Braun also detected a certain coolness from agents and producers he’d dealt with for years, in some cases for twenty years. Finally one confessed that Tarses had warned him that if she found out that he returned a phone call from Braun, his projects would be dead at ABC.
Braun finally called Eisner. “This is an unmitigated disaster.”
Eisner urged him to hang in. “I need you there,” he insisted.
A few weeks after the merger of ABC and Touchstone, Steve McPherson, Braun’s former deputy, now head of Touchstone, set up a meeting with Tarses and executives in ABC’s drama department to pitch a new crime drama that producer Jerry Bruckheimer, with Joe Roth’s encouragement, had developed for Touchstone. The idea was a fresh spin on the tried-and-true police drama: a series about a forensic team in Las Vegas that gathers evidence for police forces and prosecutors. Called “CSI: Crime Scene Investigation,” the series had been created by a young, hyperkinetic screenwriter named Anthony Zuiker, who’d grown up in Las Vegas and had driven a hotel tram. He’d sent several scripts to Bruckheimer, who liked Zuiker’s tone and sensibility, and called to ask him if he had any ideas for television.
Zuiker spent weeks trailing forensic detectives in Las Vegas, and his vision for a crime drama jelled. Las Vegas seemed the perfect setting: flashy, photogenic, running twenty-four hours a day, with 30 million visitors a year, an inexhaustible source of stories. The idea also tapped into a public fascination with forensic evidence triggered by the O. J. Simpson murder trial, which had the nation debating the significance of a bloodstained glove. The idea also had momentum at Disney, since Bruckheimer was Disney’s most successful producer, and Bruckheimer had the enthusiastic backing of Roth, Braun, and McPherson.
Dressed in black, bursting with energy, the thirty-one-year-old Zuiker gave one of his trademark pitches. To his amazement, and to the dismay of Bruckheimer and McPherson, it fell flat with Tarses and her head of drama development. ABC passed.
Zuiker was furious. He prided himself on his pitches. He promptly named his production company “Dare to Pass,” explaining, as he put it, “Dare to pass on me and this is going to show up somewhere else.” More determined than ever, Bruckheimer and Zuiker shopped it to other networks, even though it was late in the development season. Braun and McPherson saw this as an opportunity to show that Touchstone wasn’t a captive of ABC, and could sell potential hits to competing networks. CBS had closed its development slate, but McPherson convinced the network to have one more meeting. After another performance from Zuiker, drama development chief Nina Tassler made an exception. She’d loved the hit series “Quincy,” about a coroner, and as she put it, she loved a good autopsy. Tassler ordered a pilot.
As the production company for the series, Disney/Touchstone still had the opportunity to earn big profits on “CSI.” Network licensing fees almost never cover the cost of producing a series. But the production company retains the syndication rights to resell the show after its initial network run. If a program is a hit, the syndication fees can be huge when the show is sold for rebroadcast. Syndication revenues are the lifeblood of the TV production industry.
But Iger had already proclaimed his lack of interest in producing shows for rival networks. Why, he reasoned, should Touchstone incur a deficit to produce a show that ABC didn’t think was good enough to put on its schedule? Within days of CBS picking up the “CSI” pilot, Iger convened a meeting to address the issue of whether Touchstone should produce a show for a rival network. ABC’s chief financial officer had worked up three scenarios: “high,” “medium,” and “low,” depending on how “CSI” performed in the ratings, purporting to show that even under the “high” scenario, “CSI” would lose money for Touchstone. “What’s the deficit per episode?” Iger asked. McPherson explained it was about a million dollars. “We can’t do that,” Iger said. “Michael won’t understand how we can spend a million dollars a show to subsidize CBS.”
