Eisner was determined not to let anything interrupt the juggernaut of Disney animation—Pocahontas had opened in mid-June and grossed $141 million domestically, The Hunchback of Notre Dame was coming out for the summer, to be followed the next year by a musical version of Hercules—and an ambitious schedule of animated features was already in the pipeline. To keep star animators John Musker and Ron Clements happy, Eisner finally green-lit their proposal for Treasure Island in space, an idea long resisted by Katzenberg that went back to the first animation “gong show” meeting.
Although animation was one area where Eisner had specifically excluded Ovitz, he now asked him to help retain key animators. As Ovitz later described the situation, “Michael would call me constantly. ‘Can you save this?’ ‘Can you handle this?’ ‘Can you save that?’ ‘Can you do this?’ ” Ovitz encouraged animators to display their art in the commissary, and organized gallery-like “openings” every four to six weeks. Even though Eisner ridiculed the exhibits, the animators seemed to enjoy them. Ovitz met with key animators individually and tried to address their concerns. He threw a party for all the animators at his home, featuring guided “art tours” of his art collection. The more Ovitz ingratiated himself with animators, the more Eisner seemed to resent it. When he saw the bill for the party, he criticized Ovitz, saying it was too expensive and a waste of money. “Besides,” he added, “Roy didn’t like the party. He said it was rude that you wouldn’t let people in your house.”
Ovitz thought that was unfair; the dinner had been served outdoors, but the house was open, and the art tours took people through the house. Later, Ovitz asked Roy what he thought about the party, and he said he’d really enjoyed and appreciated it. Was Roy being truthful or just polite? Ovitz had no way of knowing. (Roy had criticized the party to Eisner, and said he wasn’t aware of any art “tours.” Thomas Schumacher did take some animators who wanted to see the art into the house through the kitchen.)
As Ovitz later described the process, “To his credit, Jeffrey was very tenacious at trying to romance these people. And it is not difficult to shake the relationship of a creative person. And Jeffrey was expert at it…we were in a constant fight with DreamWorks at the beginning. These kinds of things take up unbelievable amounts of time, because, unlike other people who do it, I never did nor will I ever do what we call ‘touch-and-go’ relationships, which is where you go meet someone, you salvage it through whatever means necessary…and then you just don’t talk to them again. Every time I went after one of these people I made them my client, so I had lunch with them once a month. I called them constantly to see how they were doing. I sent them things on their birthday or their anniversaries or things that were important. I helped them if their kids needed to get into a hospital with my connections. That was part of my job. Can you quantify that for shareholders? I don’t know that you can do that. No one else at that company was capable of doing it.”
Despite Eisner’s complaints about Ovitz’s tactics, none of the high-priority animators Eisner had assigned to Ovitz defected to DreamWorks. There were some losses, of course. But Deja and Keane both stayed, as did Clements and Musker, although the vastly greater sums they were offered to stay were no doubt more important than Ovitz’s ministrations. Still, they enjoyed the attention and felt they weren’t being taken for granted.
On another occasion, Eisner called Ovitz, sounding frantic, with the news that Tim Allen had just walked off the set of “Home Improvement.” “He’s a $250 million asset,” Eisner said. “You’ve got to get him back.”
Ovitz immediately left his office and went to Allen’s dressing room on the set. He suggested that Allen calm down and take the rest of the day off. The next day Ovitz invited him to lunch, and listened patiently to his grievances, promising to address them. The campaign climaxed with a dinner party Ovitz hosted for Allen at his house, which included Allen’s wife, his lawyer, his manager, and a group of his friends. After Allen admired Ovitz’s art collection, Ovitz bought Allen a gift: a print by contemporary artist Roy Lichtenstein, a personal friend of Ovitz, that cost about $1,500.
Allen returned to the set, and production of “Home Improvement” resumed without further incident. But when Ovitz asked to be reimbursed for the cost of the Lichtenstein print, Sandy Litvack hit the ceiling, suggesting that it was unethical, which gave Litvack another opening to fuel Eisner’s suspicions about Ovitz’s ethical standards. (Although Eisner cited this incident as evidence of Ovitz’s lack of ethics, it isn’t clear what was unethical about it. Eisner evidently reconsidered, since he testified years later that there was nothing wrong with Ovitz giving Allen a gift on Disney’s behalf.)
