There is no doubt a good deal of truth to these assessments. But they fail to explain the fact that Disney was already beginning to decline by the time of Wells’s death. Wells hadn’t succeeded in restraining Eisner in the building of Euro Disney. He had not been able to resolve the mounting crisis with Katzenberg. Wells’s relationship with Eisner was fraying, suggested by Eisner’s outbursts in front of Ovitz and his wife and Wells’s own laments to Stanley Gold.
The answer seems more deeply rooted in Eisner’s complex personality. Eisner is intelligent, charming, and funny. As his early years demonstrated, he has enormous creative skills and energy, and his management style in his early years at Disney, admittedly unorthodox and highly centralized, unleashed the same in others. Then, slowly but surely, as success mounted, Eisner’s own identity fused with that of Disney itself. Many observers date this process to Eisner’s insistence that he host “The Wonderful World of Disney” television program, just as Walt had done, and to claim the mantle of Walt Disney. It was a process reinforced by growing wealth and the trappings of power that, at Disney, a company deeply rooted in a culture of fantasy, actually do take on the aura of hereditary royalty. Eisner insists that his conjecture about his last name and the Disney name isn’t meant to be taken seriously and, in his words, that “I’m not genetically attached” to Walt Disney. But why else would he repeat the comparison so often, if not to suggest that he is the rightful heir to the Disney legacy?
Perhaps this also helps explain Eisner’s failures as a corporate manager. When Eisner lamented to me, as he did during our ride in his SUV, that it’s unlikely there will be another entertainment or media chief executive like him, he may well be right. His management failures include an inability to delegate, a frequent mistrust of subordinates, impulsive and uncritical judgments, his pitting of one executive against another, his disrespect for any hierarchy of authority other than his own, his encouragement of a culture of spying and back-channeling, his frequent failure to acknowledge the achievements of others, and above all, his inability to groom a successor, notwithstanding his designation of Bob Iger as his heir apparent. Though Iger is praised by many as a hardworking and inherently decent person, Eisner placed him in many untenable positions, including ABC, where he had the responsibility but not final authority for the faltering network.
Iger could, of course, have quit, as did so many other Disney executives. There are many talented, creative, hard-working executives still at Disney. But the roster of Disney alumni either fired, forced to resign, or who left of their own initiative and who now occupy important posts elsewhere in corporate America is also unparalleled: Steve Burke, president of Comcast; Paul Pressler, chairman and chief executive of the Gap; Steve Bollenbach, chairman and chief executive of Hilton Hotels; Gary Wilson, chairman of Northwest Airlines; Peter Rummell, chairman and chief executive of St. Joseph; Judson Green, president and chief executive of NAVTEQ; Meg Whitman, chairman and chief executive of eBay; Richard Nanula, chief financial officer of Amgen; and Susan Lyne, chief executive of Martha Stewart Omnimedia.
In Hollywood, Joe Roth is chairman of Revolution Studios; Steve Bornstein is chief executive of the NFL Network; Bill Mechanic was chairman of Twentieth Century Fox; Lloyd Braun is head of media and entertainment at Yahoo!; and Jeffrey Katzenberg is chairman and chief executive of DreamWorks Animation, which in October 2004 raised $812 million in a public stock offering. Disney both attracted and then disposed of an extraordinary group of senior executives—any one of whom might well have proven a worthy successor to Eisner. Indeed, the Disney board said it would consider former Disney executives in its quest for a new CEO.
The fusion of Eisner’s identity with that of Disney—l’état, c’est moi—is hardly a rare phenomenon in either business or history. It has traditionally led to the downfall of nearly all absolute monarchies. When Eisner himself sometimes referred to the drama swirling around him as “Shakespearean,” he might well have been describing the Bard’s obsession with this very theme, in which a ruler disregards his subjects and answers only to the demands of his own ego.
