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234 Chapter Nine
Case 9-1
Disney's America Theme Park: The Third Battle of Bull Run
When you wish upon a star, makes no difference
who you are. Anything your heart desires will come
to you. If your heart is in your dreams, no request is
too extreme
-Jiminy Cricket
On September 22, 1994, Michael Eisner, CEO
of the Walt Disney Company, one of the most
powerful and well-known media conglomer-
ates in the world, stared out the window of
his Burbank office, contemplating the current
situation surrounding the Disney's America
theme park. Ever since November 8, 1993,
when The Wall Street Journal first broke the
news that Disney was planning to build a
theme park near Washington, D.C., ongoing
national debate over the location and concept
of the $650 million park had caused tremen-
dous frustration. Eisner thought back over the
events of the past year. How could his great
idea have run into such formidable resistance?
I
la
th
W
children dressed as Dalmatians had appeared
in a parade that was filled with pro-Disney sen-
timent. Eisner was particularly struck by the
contrast between the two pictures: one show-
ing an anti-Disney display from the National
Mall protest and another of Mickey and Minnie
Mouse being driven through the streets of
Haymarket during the exuberant community
parade.
Despite the controversy depicted in the
press, on September 21, Prince William County,
Virginia, planning commissioners had recom-
mended local zoning approval for Disney's
America, and regional transportation officials
had authorized $130 million in local roads to
serve it. It appeared very likely that the project
would win final zoning approval in October.
At the state level, Virginia's Governor George
Allen continued his strong support of the
park's development.
Over the past three weeks, however, Eisner
had been ruminating over a phone call he
received in late August from John Cooke,
president of the Disney Channel since 1985.
Although Cooke had no responsibility for
Disney's America, he had more experience in
the Washington, D.C., political scene than any
other of Disney's highest-ranking managers
and was one of Eisner's most trusted execu-
tives. Cooke was not encouraging about the
park's prospects. Quite familiar with many of
the park's opponents, he believed they would
not give up the fight under
any
circumstances.
Given the anti-Disney coalition's considerable
financial resources, the nationally publicized
anti-Disney campaign could go on indefinitely,
inflicting immeasurable damage on Disney's
fun, family image. Cooke advised Eisner to
think very seriously about ending the project.
Since the mid-1980s, Eisner's business strat-
egy was to revitalize Disney by broadening its
le
D
THE CONTROVERSY COMES
TO A HEAD
pc
th
fri
the
de
cha
Eisner's secretary had clipped several news-
paper articles covering two parades that took
place on September 17. In Washington, D.C.,
several hundred Disney opponents from over
50 anti-Disney organizations had marched past
the White House and rallied on the National
Mall in protest of the park. On the same day in
the streets of Haymarket, Virginia, near the pro-
posed park site, Mickey Mouse and 101 local
Не
set
had
сер
bel
of c
tha
Source: This case was written by Elizabeth A. Powell, Assistant
Professor of Business Administration, and Sarah Stover, MBA 1997.
It was 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.
"The
Masi
p. 29
234 Chapter Nine
Case 9-1
Disney's America Theme Park: The Third Battle of Bull Run
When you wish upon a star, makes no difference
who you are.
Anything your heart desires will come
to you. If your heart is in your dreams, no request is
too extreme
- Jiminy Cricket
On September 22, 1994, Michael Eisner, CEO
of the Walt Disney Company, one of the most
powerful and well-known media conglomer-
ates in the world, stared out the window of
his Burbank office, contemplating the current
situation surrounding the Disney's America
theme park. Ever since November 8, 1993,
when The Wall Street Journal first broke the
news that Disney was planning to build a
theme park near Washington, D.C., ongoing
national debate over the location and concept
of the $650 million park had caused tremen-
dous frustration. Eisner thought back over the
events of the past year. How could his great
idea have run into such formidable resistance?
children dressed as Dalmatians had appeared
in a parade that was filled with pro-Disney sen-
timent. Eisner was particularly struck by the
contrast between the two pictures: one show-
ing an anti-Disney display from the National
Mall protest and another of Mickey and Minnie
Mouse being driven through the streets of
Haymarket during the exuberant community
parade.