As Ovitz later described the encounter, Litvack “got very upset with me and angry and said I didn’t know how to work in a public company and he embarrassed me in front of a number of people and he told me that I was not very bright about these things and in a public company you can’t buy gifts for people. And I explained to Sandy that, if it is the rule, I found it to be ludicrous. I would be happy to pay for it myself. But I got Tim Allen to go back to work. He never missed another episode.”
Ovitz detested Litvack, but nonetheless he enlisted his help to try to resolve the Katzenberg dispute. Litvack was a lawyer, and in any event, Ovitz had learned by now that if he didn’t get his support, his own efforts would be doomed, especially with something so sensitive as Katzenberg. “I knew what a hot button issue this was,” he later explained.
The issue had only gotten “hotter” with Katzenberg at rival DreamWorks, overtly competing with Disney and trying to woo its top animators. And it had reached the boiling point when David Geffen, increasingly angry over Eisner’s failure to honor Katzenberg’s contract, his treatment of Rich Frank (another Geffen friend), and other issues, decided to unload on Eisner to journalist Robert Sam Anson, whose book project on Disney already worried Eisner. “I’m not afraid of Michael Eisner,” Geffen told Anson. “That’s why he’s so angry with me. Because in this town where people are all about business and making money, I am the only one willing to say the truth.” And the “truth,” in Geffen’s view, was that Eisner suffered from “character flaws” and from something “very, very damaged in his background.”
“Michael is a liar,” he continued. “And anyone who has dealt with him—genuinely dealt with him—knows he is a liar.” As for Katzenberg, “Anybody who worked for me who contributed as much as Jeff Katzenberg—I’d call them chairman of the board. But Michael is a very, very ungenerous guy. He suffers when anyone else shares the credit…. I’ve always said that Michael built Hollywood Records and Euro Disney and that Jeffrey’s responsible for everything else.”
Geffen made the comments on the understanding that Anson would use them in his book on Disney. But after Anson decided he didn’t feel up to writing a Disney book and instead joined Los Angeles magazine as editor (which Disney acquired through Cap Cities two months later), Anson kicked off his tenure by using Geffen’s comments about Eisner in an article for the magazine, “Geffen Ungloved,” which ran in the July 1995 issue of Los Angeles magazine. Geffen’s comments were the talk of Hollywood. Although Geffen was upset that they were taken out of context, he couldn’t dispute their accuracy. (Anson’s next piece criticized Ovitz. He was fired as editor three months later for supposedly unrelated reasons.)
This was exactly the kind of press Ovitz was determined to avoid, and that he feared Katzenberg and his ally Geffen would continue to generate, since both had strong ties to reporters, in contrast to Eisner, who used John Dreyer to avoid them as much as possible. Litigation—the “insanity” of “facing Jeffrey’s rage” in court, as Geffen so vividly put it—had to be avoided.
“It ultimately was just not a good thing for the Walt Disney Company to be in a litigation with Mr. Katzenberg,” Ovitz later testified, “because I felt, (a) that Mr. Katzenberg would have an excellent chance of winning based on what I had seen, and (b) that it would be bad press for the company, and (c) if a deal wa
s struck they should honor the deal or settle the deal in some way, shape or form…. I knew that it was very important that the company settle this and not let it blow into a press event.”
Litvack agreed to help Ovitz make the case with Eisner, though he surely knew this was not a view calculated to win Eisner’s approval. Eisner initially rejected any idea of allowing Ovitz to try to negotiate a settlement, but Ovitz persisted (with Litvack’s lukewarm support), and after several weeks, Eisner finally gave in. Ovitz called Katzenberg, eager to follow through on the pledge he’d made to him at Iger’s wedding.
“Jeff, I want to talk to you about trying to figure out how to stop all these atrocities that are going on,” Ovitz said, the Geffen comments still on his mind.
“No problem,” Katzenberg replied. “I’ll meet you at St. Joseph’s in the reception area.” St. Joseph’s, a hospital in Burbank across the street from the Disney campus, was a place they were unlikely to be seen by entertainment executives.
