Company Name: Walt Disney
Public Availability Date: October 15, 2004

WACHTELL, LIPTON, ROSEN & KATZ
51 WEST 52ND STREET
NEW YORK, N.Y. 10019-6150
TELEPHONE: (212) 403-1000
FACSIMiLE: (212) 403-2000

October 15, 2004

DELIVERED BY HAND

U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: Shareholder Proposal Submitted by the American Federation of State, County and Municipal Employees, et al,, for Inclusion in the 2005 Proxy Statement of The Walt Disney Company.

Ladies and Gentlemen:

This letter is submitted on behalf of our client, The Walt Disney Company (the "Company"), which has received a shareholder proposal and supporting statement (the "Proposal") sponsored by the American Federation of State, County and Municipal Employees ("AFSCME") and co-sponsored by the New York State Common Retirement Fund, the California Public Employees' Retirement System and the Illinois State Board of Investment (together with AFSCME, the "Sponsors"), which Proposal was submitted for inclusion in the proxy statement and form of proxy to be distributed to the Company's shareholders in connection with its 2005 annual meeting of shareholders (the "2005 Proxy Materials"). The Company hereby notifies the Securities and Exchange Commission (the "Commission") and the Sponsors of the Company's intention to exclude the Proposal from its 2005 Proxy Materials for the reasons set forth below. The Company respectfully requests that the staff of the Division of Corporation Finance of the Commission (the "Staff') confirm that it will not recommend any

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U.S. Securities and Exchange Commission
October 15, 2004
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enforcement action to thc Commission if the Company excludes the Proposal from its 2005 Proxy Materials.

Pursuant to Rule 14a-8(j) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), enclosed for filing with the Commission are six copies of (i) this letter, which includes an explanation of why the Company believes that it may exclude the Proposal and (ii) the Proposal.

I.    The Proposal Presented by the Sponsors

A copy of the Proposal is attached as Annex A hereto. For your convenience, the text of the resolution contained in the Proposal is set forth below:

RESOLVED, that shareholders of The Walt Disney Company ("Disney") ask that Disney become subject to the shareholder right of access to the company proxy statement afforded in the SEC's proposed Rule 14a-11 (the "Rule"), which would (a) allow a shareholder or group that has held over 5% of Disney's outstanding common shares for over two years ("Nominating Shareholder") to nominate up to a specified number of candidates ("Nominees") who are independent from both the Nominating Shareholder and Disney for election to Disney's board of directors and (b) require Disney to allow shareholders to vote for Nominees on Disney's proxy card and to make certain disclosures regarding Nominees in Disney's proxy statement.

In the case of Disney, the Rule would allow a Nominating Shareholder to nominate up to two Nominees, because Disney's board currently has 11 members. However, Disney's bylaws set the board size as a range from nine to 21. In the event that Disney's board is expanded to 20 or more directors, the Rule would allow nomination of up to three Nominees.

II. The Proposal May Be Excluded Because It Is Not a "Direct Access Proposal" Contemplated by Proposed Rule 14a-11

On October 14, 2003, in Release No. 34-48626 (the "Release"), the Commission announced proposed rules and amendments to existing rules (the "Proposed Rules") including a proposed Rule 14a-11 that would permit, in certain circumstances, shareholders to access company proxy materials for the purposes of nominating directors. The Proposed Rules provide, in pertinent part, that if either (1) at least one of a company's nominees for the board of directors received "withhold" votes from more than 35% of the votes cast at an annual meeting of security holders held after January 1, 2004, or (2) a security holder proposal providing that a company become subject to proposed Rule 14a-11 submitted by a security holder or group of security holders that held more than 1% of the securities entitled to vote on that proposal for at least one year as of the date the proposal was submitted receives more than 50% of the votes cast on that proposal at an annual meeting, then a security holder or group of security holders owning more than 5% in the aggregate of the company's voting securities for at least two years would be

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U.S. Securities and Exchange Commission
October 15, 2004
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entitled to nominate a certain number of directors for election and the subject company would be required to include the names of such directors in its proxy statement. The Release states that "security holders and groups should be aware that in order for the adoption of such a proposal to be a nomination procedure triggering event, should we adopt Exchange Act Rule 14a-11 as proposed, those security holders or groups should, using the existing Exchange Act Rule 14a-8 procedures, provide evidence that they satisfy the more than 1% and one-year thresholds when they submit their proposals."

