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24TH NACDA CONVENTION
June 4-7, 1989
OPENING REMARKS AND KEYNOTE ADDRESS

GARY CUNNINGHAM:

I'd like to welcome you to the 24th Annual NACDA Convention. My name is Gary Cunningham and I'm President of NACDA. We feel we have a great program planned for you. Our Executive Committee members, which are your representatives on our board, have spent endless hours planning a program that we think is timely and will be of benefit to you. I'm looking forward to overseeing the Convention and to meeting many of you. We're pleased that you are here.

In addition to the Convention programs, we have a number of fun activities planned. There are receptions each night and we have tickets for the California Angels and the Cleveland Indians baseball game on Tuesday night, and we have some exciting door prizes. First, from Andy Mooradian of World Tech Travel and NACDA, we're giving away a package of round trip airfare for two to the 1989 Kickoff Classic between Notre Dame and Virginia. It is for three nights lodging and game tickets. The grand prize is a trip for two to the Emerald Isle Games in Ireland. It will contain two round-trip airline tickets from either New York or Boston, two game tickets and three nights lodging. This game is being played in December between Rutgers and Pittsburgh. These prizes will be drawn at the Business Session on Wednesday.

We're also guests of the outstanding people from Disneyland. We have an outing planned at the Magic Kingdom for you anytime between now and June 10. We're certainly most appreciative of our Keynote Speaker, Frank Wells, for providing this opportunity. Thank you, Frank.

Speaking of Frank Wells, we're really delighted to have this fine gentleman as our Convention Keynote Speaker. I want to share with you a little bit of Mr. Wells' background. He is the president of the Walt Disney Company and has helped Disney continue its tradition of family fun and entertainment. He's a native of California. He received his Bachelor of Arts Degree at Pomona College and then attended Oxford University in London to study law. He completed his education and law degree at Stanford University. Before joining Disney, Mr. Wells served as vice chairman of Warner Bros. Inc. and worked his way up to co-chief executive officer in 1977. Working with Michael Eisner, Mr. Wells, has helped Disney greatly increase its annual motion picture distribution, return to prime time television and strengthend theme park attendance through marketing and promotion.

Even with his work at Disney, Mr. Wells has found time to climb some of the world's tallest mountains and has authored a book about his adventures. At this time, it is my pleasure to introduce Mr. Frank Wells, president of Walt Disney Company.

FRANK WELLS:

Thank you, Gary, very much. Good morning. I welcome you to Anaheim and to Disneyland and tell you, on behalf of all of my colleagues, we don't call them employees, we call them cast members, how happy we are that you are with us this morning. It's especially appropriate that we meet this morning in Anaheim, since beginning next year, this will be the site of America's newest college football tradition, the Disney Pigskin Classic.

All of us at Disney genuinely are honored to be associated with college athletics. We are very proud that we have been able to join with you to create this new collegiate sporting event. We thank each of you for your support in obtaining the necessary NCAA approvals to make the Classic a reality. We pledge to do everything we can to make this game a tradition that we will all be proud of and we are looking forward to linking our good name with yours. I can assure you that we are going to use everything our entertainment company has at our disposal to make the Pigskin Classic the most widely recognized college event of its time. As a matter of fact, how the tools of our trade, the entertainment business, can be applied to college athletics in general, is exactly why I'm here this morning to speak to you.

The title of my talk is, "We're all in the entertainment business." I believe that to be true. The Walt Disney Company and your organization share several common principles. That's not to say that college athletics is a "Mickey Mouse" operation, if you will, and we all know that nobody is "Snow White." But if there are those days when, you as athletic directors and administrators, feel "Sleepy," "Dopey," "Bashful" or even "Happy," well you're not alone. There are those days when I feel a bit "Goofy" myself.

Is it a stretch to say that you, as athletic administrators and we, as an entertainment company, are really in the same business? Obviously, yours is a profession which has a broader scope than just entertainment. What you do provides the young people of this nation with a physical education to round out their scholastic careers. That is your goal and it is vital. But, there is no denying it. From the very first scheduled college game, college athletics has also been a form of entertainment for Americans and a very much loved one. Today, because people are offered more entertainment choices than ever before, you have been forced to compete with powers no athletic director could ever have imagined one-hundred years ago.

Game days, today, also offer students and fans the alternative choices of television, films, music concerts and, if we're talking about a Saturday morning game, you're up against Pee Wee Herman. Who could ever have imagined that one! So, face it. You're not only competing in the academic and sports arena, you're also competing in the entertainment business too. Fighting for the audience, just like any other entertainment executive. Well, welcome to the business. As one entertainment executive to another, let's talk for a moment about how we accomplish those goals.