When Ovitz arrived, Katzenberg was already waiting in a small cafe off the reception area, two Diet Cokes and bags of Fritos on the table. To Ovitz the drinks and snacks seemed, under the circumstances, like a peace offering.
Katzenberg laid out his case, calmly and without anger. He said he only wanted what his contract guaranteed him—a share in the profits he’d worked so hard to generate while he was at Disney. Exactly how much that would be wasn’t clear, given the ongoing enormous revenues being generated by hits like Beauty and Lion King, but Katzenberg said the exact amount of money wasn’t the issue. He simply wanted Eisner to make a good faith effort to honor his contract. Rather than get involved himself, Katzenberg suggested that Ovitz work through Geffen, and then when they reached a deal, Katzenberg and Eisner could meet.
Ovitz thought Katzenberg was reasonable and gentlemanly. “The conversation couldn’t have been more productive or positive,” he recalled. He said the same thing to Eisner and Litvack, even though it was obvious this was not what Eisner wanted to hear. Still, he and Litvack agreed that Ovitz should proceed, and that they’d be willing to settle the case for up to $80 million. Ovitz felt anything less than $100 million would be a bargain for Disney. He kept Eisner and Litvack informed “every step of the way; I cleared everything I was doing with them.”
Geffen and Ovitz met several times, and spoke more often on the phone. Geffen was straightforward: Katzenberg wanted a round $100 million, the amount Eisner had always said he was giving up by leaving Disney. Ovitz was pleased that the number wasn’t even higher; he got Geffen to agree to $90 million, at which point Ovitz thought they should go ahead and make a deal. “It’s reasonable, and it’s the right number, and I’m going to do my best to close this deal,” he told Geffen.
Ovitz spent forty-five minutes briefing Eisner and Litvack on the negotiations up to that point. Eisner wanted to hear every detail. When Ovitz finished, Eisner looked at Litvack, and Litvack looked back at him. “I don’t want to settle,” Eisner said.
Ovitz couldn’t believe it. “I’m not a lawyer,” he said. “I may not be as smart as you, but can you please explain the rationale? You’re going to run up $20 million in legal fees. You could be on the hook for $200 million.”
Katzenberg is “misreading the contract,” Litvack said. “He’s not entitled to anything.” Ovitz was furious that Litvack had again turned against him in front of Eisner.
“Well, let’s assume I’m misreading it. You get a bonus. I get a bonus. Are you telling me he’s different?” Ovitz said.
“Yes,” Litvack answered.
Ovitz felt himself getting agitated. He turned to Eisner. “Whatever you want to say, he worked his ass off for you. Now you’re going to make him fight you to get his bonus? What kind of message does that send?”
Eisner said the matter was closed; he wasn’t settling and he wasn’t paying Katzenberg anything. As Ovitz later testified, after nearly reaching a deal, “I couldn’t get approval from Eisner. Litvack was very vociferous about it—Originally he backed me in the settlement idea but when it came to spending that money none of them wanted to do it.”
Ovitz felt defeated. He called Geffen and then Katzenberg to say he’d failed to sell the deal to Eisner and Litvack. He felt they took the news calmly, but their comments were withering. “It’s obvious you report to Sandy Litvack,” Geffen said. “This isn’t the old you. You could close anything. You could get it done. Now you have no credibility.” Katzenberg sounded almost sympathetic. “This is just the beginning,” he said. “You have no idea what you’re in for.”
The charges were devastating to Ovitz, because they rang true. “For the previous thirty years as agent I didn’t ever, ever, not settle a deal or make a deal. I had a one hundred percent accuracy rate, a one hundred percent completion rate in settlements,” he later testified.
From Ovitz’s point of view, it was hard to know what, if anything, Eisner wanted him to do, since nearly every initiative he embarked upon was thwarted, either by Eisner himself, by Litvack or Bollenbach, or by people who nominally reported to Ovitz. As Ovitz later put it, “every time I went to do something, someone pulled the rug out from under me.”
Even Ovitz’s hard work seemed to backfire. At one point he got a breathless phone call from Jane Eisner. “I wanted you to go to Disney so Michael wouldn’t have to work so hard,” she said, obviously upset.