A familiar tragic character in Shakespeare—Lear, Henry IV, Macbeth, Richard II, Richard III—is the monarch whose power is such that he bends the truth itself to suit his will. Perhaps that accounts in some part for what is clearly Eisner’s most glaring defect, the one quality more than any other that has caused him to leave behind a trail of deeply embittered former colleagues: his dishonesty. Considering the importance Eisner places on honesty in others—dating at least to the childhood incident in which he believes his mother lied about his bedtime—it is extraordinary that Eisner himself has been so reckless with the truth, in ways both large and small, to a degree that suggests he is at times incapable of distinguishing one from the other. Far more than just a personality quirk, Eisner’s tendency to distort, embellish, or forget the truth had direct and costly business consequences for Disney. More than any other single factor, what Steve Jobs and the Weinstein brothers considered Eisner’s dishonesty accounts for the failure of the important Pixar and Miramax relationships. Katzenberg was so angry and bitter—and willing to sue—because he believed he was lied to and felt betrayed.
Like so many others emboldened by power, Eisner ultimately sealed his fate by overreaching. He lost a critical ally when Sid Bass, humbled by the post–September 11, 2001, collapse of technology stocks, divested his huge stake in Disney. And then Eisner turned against the one other check on his power, Roy Disney, embracing the effort to force Roy off the board. Eisner failed to recognize both the determination of Walt’s long-underestimated nephew and the strength of a growing national movement of shareholder democracy activists, which led to Eisner’s humiliating repudiation by 45 percent of Disney’s shareholders. In the wake of the vote, even the Disney board had to face its responsibilities to shareholders, and not just to Eisner.
Perhaps most of all, Eisner underestimated the power of the Disney name. Eisner may have taken the place of Walt Disney before a weekly national television audience, but in the public imagination, there was only one Disney. Roy emerged as the guardian of Walt Disney’s creative flame, the champion of the Disney faithful. “It’s that Disney name!” Eisner exclaimed in exasperation to Diane Miller, seemingly oblivious to the fact that Diane herself is Walt’s daughter and has proudly kept Disney as her middle name.
And so Eisner will go, perhaps on his own terms, perhaps not. A new era at Disney will begin. New generations of children and their parents will discover and be enchanted by Snow White, Cinderella, The Little Mermaid, and Beauty and the Beast. The Lion King, the musical, will be playing to packed houses. Glenn Close will still “adore fur” as Cruella De Vil, Johnny Depp will ride the high seas as Captain Jack Sparrow, and M. Night Shyamalan will find new twists to the supernatural. Visitors to Disney’s theme parks will feel the gravitational pull of the moon as they head toward Mars and will soon come face-to-face with the Abominable Snowman of the Himalayas.
And somewhere—in Orlando, perhaps, or Anaheim, Paris, Tokyo, or Hong Kong—a small child will swallow his shyness and give Goofy a hug.
A Note on Sources
This book is based primarily on firsthand reporting consisting of hundreds of interviews and a review of many thousands of pages of documents. In part because Michael Eisner and Disney extended a degree of cooperation, and because I had become a familiar presence in and around the company by the time many of the critical events in this story took place, I had remarkable access to people on all sides of the conflict as many of the events were unfolding, including Eisner, Robert Iger, and Roy Disney and Stanley Gold.
With respect to Disney and its executives, I say a “degree” of cooperation, because their participation, helpful as it was, did not rise to a level that I would describe as cooperation, certainly not as compared to the enthusiastic and exhaustive cooperation shown by many other sources. Disney did give firsthand exposure to many of its businesses and allowed me to assume the role of a character
at Walt Disney World. To my knowledge, Eisner didn’t discourage anyone inside or outside the company from speaking to me. He introduced me to numerous executives and sometimes, in my presence, urged them to speak candidly. I spent many hours with Eisner, often in interviews in his offices both in New York and Burbank, on the phone, exchanging emails, observing him in meetings and other situations, riding with him in cars, and sharing meals. Most of the time Disney’s head of corporate communications, Zenia Mucha, was also present. I have nothing but admiration for the effective, professional, and courteous reception extended me by Mucha and her staff at Disney, especially Paul Roeder and Anne Wolanski. Craig Dizern was an impeccable host at Disney World, and Walt himself would have been proud of Jonathan Frontado, who served as my guide.
