DisneyWar
Page 62
“Disney hasn’t announced anything,” Eisner replies, looking uncomfortable. “We are in conversations….” He stops. Zenia Mucha, sitting in the front row, is scowling and vigorously shaking her head.
“What if they go away?”
“My PR person worked for George Pataki,” Eisner answers. “She says don’t answer that one.”
“The Ovitz lawsuit,” Rose continues, bringing up another contentious subject.
Eisner rolls his eyes. “Why am I doing this? I can’t talk about that.”
Rose mentions that AOL’s Steve Case is his “hero,” a “genius.” “Who else has the vision?” he asks Eisner.
“Barry Diller,” Eisner answers promptly. “He spotted assets that were undervalued,” referring to the collection of Internet assets Diller has forged into a single company. “He had a strategic vision. He’s exercising it prudently and brilliantly.”
“You used to work for him.”
“Anyway, he turned out to be right. People thought he was desperate to be a movie guy but he was putting together assets…”
“Criticism of your stewardship, the stock price…is there a misconception about what happened to Disney?”
“Disney is a great company…. I’ve never seen the company in twentyyears in better shape. We’re focused on the future, we’re strategically positioned…. We didn’t make any stupid acquisitions that brought us to our knees. We were cautious, we’ve come through the storm.”
Rose brings up another awkward issue—succession. “Sandy Weill [chairman of Citigroup] just retired.”
“I’m 140 years younger than Sumner [Redstone]!” Eisner exclaims. “I’m younger than Rupert [Murdoch]! Why don’t you ask them about succession? Look, I like what I’m doing. We have excellent people in place. Bob Iger, the president, is highly respected along with five other people who could run the company.”
“Do you have a retirement date in mind?”
“No,” Eisner says emphatically.
Rose asks him about the need for a “rebirth,” the need to “redefine” Disney.
“That’s true,” Eisner says. “Disney cannot become a museum. It has to reinvent itself creatively while standing for certain values. Disney has the brand, the culture, the type-A personality to be around forever. We are managing from decade to decade, not quarter to quarter. It’s a long marathon. We have to step back. We have to put out great products, and get them to the public.”
After Eisner’s presentation, I join him and his entourage backstage, and he offers me a ride uptown in his chauffeured SUV. Once we’re in our seats and maneuvering through traffic, I ask him to name the five people at Disney who, along with Iger, could succeed him as chief executive. He gives me an annoyed look. “There aren’t five people,” he says, then pauses. “There are twenty.”
As we continue uptown, Eisner mentions that he just had lunch with Sandy Litvack, his former chief administrative officer and general counsel. “Sandy told me you interviewed him,” he said. As it happens, I had interviewed Litvack that morning. “Sandy told me you can’t be trusted.”
“Really?” I say.
“I decided to go ahead anyway. Everybody has a dark side,” Eisner continues. “It’s just a matter of finding out what it is.”
The comment gives me pause, and I find myself still thinking about it days later. I’ve heard others repeat similar comments from Eisner about a “dark side,” and it was something he mentioned several times during his testimony in the Katzenberg lawsuit. I wonder: Does everyone have a “dark side”? Do I? Even if I’m not the best judge of my own character, I don’t assume that everyone else has a “dark side.”
I realize that by mentioning Litvack’s remark—assuming Litvack said it—Eisner has simultaneously positioned Litvack as someone I can’t trust, and has ingratiated himself with me. He has cleverly attempted to turn me against Litvack—exactly what so many current and former Disney executives have told me happened to them.
By the time we reach the ABC building on West Sixty-seventh, Eisner’s cheerful mood has returned. He’s eager to tell me about a recent animation meeting similar to the one I attended the previous summer. “We had two fabulous ideas,” he says. “One is a documentary, a ‘mockumentary,’ really, with animals talking. You interview a wolf, a cow, a prairie dog…. I’ve been talking about wolves, something with wolves, but it always sounded like ‘Rin Tin Tin.’ But then I thought of Best in Show [a ‘mockumentary’ about dog owners by Christopher Guest]. And I thought, an animal mockumentary!” Eisner sounds genuinely excited. “Two. I’ve always loved White Christmas [sic]. You save the lodge with a show. Here you’ve got a circus going under. The animals put on a show, a benefit!