The potential flaw in Iger’s reasoning was that ABC’s judgment might not be infallible, and that “CSI” could be a hit on another network. Braun and McPherson were both upset, and insisted on meeting with Eisner to press the case. They argued that it would be devastating to Touchstone’s ability to sell to other networks if it pulled out of “CSI” now that CBS had picked it up. Besides, “CSI” might be a hit. Why give up the potential syndication revenues? In contrast to Iger, Eisner often wanted Touchstone to sell shows to other networks. But the “CSI” situation seemed to bring out his competitive instinct to inflict failure on a rival. In the final meeting, Eisner said he didn’t care if “CSI” was a hit if it was on a network other than ABC. He also warned that Bruckheimer was a profligate spender, and the deficits would probably be a lot more than one million per episode. Besides, he didn’t think CBS would be willing to pick up the production costs, and if Disney pulled out, the show would die, creating a hole in the CBS lineup. Braun was ordered to call Bruckheimer and pull the plug.
The unflappable Bruckheimer took the news calmly. He was disappointed but gracious. But Eisner and Iger underestimated his determination, and that of Les Moonves, the head of CBS. Instead of dropping “CSI,” as they had anticipated, CBS lined up another producer, Alliance Atlantis Communications, which presold some foreign rights to raise $800,000 per episode, an amount that nearly covered the projected deficit. CBS financed the rest, minimizing the potential loss. CBS placed “CSI” as the centerpiece of its Friday night schedule for fall 2000.
That February 1999, Eisner had asked Steve Burke to come into his office in New York on one of his many visits to ABC headquarters. Despite his many ties to the city, Eisner was tiring of the frequent travel and didn’t see why ABC’s headquarters should remain on Sixty-seventh Street. “I want to move ABC to Los Angeles,” he said.
Burke was startled; nobody had mentioned the possibility. “Why?” he asked. “Ad sales is in New York, soap opera production is in New York, news is in New York.”
“Everybody should be together,” Eisner said. “My Monday lunches are the way I run the company. I need everybody there. That’s the problem with ABC.”
This didn’t make any sense to Burke, who felt that ABC’s distance from Burbank was the least of the network’s problems. “Think about this for a minute,” Burke said. “Bob Iger and I can fly out there for your lunch. Prime time is the issue, so have Jamie Tarses come to your lunch. Why uproot five thousand people?”
Eisner shrugged, saying he needed people close by so he could be more involved.
On some level, Burke had an emotional attachment to ABC, where his father’s portrait hung in the lobby of the headquarters building. “You’re going to destroy a whole culture,” Burke warned. “You’re saying there’s nothing worth keeping.”
On February 12, Iger issued a memo saying that ABC headquarters would be moved to Burbank, so ABC executives would be “adjacent to Disney senior management”—meaning Eisner.
Predictably, Eisner’s decision caused an uproar at ABC. Several top executives quit. Morale plummeted. When Burke expressed his reservations to Iger, Iger agreed with him that it was a big mistake. Burke pressed him to stand up to Eisner on the issue, but Iger said it would be pointless. Eisner was stubborn, and his mind was made up. Burke wasn’t surprised; he’d already sensed that Iger wasn’t willing to contradict Eisner, not as long as he still thought he had a shot at being president. Burke’s high regard for top management had begun to slip.
Burke had reservations about moving his family to the West Coast, but he was willing to consider it. Then Peter Murphy, the new head of strategic planning (no relation to his predecessor, Larry Murphy), convened what Burke thought would be a routine budget meeting to discuss the ABC radio stations, which reported to Burke. Eisner attended. Like nearly everyone else at ABC, Burke was wary of the strategic-planning department. One of Ovitz’s arguments little more than a year before had been that the ABC radio network either had to grow through a big acquisition, or be sold. Eisner had rejected both alt
ernatives. But Burke was now negotiating a deal to combine the ABC stations with those owned by Westwood One, which would give ABC the critical mass to make radio a success.
At the meeting, Peter Murphy launched into a thirty-page flip-chart presentation that concluded the ABC radio stations should be sold outright, and that Disney should abandon the radio business. As Burke realized where the presentation was going, he became increasingly angry. No one had warned him about this or shown him the data. No one had consulted him.
“Wait a minute,” Burke finally interrupted. “You’ve never set foot in a radio station. Now you’re using this budget meeting to tell me to sell the division?”
Murphy just looked at Eisner, who had obviously known what was coming.
“I’m leaving,” Burke said, starting to walk out.
“Sit down. You’re not going anywhere,” Eisner ordered.