While the intent of the Proposal is not entirely clear (see Part V below), the Sponsors may be attempting to create a nomination procedure triggering event under the Proposed Rules through adoption of a direct access proposal. The Sponsors, however, by their own admission collectively own less than 1% of the Company's voting stock see Annex A, and hence are seeking to use the process set forth in proposed Rule 14a-11 despite their failure to meet all of the requirements of the proposed Rule 14a-11. The Sponsors therefore are not eligible to submit a "direct access proposal" under proposed Rule 14a-11.1/ Accordingly, the Proposal may properly be excluded pursuant to Rule 14a-8(i)(8). See, e.g., Qwest Communications International Inc. (March 22, 2004) (permitting the exclusion of a similar shareholder proposal under Rule 14a-8(i)(8) because the proposal differed from the eligibility standard in proposed Rule 14a-11 and, therefore, did not qualify as a "direct access proposal"); Verizon Communications Inc. (January 28, 2004) (same). In this regard, the proposed instruction to Rule 14a-8(i)(11) makes clear that only direct access proposals submitted by holders that held more than 1% of the Company's voting securities must be included. See Release n.76.

Accordingly, based upon Rule 14a-8(i)(8), the Company intends to exclude the Proposal from the 2005 Proxy Materials. The Company respectfully requests the Staff to confirm that it will not recommend enforcement action if the Company omits the Proposal from the 2005 Proxy Materials pursuant to Rule 14a-8(i)(8).

III.   The Proposal May Be Excluded Because It Relates to the Election of Directors

Because the Proposal does not qualify as a direct access proposal under the Proposed Rules, it should be treated as a proposal asking the Company to create its own process for shareholder access to the proxy statement. The Commission has made it clear that such proposals may be excluded. In footnote 74 of the Release, the Commission expressly states that it is "not reviewing or revising the position taken by the Division of Corporation Finance regarding the application of Exchange Act Rule 14a-8(i)(8) to security holder proposals that

1/ In addition to the Sponsors' being ineligible to submit a proposed Rule 14a-11 proposal, the Proposal does not comport with other requirements of proposed Rule 14a-11. In particular, the Proposal would only allow a "Nominating Shareholder" who held the Company's outstanding common shares for "over" two years to nominate up to a specified number of candidates, whereas the proposed Rule 14a-11 requires ownership merely for "at least" two years. As a result, the Proposal by the Sponsors would deprive those who hold the requisite number of shares of Company common stock for exactly two years to be a "Nominating Shareholder," contrary to the shareholder nomination procedure in the Commission's Proposed Rules, and, as a result, the Proposal is properly omitted under Rule 14a-8(i)(8). See, e.g., Qwest Communications International Inc. (March 22, 2004); Verizon Conununications Inc. (January 28, 2004).

