“The fact is that you are not ready to oversee finance in this company and the board would never approve it,” Eisner told him, in what Eisner later described as “one of the most unpleasant conversations we had ever had.” “I’m feeling more stressed than I ever have in my life.”
“That’s terrible,” Ovitz said. “I was supposed to make your life easier.”
The press release announcing Nanula’s reappointment stated that he would report directly to Eisner. “It was like another knife in my back,” Ovitz said.
To Tony Schwartz, Eisner maintained that Ovitz’s attitude about money was “What was a million here or there? That’s the way all agents think. Michael said that to me a thousand times while he was an agent. Even what does a few billion dollars mean to Disney…. I had to therefore hold the financial reins. I did not want to. I simply had to.”
In early April 1996, Eisner invited Katzenberg to visit him in Aspen, ostensibly to discuss the DreamWorks television production deal with ABC. Katzenberg assumed the real reason for the unexpected invitation was to discuss his still unpaid bonus, and maybe head off the threatened lawsuit. He still didn’t want to face Eisner in court. Maybe they could put this behind them, and maintain a civil relationship. Katzenberg cleared his schedule and chartered a plane.
The night before the scheduled meeting, a secretary called Katzenberg to say the meeting was canceled. No new date was offered. Katzenberg felt humiliated. He immediately called Ovitz. “He can’t do this to me anymore,” he vowed.
Five days later, on April 9, Katzenberg finally filed his suit in Los Angeles Superior Court, claiming that his contract had been breached and that he was owed as much as $12.5 billion for all the projects he developed at Disney. “If Frank Wells were alive, this would never have happened,” Bert Fields, Katzenberg’s lawyer, told the Los Angeles Times, a remark sure to anger Eisner. Respected New York attorney Herbert Wachtell, also on Katzenberg’s legal team, said that “I’ve had many years of experience as a litigator and dealt with many contracts. The provisions of this written contract expressly requiring Disney to pay Mr. Katzenberg the profit-sharing in question are as clear and unambiguous as they can be.”
For Katzenberg, bringing the case came as something of a relief, an important step in his effort to get past his Disney experience. He subsequently gave an interview to Bernard Weinraub of The New York Times, reflecting on the transition. “I ran the full gamut of emotion,” he said of Eisner’s decision to let him go. “I was disappointed, sad, angry, scared, philosophical, sad, vengeful, relieved and sad.” Of Eisner, he said, “I thought I knew him. I thought I knew the insides of him. I spent more time with him in 19 years than his wife, his children, anybody. And the truth is, either he’s changed, which is possible, or I never really knew him, which is possible…. I am aware that for a long time I worked like a mercenary soldier. Someone else wrote the music, and I marched to their tune. And if someone poked me in the chest, I would hit them with a baseball bat. And if they hit me with a bat, I would blast them with a bazooka. And I would escalate this until I reached nuclear bomb time. This was the way I was taught. And it’s a very angry place to come from in life. It’s a hostile, angry and predatory way to live.”
Also in April 1996, Disney announced that Dennis Hightower would “retire.” Eisner had finally gotten rid of him. Nevertheless, he issued a statement praising him: “While I am disappointed that Dennis has decided to leave,” Eisner said, “it does not come as a complete surprise. When I asked him to return to the United States from Paris last year, he made me aware of his plans to retire early and pursue his long-held interest in education.” This caused widespread mirth in the television division. The blow to Hightower was softened somewhat by the fact that Gary Wilson tapped Hightower for the Northwest Airlines board. (He’s also on the board of Gillette.)
Hightower insisted he was not pushed out, that his division generated 20 percent growth, and about $1.5 billion in operating income, the year he ran it. He conceded that his “hands-on” leadership style necessitated a lot of travel during his tenure at the division, but he said most of the carping about him from fellow executives had more to do with the speeches he was often asked to give as a high-profile black executive. He said Eisner’s management style fostered internal dissension. “We had a This Too Shall Pass philosophy about Michael,” he said. “And we also had a saying, which was, ‘With Michael Eisner, you’re the man of the hour for that particular moment.’ ”
Despite his frequent complaints about Roth, Eisner expanded his duties and put him in charge of television production, even more critical now that Disney had acquired ABC, as well as the film studio.