How you do that is very similar to how we accomplish ours. That's where the entertainment comes in and that's where our paths merge. As Coach Cagey Stengel once said, "I digest." So, let me get back to the point at hand. Or, maybe, I was actually thinking to keep the sports entertainment analogy going, it was probably Sam Goldwin who said, "I digest."

Let's look at the similarities between our companies' endeavors, which are built on a team of make believe characters, and yours, which are built on teams of real life characters. One similarity is a fortunate one. Both Disney and college athletics occupy a very special niche in the hearts of Americans.

It's true. Few other organizations, besides the two of ours, evoke so many warm memories of our youths. And no other two organizations could ever induce so many full-grown men and women to wear so many funny hats and outfits. But, think about that seriously. What other activities hold such a special place in the hearts of Americans, that they will knowingly and willingly let down their adult defenses enough to put a pair of mouse ears on top of their head or wear a 5O-gallon cowboy hat? Beneath the frivolity of such acts lies a deep-seeded truth. College athletics, like Mickey Mouse, is part of the fabric of American life. Both are unique franchises that people genuinely love. Both must be protected and nurtured for the ages.

I can tell you how we protect and nurture ours at Disney. I think the same thoughts apply to you as college athletic administrators and as fellow entertainment executives. I present them to you this morning in the form of the "Four Horsemen" of entertainment. If you're expecting those horsemen to be, Mickey, Donald and Pluto, you're wrong. The Four Horsemen I'm about to offer are of a much more serious nature because as entertainment executives they really do guide your destinies just as they do ours at Walt Disney.

The name of the first is, Strength. As an entertainment entity, we know we must remain vitally strong. Five years ago, Michael Eisner and I joined Disney which was in the midst of a bloody takeover battle. The wolves were at the door and we ain't talking about the Three Little Pigs. Wall Street takeover raiders were one step away from buying and dismantling the house that Walt built. The employees were in a turmoil. The son-in-Iaw of Walt Disney had just been forced to resign as president and the company, quite literally, was on the brink of ceasing to exist. Some of you out there may know the feeling. The Disney Company wasn't just facing fourth and long. This was a company facing five different opponents at once and every single one was close lining, clipping and face masking America's favorite Mouse. Actually, what Michael and I walked into wasn't anything as civilized as a football game. If it were a sport, it was more like professional wrestling, more like Hulk Hogan vs. Donald Duck in a chain match.

About my second day on the job, I felt like Bronco Nagurski who once fell out of a second story window and crashed to the pavement. A crowd gathered and the police ran up and asked, "what happened?" Still in a daze, Nagurski told him, "I don't know, I just got here myself." After Michael Eisner and I picked ourselves up, dusted ourselves off, looked around, we knew the first thing we had to do was to make Disney strong again. Strong financially and strong creatively. We knew that once the Disney house was put in order, and the takeover plotters were driven away, the only way to keep things right, would be through strength. We knew this would be the only way to protect our organization's future. Of course, it's the only way to protect yours as well.

Certainly, we do use legal means to protect what is important to us. For example, we did get a little Grumpy over Snow White in the Oscar telecast. For us, it appeared as though they were trying to add an eighth dwarf, Sleezy. Legal protection is fine, but the best protection we can have is the strength as a company to chart our own destiny. As I said, having that strength is your best protection as well. So as entertainment enterprises, we all must strive for strength. Financial and, most importantly, creative and everything else will follow.

The name of the second Horseman is Creativity. In the Disney Company, the need for creativity is obvious. If we're not constantly creative, we're out of business. Creativity is our heart and our soul. We inherited this legacy from one of the most creative minds the world has known, Walt Disney. Here was a man who, time and again, gambled everything he had on the one big creative idea. Not unlike a coach, whose entire season and maybe his entire career, comes down to just one play or one strategy. An example, few people know that Disneyland almost never was. When Walt decided to build it, no one else could see his vision. They asked, "why do you want to go into the amusement park business?" So the money was very tough to come by.

Walt even hocked his personal lire insurance to come up with part or it. Even then, things weren't perfect.

On Disneyland's opening in 1955, on a burningly hot July day, Walt faced one of the biggest calls in his career. He had run out of time, the park was opening and the plumbers couldn't get everything done by the deadline. So, they came to Walt and said, "you can have water fountains or you can have rest rooms." Walt knew human nature and he knew that people could get over the pain of being thirsty, but there were some things they would never get over the pain of. So, the rest rooms were installed.

