Pity John Dreyer. He’s the guy who has to take the phone calls every time a scandal involving Walt Disney Co. pops up.
Dreyer, Disney’s head of corporate communications, has been exceptionally busy of late. The past year or so has witnessed a snowballing stream of negative media coverage about the entertainment giant.
“One might question whether good ol’ Joe Btfsplk (a character in the comic strip ‘L’il Abner’ who walked around with a permanent black cloud over his head) has taken up permanent residence in beautiful downtown Burbank,” said David S. Leibowitz, an analyst and portfolio manager for the Burnham Dow 30 Focused Fund in New York.
One of the latest black eyes came in the form of Patrick Naughton, a former Infoseek Corp. executive who reportedly was being groomed to eventually run all of Disney’s Internet operations. Naughton was arrested at the Santa Monica Pier in mid-September for allegedly soliciting sex from an FBI agent posing as a 13-year-old girl.
The Naughton mess is only one in a string of P.R. catastrophes for Disney. The company was blamed for an ill-advised promotion on one of its locally owned radio stations in which morning-show hosts gave away a “black hoe” (the garden implement) to contest winners, infuriating black activists because of the implication that a black prostitute would be the prize.
There also was the messy departure of Jamie Tarses from ABC (a unit of Disney); a planned exhibit at Disney World calling Jerusalem the capital of Israel, enraging Arabs; the Jeffrey Katzenberg lawsuit, in which it was revealed that Disney Chief Executive Michael Eisner had referred to his ex-studio head as a “little midget”; a brouhaha over talk-show hosts on another local Disney-owned station making disparaging remarks about the Exposition Park neighborhood; and so on.
Dreyer, who oversees a staff of six in Disney’s corporate communications department, says this kind of coverage just comes with the territory. The Disney name is powerful enough to draw millions to its entertainment offerings and merchandise, but that comes at a price.
“The flip side is that if something happens that even tangentially involves us, like the Patrick Naughton case, it receives more publicity than it would if it were the XYZ Company,” Dreyer said.
Others agree, saying that it’s simply Disney’s turn for the shredder.
“They’re targeted so much because their brand is so strong,” said Don Spetner, communications chief with SunAmerica Inc. “It’s their turn in the barrel. They’ve had such good press for so long, and when things go bad, the media can turn on you.”
But while Disney is universally lauded for its ability to promote its products, its skills at crisis communications are sometimes called into question. Amid the stream of negative stories about the company, the phrase “Disney officials declined comment” is a nearly constant refrain.
“The problem with saying ‘no comment’ is that you’re allowing other people to define you,” said Michael Sitrick, chairman of crisis communications firm Sitrick & Co. in Century City. “Generally, the lawyers are going to tell you to say no comment. But that doesn’t mean the media aren’t going to find people, who often don’t know what they’re talking about, to comment about you.”
Disney’s hands-off policy also tends to frustrate reporters, eventually generating a considerable reservoir of ill will among the media.
“Reporters are like everybody else, they have a job to do. You’re making their job more difficult (by failing to comment),” Sitrick said.
Sitrick is quick to point out that he isn’t second-guessing Disney’s handling of the Naughton affair and other crises; without all the facts, it’s impossible to judge whether a P.R. problem is being handled correctly, he said.
Dreyer denies that he and his staff give “no comment” as a reflexive response to media calls. He points out that in the Naughton case, any negative comment by the company might have jeopardized Naughton’s civil rights which would have led to a call from Naughton’s lawyer and criticism from the media.
“We will comment when we think it is appropriate, but we are not afraid or embarrassed to decline to comment if we think it is in the best interest of the organization,” Dreyer said.
Does all the bad publicity have any impact on investors? That’s more than a passing question given that in the midst of the scandals, Disney’s once-spectacular stock has been stagnant. Just last week, the company was trying to win back the confidence of investors at Merrill Lynch & Co.’s entertainment conference in L.A., even as op-ed pages were still screeching about the Jerusalem blunder.
Dreyer says the negative coverage has had no effect whatsoever on Disney’s image. He points to an online poll taken in September for the Wall Street Journal by Harris Interactive Inc., in which Disney was ranked the 10th-best company in the nation in terms of corporate reputation.
Leibowitz, who likens Disney’s current situation to Queen Elizabeth II’s “Annus Horribilis,” says you have to look at the seriousness of the image problem to assess its impact on investors. And Disney’s problems, while seemingly endless, aren’t that serious.
“Most of these items are of a personality or political-sensitivity nature. If Disney releases a tremendously successful movie or cartoon, or anything else that restores luster, most of these items would pale by comparison,” Leibowitz said. “When (public opinion) turns, it will turn on a dime, and the company will likely become a Wall Street darling again.”
Assistant Managing Editor Dan Turner writes a weekly column on marketing for the Los Angeles Business Journal.