Despite the controversy depicted in the
press, on September 21, Prince William County,
Virginia, planning commissioners had recom-
mended local zoning approval for Disney's
America, and regional transportation officials
had authorized $130 million in local roads to
serve it. It appeared very likely that the project
would win final zoning approval in October.
At the state level, Virginia's Governor George
Allen continued his strong support of the
park's development.
Over the past three weeks, however, Eisner
had been ruminating over a phone call he
received in late August from John Cooke,
president of the Disney Channel since 1985.
Although Cooke had no responsibility for
Disney's America, he had more experience in
the Washington, D.C., political scene than any
other of Disney's highest-ranking managers
and was one of Eisner's most trusted execu-
tives. Cooke was not encouraging about the
park's prospects. Quite familiar with many of
the park's opponents, he believed they would
not give up the fight under any circumstances.
.
Given the anti-Disney coalition's considerable
financial resources, the nationally publicized
anti-Disney campaign could go on indefinitely,
inflicting immeasurable damage on Disney's
fun, family image. Cooke advised Eisner to
think very seriously about ending the project.
Since the mid-1980s, Eisner's business strat-
egy was to revitalize Disney by broadening its
THE CONTROVERSY COMES
TO A HEAD
Eisner's secretary had clipped several news-
paper articles covering two parades that took
place on September 17. In Washington, D.C.,
several hundred Disney opponents from over
50 anti-Disney organizations had marched past
the White House and rallied on the National
Mall in protest of the park. On the same day in
the streets of Haymarket, Virginia, near the pro-
posed park site, Mickey Mouse and 101 local
Source: This case was written by Elizabeth A. Powell, Assistant
Professor of Business Administration, and Sarah Stover, MBA 1997.
It was 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.
Government Relations 235
brand into new ventures. Although promising
at first, now the wisdom of some of the ven-
tures seemed less certain. The worst example,
Euro Disney, the new Disney park located out-
side Paris, continued to flounder. The num-
expertise and offer guests an entertaining, edu-
cational, and emotional journey through time.
They envisioned guests, adults and children
alike, embracing a park dedicated to telling the
story of U.S. history. Eisner had hoped the park
bers for fiscal year 1994, due in just a couple of
days on September 30, didn't look promising.
would be part of the personal legacy he would
Estimates said net income would be down to
leave behind at Disney. As he told a Washington
Post reporter, “This is the one idea I've heard
$300 million from $800 million the year before,
that is, in corporate locker room talk, what's
mostly because EuroDisney lost $515 million known as a no-brainer."?
from operations and $372 million from a re-
lated accounting charge.
The good news was that due to cost cutting,
THE DISNEY'S AMERICA
EuroDisney's losses were actually less than in
the previous year, while the bad news was that
CONCEPT AND LOCATION
attendance was also down. Prince al-Waleed
The idea of building an American history
bin Talal bin Adulaziz of Saudi Arabia had theme park originated in 1991 when Eisner
agreed to buy 24 percent of the park and build and other Disney executives attended a meet-
a convention center there, thus relieving some ing at Colonial Williamsburg in southeastern
of the financial pressure, but it seemed that the Virginia. The executives were impressed by
negative press coverage of that park's troubles the restored pre-Revolutionary capital. Disney
would never end.
had already been thinking about locations for
The Disney's America problem was particu- theme parks that were on a somewhat smaller
larly bothersome, however. Eisner realized that scale than the company's massive ones. Visiting
the controversy surrounding the park, coupled Williamsburg helped Disney make the connec-
with the many other highly publicized prob- tion to a new park based on historical themes.
lems of 1994, was damaging Disney's image. Disney's attention soon shifted focus to
Due to publicity about its highly visible cor- Washington, D.C. As the third-largest tour-
porate problems, Disney's image as a business ist market in the United States and the center
threatened to tarnish its reputation for family- of American government, the nation's capital
seemed a natural location for an American his-
friendly fun and fantasy.
