Book Review: Storming The Magic Kingdom

This book by John Taylor, delves into the state of Walt Disney Productions during the 1980s. Starting with a brief history of the founders, Walt and Roy Disney, it organizes primary source documents, interviews, and court proceedings to recreate the conversations and actions of principal agents involved in running, investing in, and financing the purchase of the company.

Taylor does an outstanding job in creating the tension that permeates the book. Tension between the competing Disney family members 1) Walt Disney(the creative type) verse Roy Disney(the business type) 2) Ron Miller(Chief Executive Officer) and Miller(Walt Disney's daughter and Ron Miller's wife). Tension among management and shareholders over poor returns from the film division resulting in a decline in the ticker price... DIS. Tension within the company's board of directors for developing a solution that would benefit the numerous stakeholders. And finally, Tension between maximizing profits for shareholders at any cost and retaining the American family values that made it successful in the postwar period. The tension builds up and climaxes in 1984.

After the postwar period, several shifts began to take place in America that lead to changes in movie viewing tastes, investment techniques, and management style. For these and other reasons, the 1980s often are characterized as the start of the paradigm shift. However, I view it as merely the point in time that people suddenly noticed the trend becoming the norm similar to the Italian Renaissance.
The Disney family, management team, and film producers especially failed to notice this trend and made decisions as if Walt Disney himself were still alive. This notion was shattered by Saul Steinberg, a corporate raider, filing a 13-D with the SEC to declare his intent to take a position in Disney.

Factions compete for power within management, to control majority ownership of the company, and gain representation on the board of directors. The reader and Disney executives get a crash course in terms like greenmail, severance packages(golden parachutes), high yield bonds, proxy fights, legal suits, the importance of networks, and acquisitions. Stanley P. Gold, Ivan Boesky, William "Bad Bill" Simon, Michael Milken, Irwin "the Liquidator" Jacobs, and Sid Bass all ran circles around Ron Miller. Miller weeps, as the board of directors installs a new executive team that undestands the environment Disney found itself in(catering to the whims of The Street... and the company's largest investors, the Bass family.

I literally read this book cover to cover over the extended Memorial Day Weekend and could not put it down. To me, this era is fascinating and pairs well with Barbarians at the Gates...and has guest appearances from your favorite Wall Street characters featured in Den of Thieves.

Are you interested in investing in Disney and want a brief history? Read this book. Interested in examples of stakeholder vs shareholder theory? Read this book. Interested in the film or real estate industry? Read this book. Interested in learning about Mergers and Acquisitions?! READ THIS BOOK!