Obviously, once Disneyland was open, the whole world saw the unique creativity of Walt's dream. Practically the whole world came. In fact, Disneyland has hosted well over the entire population of the United States and is still climbing. That story illustrates both the advantages and the disadvantages of being creative. You may have the most creative vision in the world, but it may take years for others to understand it. You just have to believe in it and pursue it. In the entertainment business, we have no choice. If we're not creative and if we don't take chances, we will wither. Remember, I maintain that you are in the entertainment business. Creative? College athletics? Of course, that's what puts the spark in the whole enterprise. That's what takes it out of the predictable realm of professional sports with its dollar and cents approach to gamesmanship. In a person's life, college is the time to be creative and shouldn't college athletics reflect that?

I'm talking about creativity and marketing to students, facilityand alumni. Creativity in staging the campus and community events. Creativity in anything and everything from facilities to the team uniforms and the team mascots.

I looked back on some of the great college athletic programs and found some creativity in even the names of the teams. Teams that went from simply strange or ordinary to names that now live in the pantheon in college sports. How about those Nebraska Bug Eaters? That's what the Nebraska Cornhuskers were called before some creative and wise individual dreamed up a name to better capture the spirit of the school. For years Arizona State fans cheered, "go Normals!" Then they grew tired of being normal, got creative and became Sun Devils. How about that cheer that rang through the ages, "fight on Methodists." Later on, the Methodists got a little more militant and a little more exciting and became the USC Trojans. Even the UCLA Cubs got some pizazz and grew up to be the Bruins. My point is, in the early days of college athletics, that spark of creativity was evident, even in dreaming up new and colorful names for university teams. Frankly, I think that today that spark is returning.

The Pigskin Classic is going to be a good example of it. The explosion of new ideas in college sports is further evidence that fun and creativity is once again being offered on the campus. But, let's have even more. In the entertainment business you cannot be too creative and I exhort each of you to stretch the limits of your programs to keep them fresh and exciting for everyone. As Coach Lombardi once said, "if you aren't fired with enthusiasm, you'll be fired with enthusiasm."

By the way, when it comes to odd names of the past, I must admit that our company is certainly in contention for the top prize. The name Walt first gave to our favorite mouse wasn't Mickey, it was Mortimer.

Strength and creativity as entertainment enterprises are two needs we share. But another, and the third of our Four Horsemen is, very simply, quality. The dedication to quality is something else we inherited from Walt so many years ago. It's part of our corporate culture dating from the early days when Walt, then just a young filmmaker, threw out tens of thousands of animated drawings for a half completed movie. They just weren't good enough. He redid all of the drawings, at immense cost in those days, and the movie went on to become the classic, Pinnochio.

I could stand here and tell tale after tale of how Walt constantly tossed out ideas and literally started over on many projects. Our company has learned again and again in dollars and cents terms that quality really does pay for itself. In our parts, we constantly survey for quality. We ask our guests how they perceive what they are receiving for their dollar. We found that although we've increased our prices annually over the past years to give us that financial strength I mentioned, our guests rate us higher than ever before. In other words, when they are receiving quality for their dollar, our guests do not mind paying for it. When you visit the park, you'll see this dedication to quality --things that are very appropriate to your operations as fellowentertainment executives. Again, much of what you'll see goes back to Roy and Walt Disney, as so very many of our Disney lessons do.

In building Disneyland, Walt made a huge leap into another dimension, that of the total experience. Remember, up until Disneyland, he was just a film producer. He made the movies, shipped them off to the theatres and the theatre owners assumed all of the responsibility after that. If the popcorn was cold, nobody blamed Walt. If the drinks were watered down, nobody blamed Walt. But, with the opening of Disneyland, that all changed. From that moment on, Walt could count of getting all of the blame for what went on inside the gates. Cold food, hot drinks, rude employees were no longer someone else's problems. Now they became his problems and they all affected the total experience.

Today, we put more effort in keeping that total experience pleasant. We train our people, not from day one, but from minute one. The very first thing they do after joining our company is go through a full-day program dedicated to nothing but our history and our idea of service. We keep our parks clean. At Disneyland alone, we go through 1,500 brooms each year and hose down the entire park each and every night. You see, we know that people don't just go home with souvenirs and shirts from our parks. They take home the memories of their experience and those memories will last a lot longer than just a hat or a pennant.

