DisneyWar

by James B. Stewart

  But before Burke could carry out his mission, an agreement in principle was reached on March 3. Litvack used a pay phone to call Eisner and Wells with the news. “It’s too generous,” Wells said, on the assumption that someone was eavesdropping.

  “The board will never approve it, and in any case, we’ll never be able to sell it to Sid Bass,” Eisner added.

  Litvack was furious, and later called Wells. “We made a good and fair deal and all you did was criticize it.”

  Wells said nothing, and Litvack was still angry when he hung up. But then Burke arrived at his hotel, and took him outside. Burke told him that Eisner and Wells were bluffing for the benefit of any eavesdroppers.

  It’s impossible to know if Disney’s hard line led to any concessions, but a deal to restructure the debt was announced on March 14, the same day as Disney’s 1994 annual meeting, and just in time for Eisner to reassure the Disney board. While the deal brought some immediate concessions, it really only postponed a day of reckoning. The now tainted Euro Disney name was dropped, and the park was rechristened Disneyland Paris.

  With the Euro Disney negotiations temporarily resolved, Frank Wells turned his attention to the struggling live-action studios, Touchstone and Hollywood. Contracts for several top studio executives were about to expire, including the Hoberman deal that Eisner and Katzenberg had discussed. And, of course, Eisner had been discussing the Katzenberg situation, as he had confided to Russell, on a daily basis. In March 1994, Wells wrote a detailed critique of the studios and convened a meeting with Katzenberg and Eisner to discuss it.

  Wells had two major points: Disney was making too many movies, and Eisner needed to be more involved in the creative process, as he had been in the early years of their collaboration at Disney. “It’s not worth being in the business at anything like this profile,” the memo read. “I really believe the two of you, working in partnership as you did the first four years, can make 15—plus or minus—movies a year and have spectacular results. But I’m very concerned about going much beyond 15…. I seriously do not believe that the true head of production (that is Jeffrey—let’s be real clear) can manage more than 15 pictures per year and give each one the individual attention it requires. Particularly as Jeffrey moves into broader responsibilities, we should all agree, starting now, that Michael becomes a true partner in the creative process.”

  Eisner was dubious. As he described the meeting in another letter to Russell, he confided, “When Frank and I tried to show him [Katzenberg] how badly he had done over the past three or four years in live-action films, he simply said it is all fixed. ‘This year we are going to make $250 million in live action…. Frank had tried to point out that our success came to an end after he pushed me out of the process and on top of that his desire to release 60 films. Whether that is true or not, Jeffrey displayed the strangest deafness one could imagine.”

  Shortly after that meeting, Disney released two live-action films: Angie and The Ref, which did not make any money and received bad reviews. The results only added to Eisner’s pessimism.

  In his many sessions with Tony Schwartz, Eisner complained constantly about Katzenberg. On March 2, 1994, they were discussing Katzenberg’s 1991 manifesto, still on Eisner’s mind three years later. Schwartz’s typed notes read: “jeffrey katzenberg…think I hate the little midget…but that…since plagiarized four years ago; from that moment decided was genius and loving person, he excluded me.” The notes go on to suggest that Katzenberg told Eisner he was “embarrassing” him at meetings and had “agreed to meet with him for a half hour each day, but then talked “about things other than product.”

  The growing tension between Eisner and Katzenberg, as well as Roy’s antipathy toward Katzenberg, were increasingly evident to the animation and studio staffs. Peter Schneider and Thomas Schumacher began nearly every day with a cell phone conversation about the latest quarrel between “Dad” and “Mom.” Relations between the two had gotten to the point where Katzenberg issued orders that no one who reported to him was allowed to initiate a conversation with Eisner. If Eisner happened to call one of them, they were to call Katzenberg immediately and report the substance of the conversation. Katzenberg explained the ban to Schneider by saying that Eisner was “meddlesome and crazy.”

