DisneyWar

by James B. Stewart

  Rarely if ever have I heard Eisner use any kind of expletive. Then he does talk about Pixar, sounding exasperated. He argues that he was in a no-win situation: had he done a deal on Pixar’s terms, he would have been criticized for giving away the store; now that talks have broken down, he’s being criticized for not saving the deal. “I said to Steve Jobs, ‘We’ll make the same deal as any other studio going forward.’ I’ll give you the letter we gave them! His board members can’t believe they let this deal go. Every [Disney] board member emailed me,” Eisner asserts. He says the Disney board, including Roy and Gold, unanimously rejected the terms proposed by Pixar. “Is it a ploy?” Eisner asks rhetorically. “It could be. I told the board, sixty-forty he’ll still make a deal.”

  The Pixar situation has played into Roy’s and Gold’s hands, and the two have been widely quoted in the media commenting on the breakdown of the negotiations. “This just proves, sadly, that we’re right,” Roy told the Los Angeles Times. “Our point is that if we had cultivated this relationship for the past five years you would never have gotten to where you are now. This is bad long-term management.”

  Eisner continues to dismiss Roy and Gold as ineffectual gadflies, but the strategy group is meeting every day for at least fifteen minutes, in person or by phone. Eisner seems genuinely baffled, if not hurt, that Roy has publicly turned against him.

  “Roy did nothing in animation,” Eisner tells me, stressing the word nothing. “Jeffrey Katzenberg and I did it. I spent my life encouraging people to be nice to Roy. Frank Wells would say, ‘Roy wants to do this.’ I’d say, ‘Why not?’ Jeffrey never learned. I told him, ‘Be nice to him. If you can be nice to Jack Nicholson and Warren Beatty, you can be nice to Roy.’ Jeffrey said, ‘I don’t have time.’ ”

  “I spent seventeen years indulging him,” Eisner says of Roy. “Little things: Could I be on the ‘voice’ committee [which determines the voices appropriate for the animated characters]? I came down on anyone who didn’t respect him. After fifty years, he thought he’d earned respect. The reality was, I demanded it. It was in our interest. I had him at the theme parks, I made him the Holy Ghost of the Trinity of Disney. But I never let him do anything.”

  Eisner tells me an anecdote about his grandparents. “My grandfather rescued Jews from Germany. Then Hungary. He brought Jews to this country. My grandmother would say, ‘They never even sent me a thank-you note! They weren’t appreciative.’I thought, you don’t do it for the appreciation. You saved their lives! They’re assimilated. Don’t expect them to thank and honor you. Just let them be.” He adds that his grandmother always tipped waiters before rather than after the meal. “You get better service,” she’d told him.

  In contrast to his grandmother, Eisner says he neither sought nor expected any thanks from Roy. Still, he never thought he would turn against him. “Roy and Patty do not know what I had to do to change Roy’s image in the company,” he says. He launches into the saga of Fantasia 2000, his attempt to get Leonard Bernstein involved before the maestro’s death, and describes how the animators “revolted” against his idea for the “Pomp and Circumstance” sequence, and the idea that Disney characters might have babies. “I can’t really blame Roy for Fantasia,” Eisner concedes, but then proceeds: “All my ideas disappeared. So I gave up. Bernstein would have made it commercially successful. Fantasia 2000 lost a fortune. Stanley saw in a board meeting that it lost $100 million. He called me up. ‘Never let my client do something like that again,’he said.” Eisner said Gold often called, urging him to keep a close eye on Roy. “You know Roy, he doesn’t care about money. Roy cares about art,” Gold said, according to Eisner.

  “We could not have picked two better adversaries,” Eisner says of Roy and Gold. “It’s not like they’re Warren Buffett and Tom Murphy…. Stanley says, ‘Now I’m free and can talk,’ but they’ve been talking all along.” Eisner confirms that Ray Watson reported on his lunch meeting with Gold. “Stanley told Ray, ‘You, Tom [Murphy], and I are going to go in and fire Michael,’ ” Eisner says. “I thought, what ingratitude after what I’ve done…. You see your true friends when you’re in the foxhole.”

