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The Case for Eisner

How warm was the City of Brotherly Love to Disney (NYSE: DIS  ) CEO Michael Eisner today? Apparently not very, but we'll find out more as the drama continues to unfold at the company's annual shareholders' meeting in Philadelphia.

With various individual and institutional investors vowing to vote against Eisner's board re-election, maybe I should try on some contrarian mouse ears for a change.

The time to come down hard on Eisner and its chummy board may have already run past its expiration date. That venom in 2002 could have been lethal, considering the company's mismanagement of ABC's brief tenure at the top, its failure to brace for a tourism slump, and the scandalous accusations of favoritism leveled at the board.

Things have improved since then, with the shares nearly doubling since its 2002 lows. With the insultingly weak Comcast (Nasdaq: CMCSA  ) buyout offer and Pixar's (Nasdaq: PIXR  ) walkout sting, the entertainment giant has already started to respond to the moved cheese. The financial improvement in fiscal 2003 was obvious, and things are starting to get better in many of the company's businesses.

The blockbuster success of Pirates of the Caribbean: The Curse of the Black Pearl gives Disney the ideal synergistic franchise -- one that can promote its theme park business as well as its live-action studio. Theme parks chief Jay Rasulo has been a welcome addition, with Disney acknowledging that new top-notch attractions are the drivers of growth across its parks, resorts, and cruise businesses.

While ABC is still chasing its peers -- Viacom's (NYSE: VIA  ) CBS and General Electric's (NYSE: GE  ) NBC -- in the ratings book, it's doing so in an improving ad climate, in which all ships shall rise.

Yes, there will be a large amount of abstentions and nay votes cast today, but it's not likely to be enough to catapult Eisner from the company's board. The narrowness of the margin will bear watching. It may send a message. There are some legitimate beefs from the dissidents over compensation levels and the hierarchy of power. However, Eisner's got a strong ally right now -- time.

David and Tom Gardner have some different thoughts on the matter today. Be sure to read them in Time for Eisner to Go?

Where does Disney go from here? Are you a backer of Roy Disney Jr., or do you favor Michael Eisner? All this and more -- in the Disney discussion board. Only on

Longtime Fool contributor Rick Munarriz owns shares in Pixar and Disney. Pixar was singled out as a recommended stock inMotley Fool Stock Advisor. He does not own shares in any other companies mentioned in this story.

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