“Michael Ovitz joined me in Paris. Let me just say right here, boy are we lucky!!!! Even though he is going to read this letter; and I do not want to encourage him too much (I want something to continue to do in the company), his coming to Disney was a great coup for us and a saving grace for me. Everybody is excited being with him, doing business with him, enjoying his energy and knowledge, sense of humor and enthusiasm. He comes with training and experience in the business we are in and has quickly gone from deal-maker to program-maker who understands the deal. He has already run a private company, and being a quick study, has quickly adapted to the public institution.”
As Thanksgiving 1995 approached, John Lasseter at Pixar was working feverishly to put the finishing touches on Toy Story, the fledgling studio’s first feature-length computer-generated film. After Katzenberg’s departure from Disney, the project had nearly died once again. Although Lasseter had embraced Katzenberg’s suggestion for a buddy picture, Katzenberg had been encouraging him to make the story darker, “edgier.” After a disastrous test screening near San Francisco, Peter Schneider had pulled the film from the release schedule and insisted that Lasseter and his staff rework it. Lasseter didn’t object. He felt the movie had been drifting further and further from the film he wanted to make.
When Lasseter returned with the revised version, Schneider and Thomas Schumacher were so excited that they moved up the release date from spring 1996 to November 1995. The story of a group of toys that come to life, and the fears of the cowboy Woody that he will be displaced by a space-toy astronaut, Buzz Lightyear, the film opened on November 22 and was an immediate sensation, a technological breakthrough, and a compelling and exciting story.
The new, hip magazine Wired featured Toy Story on its cover, and the article noted that the movie had required a bank of 300 Sun microprocessors and 800,000 hours of computing time. Each frame required 300 megabytes of information. Roy Disney was astonished that the CAPS system he’d fought for ten years earlier had evolved into something so complex and artistically liberating. In one sequence, Buzz Lightyear jumps off a bed, bounces off a ball, rebounds off the ceiling, and spins around a hanging toy helicopter. Unlike the static backgrounds of conventional animation, the walls, ceilings, and objects expand and contract to simulate the high-speed perspective of Buzz. “It’s an amazing ride,” concluded Chicago Sun-Times critic Roger Ebert. “A visionary roller coaster of a movie…. I felt I was in at the dawn of a new era of movie animation, which draws on the best of cartoons and reality, creating a world somewhere in between, where space not only bends, but snaps crackles and pops.”
Costing $30 million, Toy Story was a huge box-office success, grossing nearly $200 million in the United States alone. And it was a windfall for the consumer products division and the Disney stores, since the very concept of the movie was toys, all of which could be manufactured and sold. Eisner reacted swiftly, ordering Schumacher to negotiate a new, longer-term agreement with Pixar to replace the original three-picture deal with one that provided for seven feature films, a fifty-fifty split of revenues, and reserved to Disney control over any sequels and rights to consumer products.
As they had for years, the Ovitzes and Eisners spent both Christmas Eve and Christmas day together in Aspen, alternating between their houses. On Christmas Eve that year, Eisner handed Ovitz a handwritten note:
1996 is going to be a great year—we are going to be a great team—we every day are working better together—time will be on our side—we will be strong, smart and unstoppable. And I think it will be fun because both of our hearts are in the right place and pumping. I have a lot to learn from you and that is something I look forward to. Only a really smart person* realizes that he can always be educated. I am ready for more. Everybody knows we are winners. Every day I am thankful we are together. Here’s to 1996, fun, success, and little stress.
Michael, 12/24/95
*Eisner also testified that he told Ovitz while they were in Aspen that the chief financial officer wouldn’t report to Ovitz. “I had told Michael that Steve had this contractual commitment to report to me…on this weekend he accepted that the CFO would report to me…. Mr. Ovitz knew from day one that Mr. Bollenbach…was going to report to me directly.” In his book, Eisner concedes that he promised that “all operating divisions” (except animation) would report to Ovitz. Ovitz testified that Eisner had never said anything about Bollenbach not reporting to him, and that he considered legal and financial to be among the operating divisions that would report to him, as they had to Frank Wells.
*Iger recalled that the dinner was at The Mark hotel. Both hotels are on Manhattan’s Upper East Side.