Personally, Eisner was particularly fond of tory park. The abundance of historical sites in
the Disney's America concept. He had helped the area broadened its appeal as a center of
develop the original idea and had personally
American history. Disney's other parks were
located on the fringes of developed urban
championed it within the Disney organization.
centers (Anaheim, Orlando, Tokyo, and
He recalled the early meetings during which
Paris). The parks gained advantages from
several Disney executives, including himself,
their proximity to urban centers, but due to
had brainstormed an American history con-
their peripheral locations, Disney was able to
cept. He and the other executives had strongly
acquire lower-priced land and ensure a safe
believed that Disney had the unique capability
environment for visitors, far from inner-city
of designing an American history theme park
congestion and crime.
that would draw on the company's technical
2
s
of
d
eS.
le
ed
ly,
y's
to
t.
cat-
its
The Walt Disney Company Annual Report, 1995. See also Kim
Masters, The Keys to the Kingdom (New York: William Morrow, 2000),
p. 299.
2 William M. Powers, "Michael in Eisnerland: Disney's Chairman's
Sense of Wonder, Will to Win Drive for Virginia Theme Park Plan,"
Washington Post, January 23, 1994, p. 11.
236 Chapter Nine
Disney needed a location with easy access
to an airport and an exit off an interstate high-
way. Executives hoped to find land that had
already been zoned for development as well
as local and state politicians who would be
open to economic growth. In Prince William
County, located in the heart of Virginia's
Piedmont region, Disney found all these
things. Dulles International Airport was lo-
cated just east of Prince William County. U.S.
Interstate 66 (1-66), the main traffic artery con-
necting Washington, D.C., with its western
suburbs, could transport tourists straight from
Washington's monuments and museums into
Prince William County, a distance of about
35 miles.
The political and economic context also
made Prince William County attractive to
Disney. Virginia had long been a pro-growth
state, and its governors were constantly under
pressure to bring in new business. Democratic
Governor Doug Wilder would leave office in
November 1993, having lost some notable
campaigns to bring growth to Virginia's econ-
omy. Polls showed that he would likely be re-
placed by Republican George Allen, the son of
a former Washington Redskins American foot-
ball coach and a graduate of the University
of Virginia. If elected, Allen would be un-
der instant pressure to create state economic
growth. Most Prince William County officials
were also "pro-growth,” though not well pre-
pared for it. The county's growing population
of middle-class residents (up 62 percent since
group, as well as the real estate division,
identified 3,000 acres in Prince William County
near the small town of Haymarket (population
483). The largest property was a 2,300-acre plot
of land, the Waverly Tract, owned by a real
estate subsidiary of the Exxon Corporation.
Waverly was already zoned for mixed-use de-
velopment of homes and office buildings, yet
due to a weak real estate market, Exxon had
never broken ground on the undeveloped
farmland. For a modest holding price, Exxon
was willing to option the property. Using
a scheme that had worked years before in
Orlando, the Disney real estate group bought
or put options on Waverly and the remaining
3,000 acres without revealing the company's
corporate identity in any of the transactions.
THE VIRGINIA PIEDMONT
The northeast corner of Virginia comprises
the Piedmont region. The region contains
countless significant sites related to U.S. his-
tory, including, for example, the preserved
homes of four of the first five U.S. presidents:
Washington, Jefferson, Madison, and Monroe.
According to Pulitzer Prize-winning histo-
rian David McCullough, “This is the ground
of our Founding Fathers. These are the
landscapes-small towns, churches, fields,
mountains, creeks, and rivers—that speak
volumes."3 Thomas Jefferson loved the
agrarian life he found on the farms east of the
Blue Ridge Mountains. In his letters, he exulted
over the region's "delicious spring," "soft
genial temperatures," and good soil.4
The region is also home to more than two-
dozen Civil War battlefields. The U.S. Civil
War was fought largely over the issue of slav-
ery, pitting northern states against the southern
states that had seceded from the union. Just
1980) paid the highest taxes in the state of
Virginia due to a dearth of economic develop-
ment within the county. The Virginia legisla-
ture set an ambitious goal in 1990 to attract
14,000 jobs and $1 billion in nonresidential
growth to the county to fund more and better
schools and county administrative services, in
addition to reducing residential taxes paid by
each family.
