Feb. 15–Brian Roberts and Michael Eisner wear neatly tailored suits to work, but they may as well wear armor. People who know the two say both men will fight fiercely to get what they want.

With his bid for Disney, Roberts, chief executive officer of Comcast Corp., has launched a grenade into the world of Eisner, who for 20 years has ruled Disney. The ensuing battle could end quickly with either Comcast pulling out or Disney saying yes.

Or, it could take more than a year if a bidding war erupts or Disney digs in its heals and Comcast bypasses the Disney board and goes directly to shareholders. But for now, Comcast’s proposal, initially valued at $66 billion, is in the hands of the Disney board, which said last week that it would evaulate it.

“The ball is in their court,” Roberts said Friday.

If the Disney board rejects the offer, Comcast could decide to raise its bid, and this is what many analysts expect.

Already, both sides have lined up their teams that will be providing advice on financial, legal and strategic issues, such winning over shareholders. Roberts has Comcast Cable president Stephen Burke, a former Disney executive, at his side. Dealing with Congress and regulators will be Comcast executive vice president David L. Cohen, who rushed from Wednesday’s New York news conference announcing the deal to Washington to meet with government officials.

Roberts also has brought back the investment banking team of Morgan Stanley, J.P. Morgan, and the Quadrangle Group that helped him win AT&T Corp.’s cable business in 2002. As extra ammunition, he’s also brought in Felix Rohatyn who, with Steven Rattner of Quadrangle, put together Viacom’s $10 billion takeover of Paramount in the early 1990s. “These guys are great financial operators, they’re great corporate operators, and they’re great deal-makers,” said Jim Cramer, a former hedge-fund manger who cohosts a CNBC talk show.

Eisner, too, has brought in some heavy-hitters. He’s hired Goldman Sachs and Bear Stearns to counsel him, as well as high-powered New York lawyer Martin Lipton.

After that, though, the Eisner coporate team starts to look a little shaky, said Kevin Calabrese of Argus Research.

A string of executives, including Comcast’s Burke, have left Disney in part because of struggles with Eisner. Roy Disney, nephew of company founder Walt Disney, is leading a drive to oust Eisner from the board, arguing that he has destroyed the company’s creative heritage as home of Mickey Mouse, Snow White and The Computer Wore Tennis Shoes.

“You’ve got a split at the top of Disney right now,” Calabrese said. “The struggle at Disney has been over what is the driving force. Is it Eisner’s group, which represents the business faction, or Roy Disney and his people, who believe they represent the creative side.”

So far, Disney’s board appears to be trying to support Eisner. George J. Mitchell, the former U.S. senator brought in to try to improve corporate governance at Disney, defended Eisner to analysts meeting with Disney executives this week. Mitchell said he disagreed with Institutional Shareholder Services, a company that advises large investors how to vote their shares and recommended that clients not reelect Eisner to the board.

“My belief is that the specific recommendation with respect to Mr. Eisner is based upon a perception that never fully existed as described,” Mitchell said at the meeting, according to the Associated Press. “But to the extent that it did exist, has been completely changed and does not reflect the current reality.”

But the perception that Roberts is a far superior manager to Eisner allows the Comcast CEO to act boldly, Cramer said. Roberts seemed to time his announcement Wednesday that he was making a public offer for Disney, after Eisner had declined such a possibility privately, for maximum embarrassment in the Magic Kingdom. Disney executives had hoped to spend the day gloating about their strong earnings at the analysts’ meeting but instead were forced to deal with Comcast questions.

“It’s so smashmouth and so confident,” Cramer said. “I love it.”

If Disney’s board turns down the offer, Comcast could take their proposal directly to shareholders through a vehicle known as a consent solicitation. Comcast has not said whether it would do that.

Analysts are also wondering what the other interesting characters in this story will decide to do. Will Microsoft, which owns 7.4 percent of Comcast’s shares, step in to help the Philadelphia cable company sweeten its bid? Will Harvey Weinstein, who runs movie studio Miramax for Disney and has feuded with Eisner himself, go public with his opinion? Will Roberts try to court Steve Jobs, whose animation company, Pixar, created such hits as Finding Nemo with Disney but recently decided not to renew their deal?

Roberts and Eisner both will press their cases in Washington, where increasing media consolidation has become a hot-button issue. Consumer advocates vow to fight Comcast’s offer, saying such concentration hurts democracy. Most observers, however, believe Comcast will be able to overcome any regulatory concerns.

“It will be house-to-mouse combat on this one in Washington,” said Jeff Chester, executive director of the Center for Digital Democracy in Washington. “We intend to crank up the political pressue on this deal and mobilize … opposition.”

Ellen Goodman, a media law professor at the Camden campus of Rutgers University, agreed that the issue could touch a nerve in Washington. About one million people wrote to Congress and the Federal Communications Commission recently when the FCC tried to ease media ownership rules.

“What it exposed was perhaps this latent conern about media concentration,” Goodman said. “So there will be regulatory concerns, and they’ll have hearings on it, and it will probably be a circus.”

By Miriam Hill and Patricia Horn

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(c) 2004, The Philadelphia Inquirer. Distributed by Knight Ridder/Tribune Business News.

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