Now Disney's president faces axe

WALT DISNEY president Bob Iger may be sacrificed, as chief executive Michael Eisner desperately searches for a scapegoat in a bid to save his own job in the face of rising criticism from shareholders.

Entertainment industry insiders say the company is virtually paralysed as Eisner devotes himself almost full-time to short-circuiting the attempt by dissident shareholders to oust him following last week's vote in which 42% of investors failed to support his re-election as chairman.

Despite giving up the chairmanship, Eisner is still under heavy fire. Insiders say that Iger's days are numbered because he is head of the company's embattled ABC television network, which has been one of Disney's weak spots since its was bought in 1996. This makes him a natural for Eisner to sacrifice in an attempt to appease his critics.

Until last week's shareholder vote, Iger was a favourite candidate to become Eisner's successor. Although the board has now launched a search for a successor, analysts say Iger would be unlikely to get the position because he is too closely identified with old management mistakes. Eisner urgently needs to distract the attention of shareholders because he failed to silence criticism by relinquishing the chairmanship.

Former senator George Mitchell took the job instead but, as a friend and supporter of Eisner, he is not regarded by many shareholders as an improvement. Eisner has a history of ejecting senior executives who became too successful, and therefore a threat to his control of the company, or whose departure suited his internal political aims.

Jeffrey Katzenberg, head of the animation division in the 1990s, and Hollywood superagent Michael Ovitz were well-known top executives sacked by Eisner. Firing Iger, however, may only postpone Eisner's problems. Roy Disney, the founder's nephew who was behind the recent anti-Eisner vote, is determined to get rid of the chief executive.

In the middle of the political infighting, Iger tried to talk up the Disney share price by saying he believed cable TV company Comcast was planning to raise its bid for the company. Its original $50bn (£27.3bn) offer has languished because shareholders do not think it is high enough and because Disney's shares rose after the bid announcement, reducing the value of the all-share offer.

However, Disney stock has weakened again since last week, which would make the company more vulnerable to an attempt at a takeover.