“We’ve totally refocused animation,” Eisner continues, as he gets out of the SUV. “I brought all the best animators, Glen Keane, everybody, into the office last Wednesday. I said they weren’t leaving until we had two great ideas, and I’d stay as long as it took. It took an hour!” Eisner says, as he heads into the building.
That evening I join Eisner, his assistant Chris Curtin, and Mucha for dinner at Ouest, a “hot” restaurant on the Upper West Side. I’ve noticed that Eisner gets reservations anywhere on short notice, which reminds me of the anecdote in which Ovitz was able to book a table at Morton’s when Eisner couldn’t. Eisner is, as usual, good company at dinner, though it’s difficult to interview him as he hops conversationally from one topic to another. But tonight he’s prepared to discuss the September 24 board meeting at which Gold threw down the gauntlet.
The background, he explains, is that Disney faced a “perfect storm”: the beginning of a recession, September 11, the Iraq war, aging ABC programs, having to spend $9 billion for the NFL football package. “This gave my enemies for fifteen years the pleasure of a fall.” Then Sid Bass had to sell his Disney stake. “People got caught in the bubble,” Eisner observes. “Sid Bass was brilliant. I hope I can be so graceful. It was financially devastating for him. Not for a moment was anyone blamed.”
After Gold’s presentation to the board, Eisner says, “I presented to the board the real situation, division by division. I had to reinvent the movie business. I had to promise the board I would run it personally. Nina and Dick could handle it day to day, but I would decide what to make. I promised the board.
“Anyway,” he continues, “the perfect storm. I’ve been there before so many times since the 1960s. ‘All My Children’—no one was watching. Bad press. There were rumors I was going to be fired three weeks after I got to Paramount. I’ve been there, walking the plank. On the cover of Time, both ends! It’s ludicrous. Still, the board meeting was a new experience. Stanley was the one board member against me. Ray Watson told me Stanley was unhappy I didn’t make him president.
“As long as I’ve been doing this, criticism doesn’t bother me. I read a review every morning. Everyone’s an expert. Even my kids call up: ‘What were you thinking?’ I don’t care.
“I was invigorated by the rebirth we had to do. It’s fun to go from the floor to the ceiling. When someone threatens you, you either run away or you’re invigorated by it. I handle crisis well. Success is the hardest to endure, not failure…. My job is like a baseball coach. Getting fired is no dishonor. You just had a bad season.”
Later, the conversation turns again to the question of succession, and his decision to name Bob Iger president. “Bob looks ‘straight,’ ” Eisner observes, “but there’s more there. He did ‘Twin Peaks’ and ‘Cop Rock.’ You’re looking for some theatricality…. He’s a tireless worker. People like Bob.”
But it’s clear Eisner isn’t comfortable describing Iger’s promotion, and says that Iger had no reaction when Eisner told him he was making him president. “Bob and I are both ‘cool’ people,” he says by way of explanation. “We’re not ‘high-fivers.’ ” Eisner also makes clear that Iger is by no means his heir apparent. Besides the five (or twenty) Disney executives who Eisner believes could succeed him, Eisner mentions that
there are a number of ex-Disney executives who should also be considered.
“I see these companies,” he says. “They have a successor, and then there’s a shark frenzy. You become a lame duck the minute you say so. No one respects you.”
It took a Herculean effort to get “8 Simple Rules” back on the air, and not just because Eisner and Iger didn’t like the script. At the first table read, actress Kaley Cuoco, one of the teenage daughters, had the first line. Every time she started to speak, she burst into tears. “I’m so sorry,” she said. Just about everyone on the set ended up crying, including Susan Lyne.