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U.S. Securities and Exchange Commission
October 15, 2004
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would have the effect of creating a security holder nomination procedure, other than a direct access proposal." (emphasis added). The Staff has found such proposals to be excludable pursuant to Rule 14a-8(i)(8), which permits exclusion of a shareholder proposal fom a company's proxy materials if it "relates to an election for membership on the company's board of directors or analogous governing body." Specifically, the Staff has found that shareholder proposals seeking to include shareholder nominees in the company's proxy materials may be excluded under Rule 14a-8(i)(8) (or its predecessor, Rule 14a-8(c)(8)) because such proposals "rather than establishing procedures for nomination or qualification generally, would establish a procedure that may result in contested elections of directors." Eastman Kodak Co. (February 28, 2003); see also, The Bank of New York Co., Inc. (February 28, 2003); AOL Time Warner Inc. (February 28, 2003); and Citigroup Inc. (April 14, 2003) (all permitting exclusion of a proposal to amend the bylaws to require that the company include the name, along with certain disclosures and statements, of any person nominated for election to the board by a shareholder who beneficially owns 3% or more of the company's outstanding common stock). ee also Storage Technology Corp. (March 22, 2002); General Motors Corp. (March 22, 2001); Oxford Health Plans, Inc. (February 23, 2000); The Coca-Cola Co. (January 24, 2000); Citigroup Inc. (January 21, 2000); BellSouth Corp. (February 4, 1998); and Unocal Corp. (February 8, 1991).

Similarly, the Proposal, if adopted, would establish a procedure relating to the election of directors that would result in contested elections of directors, and is therefore contrary to Rule 14a-8(i)(8). The Proposal's clear intent, as stated in the Sponsors' supporting statement, is to provide shareholders with a means to create competition in director elections. Specifically, the Proposal provides that "Nominating Shareholders" may nominate candidates for the Company's board of directors (the "Board") and that the names of such candidates must be included in the Company's proxy statement. Because the Board intends to nominate a sufficient number of candidates for all available seats on the Board, and the Proposal urges the Company to include in its proxy statement nominees who are not nominated by the Board, the Proposal's implementation would necessarily result in contested director elections.

Accordingly, because the Proposal seeks to establish a procedure that would result in contested elections of directors in direct violation of Rule 14a-8(i)(8), the Company intends to exclude the Proposal from the 2005 Proxy Materials. The Company respectfully requests the Staff to confirm that it will not recommend enforcement action if the Company omits the Proposal from the 2005 Proxy Materials pursuant to Rule 14a-8(i)(8).

IV.   The Proposal May Be Excluded Because It Is Materially False and Misleading

Rule 14a-8(i)(3) under the Exchange Act permits the omission of a proposal or any statement in support thereof if such proposal or statement is "contrary to any of the Commission's proxy rules, including Rule 14a-9 under the Exchange Act, which prohibits materially false or misleading statements in proxy soliciting materials." Rule 14a-9 also prohibits a statement which "omits to state any material fact necessary in order to make [a statement] not false or misleading." While the Staff, in Staff Legal Bulletin 14B (September 15, 2004). clarified the circumstances in which companies will be permitted to exclude proposals

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U.S. Securities and Exchange Commission
October 15, 2004
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pursuant to 14a-8(i)(3), it expressly reaffirmed that materially false and misleading proposals may be subject to exclusion. According to Staff Legal Bulletin 14B:

There continue to be certain situations where we believe modification or exclusion may be consistent with our intended application of rule 14a- 8(i)(3). In those situations, it may be appropriate for a company to determine to exclude a statement in reliance on rule 14a-8(i)(3) and seek our concurrence with that determination. Specifically, reliance on rule 14a- 8(i)(3) to exclude or modify a statement may be appropriate where:

* the company demonstrates objectively that a factual statement is materially false or misleading.

* the resolution contained in the proposal is so inherently vague or indefinite that neither the stockholders voting on the proposal, nor the company in implementing the proposal (if adopted), would be able to determine with any reasonable certainty exactly what actions or measures the proposal requires this objection also may be appropriate where the proposal and the supporting statement, when read together, have the same result.

