Disney Learns to Crawl

The media circus has moved on. For Disney (NYSE: DIS) supporters, that's welcome news. Now, the healing process can begin. After CEO Michael Eisner received an embarrassingly huge 45% of the shareholder vote against his board retention earlier this month, it's just as well. The clotting process is going to take awhile.

Yesterday, the six state pension funds that sided with the dissidents penned an open letter to Disney. They want a meeting with the company's entire board to see how serious its complaints are being taken. While the institutional investors see Eisner and George Mitchell swapping board titles as a positive move, they want to make sure it's the first step in the realization process that Disney has not lived up to its potential in recent years.

Both sides need this meeting. It's not just because they all have money riding on the future of the company's growth. That's a given. However, the funds gone gadflies need to know that their flexed muscles matter. Meanwhile, Disney can use a slap of brutal honesty.

The way Disney has deflected the criticism by faulting the bothersome economy has grown tired. The media might buy it, but these pension fund managers sure won't. Whether Disney believes its own excuses or not, these interested institutional investors will be the first to point out how that does not explain Disney's relative underperformance within its trying sectors.

If broadcasters are slumping, how did Disney get lapped by Viacom's (NYSE: VIA) CBS, General Electric's (NYSE: GE) NBC, and Fox (NYSE: FOX)? If the company is shuttering its Disney Stores why are new retailers there to take up the vacant leases? If theme parks are hamstrung how do you factor in rivals like Cedar Fair (NYSE: FUN) or smaller regional parks like Holiday World that have grown their turnstile clicks every year with local and out-of-town patrons?

The company's fundamentals are getting better right now. That's why Eisner would be best served to meet with the institutional dissidents as a way to not only step out of the ill-advised boardroom head nodding for a necessary reality break, but just as importantly, to buy his tenure some time.

Winding that Mickey Mouse watch will work wonders that way. Nothing happens if the hands don't move.

Do you think Eisner has seen the worst of the dissident wrath, or was this month's alarming vote simply the beginning? How would you fix Disney or capitalize on its assets? All this and more -- in the Disney discussion board. Only on Fool.com.

Longtime Fool contributor Rick Munarriz owns shares in Disney and Cedar Fair. He's a regular at the parks, usually with FastPasses and a box of popcorn in hand.