In the spring of 1993, Peter Rummell, presi-
dent of Disney Design and Development,
which included the famous Imagineering
3 Richard L. Worsnop, "Historic Preservation," The CQ Researcher,
October 7, 1994, p. 867
4 Rudy Abramson, "Land Where Our Fathers Died," Washingtonian
Magazine, October 1996, p. 62.
236 Chapter Nine
Disney needed a location with easy access
to an airport and an exit off an interstate high-
way. Executives hoped to find land that had
already been zoned for development as well
as local and state politicians who would be
open to economic growth. In Prince William
County, located in the heart of Virginia's
Piedmont region, Disney found all these
things. Dulles International Airport was lo-
cated just east of Prince William County. U.S.
Interstate 66 (1-66), the main traffic artery con-
necting Washington, D.C., with its western
suburbs, could transport tourists straight from
Washington's monuments and museums into
Prince William County, a distance of about
35 miles.
The political and economic context also
made Prince William County attractive to
Disney. Virginia had long been a pro-growth
state, and its governors were constantly under
pressure to bring in new business. Democratic
Governor Doug Wilder would leave office in
November 1993, having lost some notable
campaigns to bring growth to Virginia's econ-
omy. Polls showed that he would likely be re-
placed by Republican George Allen, the son of
a former Washington Redskins American foot-
ball coach and a graduate of the University
of Virginia. If elected, Allen would be un-
der instant pressure to create state economic
growth. Most Prince William County officials
were also "pro-growth,” though not well pre-
pared for it. The county's growing population
of middle-class residents (up 62 percent since
group, as well as the real estate division,
identified 3,000 acres in Prince William County
near the small town of Haymarket (population
483). The largest property was a 2,300-acre plot
of land, the Waverly Tract, owned by a real
estate subsidiary of the Exxon Corporation.
Waverly was already zoned for mixed-use de-
velopment of homes and office buildings, yet
due to a weak real estate market, Exxon had
never broken ground on the undeveloped
farmland. For a modest holding price, Exxon
was willing to option the property. Using
a scheme that had worked years before in
Orlando, the Disney real estate group bought
or put options on Waverly and the remaining
3,000 acres without revealing the company's
corporate identity in any of the transactions.
THE VIRGINIA PIEDMONT
The northeast corner of Virginia comprises
the Piedmont region. The region contains
countless significant sites related to U.S. his-
tory, including, for example, the preserved
homes of four of the first five U.S. presidents:
Washington, Jefferson, Madison, and Monroe.
According to Pulitzer Prize-winning histo-
rian David McCullough, “This is the ground
of our Founding Fathers. These are the
landscapes-small towns, churches, fields,
mountains, creeks, and rivers—that speak
volumes."3 Thomas Jefferson loved the
agrarian life he found on the farms east of the
Blue Ridge Mountains. In his letters, he exulted
over the region's "delicious spring," "soft
genial temperatures," and good soil.4
The region is also home to more than two-
dozen Civil War battlefields. The U.S. Civil
War was fought largely over the issue of slav-
ery, pitting northern states against the southern
states that had seceded from the union. Just
1980) paid the highest taxes in the state of
Virginia due to a dearth of economic develop-
ment within the county. The Virginia legisla-
ture set an ambitious goal in 1990 to attract
14,000 jobs and $1 billion in nonresidential
growth to the county to fund more and better
schools and county administrative services, in
addition to reducing residential taxes paid by
each family.
In the spring of 1993, Peter Rummell, presi-
dent of Disney Design and Development,
which included the famous Imagineering
3 Richard L. Worsnop, "Historic Preservation," The CQ Researcher,
October 7, 1994, p. 867
4 Rudy Abramson, "Land Where Our Fathers Died," Washingtonian
Magazine, October 1996, p. 62.