“I’m doing the best I can,” Ovitz said, “but it’s not easy. He won’t delegate.”
“You’re there Saturdays, Sundays. He can’t keep up,” she said.
“What are you talking about? He doesn’t have to keep up.”
“It’s causing him stress,” she said. “If you’re there, he feels he has to be there.”
“Jane, talk to him,” Ovitz said. “That’s ridiculous.” But it dawned on him that it wouldn’t make any difference what Jane said. Eisner saw Ovitz as a competitor to be vanquished, not an ally, friend or “partner.”
Unknown to Ovitz, it’s clear that Eisner felt he had made a mistake hiring Ovitz even before he began working at the company, and had already decided to fire him. In any event, that’s what Eisner told Sid Bass just five weeks into Ovitz’s tenure. The only reason he didn’t fire him immediately, Eisner told Bass at the time, was because he thought Ovitz would commit suicide.*
It isn’t clear where Eisner came up with the idea that Ovitz was potentially suicidal, but it didn’t come from Ovitz. Eisner later testified that suicide was on his mind because he and Ovitz had just seen the Broadway musical Rent, in which one of the characters commits suicide. Eisner told me that a fragment from the poem “Richard Cory” by Edwin Arlington Robinson, which Eisner had studied in college, was on his mind. (The poem addresses the paradox of a town’s leading citizen, Richard Cory, who “one calm summer night / Went home and put a bullet through his head.”)
Even then, Eisner indicated to Bass that he was only going to keep Ovitz for another twelve months, and that he’d have to be fired no later than October of the following year. Eisner complained repeatedly to Bass that Ovitz was unethical, untrustworthy, and that he had suggested lying as a “modus operandi.”
Eisner had also expressed his reservations about Ovitz to Tony Schwartz, which surfaced in a draft of the book Schwartz was writing:
“Nothing interested [Ovitz] so much as deals. During his first several months on the job, he suggested a litany of possibilities, among them buying the Seattle Seahawks, the Los Angeles Lakers, and the record company EMI. I was loath to dampen his entrepreneurial instincts, but in each case, when we ran the numbers, they did not come close to making economic sense. Faced with these facts, Ovitz would back off, but only after considerable time had been invested in due diligence…. The more relentlessly he pursued deals that ultimately made no financial sense, or failed to take account of how his actions would go over with our other executives, or made choices about how he operated that I believed seemed inappropriate in a public company or sent the wrong message, the more prompted
I felt to maintain checks and balances on his authority, and to get involved myself. It was a negative cycle that fed on itself.”
Evidently, as part of these “checks and balances,” Eisner encouraged even those executives who nominally reported to Ovitz to bypass him and consult with Eisner. After the Brad Grey incident, Joe Roth regularly consulted Eisner without informing Ovitz. As Ovitz later testified, Eisner “advised Larry Murphy, who was then head of strategic planning, who reported to me, who I held a weekly meeting with his entire staff, to do nothing that I suggested and to report everything in the meeting back to him. Dean Valentine, who was head of television, told me that Mr. Eisner told him that even though he reported to me, that he should not do what I said and he should consider his channel to Mr. Eisner open.”
At another point in the draft of his book, Eisner accuses Ovitz of suffering from “fierce insecurity. In an almost manic desire to prove himself at Disney, he sacrificed the humility, patience, and openness that are necessary to learn any complicated new job. Instead, from the first day, Ovitz focused nearly all of his attention on the same things that had always worked for him successfully before: orchestrating high-profile deals, focusing on his image, and cultivating the visible trappings of power.”
Despite their long friendship, or perhaps because of it, Eisner failed to communicate the depth and intensity of these feelings to Ovitz himself, much as he had so long concealed his feelings about Katzenberg. The Eisners and Ovitzes continued their social lives together. Jane Eisner and Judy Ovitz remained best friends; they spent time together at Aspen and in Los Angeles.
Indeed, given what Eisner did say, it’s no wonder that Ovitz felt Eisner still valued his friendship as highly as ever. In an October 20, 1995, letter to “Board Members, Bass Family and Jane,” Eisner showered Ovitz with extravagant praise:
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