*Eisner later testified that Bass was mistaken, and the conversation took place later in Ovitz’s tenure.
*I hope I am
Ten
At Disney’s live-action operation, David Vogel was pouring his efforts into 101 Dalmatians, which was now scheduled to be the successor to Toy Story as the “event” film for the 1996 holiday season. Though Vogel and Joe Roth had called on Glenn Close during her triumphant Broadway run as Norma Desmond in Sunset Boulevard, she had turned down the part of Cruella De Vil, the glamorous but evil dognapper at the center of the plot, as did Sigourney Weaver. But on impulse, after her run in Sunset Boulevard had ended, Vogel called Close’s agent, stressing the similarities between the two divas, Cruella and Norma. Maybe Close would like to play another over-the-top character. Vogel was ecstatic when she accepted—on condition that John Hughes rewrite a few of her lines. She and Hughes met soon after.
In the first week of January 1996, Vogel flew to London, where filming was set to begin and Close had arrived for hair and makeup. A few days before filming began, Close looked at the script, and saw that none of the changes she’d requested had been made. Vogel frantically tried to reach Hughes, but he didn’t return the calls. The producer, former Disney executive Ricardo Mestres, was in the Caribbean and unreachable. It fell to Vogel to take Close to tea at Claridge’s Hotel, hoping to smooth things over, but it was clear that Close was hurt and insulted. “David,” she intoned in a deep, throaty voice, “no lines—no Cruella!”
Vogel saw the project collapsing before his eyes. “I don’t know where John is,” he stammered unconvincingly, though it was true. “So let’s figure out what you want.” Close went over the lines with Vogel, and he didn’t think her requests were so unreasonable. Afterward, he called Joe Roth. “John is in hiding,” he reported. “You’ve got to find him.” He finally reached Mestres and told him to either get Hughes to make the changes or he would hire someone else. Mestres called Hughes’s lawyer. Finally word reached Hughes, who was furious.
“There’s a bullet circling London and it’s headed for you,” Roth reported to Vogel. Given Hughes’s stature in Hollywood compared to Vogel’s, Vogel knew that if he alienated Hughes he’d probably be fired.
Hughes finally called Vogel, his tone icy. “I hear you have sided with the actress against me.”
“Absolutely not,” Vogel insisted. “If you don’t want to rewrite these lines, it’s totally up to you. I’m prepared to shut down this movie and fire the actress and look for a new Cruella. I have a list of actresses who want to do it, and I’ll fax it to you.”
There was a long silence. Vogel waited anxiously. Did John Hughes really want to go to war with Glenn Close over a few lines?
“All right,” Hughes finally said. “I’ll talk to you in the morning.” The next morning Vogel found five new lines on his fax machine. Close was satisfied. Filming commenced. Vogel had dodged the bullet.
Vogel thought he might get a call from Roth thanking him for a job well done. If this was any other studio, he might even get a bottle of champagne. But he heard nothing.
Disney’s acquisition of ABC closed in January 1996. Katzenberg was threatening to file suit against Disney the same day, but Ovitz persuaded him to hold off. Tom Murphy joined the Disney board, as did Ovitz, on Eisner’s recommendation. In a note to Ovitz t
yped by Eisner that same month, he praised Ovitz as “professional, attractive and competent,” and added, “like a marriage, we are doing wonderfully to the outside world.”
But there were ominous signs. Eisner was upset that Ovitz had wished Sid Bass a happy New Year. “I really must know what you’re up to. It’s not enough that you have your secretary call to say that you wished Sid Bass a happy New Year. Hearing from a secretary…puts me in a dark position.” It was one of many indications that Eisner did not want Ovitz to speak to Bass or any board members. Ovitz was warned specifically not to talk to Tom Murphy or Dan Burke. “These small but aggravating problems pale in comparison to how well you are operating,” Eisner continued, “but it’s just little things like respecting my relationship to my bosses, the Basses and the board…you are squeezing the toothpaste from the middle. It’s one way to get paste, but not the way for me.”
