Lyric discussion by mattythetiger 

The song is, as BlimpyJones said, about Peter Gabriel leaving Genesis. There's a bit more to it than that.

After he left, he wasn't sure if he would continue making music - he felt he had lost his inspiration. But he went to see a Bruce Springsteen concert and was invigorated by Bruce's love and energy; that, at least partly, inspired him to start his solo career.

The eagle in the song is Bruce: as petere gabriel sings, 'he was something to observe". (Bruce is also the subject, though less flatteringly, of Prefab Sprout's Cars and Girls.)

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