So it is with college athletics. The condition of the facility, the quality of the food, the politeness or rudeness of the employees and even the crudeness of the small minority of the people in the stands will have a direct and lasting effect on your programs; probably as much or greater than the year-to-year quality ot your teams. If the fans perceive the total experience to be poor, their support will wane. And, as fan support dies, your programs die with it. I urge each of you to pay close attention to these elements of your own entertainment business. Whether you have direct contractual control over them or not, you must assure that they complement and never detract from the total experience.

Finally, let's talk about our fourth horseman, honesty. This can be a tough one for anyone in any leadership position. Even with the pressures that exist today, can we as Disney take the shortcuts on our products and you, as leaders of college sports, take the most expedient means. From personal experiences in our company, it just isn't even an issue. It never has been. A less than honest decision always comes back to haunt the decision maker. The honesty I'm speaking of is more than simply just telling the truth, of course. It's being honest to ourselves and our product. At Disney, one form of honesty we must face is honoring the trust our customers have in us. They must always know we have their best interest at heart. We think they know this to be true. Ever since that first day when Walt chose the rest rooms over the fountains, they trust us to give them their money's worth and they trust us to take care of their families when they visit us.

But, most importantly, they trust us to take care of their legends. Don't tell our legal staff I said this, but Mickey Mouse and Disneyland and Walt Disney World and the entire empire of Disney legends belong to us only in the strictest legal sense. We realize that in a much grander sense, the fantasies of the Walt Disney Company and all of our characters belong to the ages. We're just the keepers and protectors of that legend. And as such, our public has the right to expect from us honesty and truthfulness in what we do under the Disney banner. Anything else would destroy that legend.

So it is with college athletics. The legend you have been entrusted to keep is the legend of youth, of sport and of excellence. I know you're constantly being forced to be more competitive and are constantly defending yourselves against attacks on your programs from all quarters, no matter how high-minded. I had to laugh when I read of Charles Elliott, the distinguished dean of Harvard at the turn of the century. One year after a particularly good baseball season at Harvard, Elliott announced he was thinking of dropping the sport. When asked why, he said, "well, I'm told the team did well this year because one pitcher had a fine curve ball. I understand that a curve ball is thrown with a deliberate attempt to deceive. Surely, that is not the ability we want to foster at Harvard." To this day it's true, Harvard pitchers deceive no one.

Arguing against logic like that and being the keeper of any legend can be a very heavy burden at times. But when it is all said and done, I believe there is no other life's work that is as rewarding. Well, those are our four horsemen of entertainment --strength, creativity, qualityand honesty. Whether you are ahead of an athletic organization, as you are, or the head of an entertainment company, we are all dependent on those elements whether we like the idea or not. So, we had all better embrace them and turn each of those elements to our advantage. Certainly, our futures depend on it. But, more importantly, the futures of the legends we are all entrusted with depend on it. Yes, we are all in the entertainment business. I must say, I think I would rather be at my end than in yours. I have only to answer to 124,000 stockholders and a board of directors. You have to answer to over 250 million part-time fans, coaches, scouts, play makers, facultyand government officials. Given an opening lineup like that, your players shouldn't wear the protective gear, you should.

A few of you might have heard, as Gary mentioned, that I once took off two years, actually, from the entertainment business in between my careers at Warner Bros. and what happened at Disney. During that time, . tried to be the first human being to climb the highest mountain on each of the seven continents. One of the things that I often talk about when I speak of those two glorious years, are what I call the magic moments. You never knew when you were climbing when they would happen, but sometimes they were just around the next corner, larger than life and moments that will stay with me forever. I had several of them, for example, the first time I saw Mount Everest on the way in from Tibet. Frankly, as president of Disney, I've been fortunat. enough to have some others. The opening of our Disney MGM Studios in Florida on May 1 of this year was one.

Or, having a monster hit like Roger Rabbit was another. I must tell you that you are the makers of magic moments for people allover the world. Collegiate athletics is all about magic moments and they are greater than any moments in Olympic or professional sport. They are the real moments, the events which occur at the grass roots levels which make young people into wiser people and shape the rest of their entire lives.

For that, we at Disney salute you. I tell you that for all of the Disney family we could not be happier to be associated with anything more than with collegiate athletics. So, if I may, on to the Disney Pigskin Classic and I thank each of you very much for inviting me to be your Keynote Speaker this morning. Thank you.

GARY CUNNINGHAM:

Frank, thank you very much. We certainly appreciate your coming and taking time from your busy schedule to be a part of our program.