It has taken many years, but the man he called his “golden retriever” and more derisively the “little midget”, has finally stumbled — and stumbled big time. Even better, it is exactly the kind of public company blunder that Eisner used as an excuse to not promote Jeffrey back when Katzenberg was still a knight in Mickey’s Kingdom. Eisner never felt that Katzenberg was up to the task of managing a public company.

When DreamWorks posted its first-quarter earnings on May 11th, the DreamWorks Animation CEO had to admit that the company had overestimated sales of “Shrek 2”. This was bad for many reasons. First, he wasn’t just a little off, but 25% — no rounding error. Second, it raised questions why it took so long for the company to recognize and admit the miscalculation. Third, it hit DreamWorks in the pocketbook, dragging its share price down and shaking investor confidence. Fourth, it comes at a particularly poor time for DreamWorks as a secondary offering is in the works. Fifth, the person in charge of selling DVDs for DreamWorks is Ann Daly, a former Disney employee who quit the mouse to work for Jeffrey (an unforgivable sin in Eisner’s world).

Of course, there had been earlier mis-steps for DreamWorks and Katzenberg. “Sinbad: Legend of the Seven Seas” was a bomb, but that had been largely hidden from public view because DreamWorks was a private company. Eisner had never had that opportunity with his miscues; even his most private discussions have become public fodder due to lawsuits from disgruntled investors and board members, things that Katzenberg hasn’t previously had to deal with.

Yes, May 11th must have been a wonderful day for Michael Eisner … only topped by May 31, the day that the Wall Street Journal published Katzenberg’s picture with the headline “How DreamWorks Misjudged…” You have to imagine that this article was emailed and faxed to and from Eisner’s office all day and how Eisner must have fantasized about how his former protege was dealing with it all. Yes, revenge is a dish best served cold.

Enjoy the day Mr. Eisner, it has been a long time coming.

Technorati Tags: big business

This entry was posted on Tuesday, May 31st, 2005 at 10:31 pm by Insider and is filed under Brilliant, but uncategorizable, How Not To Succeed In Business. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.