Disney's america theme park case study

This case was written by Sarah Stover, MBA ’97 and Elizabeth Powell, Assistant Professor of Business Administration. It written as a basis for class discussion rather than to illustrate effective or ineffective handling of an administrative situation. Copyright © 2001 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved. To order copies, send an e-mail to dardencases@virginia.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of the Darden School Foundation.

THE THIRD BATTLE OF BULL RUN THE DISNEY’S AMERICA THEME PARK (B)

On September 28, 1994, Disney officials announced the end of the Disney’s America project in Prince William County, Virginia. Two representatives from Disney’s America flew to Richmond to brief Virginia’s Governor George Allen on the decision. The same day, Prince William County officials were notified as well.

Peter S. Rummell, president of Disney Design and Development Company, issued a public statement, saying in part:

We remain convinced that a park that celebrates America and an exploration of our heritage is a great idea, and we will continue to work to make it a reality. However, we recognize that there are those who have been concerned about the possible impact of our park on historic sites in this unique area, and we have always tried to be sensitive to the issue.

While we do not agree with all their concerns, we are seeking a new location so that we can move the process forward. . . .

Despite our confidence that we would eventually win the necessary approvals, it has become clear that we could not say when the park would be able to open—or even when we could break ground.

The controversy over building in Prince William County has diverted attention and resources from the creative development of the park. Implicit in our vision for the park is the hope that it will be a source of pride and unity for all Americans. We certainly cannot let a particular site undermine that goal by becoming a source of divisiveness.1

1 Peter S. Baker and Spencer S. Hsu, Washington Post, “Mickey’s Tactical Retreat; Worried about Its Image,

Disney Co. Stunned State Officials by Giving Up Its Park Site,” Norfolk Ledger-Star, 29 September 1994, A1.

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Rummell stated that Disney would try to build an American history theme park elsewhere in Virginia, but that a site had not yet been selected.

Many Virginia politicians were disappointed, but some tried to remain optimistic. Governor George Allen’s office issued a statement: “I’m committed to a Disney theme park in Virginia and the jobs that will be created thereby. I’m pleased that the Walt Disney Company shares that commitment.”2

Robert S. Skunda, Allen’s Secretary of Commerce and Trade, commented to reporters, “I think they see the likelihood of long-term damage to their image. No company likes to be publicly bashed when they feel as though they are doing something that is worthwhile. . . . The thing that a company values most is its reputation. It has to. Without a reputation a company cannot continue to exist. I think those things drove Disney away from the Haymarket site.”3

Prince William County executive James Mullen said the county would be forced to go through a time of self-examination following Disney’s exit. He stated, “Mainly I’m disappointed for the people in the community who supported the project and for our staff, who put so much time in on this. Disney certainly hasn’t helped our marketing effort. They’ve made it very difficult for us to overcome the perception that this is a place (where) you can’t do a big project without a hassle.”4

Other local politicians were not as generous in their remarks about Disney. State Senator Joseph Benedetti of Richmond stated, “Promises were made that they’d stay, come hell or high water. Whatever they do is going to have to be written in blood next time.”5 State Senator Charles Colgan of Prince William County stated, “I think they broke faith with us.”6

James McPherson, the Princeton history professor and one of Disney’s most vocal opponents, stated, “I’m very happy. It’s good news.”7 McPherson said that he would be happy to help Disney find another location in Virginia that would be less significant historically. He stated, “Some of us would be quite happy to advise them. This has never been an attempt to bash Disney.”8

Over the next few weeks, scores of municipalities wrote newspaper articles and petitioned Disney directly, stating that they would welcome a Disney park in their areas.

2 Ibid. 3 Ibid. 4 Ibid. 5 Alec Klein and Margaret Edds, “Disney Lost Will To Fight; Bad Press, Internal Woes Cited,” Roanoke Times

and World News, 30 September 1994, A1. 6 Ibid. 7 Michael D. Shear and Martha Hamilton, “Disney Packs Up Muskets at Civil War Battlefield,” International

Herald Tribune, 30 September 1994. 8 Ibid.

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In Retrospect Since the decision to halt plans for Disney’s America in Virginia, observers have tried to

make sense in retrospect of the park’s failure. In 1998, Eisner issued a memoir, Work in Progress. In a chapter devoted to the Disney’s America project,9 Eisner freely and openly admits that Disney made many missteps, while still arguing for the vision he had for the theme park. Among the missteps Eisner identified were

• Naming the project “Disney’s America,” which implied the company’s

ownership of U.S. history. He said, “That was unfortunate because we were never interested in a park that merely reflected a Disneyesque view of American history.”

• Failing to “recognized how deeply people often feel about maintaining their communities just as they are. . . . There may have been no collection of people [the Piedmont Environmental Council] in America better equipped to lobby a cause, whether with Congress or government agencies or through the media.”

• Being “blindsided” by the issue of proximity to the Manassas Battlefield Park. Jody Powell’s advice had been that the distance of three miles would be great enough to avoid controversy.

• Believing Disney “could announce the project on [its] own timetable. Our focus on secrecy in land acquisition had prevented us from even briefing, much less lobbying, the leading politicians in the state about our plans as they evolved. The consequence was that we lost the opportunity to develop crucial allies and nurture goodwill.”

• Revealing to the public “a plan that looked relatively complete [which] opened ourselves up to every critic with different ideas about what a park based on American history should and should not include.”