The show returned in an hour-long episode that aired on November 4, which was also sweeps week. Braun had banned any laugh track, with the exception of some faint laughter in the opening segment, before Ritter’s character, Paul Hennessy, suffers a fatal heart attack while on an errand to buy milk. Two new characters, the grandparents, played by James Garner and Suzanne Pleshette, arrive to rally the family and help the children and their mother confront their devastating loss. No one is pregnant.
Considering the delicacy of the situation, and the inherent difficulty of treating subjects as profound as death, remembrance, and grieving on a sitcom, the episode was remarkably successful. The show “was done as tastefully as television permits, blending scenes of sorrow with wry touches of comic relief” (New York Times); “a heartfelt, emotional farewell” (Los Angeles Times). And from a commercial standpoint, the gamble paid off: “8 Simple Rules” attracted over 20 million viewers, giving ABC a huge boost during the critical sweeps week.
In the wake of the reviews and ratings, Lyne and Braun waited in vain for any congratulations from Eisner or Iger. Finally Lyne asked Eisner what he thought of the show, hoping for at least a modest compliment. “I didn’t like it,” he said, complaining that it was “lugubrious.” Neither he nor Iger said anything positive to either her or Braun, leaving them both angry and dispirited.
Braun was also furious when he discovered that NBC had picked up a new reality show from Mark Burnett, the “Survivor” producer, that Braun thought he had locked up for ABC. A year before, Braun and Andrea Wong had pitched an idea to real estate mogul Donald Trump. Though Trump had declined, opting to create another show, “The Apprentice,” with Burnett, he insisted they offer the show first to Braun and ABC. Two minutes into the pitch—aspiring business tycoons vie for a job in the Trump organization—Braun jumped up from his sofa and said, “Done. I’ll take it. We want it.” He and Burnett shook hands and hugged each other to seal the deal.
Then “The Apprentice” was turned over to business affairs and ABC’s bureaucracy. At $1.5 million per episode, with a projected fifteen episodes, ABC didn’t have the money in its budget for Braun to approve the show on his own. It would need Iger’s approval (budgetary discretion was crucial to Eisner’s and Iger’s ultimate control over the network). ABC negotiators tried to get Burnett to lower the price. Exasperated, he took the show to NBC, where programming head Jeff Zucker, who had virtually unfettered authority to make programming decisions, immediately bought it. Braun was furious when he found out, both because ABC had lost the show and because Burnett gave him no advance warning that he was going to NBC.
After the blowup in Eisner’s office, the email from Iger accusing Braun of insubordination, and now this, relations between Braun and Iger, never warm, deteriorated even further. There was palpable tension between the two in every meeting. Morale at ABC suffered as speculation swirled that Braun would quit or be fired. Finally, on a Thursday just after the November sweeps, Iger asked Braun to dinner at Vincente, a popular restaurant near Iger’s Brentwood residence. Braun agreed. But he came prepared with a litany of complaints that he had discussed with Lyne. “I don’t know how this will play out,” he told her. “I can make these just from me, or from both of us. It’s your call.”
Lyne said she’d back him, and that he could say they were from both of them.
When Braun arrived at the restaurant, he held out his hand, but Iger refused to shake it. “I hope you’re up for this,” Iger said, “because I’m going to let you have it.” They were seated, and Iger continued, “This is the most dysfunctional relationship I’ve ever had. You don’t respect me. You don’t like me. It’s unacceptable.”
“Really?” Braun said. “Well, maybe you need to know why. Do you want to know?”
“Yeah,” Iger said.
Braun pulled out some notes he made and said he had several major problems. “Lack of character; incompetence; taking credit for things you had nothing to do with; and running away from decisions you made.” Saying that Lyne agreed with him, Braun started citing specific allegations in each category, from the mishandling of “Millionaire” to “8 Simple Rules,” as Iger grew visibly more angry. Braun said Iger deserved little or no credit for ABC’s few successes.
“What about ‘Bachelor’?” Iger countered.
“You did shit on ‘Bachelor’!” Braun exclaimed, his voice rising. “You didn’t even know about it until we were half done shooting it.”
At this point Iger was so angry that he gestured with his arm, hitting a passing waiter who was carrying coffee. The waiter stumbled, spilling coffee down Iger’s shirtfront, ruining his tie.
