It also opened a new theme park next to its flagship Disneyland in Anaheim, Calif., and a second park in Tokyo. In March, it will open a second park in Paris and is continuing work on its Hong Kong park, which should open in 2005.
And in January, Disney replaced its programming chief at ABC and both Eisner and Iger said they would become personally involved in improving ratings.
http://accesswdun.com/article/2002/2/198578