Peter Schneider has stepped down as chairman of Walt Disney Studios less than one week after Atlantis:The Lost Empire suffered the lowestsummer opening box office gross in the US of any Disney cartoon feature since GreatMouse Detective, which came out justa year after he first joined the studio's animation division in 1985.

The timing ofSchneider's resignation yesterday will not have been lost on Hollywoodcoming as it did on the very same day that Shrek, a feature animation from arch-rivals DreamWorksSKG, cruised past the $200m mark domestically to become this year'sundisputed box office champion. Shrek is the first movie this year to pass the $200m landmark.

In its official statement, Disney's top brass made no reference to either Atlantis or to its other summer tentpole release PearlHarbor, a film that will behard-pressed to earn back its estimated $270m-plus production and marketingcosts from its global theatrical run even after taking more than $160mdomestically.

Making matters worse in a town where success is often a matter of perception is thefact that Shrek opened one week before Pearl Harbor yet is now grossing more per week. Nor can it have helped Schneider's cause that Disney's one unqualified success this year in the family entertainment arena, Spy Kids, was the product of the autonomous specialist subsidiary Miramax Films rather than the main Walt Disney label over which he wielded more direct control.

Anysuch misgivings, however, were swept aside in the mutual back-slapping that accompaniedSchneider's resignation and by its media relations staff which noted thathis motion picture group was the strongest performing division across theentire Disney empire in the last financial quarter.

WaltDisney chairman and chief executive officer Michael Eisner said that Schneider's"passion and purpose" will be missed at its Burbank headquarters nowthat he has "chosen to go back to his roots in live theatre" in NewYork City. Indeed, Disney has agreed to partially fund the independent Broadwaytheatre production company that Schneider now plans to spearhead in the hopesof continuing the success of stage-shows such as The Lion King. He is credited with making that show a Broadwaysmash by having it staged by the relatively avant-garde director Julie Taymor.

Schneider'sdeparture, which comes almost a year and a half after Joe Roth quit the samepost to start his own indie production outfit known as Revolution Studios,creates a measure of uncertainty at Walt Disney Studios since no immediatesuccessor was named. Instead, the trio of executives that reported to Schneider- marketing and distribution chief Dick Cook; animation president TomSchumacher; and live-action development and production head Nina Jacobson -will all retain their titles but report directly now to Eisner.

Ofthese three, it is Cook that is seen as the early frontrunner to take over asoverall studio boss, a position that has seen an increasing level of hands-on interventionfrom Eisner as he tries to revive Disney's once lustrous brand. Already aquarter of Disney's animation staff has been cut back this year.

Determiningthe extent of Schneider's legacy at Disney may prove tricky, especiallysince so many of the films that he hurriedly greenlit ahead of potential summershutdown by striking actors have yet to be released. Moreover, some past successeslike Remember The Titans were reallythe work of Joe Roth; while a film like Pearl Harbor, seems to have straddled both regimes. Even theatricaldisappointments such as The Emperor's New Groove and 102 Dalmatians, both held as black marks against Schneider inyesterday's press coverage, were major hits in the home entertainmentmarkets.