  But Eisner had already asked Schneider to report to him on Katzenberg’s activities. He often called Schneider to gather intelligence on Katzenberg, which naturally put Schneider in the awkward position of double agent. As Eisner later confided to Irwin Russell, “I call Peter all the time, and although he is a political troublemaker, he did know what was going on.” Eisner flew into a rage when Schneider told him that Katzenberg was taking cels and backgrounds from the Disney archives for his own personal collection. When Schneider suggested that this was inappropriate, considering that Disney was planning to auction off some of its collection, Katzenberg had argued that Walt Disney himself had a collection he’d taken from archives. “But you’re not Walt,” Schneider said.

  “I’m the Walt Disney of today,” Katzenberg replied.

  That, at least, was the substance of the conversation that Schneider reported to Eisner, who “went wild” over the reference to Walt, Schneider recalls. Eisner insisted that Katzenberg reimburse the company for the cels (Katzenberg did). Even more than the taking of the cels, Eisner was incensed that Katzenberg would dare to compare himself to Walt. Eisner promptly reported the incident to Roy, further fueling Roy’s antipathy toward Katzenberg.

  Schneider had lunch every Tuesday in the Rotunda, the executive dining room, with Roy. Given that Roy was such a large shareholder, neither Eisner nor Katzenberg could forbid Schneider from talking to him, but it was clear to Schneider that they resented it. “You’re much too political,” Eisner warned Schneider at one point. But Schneider, like most Disney executives, felt he had little choice, caught between warring factions in which each piece of information became a test of loyalty.

  Eisner was also furious that earlier that year Katzenberg had opened a deep-sea-themed restaurant in partnership with Steven Spielberg called Dive! Although Katzenberg cleared the venture in advance with Wells, who had no objection to it, Eisner thought it was a blatant conflict with Disney’s efforts to open its own themed restaurants. It was especially galling to Eisner that, while Dive! was enough of a success that a franchise opened in Las Vegas, a Disney-themed restaurant never got beyond a prototype. As Eisner later expressed it, “my deepest concerns about Jeffrey had to do with the way he conducted himself, and the degree to which he focused on his own agenda.”

  Eisner concealed these feelings from Katzenberg, and Katzenberg brushed aside his complaints about the performance of live action. “Wait until next year. It’s going to be great!”

  Katzenberg’s optimism sprang in part from ongoing work on King of the Jungle, which had now been renamed The Lion King. Thomas Schumacher had convinced Katzenberg that King of the Jungle should be a musical. Tim Rice, who’d stepped in for Howard Ashman on Aladdin, wanted to work with popular composer Elton John, but Katzenberg resisted. It took another phone call from Geffen, a friend of John’s and former producer of his records, to get Katzenberg to agree. But once John accepted the assignment, Katzenberg was so enthusiastic that he flooded the composer with press and marketing requests. Finally John called Schumacher. “Make him stop calling,” he begged. So Schumacher called Katzenberg.

  “Too many people are calling Elton,” he said.

  “Great,” Katzenberg responded. “We’ll limit calls to just you and me.”

  “He’d rather you not call.”

  “Oh.” There was a brief silence. “You mean just you?”

  “Me and Denise [Greenawalt],” he said, who was the press person in charge of the film.

  Schumacher thought Katzenberg took the rebuff well, and Katzenberg issued a memo saying John didn’t want to be disturbed by calls.

  For the most part Katzenberg honored his own edict, though it didn’t stop his active involvement i
n the project, which, after all, was his idea. He wasn’t satisfied with the development of the script. Countless scripts had been written and rejected, and Katzenberg felt that the story wasn’t jelling. Then, in the fall of 1993, during one of the weekly meetings, a story artist mentioned that “You know, what you’re really trying to do here is tell the story of Hamlet.” Katzenberg paused for a second. Suddenly everything fell into place. “You’re right!” he exclaimed. Katzenberg urged that the dialogue be made “more Shakespearean.”

  In the resulting script, Scar, the king’s brother and Simba’s uncle (and the voice of Jeremy Irons), became a much more important role. In Shakespeare, Hamlet’s uncle kills Hamlet’s father, the king, so he can marry Hamlet’s mother. The king’s ghost returns to exact vengeance. In Lion King Scar kills Simba’s father, who later returns as a ghost, though the analogy probably shouldn’t be stretched too far. Simba, unlike Hamlet, leaves his father’s kingdom to find himself, weaving in an element of the biblical story of the prodigal son.