  I ask Eisner about the “reforms” that stripped Gold of his power and forced Roy off the board. “I didn’t set a trap,” Eisner says. “We put in strong rules, we had to. I’ve led the charge. The shareholders were expecting this. You want current, up-to-date governance. True, a lot of the new rules caused Stanley to become impotent. He could not be on the compensation committee, or governance. Stanley feels he was marginalized. The board, having been abused by Stanley, had to deal with this.”

  As for Roy, he was over seventy-three, “and the committee said, no exceptions,” Eisner says. “We talked about making him a director emeritus, but he couldn’t be a voting member. Some board members said to the committee, ‘Is it worth it? Why not give him another year?’ The board disagreed.” Eisner says he was concerned at the time, but now that Roy has resigned, “I’m glad it happened,” and Gold’s resignation “was a gift. We finally had a board meeting that was intelligent and calm.”

  It’s a brilliant, sunny winter afternoon as I ride with Eisner in the SUV to Times Square and a “table read” of the musical Tarzan, which Disney hopes to open on Broadway in the fall of 2005. He seems in a pensive mood. “This business is changing,” he observes. “I’m not sure you’re going to see another chief executive in Hollywood like me. I think I’m probably the last of the creative types to run a company like this. They want MBAs, accountants.” He shakes his head.

  Eisner brings up the subject of ABC, and acknowledges that prime time isn’t showing any signs of improvement. “We turned around the studio,” he reminds me. “The board insisted that I step in and personally oversee it, and I did. I could do the same thing at ABC, if I spent one day a week there and focused on it.”

  “Why don’t you?” I ask, which seems an obvious question.

  “Because I can’t pull the rug out from under Bob,” he replies, sounding frustrated. Since he has delegated responsibility for the network to Iger, he explains he can’t undermine him by substituting his judgment. “But if things don’t improve by May, there’s going to be a big change,” he says somewhat ominously. There have been persistent rumors that Eisner will replace Iger, even that Eisner has approached Peter Chernin, the highly regarded president of Twentieth Century Fox, about coming to Disney. Iger has heard it so many times, that he has asked Eisner if it was true. Eisner has denied it.

  The situation was increasingly frustrating for Iger, who called various executives outside of Disney to complain. In one of these conversations, he said “I just feel every time I pick up a magazine I read there isn’t any successor. I’m invisible. No one takes me seriously. I’m miserable.” (Iger said that while he may have mused with people from time to time about quitting, he doesn’t recall ever saying he was “miserable” and in fact has enjoyed his tenure as Disney’s president.)

  When we arrive at the rehearsal studio on Forty-second Street, Thomas Schumacher is in charge, and the creative team has gathered—composer and songwriter Phil Collins, writer Henry David Hwang, director and set designer Bob Crowley. The “table read” features a full cast, a small orchestra, and the performance is far more polished and professional than I’d expected. There are about forty people in the audience, which responds with prolonged applause. Though everyone, including Eisner, seems aware that Disney’s remarkable string of Broadway successes is bound to end sometime, the buzz in the room lends Tarzan the feel of another hit.

  Afterward, the creative team gathers with Eisner in an adjoining room. “I think it’s great,” Eisner begins. “It’s further along at this point than any show we’ve had before. I have one idea. I finally figured out why the movie didn’t make $200 million. There’s a flaw…the ending of the movie is unsatisfying. It turns into a TV show.”

  In both the Disney animated film and in this musical, Tarzan, having been raised by apes, discovers he’s human and falls in
love with Jane. The climax comes when he has to decide whether to return to England with Jane or remain with his ape family; Tarzan chooses the apes, and Jane impulsively stays with him in the jungle—a predictably happy ending.

  “We should not do the Disney [film] ending,” Eisner continues. “Do the ending in the book—the apes send Tarzan back to England. Let the apes conclude that he is now the man and should go back into his jungle…. Man is the animal, the animals are men. This is what [author Edgar Rice] Burroughs did. Why did we do it this way?”

  This pronouncement seems to leave the group speechless. “It did do $175 million,” Schumacher finally says, somewhat defensively, of the animated Tarzan, which was released during his tenure as head of feature animation.

  If Tarzan returns to England, “then what happens?” Schumacher asks Eisner.

  Eisner shrugs. “That’s for the sequel.”