Perhaps because he had so little real authority, Ovitz seemed to obsess over those things he could control. His office renovation was finally completed—at a cost to Disney of over $2 million, much of it due to overtime charges. Much was made of Ovitz’s extravagance—the office costs, the many assistants and secretaries, the $76,000 he spent on flowers—even though Eisner later conceded that Ovitz wasn’t really to blame.
With the acquisition of Cap Cities, Eisner wanted to move swiftly to put his stamp on the network, and urged Ovitz to find a programming executive to replace Ted Harbert, who’d been at ABC for twenty years. He was also “very concerned about Mr. Iger’s ability creatively,” Ovitz later testified. Eisner tried to recruit Marcy Carsey, a partner in Carsey-Werner television, the producers of ABC hits “Roseanne” and “Grace Under Fire,” but she turned him down. Ovitz canvassed agents, producers, and directors and came up with a short list of candidates. Jamie Tarses was the first name on just about everyone’s list. Ironically, Harbert had suggested trying to recruit Tarses to ABC the previous fall, though certainly not as his replacement.
Tarses was the number two programming executive at NBC, which had streaked past ABC in the ratings with Tarses-developed hits like “Caroline and the City,” “Mad About You,” and “Friends.” Intense, dark-haired, attractive, and a smoker, Tarses embodied the hip, young, affluent audience that advertisers coveted and that had flocked to NBC.
As the daughter of TV producer Jay Tarses, creator of the acclaimed 1987 series “The Days and Nights of Molly Dodd,” Tarses had grown up in the television business, reading her father’s scripts and analyzing shows during dinner-table discussions at the family’s home in the San Fernando Valley. “My father hated executives,” Tarses told The New York Times. “He would say they were hateful, horrible people who should be shot on sight.” After graduating from college, Tarses worked at “Saturday Night Live” in New York and then at Lorimar in Hollywood before joining NBC.
Even as Ovitz was putting out feelers, he got a call from Robert Morton, the executive producer of “Late Show with David Letterman,” who was Tarses’s boyfriend and a client of Ovitz at CAA. Ovitz had been talking to Morton about luring Letterman away from CBS to ABC, but in this call Morton broached the subject of Disney hiring Tarses to be in charge of programming at ABC. Though she still had eighteen months on her contract at NBC, Tarses was miserable, he reported. She was contemplating a sexual harassment suit against network president Don Ohlmeyer. Also, her immediate boss, programming head Warren Littlefield, had just gotten a new five-year contract, which meant she wouldn’t be advancing anytime soon at NBC. She was not only interested in switching to ABC, but under the circumstances, Morton was sure she could get out of her contract at NBC.
Ovitz wasn’t really surprised. Rumors about Ohlmeyer’s heavy drinking and erratic behavior had circulated for years. He promptly reported this development to Eisner and Iger. Eisner was keenly interested in any gossip about rival entertainment executives, especially a direct competitor like Ohlmeyer, but he was less sure about Tarses, and said he wanted to do his own “due diligence.” But he, too, soon reported that she had received glowing recommendations. Eisner authorized Ovitz to make an approach, and he urged Bob Iger to set up a clandestine meeting.
Almost as soon as Iger and Tarses started talking, Tarses said she’d already met with Ovitz. “Really?” Iger responded, trying to disguise his surprise. Ovitz hadn’t said anything about meeting with Tarses. Iger thought he was in charge of hiring a new programming executive, but Tarses was acting as though she and Ovitz practically had a deal. Afterward Iger asked Ovitz why he hadn’t told him about the meeting. “We just had a drink,” Ovitz said. “It was just a social thing.”
The courtship continued, with the main sticking point that Tarses didn’t want to report to Iger, but directly to Ovitz and Eisner. But Ovitz was impressed at Iger’s ability to overcome her objections in a series of meetings in which he stressed his willingness to delegate the authority she needed and his eagerness for Disney and ABC to have a successful woman executive. Finally, when Tarses spoke with Eisner, he was at his most charming and persuasive. “She was so stimulated by the meeting she had with Eisner and the idea of coming to ABC and being able to be a woman in that high a position and have the control of that development budget, that she wanted to leave under any condition,” Ovitz later testified. He added that there wasn’t much further discussion of the Ohlmeyer situation, just that Tarses kept assuring them that she’d have no trouble getting out of her contract at NBC, a point reiterated by her lawyer and Robert Morton. (Tarses maintains that Ovitz told her to use the sexual harassment charge to get out of her contract. Ovitz denied this in his testimony.)