Burke stayed, quietly fuming. He’d had all the freedom he wanted to run the Disney stores, and at Euro Disney, he had been geographically so far away that he was pretty much left alone. His father’s management style at ABC had always been to choose good executives, then trust them to run their businesses. But working at ABC was no longer fun. It seemed like every decision was second-guessed by Eisner, with strategic planning pulling strings behind the scenes.
Coming on the heels of the decision to move ABC to Los Angeles, the radio meeting was tough to take. Burke went to Iger and said he wouldn’t relocate to L.A. “Wait,” Iger urged. “Don’t make any decisions until I talk to Michael.” Later, he came back and said Burke could stay in New York and be in charge of all the ABC operations, in effect replacing Iger. Iger himself would move to L.A. in some new higher-ranking capacity reporting to Eisner. Iger seemed excited; it would position him for the presidency. Burke said he’d think it over.
On one level, Burke wanted to stay. The new job would keep him in New York. Turning around ABC would be an interesting challenge, if he really had the freedom to do it. But he concluded that he never would, not as long as Eisner was in charge. Burke was grateful to Eisner for launching his career. But, he thought, that was a different Eisner—relaxed, confident, willing to take risks, willing to delegate. Burke still respected his creative instincts, but Eisner’s management style had become the antithesis of what Burke had learned from his father and Tom Murphy.
So when a headhunter called Burke, he took the call for the first time in his career. He began talking to Comcast, a large cable company based in Philadelphia. He told Iger he’d decided to leave the company. Iger seemed surprised. “You’ve really made up your mind?” he asked. Burke insisted he had. A big affiliates meeting was coming up in Orlando, and Burke said he’d be happy to go ahead with his presentation at the meeting. “I’ll handle this any way you want,” he offered.
The next day Burke got a terse voice message from Iger. “Michael and I have talked. He’s very upset. We’ve decided there’s no further need for you here. You can leave tomorrow.”
Burke placed several calls to Eisner, who didn’t call back. He cleaned out his office, and left. He’d already gotten a job offer from Comcast. Still, people at ABC were stunned that he’d leave Disney and the chance to run ABC for what seemed a lesser job at a much smaller company.
The next week Time magazine ran an article on Disney, pointing out Eisner’s lack of a successor, noting the recent resignations of Burke and also Geraldine Laybourne from TV, Richard Nanula, and Larry Murphy. But Burke told Time, “The whole situation is a lot less sexy and nefarious than people believe. Eisner is the most interesting combination of entertainment and business talent in the entertainment business—maybe in any business—and the company still has one of the greatest collections of business talent I’ve ever seen.” After the article appeared, Eisner returned Burke’s call.
“I’m sorry this turned out this way,” Burke said, “but I appreciate everything you did for me. I hope we can get beyond this.”
“Why didn’t you tell me?” Eisner asked. “I made your career.” Eisner said Iger had assured him everything would be okay, that he had Burke under control.
Burke conceded that he should have earlier dealt directly with Eisner. Maybe he’d made a mistake communicating through Iger. Still, it wouldn’t have changed anything because Eisner himself was the problem.
“Thank you for the comment in Time,” Eisner added. “But I’m still mad at you.”
In anticipation of ABC’s move to the West Coast, Eisner commissioned a new ABC building from Italian architect Aldo Rossi, who had snubbed the Euro Disney competition, to be built on the Burbank campus. Iger was promoted to a new position in Los Angeles, though still not to the Disney presidency. He would oversee ABC, but also be responsible for international, the same as Ovitz’s ill-fated assignment, and an area in which Eisner was relatively uninterested, in part because he didn’t enjoy foreign travel. To replace Iger in New York, Eisner tapped Steve Bornstein, the head of ESPN.