That same spring, Steve Burke was thrilled when Eisner offered him a job at ABC, first as an executive vice president reporting to Iger, then as head of the ABC-owned local television and radio stations. He and Iger got on well together, and were soon working closely, along with Stu Bloomberg, head of program development. Eisner was spending one day a week at ABC in New York, which gave Burke his first chance to see Eisner in action on a regular basis. Burke still looked at Eisner as a mentor, but what he saw began to give him pause. It wasn’t that Eisner wasn’t creative—he was—or that his decisions, in isolation, were wrong, but that the whole decision-making process was skewed by Eisner’s presence.
With Tarses still in Tuscany, and Harbert’s status unclear, the pilot development process was even more chaotic than usual. Everyone was working nonstop to get ready for the “upfront” presentations in April—the first under Disney ownership—when the networks unveil their fall prime-time schedules to advertisers in lavishly choreographed previews, followed by opulent parties, the kickoff for the sale of national advertising time. Everyone felt his or her job was on the line, especially since Eisner himself would spend two days watching the pilots, deciding which ones the network would pick up, and when to schedule them.
It was a critical season for ABC. Its long and lucrative hold on the ratings as the number one network had slipped away. Its top shows—“Roseanne,” “NYPD Blue,” and Disney’s own “Home Improvement”—were aging, their ratings in decline. NBC had broken through on Thursday night with two new dramas, “ER,” which Ovitz had brokered for his client Michael Crichton, and “Friends,” developed by Tarses. And it still had its Tuesday night juggernaut, “Seinfeld.” With its new mantra, “Must See TV,” NBC had captured the young, affluent urban audience most coveted by advertisers and Eisner. During the February sweeps week, ABC had fallen to third place. At the winter affiliates’ meeting, Eisner had vowed, “ABC will never again come in third in a sweeps.”
Then, with the 1996 development season in full swing, the whole unsavory Ohlmeyer affair burst into public view, first in a brief item in the New York Post, then a gossip column in New York magazine, and worst of all, an article in Time magazine, in the April 15 issue. It wasn’t clear who the Post’s source was, but Ohlmeyer mounted a furious counterattack, with Ovitz bearing the brunt of it. He told Time that Ovitz was responsible for “rumors and innuendo that have no basis in fact…. Michael Ovitz is the Antichrist, and you can quote me on that.”
Even by Hollywood standards, this was extreme. Ovitz was shocked, thought the remark was deliberately anti-Semitic, and that Ohlmeyer “was trying to protect himself…. Mr. Ohlmeyer had a certain set of problems, which everyone was very aware of, that induced him into this kind of behavior.” He was also upset that Tarses, ABC’s new programming executive, initially identified by the press as a victim of mistreatment, was now being vilified as a ruthless schemer.
Eisner was apoplectic about the press coverage, especially after General Electric chairman Jack Welch wrote him a letter complaining about ABC’s tactics. He made Ovitz apologize. Ovitz denied he was the source of the leak and assured Welch that he’d never told Tarses to use a sexual harassment charge to get out of her contract. Welch, Ovitz testified, “was aware, as was [Bob] Wright, that Mr. Ohlmeyer had a very serious problem at the netw
ork that had little or nothing to do with Jamie Tarses…. I called him and gave him my side of the story and he was, as usual, very receptive, he was very humble, he said he understood.”
Eisner, too, tried to assuage Welch, and later testified, “We had a very pleasant conversation recognizing that these companies are hard to manage.” But Eisner didn’t exactly defend Ovitz, telling Welch only that he “wasn’t so sure” that Ovitz was behind the contretemps. And to Ovitz, he said bluntly that he thought he was, in fact, responsible for leaking and didn’t believe Ovitz’s denials—yet another example of Ovitz’s lying. “He did not back me,” Ovitz testified. “He took the side of the press.” Eisner also later testified that he realized Ohlmeyer’s bold and public criticism of Ovitz marked an ominous turning point for Ovitz. Before, as the most powerful man in Hollywood, nobody dared criticize Ovitz, at least publicly. Now, at Disney, he was seen as wounded and vulnerable, lacking authority and the backing of Eisner; an easy target.