“Can we just go home?” Braun said. “Nothing good is going to come from this.”
They got up without having eaten and left. They waited in silence on the sidewalk for the valets to bring their cars.
Braun stayed home the next day. He consulted his lawyer, saying he expected to be fired. Eisner replied to his email, proposing a meeting, saying that given how Braun had treated Iger in recent months, a meeting would be a good idea. But he refused to see Braun alone, arguing it would just turn into another personality conflict.
Accounts of the ill-fated dinner spread rapidly through the ranks at ABC. Susan Lyne and others worried that things had blown up so quickly that Braun hadn’t been able to get his message across. Lyne was so worried Braun would be fired that she went to see Iger that Friday. She spent two hours with him, trying, in a measured and calm way, to underscore how important Braun was to the network and how much he did to boost morale. At the same time, she was candid in her assessment of Iger. Echoing sentiments that were widespread at ABC, she told him that his presence at the network had become a “dark cloud” because he always seemed negative, and that he kept demanding that they fix things while conveying skepticism that they could. “The Bob Iger who hired me, who got me to ABC, who was trained and guided by Tom Murphy, is gone,” she said, her tone one of sadness more than criticism.
It was a sobering message. Iger looked anguished, and finally said, “You don’t know how hard it is to do the job that I have. Working for Michael is very different from working for Tom.”
Over the weekend, Eisner sent another email to both Braun and Iger. “Can we all please just take a deep breath and calm down?” he wrote. And then, on Monday, Iger struck a conciliatory note, acknowledging that it was healthy to discuss their differences, and joking that he’d ruined his tie.
Braun went to the Giorgio Armani boutique in Beverly Hills, picked out a tie, and sent it to Iger with a note: “A fresh start requires a new tie.”
Braun and Iger had lunch the next day. The tone was civil, conciliatory. They agreed to try to work together. That weekend, Eisner invited Braun to meet him at his home. “How did it get to this point?” Eisner asked, referring to Braun’s relationship with Iger.
“It’s not productive at this point to get into it,” Braun replied. “I dealt with this with Bob. I didn’t run to you. It got horrible, but let’s just leave it at that.”
Eisner pressed him for more details, but Braun held fast. He didn’t want to get between Iger and Eisner.
The next week, Iger told Braun that Eisner had told him about the meeting. “He said you wouldn’t trash me,” Iger reported.
*Eisner insisted that he was only trying to adhere to the highest standards of corporate governance.
*There are rules requiring a write-down of assets under certain circumstances. Valuing intangible assets such as goodwill is the subject of the Financial Accounting Standards Board Statements 141, “Business Combination,” and 142, “Goodwill and Other Intangible Assets.”
*Gold says that he meant that Eisner was the only person at the company who could run it, given his failure to groom a successor, not that there was no one else who could run it.
Part Three
DisneyWar
Sixteen
On November 20, 2003, a week before Thanksgiving, Roy Disney met with John Bryson at the bar in Pasadena where Bryson broke the news that Roy would not be renominated to the Disney board. After Roy abruptly ended the discussion and walked out, Bryson called Eisner. “Roy seemed shocked,” he reported. “Roy said it was like we stuck a knife in his heart.”
Eisner felt uneasy. This didn’t sound good. He wondered if Bryson had been the right person to handle this. Had he been too blunt? If Eisner had been the one to deliver the news, he would have soft-pedaled it a little, left some “air” in the situation, maybe given his famous “elastic no.”
“I think we’ve got a problem here,” Eisner said. “I’d say we tested the water and the water is cold.”
“Yeah,” Bryson agreed. He said he had told Roy that he would discuss the matter with the committee and get back to him.
After the call, Eisner spoke to public relations executive Gershon Kekst, a longtime adviser who was also concerned about Roy’s reaction. “I don’t see why you’d want to put the Disney name into the battle,” Kekst said, urging Eisner to back off. Zenia Mucha, Disney’s head of public relations, also advised that alienating Roy was a mistake.