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source: SaveDisney.com

Roy Disney and Stanley Gold Response
to Walt Disney Company Directors' Letter

Burbank, CA -- February 9, 2004 -- Roy E. Disney and Stanley Gold today issued the following open letter in response to a letter to shareholders from Directors of The Walt Disney Company released to the media today:

February 9, 2004

To the Directors of The Walt Disney Company:

We read with disappointment, but not surprise, the shareholder letter you released today regarding our "just vote no" solicitation of Disney shareholders. It appears that the Board continues to resist independent, thoughtful consideration of opinions raised in opposition to Michael Eisner.

Although we could very easily refute your letter point-by-point, we will not do so. Rather, we will just highlight a few of the letter's misleading facts and distortions:

• You herald the Company's performance and that last year the stock increased by 43%, versus 26% for the S&P 500. In fact, an initial investment in Disney stock on January 1, 1996 would have grown to just $11,497 at January 31, 2003 versus $17,913 if that same money had been invested in the S&P 500 at the same time.
• Even after Disney's gains in 2003, the company's operating income is only back to slightly more than 1994 levels. (In 1994, Disney's operating income was approximately $3.1 billion (pro-forma for Cap Cities/ABC Acquisition). Disney's operating income in fiscal year 2003 was approximately $3.2 billion.) And this is after reinvesting $25 billion in the Company during that period.
• Even assuming the Company achieves its forecasts for FY 2004 - which given its history of missing its own forecasts would be a welcome change, earnings will only approximate those achieved six years ago.
• Our votes, while on the Board, for such investments as the Fox Family Channel acquisition, were based on projections provided by management to the Board, which projections management repeatedly failed to even come close to achieving. We were reluctant to approve the Fox Family deal because of a huge price tag that included hidden costs, including the costs required to acquire major league baseball rights. However, management projected a 20-22% growth in EBITDA, a rate of growth which Tom Staggs publicly endorsed. Suffice it to say, the Fox Family Channel business has not come close to achieving those growth levels. If asked, we believe Tom Staggs would confirm that the Fox Family Channel has been a money-losing business from the moment the Company acquired it.
• The Company's retirement policy under its Corporate Governance Guidelines for directors excludes by its terms management directors, a category that clearly included Roy Disney.
• John Bryson was not initially selected for the Board because he was independent. We objected to his subsequent classification as independent because, while Mr. Bryson was classified as an "independent" director, his wife was an employee of the Lifetime Channel earning millions of dollars in income. Only recently has the Board belatedly agreed with us that Mr. Bryson is not independent.
• No one ignores Michael's successes from 1984 to 1994. Roy commented on them in his resignation letter. The problem is, following the death of Frank Wells in 1994, the Company's performance has been substandard. How long can Michael Eisner live on the Company's accomplishments from 1984 to 1994?

We could go on but suffice it to say it is not we who are trying to protect executive positions or board seats. As we have repeatedly stated, neither of us desire to be the Chairman or CEO of the Company; our concern is solely the interests of the shareholders and the integrity and future of The Walt Disney Company.

It is sad and unfortunate that the Board has resorted to these tactics in the wake of our campaign to educate shareholders as to the issues facing the Company. We expected better of you.