Eisner showed little sympathy for Ovitz’s plight. He told Tony Schwartz that Ovitz was to blame for having nurtured such a high profile. “Like a moth to flame, he seemed to love the press, loved courting the press, and especially loved the reaction he was getting in the press,” Eisner told Schwartz. “He now had the unheard of thing: a personal publicist that not only got his name in the papers but forced them to give him credit for things which he was not responsible for…the ball was rolling. It was like air and water and life.” Eisner concluded, “The [Tarses] episode itself became a source of embarrassment to all the parties involved.”
Ovitz simply couldn’t understand how for almost thirty years Eisner had apparently believed everything he told him, and from the day he started working at Disney, believed nothing. It was bad enough to be called the Antichrist in print, but for Eisner not to support him or believe him was a worse blow.
Still reeling from the Tarses publicity, everyone filed into the ABC screening room, with Eisner and Ovitz taking seats in the rear. Iger and Ted Harbert sat in front with other ABC programming executives. They watched about two dozen pilots over the next two days. When they concluded, Eisner complained that ABC was two or three pilots short of being able to fill the schedule, which was going to force them to renew some clear failures, like “Murder One” and “High Incident.” He spent the next two days shuffling programs, rearranging the schedule. He and Harbert had some furious arguments. Harbert bore the brunt of Eisner’s ire, but Eisner also complained to Ovitz about Iger.
Ovitz had little to contribute. With Eisner making the critical decisions, even though ABC reported to Ovitz, Ovitz told Eisner that it was obvious that ABC needed more management attention. “One or the other of us has to be in charge.” He offered to move to New York for six months and spend full time on the network. “No,” Eisner responded sharply. “We’ll both do it.”
The situation brought to the surface a basic difference in philosophy between Ovitz and Eisner. As Ovitz later testified, “It was a very complex situation. Mr. Eisner is very, very good at television development. It’s also very hard to come into television development and just look at pilots without having been involved in the creative process. And Michael and I were coming in to watch pilots and make decisions on scheduling. It actually was Michael. I was just there. And it’s very tough for the people who have spent the whole year in development and then not have the boss, which would have been me, but the big boss, which was Michael, come in and view their work and then start to help them schedule when they have been doing it without him the prior year and the prior 20 years.”
Ovitz tried to warn Eisner about growing discontent at ABC. “You’ve got to stop criticizing them,” Ovitz said. “It’s irritating. Stop living in the past. This isn’t twenty years ago.” Although Ovitz had always felt that one of his strengths as Eisner’s friend had been his ability to disagree with him, anything he now said seemed to irritate Eisner. Eisner told him, “My obligation is to make ABC work and if some feathers have to be ruffled in the course of business, then that would be part of the process.”
Ovitz explained, “I felt that that could still be accomplished without ruffling the feathers and trying to keep the individuals that worked for us working with a smile rather than with a frown…. It’s just as easy to handle them with kid gloves and get a better result than to handle them in a very harsh way.”
Although Ovitz felt he had little or no authority at the network, Eisner was quick to blame him for the failures. That spring, Eisner bumped into Sid Bass on Fifth Avenue in New York. Bass had heard about mounting discontent with Ovitz, about restlessness at ABC, and urged Eisner to talk to Bob Iger. He’d even heard that Iger might quit.
Eisner went to Iger’s office at ABC headquarters on West Sixty-seventh Street. He walked in and abruptly closed the door. “I know you’re unhappy,” he said. “I want you to know that Michael Ovitz is not working out as president. At some point, and I can’t tell you when, I’m going to take care of this. You can’t tell anyone. But I’m afraid I’m going to lose you and Joe Roth if I don’t so something.”
Iger had been careful never to complain to Eisner directly about Ovitz; he did after all report to him. But now that Ovitz was a lame duck, Iger unburdened himself. He told Eisner the story of the aborted ESPN meeting, and other incidents that had agitated ABC executives. Iger confirmed that Ovitz wasn’t someone he felt he could work for and Eisner encouraged him to call him directly, bypassing Ovitz, if he had any problems.