  Elton John and Tim Rice had finished their score, which had a troubled history. Katzenberg had initially rejected the music for the opening sequence, “Circle of Life.” Even after John rewrote it with a different melody, Katzenberg thought it was “barely suitable for the end credits.” But composer Hans Zimmer, brought in to supervise the music, had transformed it using African musical influences in the voices and orchestrations. The directors had wanted to cut “Can You Feel the Love Tonight?,” which they thought was an “unearned” moment between Simba and his budding love interest. A version of the film was screened for John with the song deleted. John went ballistic, shouting at Katzenberg on the phone that he’d cut his best song. Katzenberg intervened, and the directors found a way to bring the song into the story much later, when Simba and Nala have established their relationship, and the audience would be yearning for their reunion.

  Katzenberg was also working to salvage Toy Story, Disney’s first joint venture with Pixar. Late that year, John Lasseter and his team came to Burbank and screened some of it for Katzenberg, Schneider, and Thomas Schumacher, who was acting as the Disney liaison to Pixar. While they still liked the idea of toys coming to life, the Disney executives agreed that the project was a “mess,” as Katzenberg put it. There was no coherent narrative line. But suddenly Katzenberg had an idea: In the characters Woody and Buzz Lightyear, the retro cowboy and the futuristic spaceman, Lasseter had the makings of a classic buddy movie. “Go out and watch two movies,” Katzenberg told Lasseter and his team, “The Defiant Ones and 48 Hrs.” Both were classic “buddy” pictures where opposites bond, with 1958’s The Defiant Ones starring Sidney Poitier and Tony Curtis.

  “I get it,” Lasseter said. Katzenberg felt it was a breakthrough moment, just like Hamlet had been for Lion King.

  Not that these suggestions, however constructive they may have been, endeared Katzenberg to either the Disney animators or their Pixar counterparts working on the project. In one of the cartoons they drew, which especially amused Roy, Katzenberg stands at the head of a conference table surrounded by animators. They have unzipped their trousers and put their penises on the table. Katzenberg’s is so small as to be barely visible.

  “Who has the biggest?” Katzenberg demands.

  “You do, sir,” chime the animators.

  *Where Eisner came up with such a round number isn’t clear. It doesn’t correspond to anything in the Project Snowball calculations, which projected Katzenberg’s total compensation in 1995 and 1996 would be approximately $44 million. The bonus due him was far more than $100 million.

  *Buffett is famous as a long-term “value” investor rather than an aggressive buyer of other companies, like Rupert Murdoch.

  †Katzenberg maintains that while these subjects may have been touched upon, Eisner’s account is grossly inaccurate, noting that it was Eisner who offered him a seat on the board, which he didn’t want.

  Six

  One measure of Eisner’s rising stature in Los Angeles was a membership in the exclusive Bel Air Country Club, which he’d joined in the fall of 1993 at the request of his sons who wanted to learn to play golf—much as Roy O. Disney had joined Lakeside so that Roy E. could learn the game. Michael Ovitz helped pave the way. Bel Air had been Ron Miller’s club, and though it no longer excluded Jews (Ron Miller had proposed the first for membership, and recalls taking “quite a bit of heat for it”) or entertainment industry people, it retained an aura of wealth and inherited privilege. The club was on Bellagio Road in the heart of Bel Air, a few minutes from the Eisner home.

  Eisner had neither the time nor patience for golf, though he’d occasionally played with his father and had a decent swing. Six months after joining Bel Air, he had yet to set foot on the course. But on Easter Sunday afternoon, March 27, 1994, a beautiful, warm spring day, he, Jane, and their son Anders decided to play a round. Though Eisner was pleased to discover he could still hit the ball, they were erratic players, with numerous divots, tree and sand trap shots, and balls lost in water hazards and out-of-bounds. So they were late arriving for an Easter dinner hosted by their oldest son Breck and his girlfriend. Everyone gathered around an antique dining table that had once belonged to Eisner’s grandmother.

  Five minutes into dinner, at about 6:30, the phone rang. Breck answered, then told his father it was Lucille Martin, his secretary. It was very unusual for Martin to interrupt Eisner at a family event.