In Hollywood, recruiting an executive under contract at a rival company was routine. There was even a name for it: “stacking a deal.” “That’s the way it is in the business. I’m not saying it’s proper or appropriate. That’s just the way it works,” Ovitz said. Still, recruiting Tarses raised the question of whether Disney was trying to induce her to breach a contract, with the added twist of using the threat of sexual harassment. No one seems to have considered that Tarses’s threat to sue unless NBC released her from her contract might look like thinly disguised blackmail.
In any event, Disney offered Tarses the job of head of programming, which would make her the first woman to head a network programming operation. In February, when she conveyed the news to NBC and began negotiating to get out of her contract there, Warren Littlefield called Ted Harbert at home on Presidents’ Day weekend. “I hear they’ve offered Jamie your job,” he told Harbert. Harbert expressed shock and disbelief. “Well, you ought to look into this,” Littlefield urged. Harbert called Iger, who was out, and then reached David Westin, then president of ABC News. Westin said he’d heard something about it but wasn’t involved.
Later that evening, Iger returned Harbert’s call. Harbert was furious. Iger had to admit that Tarses was coming but said Disney lawyers wouldn’t let him say anything to Harbert. Iger felt terrible. Harbert had helped teach him the business and had loyally stood by him over the years. Now Iger felt he’d been disloyal. He told Harbert he didn’t want him to quit and tried to assuage him by offering him the position of chairman of ABC, with Tarses reporting to him.
ABC needed to keep Harbert, at least for the next few months. But offering his title to Tarses had breached his contract, which had more than two years to run. So Iger agreed that Harbert could leave after six more months, and still be paid for his entire contract.
Tarses did not file a sexual harassment complaint against Ohlmeyer, and NBC released her from her contract, but only on condition that she not start working at ABC until after the end of the spring development season. ABC executives were barred from talking to her until then. Although she would be given the title of president of ABC Entertainment, she would not be the top programming executive (Harbert still was) as she had expected. After leaving NBC in February, Tarses and Morton headed off for an extended vacation in Tuscany.
In the midst of this awkward situation, Stephen Bollenbach,
who’d been the strongest advocate for a big acquisition like ABC, quit in late January to become chief executive of Hilton Hotels Corporation. He’d begun looking for a job soon after Ovitz was appointed, when he realized that Eisner was not going to make him president, let alone name him his successor as CEO. He later testified that Eisner tried to keep him by saying that the job of president “may open up soon.” But having been disappointed once, he wasn’t inclined to wait.
Since the evening at Eisner’s house when Bollenbach had announced that he wouldn’t report to Ovitz, the two had been estranged, Ovitz suspicious of him and Bollenbach resentful of Ovitz’s presence. Bollenbach had offered to meet with Ovitz and teach him the company’s financial structure, but never with any enthusiasm, and Ovitz thought it a hollow gesture, especially after the meeting about the radio stations where he felt Bollenbach had pulled the rug out from under him. One or the other had canceled nearly all their scheduled meetings on grounds they were too busy with other things. But now that Bollenbach was leaving, they agreed to have dinner.
“You may think I don’t like you,” Bollenbach told Ovitz, “but it’s not true. It was just that Michael promised me your job. The day you walked in, he broke that promise. I got upset.”
So that was it, Ovitz thought. (However genuine those sentiments, they didn’t stop Bollenbach from subsequently criticizing Ovitz to the press.)
With Bollenbach on his way out, Eisner hastily retrieved Richard Nanula from the Disney stores and returned him to his old job as CFO. Ovitz was in Europe at the time, but he called Eisner and all but begged him to realign the reporting structure, and have Nanula report to him. “This is the perfect opportunity to turn the bad press around,” Ovitz argued. “This is a perfect opportunity to send a signal to the hundred thousand employees of the company that we have a team and a partnership. This is a perfect opportunity to stop the press cold. You are having everything report up to me. I report to you.”
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