Eisner reported his conversation with Iger to Sid Bass via email:
“I cannot tell you how good your advice was on talking directly to Bob Iger. I told him…I was very happy dealing with him directly if I could totally trust him, if he told me the good news and especially the bad, and if he let me give directly to him my ideas on projects, on schedule, on other creative things. I explained I just did not want to be finessed or ignored….
“So far Michael [Ovitz] has been no help. He still looks at the studios the same way he look[ed] at them as an agent—BIG POCKETS! And since Michael Ovitz has joined, between Joe [Roth] and Michael (big spenders), we are spending $80 [million] a year on talent deals. We should spend maybe $8 million or $18 million. You can see what a great problem we have….
“Of course the one problem that Bob and I both have is Ovitz. He does come between the two of us. And finally Bob simply told me, Ovitz was his problem. After two hours of discussion, he finally admitted he did not trust Michael and gave me many examples.
“At any rate, I want to thank you for clearing my mind about what was going on. Not only did it help, but may have set up the future.”
From Iger’s perspective, the meeting couldn’t have gone any better. Though Eisner still barely knew Iger, and had come close to firing him, he was already telling Sid Bass that Iger might be his successor. Steve Burke, for one, could tell that Iger and Eisner had bonded. “We had a really good session,” Iger reported to Burke. “Michael totally understands what a problem Ovitz is.”
Not long after Iger’s conversation with Eisner, Ovitz called Iger to say that he thought he should consider hiring John F. Kennedy Jr. to be one of the hosts of “Good Morning America.” “I just saw him on ‘Oprah,’ ” Ovitz said, “and he was great.” Iger was a friend of the Kennedys—they and their wives socialized from time to time, both in New York and on Martha’s Vineyard—and Iger doubted that Kennedy wanted to be on television. But he said he’d get a copy of the tape and check it out. Oprah’s syndicated show ran on ABC, and when he called, Iger learned that the show with Kennedy hadn’t aired yet. Iger called Oprah. Were any advance tapes available? She said no. So Iger called Ovitz to say the show hadn’t aired. Ovitz insisted he had obtained a tape. Iger concluded he was lying.
Iger reported this to Eisner, who clearly relished any bad news about Ovitz. “This gives you an idea of what we’re dealing with. He says he sees JFK on ‘Oprah,’ and he hasn’t even been on yet,” Iger told him.
The Kennedy incid
ent was much repeated by Eisner and Iger as evidence of Ovitz’s duplicity and untrustworthiness, both to others at the time and in later testimony. And yet it’s difficult to know where the truth lies, or if their conclusions were fair. When asked about the incident years later, Ovitz had no memory of it, even that he recommended Kennedy to Iger. Clearly there was some truth to his account, since Kennedy had taped an “Oprah” show. Ovitz was also a friend of Kennedy—the two had raised money together for the Municipal Art Society, founded by Jacqueline Kennedy Onassis. Ovitz speculated that he might have gotten a tape from Kennedy himself, though if so, he didn’t mention it to Iger. Perhaps he saw a promotional spot for the show and confused it with the actual program. Whatever the truth of the matter, the incident in itself was trivial. But the zeal with which Ovitz’s detractors seized on the matter spoke strongly to his rapidly waning stature at Disney.
In May 1996, Ovitz and Eisner had dinner alone, and Ovitz couldn’t contain himself. He said point-blank that he disliked his job; that Eisner had undercut him at every step; that he knew Iger, Roth, and other people were going behind his back and that Eisner did nothing to discourage it. “You put me in a position, I gave up the agency, I came to the company, and everything I did you negated—everything.” He ticked off the failed deals and opportunities. “I don’t have a job,” he concluded. “Just give me something to run,” he pleaded.
Eisner said he wasn’t “ready.” Ovitz was still a deal-maker, not an “operator,” though Ovitz could never get Eisner to clarify what he meant by that. Eisner lectured him again on the higher ethical standards of a public company. Ovitz complained about John Dreyer, head of PR, and his wife, Jody, who was Eisner’s assistant, who he felt were trying to undermine him. “Just fire them,” Eisner replied.
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