In their Proposal, the Sponsors state that they do not meet the 1% ownership requirement set forth in the Proposed Rules and that therefore the adoption of the Proposal would not automatically lead to the inclusion of candidates nominated by holders of more than 5% of the Company's voting securities. However, under proposed Rule 14a 11, the inclusion of candidates would be triggered by either one of two events: (1) more than 35% of the shareholders withheld their votes from any director at an annual meeting held after January 1, 2004; or (2) the shareholder proposal was submitted by holders of more than 1% of the outstanding shares and the proposal received more than 50% of the votes. Because the last annual meeting of the Company was held after January 1, 2004, and, as the Proposal's supporting statement notes, holders of more than 35% of shares withheld their votes from CEO Michael Eisner for his reelection, one of the two requirements for automatic inclusion of candidates has already been fulfilled in the Company's case. If the Proposal were to be treated as asking the Company to create its own process for shareholder access to the proxy statement on the terms of proposed Rule 14a-11, then the Proposal materially misleads by stating that "adoption of this proposal would not automatically lead to the inclusion of candidates nominated by 5% of [the Company]'s shareholders." If the Proposal were to be adopted under those circumstances and the Company applied the terms of proposed Rule 14a-11, the adoption of the Proposal would in fact lead to automatic inclusion.

The Proposal may also be excluded under Rule 14a-8(i)(3) because it is impermissibly vague. The Staff has consistently taken the position that shareholder proposals that are vague and indefinite are excludable under Rule 14a-8(i)(3) as inherently misleading because neither the shareholders nor the Company would be able to determine, with any reasonable amount of certainty, what actions or measures would be taken if the proposal were implemented. See, e.g.,

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U.S. Securities and Exchange Commission
October 15, 2004
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The Procter & Gamble Company (October 25, 2002) (permitting omission of a proposal requesting that the board of directors create a specific type of fund as "vague and indefinite," where the company argued that neither the shareholders nor the company would know how to implement the proposal). The Proposal meets this standard. As noted above, it is not clear whether the Proposal (1) seeks to be a direct access proposal invoking proposed Rule 14a-11, or (2) requests the Company to create its own shareholder access process irrespective of whether proposed Rule 14a-11 is adopted by the Commission. Nor is it clear how the Company is to implement the Proposal, whether through bylaw amendments, Board policy or otherwise. And it is not clear what process the Company should adopt if the Commission adopts Rule 14a-1  on terms different from those proposed or described in the Proposal.2/ Therefore, neither the shareholders nor the Company would be able to determine with any reasonable certainty what actions or measures the Proposal requires.

Accordingly, based upon Rule 14a-8(i)(3), the Company intends to exclude the Proposal from the 2005 Proxy Materials. The Company respectfully requests the Staff to confirm that it will not recommend enforcement action if the Company omits the Proposal from the 2005 Proxy Materials pursuant to Rule 14a-8(i)(3).

V.     Conclusion

For the foregoing reasons, the Company respectfully requests that the Staff confirm that it would not recommend enforcement action if the Company omits the Proposal from its 2005 Proxy Materials. If you have any questions, or if the Staff is unable to concur with the' Company's conclusions without additional information or discussions, the Company respectfully requests the opportunity to confer with members of the Staff prior to the issuance of any written response to this letter. Please do not hesitate to contact the undersigned, Pamela S. Seymon, at (212) 403-1205.

2/ Indeed, the Company respectfully submits that the appropriate approach for the Staff to take is to permit the Commission's rulemaking process to proceed to its natural conclusion, rather than require the Company to include a shareholder proposal that may be inconsistent with the Commission's final rules (and is inconsistent with the Proposed-Rules), especially given the impossibility of shareholders making an informed decision on a shareholder proposal with respect to a proposed rule that is subject to subsequent revision. See, e.g., Letter from the American Bar Association, Section of Business Law, Committee on Federal Regulation of Securities, to Jonathan G. Katz, Secretary, Securities and Exchange Commission (November 3, 2003).

WACHTELL, LIPTON, ROSEN & KATZ
U.S. Securities and Exchange Commission
October 15, 2004
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Please acknowledge receipt of this letter and its attachments by stamping the enclosed copy of the first page of this letter and returning it in the self-addressed stamped envelope provided for your convenience,

Very truly yours,

Pamela S. Seymon