Disney was of course free to decide to what degree it would share information with me. By the traditional, secretive standards of Disney (and most corporations, for that matter) it no doubt thought it was being extraordinarily open. But I quickly realized that its willingness to cooperate was limited. My requests to spend time with Eisner at his homes in Aspen and Bel Air, or on the corporate jet, where I had hoped to have extensive and uninterrupted time for interviews, were declined or went unanswered. No such meetings took place. My repeated requests for copies of written communications—letters, memos, emails—many of which I knew existed, were denied. Eisner declined to discuss, or was willing to discuss only to a limited degree, many aspects of his career. When he did sometimes provide narrative accounts of events I had already heard described by others, there were major omissions and inaccuracies. Other company executives were often put in difficult positions by my questions, having to choose between speaking openly and saying something for which they feared retaliation. I quickly realized on which side of that divide most of them would fall.
Despite this lack of full-scale cooperation, I had the extraordinary advantage of access to a rich lode of material describing Eisner’s actions, words, and state of mind throughout his career at Disney, as well as many other executives and board members. Has there ever been a chief executive who put more of his thoughts in writing than Eisner? I know of none. Though Eisner appears to have curtailed the practice in recent months and years, he is a natural—some might say compulsive—writer, in letters, handwritten notes, and especially in emails. Even then, I might never have had access to these communications had Eisner and Disney not embroiled themselves in prolonged and contentious litigation, first over Jeffrey Katzenberg’s bonus and then over the hiring and firing of Michael Ovitz. Many of these written materials were introduced as evidence and read into the record at trial and in depositions.
My sources for much of the narrative describing Katzenberg’s career at Disney and his relationship with Eisner are the transcripts of testimony and the exhibits in Jeffrey Katzenberg vs. The Walt Disney Co., Case No. BC 147864, in the Superior Court of the State of California, Los Angeles. These include many of the notes taken by author Tony Schwartz, which played such an important role in the trial.
An even more voluminous record has been compiled in In Re The Walt Disney Co. Derivative Litigation, Consolidated Action No. 15452, which was pending in the Delaware Court of Chancery as this book went to press. Thanks to the rulings of Chancellor William B. Chandler III, whose opinions consistently recognized the high level of public interest in Disney’s conduct, as well as the First Amendment guarantee of public access to court proceedings, I was able to review tens of thousands of pages of deposition testimony, trial testimony, and related exhibits, which exhaustively explored the hiring and firing of Ovitz as well as other events at Disney during the period. I have quoted extensively from these materials, as indicated in the text. Whatever the outcome of the case, credit belongs to Steven Schulman, the lead lawyer for the plaintiffs, and his colleagues at the firm of Milberg, Weiss, Bershad & Schulman, for diligently pursuing a case against formidable odds that is likely to set new standards for corporate governance. Jennifer Hirsh, also of Milberg, Weiss, provided invaluable assistance in helping me gain access to these materials.
I am also grateful to Martha Rainbolt, Andrea Sununu, and Cynthia Cornell, members of the DePauw University Department of English, for their guidance in comparing Eisner to characters in Shakespeare.
This book would not be what it is without the unstinting cooperation of many people with firsthand knowledge of events at Disney over the past twenty years. Some of these people are or were employed at Disney and spoke to me at considerable risk to their careers, especially given Disney’s reputation for vindictiveness and litigiousness. Many of these people spoke on a not-for-attribution basis; others were on the record. An advantage of using a narrative approach is that none of these sources are identified. Nearly all the quotes taken directly from my interviews and attributed to the speaker are those from Eisner. Otherwise, to identify some sources and not others would simply invite speculation, by process of elimination, about who was or wasn’t a source.
As part of the narrative, I have included passages of dialogue. Dialogue—what words were said—is a fact like any other. It is not necessarily a quotation from an interview with me and I would discourage readers from inferring that one or both of the speakers is a direct source. Especially in today’s world of instant communication, it is sometimes amazing how many people turn out to be privy to what others may assume is a private conversation. Many of the conversations reported in this book either took place before an audience or became known to a wide circle of people, often within minutes of their taking place. Many of these conversations were the subjects of testimony. In a few cases other people were listening in on speakerphones, extensions, or overheard conversations without one or both of the speakers’ knowledge. Readers should bear in mind that, given the vagaries of human memory, remembered dialogue is rarely the same as actual recordings and transcripts. At the same time, it is no more nor less accurate than many other recollections.