  “The end does have a problem,” Schumacher concedes. “We know there’s something wrong at the end.”

  “I don’t like the ending,” Eisner persists. “It’s too much. It has an obligatory feeling.”

  “It’s been unconventional, and then it turns into…Beauty and the Beast,” Schumacher observes.

  “Well, that’s my big idea,” Eisner says. “It’s only five pages at the end. Otherwise, it moves.”

  “You mean that’s your cherry bomb in the pond,” Schumacher says.

  The Tuesday after the Super Bowl, ESPN’s Mark Shapiro called John Eisendrath, the writer for “Playmakers.” Despite the success of the series, Eisendrath was worried. He knew Tagliabue had complained strenuously to Eisner. Indeed, the NFL had gone further. Denver Broncos owner Pat Bowlen told The Wall Street Journal that the show was “horrible” and he couldn’t understand why ESPN “would go out and crap all over” the NFL.

  “They’re killing it,” Shapiro said, sounding dejected. “The NFL is too important a partner to us and we can’t do it.”

  “Can I take the show somewhere else?” Eisendrath asked.

  “No, because the NFL will get mad if we let it go.”

  (While conceding that Disney was facing critical contract negotiations with the NFL, Iger told me the show was canceled not because of pressure from the league but because “it wasn’t very good.”)

  At ABC, Lloyd Braun and Susan Lyne were working feverishly on developing the 2004–2005 ABC season. Despite Eisner’s oft-repeated claim that he could turn the network around, it was too late for anyone to salvage the current season. Barring a miracle, ABC seemed destined for a fourth-place finish, even in the eighteen- to forty-nine-year-old demographic where it had been third the prior year. It was especially demoralizing to Braun that “The Apprentice,” the show ABC lost to NBC, was an instant hit, attracting upwards of 20 million affluent viewers and saving NBC’s all-important Thursday night lineup.

  The previous summer, Braun and Lyne had run their own version of Eisner’s “gong show,” gathering everyone at ABC for a retreat at the Grand Californian Hotel at Disneyland’s California Adventure. Even Iger was responsible for pitching a drama, comedy, and “alternative”—meaning, reality—idea. Iger pitched a show he called “Stacey’s Mom,” based on a Fountains of Wayne music video he showed. The premise was that the mother was the “hot mom” in the neighborhood, and teenage boys come over to be around her rather than her kids. The idea made it into development, but was never ordered as a pilot.

  Braun pitched an idea he called “Lost.” He described the show as a cross between Cast Away, the 2000 movie starring Tom Hanks as a survivor on a desert island, and “Survivor.” (Like “The Sopranos,” many of Braun’s series ideas have come from feature films.) But, Braun explained, “not a guy alone on a desert island with a soccer ball, but rather a group of people who find themselves thrown together and now have to make a life together and form a society. A world where no one knows who anyone really is, where, at the end of the day, everyone has to figure out, ‘how the hell do we get off this island?’ ”

  “Lost” was one of dozens of ideas to emerge from the meeting that got circulated to Hollywood agencies and producers to see if any attracted any interest. A few weeks later, veteran producer Aaron Spelling said he wanted to do “Lost,” and ABC ordered a pilot script from a Spelling writer. When the script arrived in December, Braun hated it. A rewrite in January was, if anything, worse. Warned that the show would have to be delayed a year, Braun insisted he’d get a new writer and salvage it. With ABC in fourth place, “We have to swing for the fences,” he told Lyne. “I have a feeling this is going to be a home run.” She agreed.

  Braun turned to J.J. Abrams, the creator of “Felicity” and “Alias,” the closest thing ABC had to a hit, and did everything he could think of to interest him in the project. Finally Abrams agreed to think about it over the weekend. Heather Kadin, who worked in ABC’s drama department, introduced him to a promising young writer named Damon Lindelof. They hit it off, and at their next meeting Abrams was excited. He and Lindelof had a new idea: Besides the group of castaways, the survivors of a plane crash, there would be something else on the island—a sinister, unseen presence. But it was now February, too late to complete a full script. Braun and Lyne would have to green-light the project without a script.