• Making emotional statements that critics latched on to, including being shocked about not being taken around on people’s shoulders and complaining that history in school was boring. Eisner reflects: “My comments made me sound not just smug and arrogant but like something of a Philistine. . . . Looking back, I realize how much my brief moment of intemperance undermined our cause.”

To balance his story, Eisner also recollects his well-meaning intentions for the theme

park, describing his motives as the patriotic and socially responsible vision of a son of immigrants. He wanted visiting Disney’s America to be as multimedia intensive and deeply moving an experience as the U.S. Holocaust Museum. In retrospect, Eisner explained “We saw ourselves as storytellers first and foremost,” who needed advice from historical experts to portray American history “knowledgeably and responsibly.” Working with the advisory group of “open- minded” historians who critiqued comparable exhibits in Orlando was particularly eye-opening: “In our original plan, for example, we’d envisioned recreating a classic twentieth-century steel

9 Michael B. Eisner, Chapter 12, “Disney’s America,” Work in Progress (New York: Random House, 1998)

319-338.

-4- UVA-BC-0178 mill and then putting a roller-coaster through it. To do that, we began to understand, could trivialize and even demean the attempt to portray the steel mill realistically.”

Of his critics, Eisner complains, “By any reasonable measure, this attack on Disney’s

America was dramatically overstated. . . . Much like negative advertising in a political campaign, [their] incendiary claims were effective in influencing public opinion and putting us further on the defensive. I was suddenly the captain of Exxon’s Valdez. . . . By the summer of 1994, opposing Disney’s America had become a fashionable cause célèbre in the media centers of New York City and Washington, D.C. . . . Fairness seemed to have given way to polemics.”

In the end, Eisner explains that financial projections made in late August 1994 “showed

that rather than the profit we’d previously projected for Disney’s America, we were now facing the prospect of substantial losses.” On the cost side, Eisner attributed the losses to the current and future expense of dealing with opponents’ legal challenges, to the carrying costs caused by a projected two-year delay before breaking ground, and to the modifications to the original plans that increased costs by almost 40 percent. On the revenue side, the Disney’s America team now projected a lower price point for tickets and a shorter season at eight months down from nine. According to Eisner, “Now that a dozen members of our team had spent a year living in the towns adjacent to our site, they had a different view. An eight-month season for the park seemed more realistic.”

The revised figures, coupled with the psychic impact of Wells’ death, Eisner’s by-pass

surgery, and Katzenburg’s departure led to the decision to abandon plans for Disney’s America. As Eisner concludes,

I still believed that it was possible to get Disney’s America built, but the

question now was at what cost. . . . [A]fter two weeks of soul-searching, we finally agreed that it wasn’t fair to subject the company to more trauma. The issue was no longer who was right or wrong. We had lost the perception game. Largely through our own missteps, the Walt Disney Company had been effectively portrayed as an enemy of American history and a plunderer of sacred ground. The revised economic projections took the last bit of wind out of our sails. The cost of moving forward on Disney’s America, we reluctantly concluded, finally outweighed the potential gain.

Others interpreted the situation as one in which Eisner himself needed better handling. In

The Keys to the Kingdom, former Washington Post reporter Kim Masters says Eisner’s dealings with the media had suffered since late 1992 when he lost his chief of corporate communications, Erwin Okun, to cancer. “Okun had a shrewd yet avuncular style that worked well with the press,” wrote Masters. Journalist Peter Boyer said of Okun “‘He somehow pushed that button in all of us that said Disney is an honest, good company that meant well. . . . He packaged [Eisner] well without seeming to do so.’” “Eisner said he relied on Okun ‘to counsel, review, berate, encourage, and protect me,’” Masters writes. Okun’s successor, John Dreyer, however, “came from the theme parks. He lacked Okun’s cordiality and treated the press with suspicion bordering on hostility. At the Washington Post, he quickly alienated the very reporters whose

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coverage of Disney’s America would prove most influential.”10 Pat Scanlon, formerly an Imagineer, speculated that Wells might have salvaged the Disney’s America project.

“There wasn’t anybody at a high enough level to keep Michael in his box, [Scanlon] says. “Michael was making public remarks that weren’t helpful. Michael sounded a bit like an abrasive Hollywood producer coming to town. Frank would have shaped public relations because he would have made Michael more aware. Frank was the consummate diplomat.”11 Whatever the cause, Nick Kotz, a member of the Piedmont Environmental Council and

author of the editorial in the Los Angeles Times, observed this about the effects of the Disney’s America theme park controversy: “Undoubtedly Disney had internal reasons for the decision to strike its tent on the Piedmont battlefield. But it had also faced the danger of a Pyrrhic victory. In all probability, it could have prevailed and built its theme park, but it would have suffered serious and perhaps permanent value to its reputation.”12

Despite claims by Eisner and Disney officials to the contrary, as of the writing of this

case, no further plans have been announced for a Disney’s America theme park.

10 Kim Masters, The Keys to the Kingdom: How Michael Eisner Lost His Grip (New York: William Morrow,

2000) 297. 11 Masters, 329. 12 Nick Kotz and Rudy Abramson, “The Battle to Stop Disney’s America,” COSMOS, (on-line journal) 1997,

(accessed on 20 May 2002).

http://www.cosmos-club.org/journals/1997/disney.html