There is an extensive bibliography on the subject of the Walt Disney Company and its founders. Apart from the many travel guides to theme parks, uncritical fan and movie enthusiast publications, histories and picture books on the theme parks and the animated classics, much of it is of dubious accuracy, to judge from my reporting as well as comments from members of the Disney family and current and former employees. I have cited below only those works on which I relied in some part. The biographies of Walt and Roy Disney by Bob Thomas were consistently reliable and did not shy away from controversy, such as the schism between the “Walt” and “Roy” sides of the Disney family and within the company, even though they were authorized books, in that Disney executives had prior approval of their content.
Among journalists covering Disney, a few stand out for the quality, reliability, and insightfulness of their work: Bruce Orwall and Richard Turner at The Wall Street Journal; Laura M. Holson and Bernard Weinraub at The New York Times, Claudia Eller and James Bates at the Los Angeles Times, Bryan Burrough in Vanity Fair, and Ken Auletta in The New Yorker.
Books
Biskind, Peter. Down and Dirty Pictures: Miramax, Sundance, and the Rise of Independent Film. New York: Simon & Schuster, 2004.
Broggie, Michael. Walt Disney’s Railroad Story: The Small-Scale Fascination That Led to a Full-Scale Kingdom. Pasadena, Calif.: Pentrex Media, 1998.
Dunlop, Beth. Building a Dream: The Art of Disney Architecture. New York: Harry N. Adams, 1996.
Eisner, Michael, with Tony Schwartz. Work in Progress. New York: Random House, 1998.
Imagineers (Group). Walt Disney Imagineering: A Behind the Dreams Look at Making the Magic Real. New York: Hyperion Books, 1996.
Manvell, Roger. Art and Animation. New York: Hastings House Publishers, 1980.
Masters, Kim. The Keys to the Kingdom: How Michael Eisner Lost His Grip. New York: HarperCollins, 2000.
Taylor, John. Storming the Magic Kingdom: Wall Street, the Raiders, and the Battle for Disney. New York: Knopf, 1987.
Thomas, Bob. Walt Disney, an
American Original. New York: Simon & Schuster, 1976.
———. Building a Company: Roy O. Disney and the Creation of an Entertainment Empire. New York: Hyperion Books, 1998.
Articles
Prologue
Orwall, Bruce, and Emily Nelson. “A Hidden Wall, Upheld by 80 Years of Culture, Shields Disney Kingdom: For Comcast or Any Suitor, Mastering Insular Ways Would Be Daunting Job; Walking in Mickey Mouse’s Shoes.” Wall Street Journal, February 16, 2004.
One
Cieply, Michael. “Hollywood Star: An Agent Dominates Film and TV Studios with Package Deals; Michael Ovitz Puts Together Clients of Creative Artists in Single High-Fee Unit; Huffled Voices of Protest.” Wall Street Journal, December 19, 1986.
Harmetz, Aljean. “Disney Hopes Eisner Can Wake Sleeping Beauty.” New York Times, October 17, 1984.
Hayes, Thomas C. “Disney’s Chief Is Forced Out.” New York Times, September 8, 1984.
Schwartz, Tony. “Hollywood’s Hottest Stars.” New York Magazine, July 30, 1984.
———. “Son of Hollywood’s Hottest Stars: Behind the Quake at Paramount that Rocked the Business.” New York Magazine, July 30, 1984.
Two
Frook, John Evan. “Disney Changes Its Toon.” Variety, October 18, 1993.
Three
Ebert, Roger. “ ‘Down and Out’Is Authentic, Funny: Film Is Perfectly Cast.” Chicago Sun-Times, January 31, 1986.
Harmetz, Aljean. “Looking Ahead.” New York Times, December 20, 1987.
Kempley, Rita. “The ‘Rabbit’ That Roared; From Disney and Spielberg, a Charmer, More Fun Than a Barrel of Bunnies.” Washington Post, June 22, 1988.
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