  “Michael,” she said. “Frank is dead.”

  Eisner felt numb. “What happened?”

  Martin had only a few details: Wells had been killed in a helicopter crash returning from skiing in a remote area in the Nevada mountains. Only one passenger had survived. Others on the trip, including one of Wells’s sons, his mountain climbing partner Dick Bass, and actor Clint Eastwood, had been in a different helicopter.

  Eisner said he needed a moment to collect himself. He hung up and gestured for Jane to join him outside the dining room. Conversation came to a halt. “Frank is dead,” he said. Jane screamed, then started crying. Eisner himself showed little emotion; “My reaction in crisis has always been to set my emotions aside and to focus on the issue at hand,” he has said.

  Roy, Patty, and their pet Labrador were returning from their weekend house in San Juan Capistrano when their car broke down, stranding them alongside the road until a truck arrived to rescue them. They, too, were late for dinner at their son Roy Patrick’s house, and the meal had barely begun when Martin reached Roy. “My God,” Roy said. “Frank is dead.”

  Stanley Gold was in his car with his family, after an early dinner, when the phone rang. “Are you driving?” his secretary asked. “Pull over.”

  “What is it?” he asked, but she insisted he stop driving. “I just heard from Lucille. Frank was killed in a ski accident.” Gold let his head fall to the steering wheel. Wells was his best friend.

  When Michael Ovitz walked into his house that evening, the usual array of notes from a message pad was arrayed on the dining table. He glanced through them and saw one from “M”: “Mr. Eisner called. Mr. Wells was killed in a helicopter crash an hour ago.” Thinking of the time he’d called Eisner with the news that John Belushi had died of a drug overdose, and Eisner hadn’t believed him, Ovitz thought the message was a prank. He immediately picked up the phone and called Eisner.

  “He’s not dead,” Ovitz said.

  “He’s dead, Michael.”

  As usual, Eisner’s first call was to Sid Bass, whom he reached at a restaurant in Aspen. Then he spoke to Gold, Roy, and Irwin Russell, his closest confidants on the board, and then Ovitz had called. With each, he discussed what immediate steps needed to be taken and the issue of succession. Roy insisted that Eisner not try to find another Wells. “He was unique,” Roy said. “You can’t clone him.” The consensus was to not make any dramatic moves. Eisner called John Dreyer, head of public relations, asking him to draft a press release. He called Sandy Litvack, a sign of Litvack’s growing stature in the company.
He phoned other board members, the heads of Disney’s various divisions, asking them to inform their staffs, and finally, at about 9:30 P.M., he called Katzenberg.

  The Eisners were about to set out to try to console Luanne Wells. As usual, Luanne had not accompanied her husband on one of his strenuous outdoor weekends. She was at their beach house in Malibu. Katzenberg suggested he come along. That was the last thing Eisner wanted, and he dismissed the idea as “inappropriate.” Instead he told Katzenberg to call his people, and said he’d meet with him early the next morning. “We have to keep the ship on an even keel,” he said.

  Wells’s death was front-page news in the next morning’s Los Angeles Times, which reported that he and two others were killed when their helicopter crashed in the remote Ruby Mountains in northeast Nevada. “There are no words to express my shock and sense of loss,” Eisner said in a prepared statement. “Frank Wells has been the purest definition of a life force I have ever known. His wisdom, his charm, his zest for experience and challenge…his naked and awesome intelligence…set him apart and beyond. The world has lost a great human being.”

  As Katzenberg pulled into the parking garage at 6:30 that morning, he noticed Eisner’s car wasn’t there yet. He cleared his schedule, canceling lunch and dinner plans, in case Eisner needed him, as he assumed he would.

  Overnight, Katzenberg had thought of little else but the assurance Eisner had given him at Aspen that if anything ever happened to Wells, Katzenberg would succeed him. Of course he’d never expected anything so sudden, so tragic, as this. Wells had been a mediator between him and Eisner so often, and Katzenberg would miss him. But fate moved in unexpected ways. At age forty-three, Katzenberg was ready for the partnership with Eisner that they’d discussed for so long, and that now seemed within his grasp.