“How?” Ovitz asked. “They don’t report to me.” By the end of the dinner, Ovitz felt he’d gotten nowhere. “I wish you’d listen to me when I talk,” Ovitz said.
In June, Ovitz put his mounting grievances and frustrations into a handwritten seven-page letter. “For me, it’s just not right,” he said of his position at Disney. “I really have nothing to do…. I am fighting with the outside world. I have no real authority to do anything. You really do not need me. You need someone who can be happy running point but not looking to grow. My services and talent are lost in this set up. I can think of a lot of people who could help you more than me.”
Eisner was inclined to agree. But other parts of the letter infuriated him. Ovitz had mocked the idea of calling the executive offices the “Team Disney” building. “You’re a team destroyer, not a team builder,” he wrote. “I’ve had enough trouble inheriting your fights and enemies. Every day somebody complains to me about something…. It’s okay because it is human and healthy…. I’ve always had one goal, which is to protect you, the company and our relationship…. Maybe you cannot have a partner. You have failed with everyone over the years. You hated Diller. You constantly complained about him even when you went to Disney. You couldn’t stand Frank [Wells] or his work habits for the first five years and told Judy and me how hard it was.
“We can talk about this and should…but nonetheless I do have some feelings, that have been knocked, stamped and jumped on…. I do not give up…but let’s respect each other’s feelings.”
Eisner stormed into Ovitz’s office brandishing the letter—one of the few times he ever came to Ovitz’s office, instead of summoning Ovitz to his. “I never badmouthed Frank Wells. Never. And I never badmouthed Barry Diller,” he said, his voice rising.
“Sit down and listen to yourself,” Ovitz replied. “You know that is a god-damned lie. You can’t rewrite history.” Ovitz thought of all the times he and Judy and Jane had listened to Eisner rant about Wells and Diller. “Do you want me to put you on the phone to my wife and Jane to prove it?”
“No, no.” Eisner backed down. “But we need to talk this out.”
“The letter is how I feel,” Ovitz said. “Read it again after you calm down. Then we can discuss it.”
They did discuss it—ad nauseam, as Ovitz later recalled—but Ovitz wouldn’t retract any of it. The more they talked, the angrier Eisner seemed to get.
Still, Eisner spoke warmly of Ovitz and his family at Ovitz’s daughter’s bat mitzvah in July. Afterward, Ovitz rented the House of Blues restaurant in Hollywood for his daughter’s party. He was a friend of actor Dan Aykroyd, who was a part owner of the chain. Afterward, Eisner called Ovitz in and demanded to know whether he’d paid for the event, or gotten it for free. Litvack had brought to his attention that Disney owned a small stake in the House of Blues, and suggested that Ovitz’s use of a facility that was partly owned by Disney was a violation of company policy. Ovitz was flabbergasted; he didn’t even know that Disney had an interest in the restaurant, and in any case, he’d paid the restaurant its usual charge. He later produced his canceled check to prove it. But he felt he was being shadowed at every step, spied upon, and certain that Eisner didn’t trust him. (Indeed, Eisner continued to cite the House of Blues affair as an example of Ovitz’s unethical behavior, including to members of Disney’s board.) Life at Disney was becoming a nightmare for him. Yet Ovitz felt his reputation was at stake. He had to make it work.
Later that month, on July 31, Eisner’s mother died at age seventy-nine. The funeral was held the next day at Temple Emanu-El on Fifth Avenue in Manhattan. Ovitz and his wife attended, and when they emerged from the service, Ovitz noticed that a car idling at the curb was blocking the hearse from pulling up to the entrance. Ovitz went over to the car and asked the driver to move. He refused, and they exchanged some sharp words before a security guard intervened. The car finally pulled away; the hearse pulled up to the temple without further incident; and the pallbearers emerged with the casket. Ovitz later said that he was only doing what he thought any friend would have done under the circumstances.