Given the success of ESPN, Bornstein was an obvious choice, even a possible rival to Iger. A native of New Jersey, he’d worked at the Public Broadcasting affiliate in Columbus, Ohio, before joining a still-fledgling ESPN in 1980 and became president and CEO ten years later. Under his leadership, ESPN had become even more wildly profitable than anyone had expected; in 1999 its operating profit was a remarkable $750 million. The number of households with cable had soared during Bornstein’s tenure from 50 to 90 million. With its heavily male, eighteen to forty-five viewership, a much coveted audience for advertisers, ESPN could command steep advertising premiums. But Bornstein’s masterstroke was a $9 billion deal with the National Football League that guaranteed ESPN eight years of Sunday-night football games for the full season, and secured eight years of Monday-night football for ABC as well as the broadcast rights to two Super Bowls, the most coveted event on network television.
The contract not only conferred a near-monopoly on the most important sports programming, but under a little-noticed provision in ESPN’s agreements with its cable operators, securing a full season of NFL games gave ESPN the right to raise its subscription fees 20 percent per year. Bornstein moved aggressively to do just that, and ESPN was able to double its per subscriber fees, from one dollar to two dollars. Still, at the time, a record $9 billion deal for sports programming seemed audacious and risky. Bornstein was grateful that Eisner backed his NFL strategy, something that the more cautious Cap Cities/ABC leadership had been reluctant to do. And Eisner let Bornstein launch ESPN magazine in partnership with Hearst, another idea that Cap Cities’ Tom Murphy had resisted. The magazine was an immediate success. Eisner was willing to spend money when he believed in an idea. Indeed, in Bornstein’s view, he sometimes seemed too willing. Eisner insisted on launching ESPN retail stores, though Bornstein opposed the idea. “Men don’t shop in malls. It’s that simple,” he argued. The effort was abandoned after a handful of test stores failed abysmally.
More important, Eisner let Bornstein run the ESPN business with minimal interference. Eisner came to ESPN headquarters in Bristol, Connecticut, from time to time, and he loved to talk about his enthusiasm for sports in his letters to shareholders. He boasted about ESPN’s burgeoning profits in meetings with analysts. But Bornstein knew that Eisner didn’t really care that much about sports. He knew real, dyed-in-the-wool sports fans, and Eisner wasn’t one.
The dynamic changed when Bornstein arrived at ABC. Nominally he was in charge of the network, but Iger oversaw ABC entertainment and Eisner intervened in all the major programming and scheduling decisions. The blurry lines of authority were exacerbated by the ongoing war between Tarses and Braun. Bornstein thought Tarses was in way over her head, immature, and that she was manipulating Bloomberg, the third member of the triumvirate. It was a mess. Bornstein warned Iger that he’d have to fire Tarses, but Iger resisted. “She’s never going to thank you,” Bornstein warned. “You’re just putting off the inevitable. You’re going to have to do it eventually.”
ABC prime time
was taking up so much of Eisner’s attention that he didn’t have much time for any of the other divisions, such as the live-action studio under Joe Roth, or animation under Peter Schneider. Despite Roth’s efforts to cut costs, to eliminate costly talent deals, to reduce overhead, Eisner was convinced that spending remained out of control and that Roth lacked the capacity to say no. Schneider had been restless ever since the Lion King triumph on Broadway, and was threatening to quit. Eisner’s solution was to move Schneider from animation to become head of the Walt Disney live-action studio reporting to Roth, with Thomas Schumacher succeeding Schneider at animation. Schneider’s orders were to keep costs down, to monitor Roth, and to report directly to Eisner—in effect, to spy on Roth.
News of Schneider’s ascension came as a blow to David Vogel, who now reported to Schneider, even though he retained his titles as president of the Walt Disney Studio as well as Touchstone and Hollywood. He went to see Roth. “So I’m fired,” he said.
“No, no,” Roth assured him. Schneider “had to get the studio, but he’ll be far too busy to bother you.”
Right, Vogel thought. He wished Roth would just have the decency to level with him. For whatever reason—buying The Sixth Sense, he suspected—he was being hung out to dry.
The next Monday, Schneider and Vogel had lunch at the Rotunda, the Disney executive dining room. Schneider announced that he would be making all decisions involving the Disney label, and Vogel would carry them out. “If you’re not happy with this, I’m prepared to move into your office,” Schneider said. As he said this, Schneider was gripping the table so hard that it shook.
DisneyWar Page 42