  The year 2004 was the first in which Braun and Lyne had been granted the authority to approve the new schedule. In prior years, Iger had retained the right to make the final decisions in consultation with Eisner. This year, eager to distance himself from the floundering network, which was clouding any possibility he’d ever succeed Eisner, Iger had ceded control, at least in principle. Lyne had reservations about approving a show like “Lost” without a script. Still, she admired Braun’s passion for the show, and agreed with his argument that ABC had to try something different, something that, in his words, would “make noise,” that would be “so big, so different, you can’t avoid it.”

  Lyne threw her support behind “Lost,” and Braun, in turn, backed her favorite project, “Desperate Housewives,” a combination of soap opera and satire about a group of suburban women from creator Marc Cherry. Lyne had been looking for a show that would appeal to women, a group she felt the networks were ignoring in their rush to air procedural police dramas. HBO’s popular “Sex and the City” was finishing its run, leaving open Sunday evenings for a must-see women’s show. Lyne had even hired “Sex and the City” director Charles McDougall.

  When Braun and Lyne met with Iger to go over all the projects they’d approved, he was amenable to “Desperate Housewives” but critical of “Lost.” “This is a waste of time,” he said. “It might work as a miniseries, but not as a series.” “Lost” also kindled bad memories of “Twin Peaks.” Just as “Twin Peaks” creator David Lynch had never known who killed Laura Palmer (and as a result, the show devolved into an incoherent mess), the creators of “Lost” either didn’t know or wouldn’t say who or what the mysterious presence on the island was.

  Iger’s response was a clear invitation for Braun to kill it, but instead Braun openly defied him, despite the new spirit of cooperation and collegiality that both were supposed to foster. Braun urged Abrams to finish the script, began casting the show, and assigned a team of preproduction people to shepherd it. Steve McPherson, head of Touchstone, was so hostile to the project that Braun threatened to banish him from casting sessions.

  Eisner was similarly dismissive. At one of their meetings with Iger, he came in through the connecting door to his office and sat down. “What have you picked up?” he asked. When they described “Lost,” he frowned and said, “That’s never going to work.” He argued it was just another “crazy” Abrams project. He and Iger frequently criticized “Alias” as needlessly complicated and faulted them for “coddling” Abrams. On another occasion, Eisner gave Braun and Lyne a list of the pilots they’d ordered on which he’d graded them on a scale of one to ten, one being the worst. Eisner gave “Lost” a two.

  Finally the new pilot script was done. Braun and Lyne th
ought it was brilliant, but the price tag for the two-hour episode, which involved staging an elaborate plane crash, was a whopping $12 million. Braun persuaded Abrams to make a two-hour pilot, so that if it didn’t work as a series they’d still have a made-for-TV movie for their money. He and Lyne did everything they could just to keep production moving forward. “If we’re pregnant enough, they won’t shut us down,” Braun argued. At the same time, he realized that he was living dangerously. If Eisner or Iger decided they wanted to get rid of him, he’d handed them the ammunition: He had green-lit a $12 million pilot that didn’t even have a script.

  Pixar’s surprise announcement that it was withdrawing from talks with Disney lent new urgency and momentum to Comcast’s planning for a bid for Disney. As Jobs had intimated in his phone conversation with Roy, perhaps new management at Disney, unburdened of the strained Eisner-Jobs relationship, could salvage a Pixar deal.

  On Thursday, February 5, 2004, the Comcast board met over dinner to discuss a formal bid for Disney. By now there had been numerous discussions between Mitchell and the intermediary. In a one-hour presentation, Roberts and Burke emphasized that this was a unique opportunity, since it was unlikely that any of the other major entertainment companies would ever be for sale. He also stressed that after years of investment in broadband technology, the cable systems were now in a position to profit from entertainment content, especially by offering video on demand and creating new cable channels. A major issue was how much it made sense for Comcast to pay for Disney. The film library, the cable channels, and especially ESPN offered major synergies to the cable operators. The theme parks, none. And it would probably have pained Eisner to know that Comcast valued the ABC Network at zero. Based on this analysis, Comcast felt it could get to the mid-twenties per share, but not much higher. Brian Roberts summed up, lending his support to the merger on the right terms and the right price, and the board gave its unanimous approval to move forward.