Even though Eisner didn’t see any of this, he later said he was told by Iger that Ovitz pulled the driver out of the car and knocked him to the ground. (Ovitz flatly denied this.) Eisner testified that this was a pivotal moment in his thinking about Ovitz. “Somebody was driving a car and he thought they were in the way of the hearse and he made a giant scene and everybody reported it to me. It just—I was not in the mood to deal with it or to be too understanding about it…not only did I not want him to be my replacement, I didn’t want him to stay as president.”
Apart from the notion, extraordinary in itself, that at his mother’s funeral Eisner was pondering the need to fire Ovitz, this seems far-fetched, since Eisner had decided to fire Ovitz long before, as he had made clear to Sid Bass when he worried that Ovitz might be suicidal.
Ovitz hoped that the combination of Eisner’s mother’s death, and the onset of August, typically a slow month in Hollywood, might bring a respite. He used the occasion of a Disney executive retreat in Aspen on September 6 to denounce leaks to the press. But the very next day, the New York Post reported his comments. Ovitz threw up his hands. It was obvious that he was surrounded by people trying to undermine him. To Tony Schwartz, Eisner excoriated Ovitz’s Aspen performance, complaining he hadn’t shown up for an afternoon session, that he was “not in sync” with Eisner “on any ethical grounds,” and that he was a “cancer” in the organization, and reported that Bob Pfeiffer, the head of Hollywood Records (whom Ovitz wanted to replace) had called Ovitz the “most devious mean motherfucking creep.”
It was by now obvious to everyone near the top of the company that Ovitz’s days were numbered. To the extent that he had any friends or supporters, no one was going to risk his or her own capital with Eisner to defend him. As Eisner reported to Schwartz, “Iger was not as direct about his unhappiness as Sandy [Litvack] had been…still, by the summer he had let me know that he increasingly found Ovitz’s involvement at ABC more undermining than constructive. By the time we got to Aspen, a half-dozen other senior executives had communicated similar sentiments to me, either directly or through their body language.”
Nonetheless, Eisner told the Los Angeles Times that same month that rumors of a rift between him and Ovitz were “ludicrous. I’ve been in a lot of management in a lot of companies. I’m sitting here at quarter to 10 in the morning on a treadmill feeling extremely comfortable about the trajectory of the company going forward.” Eisner told The New York Times during the same period that Ovitz was “a talented, strong and effective executive.”
With Eisner’s public comments and the reality of his relationship with Ovitz glaringly at odds, a glimmer of a solution occurred to Eisner. Ovitz was still trying to salvage a deal with Sony to merge the record division, and in late September, he had arranged a meeting in New York with Idei, Norio Ohga, and Eisner and himself. During the elaborate three-hour dinner, Ohga went on at length about what a good relationship Ovitz had with Sony and how much he respected him. “You’re so lucky to have him,” Ohga told Eisner. “Good managers are hard to find.”
Eisner grew increasingly restless, and looked visibly relieved when the dinner finally ended. Afterward he lit into Ovitz. “It took you three hours to get to two minutes of real negotiation,” he complained. “Why couldn’t you get to the point?” Ovitz tried to explain that patience was essential when negotiating with the Japanese. “That’s bullshit,” Eisner said. Still, he seemed impressed. “They really like you. I bet they’d hire you.” Eisner seemed taken with this idea. “Why not?” he continued. “You could run their operations here in the U.S. It’s a great idea for you.” It was obvious to Ovitz that Eisner wanted to get rid of him, and this provided a face-saving excuse.
“I’ll think about,” Ovitz said reluctantly.
At the end of September, the Disney board was scheduled to meet at Walt Disney World, and Eisner decided the
time was at hand to reveal that he was planning to get rid of Ovitz. As usual, Eisner told some directors of his decision in advance, but not others.
Eisner poured out his feelings in a long letter addressed to Irwin Russell and Ray Watson, his closest confidants on the board, along with Stanley Gold. Ovitz, he wrote, “seems manic and for many reasons is ill-equipped to lead The Walt Disney Company…. if I should be ‘hit by a truck.’ The company simply cannot make him CEO…it would be catastrophic! I hate saying that but his strength of personality together with his erratic behavior and pathological problems (and I hate saying that) is a mixture leading to disaster for this company. You, Irwin and Sid Bass know this already and have many examples. Stanley Gold is aware of the problem, but he does not know the boring details.
“His choice was ill founded, unfortunately,” Eisner continued. “The mistake was mine, totally and completely. Maybe I suspected it at the time, but my desire to bring in a strong number two executive, my desire to satisfy my wife’s honest request that I get help, my desire to appear not threatened by strong executives, my desire to seek experienced help to run ABC, and my desire to do what was right for Disney, all clouded my basic instinct that I was making a mistake….
“Michael does not have the trust of anybody. I do not trust him. None of the people he works with feels comfortable with his directness and honesty…he cannot tell the truth. He says whatever comes to his mind, no matter what the reality…. Michael Ovitz has not taken any workload off me. He is work. It is necessary to check on everything he does…. I had hoped it was me, that I was dealing badly with some kind of Shakespearean threat from inside the company. It is not. I am sure I am not without political anxiety, but this is not that. Michael Ovitz simply is not a corporate executive.”
Eisner also addressed the issue of succession should he be “hit by that truck.” “If I had to pick a new president today, I might pick Bob Iger. He is certainly steadier than Michael Ovitz by a thousand fold.” But then he cataloged Iger’s faults: “He will not get the company into trouble. He is a corporate executive. He is not an enlightened or brilliantly creative man, but with a strong board, he absolutely could do the job. He will want to keep the board out of his way just as he tries and succeeds in keeping out Tom Murphy and Dan Burke. I have found that stupid and weak. They could be great help to him, but he resents them for some reason.” Eisner then ticked off all the ways that the board would have to curb Iger’s authority, including “spending limits on movies and television shows and series.” It was hardly a vote of confidence.
“My conclusion: It is looking bad for Ovitz to continue being president past February. And should I not be around to oversee the selection of a new president or CEO, the Board would be wise in not naming him CEO or appointing a CEO that let Ovitz run the company. I think he would leave anyway and should. The results would be disastrous if he stayed…. We should all discuss this soon.”
The letter itself wasn’t dated, although Eisner appears to have put a copy with the handwritten date of October 1, 1996, in his Ovitz file. Although the letter anticipates keeping Ovitz until February of 1997, Eisner later testified that he told the board at its September meeting that Ovitz had to go. Obviously, Eisner wasn’t going to inform the full board at its regular meeting, attended by Ovitz, so he pressed the point in various lunches and dinners with directors where Ovitz wasn’t present, and testified that he brought it up in an executive session of the board, saying that “You should know that I’m probably going to work from now on at getting rid of him rather than rehabilitate him.” He maintained that, one way or another, he told all the directors about his decision on Ovitz.*
Ovitz knew nothing about these conversations, but he’d already experienced a disconcerting and awkward chill in his relationships with most of the directors. One day he’d walked into Eisner’s office and overheard him telling Stanley Gold that he had “problems” with Ovitz. That’s all Ovitz heard, but it was obvious that both Eisner and Gold were startled by his interruption. Afterward, Ovitz confronted Eisner: “If you have a problem, I’d rather you address it with me, and if you feel you have to talk to Stanley about it, then speak to both Stanley and me. I’d like to correct the issue or whatever it is you have a problem with.”
Then, one day when Roy Disney was absent because he was sick, Ovitz called him to see how he was feeling, even though he knew “it would really irritate Michael when I would call him. I figured I was just being polite.” Ovitz had made it a practice at CAA to make a personal call to any employee who was out sick, something he also encouraged at Disney. “They thought I had lost my mind,” he said, but he persisted, and most people seemed to appreciate it. But when he reached Roy, with whom he’d always had a cordial relationship, “it was like talking to an ice cube.” (Roy said he had no recollection of such a call.)
Ovitz expounded at considerable length on his deteriorating relationships with Disney directors when he was later asked to testify about the subject:
You would have to be a raving idiot, totally insensitive, imperceptive and stupid to not feel the vibrations that you got from some of those people from the beginning—if I put it on a graph…it would move down geometrically each month. And I exclude Litvack from all of this because he was, you know, the Cardinal Richelieu of the group…. To the best of my knowledge, I believe that Stanley Gold and Irwin Russell knew everything first. Then Tom Murphy and the others…and on the other side, I don’t believe that Cardon Walker or Bob Stern or Dick Nunis or Ignacio Lozano or Reveta Bowers knew anything first. They knew it eventually…that was my perception of it. It was the way I interfaced with these people. It started fantastic and it quickly—I could feel it start to go downhill. I could feel Roy Disney turn on me. I could just feel it. Now why would he do that? I never had any interaction with him to make him do that. So…somebody had to be saying it to him…so I assumed when I felt him going south on me it had to come from Eisner. And I felt the same thing from the other directors that I mentioned.
At the same time, Ovitz remained convinced that Eisner could also turn the situation around, both with directors and in the media, with just a few firm words of support. “I went to him many times,” Ovitz testified, “and asked him to just please, please make some comment that backs me up. I said, ‘You’ve got to back me up. This is the kind of thing that I told you before I got here conceivably could happen….’ He could have stopped this in its tracks by just making the appropriate public statements, but he refused to do it.”
Nonetheless, on September 30, the same evening he was briefing directors about his decision to fire Ovitz, Eisner agreed to appear with his beleaguered president on CNN’s “Larry King Live” via a live satellite hookup from Orlando. Eisner said nothing about his own nearly constant concerns that Ovitz wasn’t telling the truth and couldn’t be trusted, and instead suggested that false rumors of a rift between him and Ovitz were being planted by unspecified “enemies.”
“Michael,” King said, “when Frank Wells died, he was a close friend of yours and a great guy. We knew him very—You replace him with Michael Ovitz. First, would you do that again?”
“I actually offered it when Frank Wells was alive,” Eisner replied. “Frank and I both wanted Michael to join us and Frank selfishly would say to me consistently that we needed Michael Ovitz in this company.”
“Really?”
“Absolutely,” Eisner continued. “And I’ve known Michael Ovitz since he tried to sell me a game show in the early ’70s and I got annoyed because he sent flowers to my wife because he thought she liked the show. He hasn’t sent her flowers since, by the way.”
“So Michael Eisner, you would hire Michael Ovitz again today?”
“Yes. Are you offering him again?”
“No. All things being…”
“Yes. The answer is yes,” Eisner said.
“I mean,” King continued, “that would certainly clear up any rift stories. Have you any idea—”
“By the way,�
� Eisner interrupted, “there has not been one story where one person is quoted directly about any problems inside our company. It’s just all baloney. The fact of the matter is, we, together, have almost as many enemies as Saddam Hussein, and so it’s very difficult not to have this kind of gossiping.”
“So Michael Eisner, what you’re saying, before we take a break, is this is enemies involved. These are people who are in competition with you spreading stuff that isn’t true?”
“I don’t know who’s spreading stuff,” Eisner replied. “First of all, it’s minuscule…. As far as we’re concerned, it’s an irrelevant gossipmongering kind of thing and they wouldn’t be interested in us if we weren’t doing well. So I guess we should sort of be flattered.”
Eisner later testified about the appearance on “Larry King,” saying, “I was telling the board that the Ovitz situation was coming to an end. I had gotten myself or we had gotten ourselves into this interview, so I was trying as best I could as I now try to recall this, that I was ‘frumping’ [apparently, Eisner’s slang for evading the truth]…I was trying to obfuscate not trying to answer that directly in that I told the board that very weekend that we were beginning to unravel Mr. Ovitz’s arrangement and that I had decided by this time that he had to leave the company.”
However misleading to the public, Eisner’s evasive performance wasn’t lost on Ovitz. “Even when we went on ‘Larry King’ together he never came out and took my back, ever,” Ovitz maintained. “He just wouldn’t commit himself to do it. He would say he would do it but he didn’t do it.”
Still, Ovitz was wholly unprepared when he got an unexpected visit from Litvack the following week. Ovitz was on the phone, but Litvack walked in anyway and waited. Ovitz avoided looking at him, figuring he’d leave, but Litvack kept staring at him. Finally Ovitz hung up. “How can I help you?” he asked.
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