by Robert Iger;
I don’t know if he was thinking back to those days when we could go anywhere and do anything, and there were no executives haranguing him about the money he was spending. Or the days when he was a legend in the room and no one would dare to doubt his authority. Or maybe it was more existential than that. The business had changed beneath him. The world had changed. He didn’t have much time left. I looked down at him in bed and I knew this would be the last time I saw him. “No, Roone,” I said. “It’s not what it used to be.”
* * *
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OUR FORTUNES AT ABC went downhill after the bright spot of our millennium coverage. Millionaire was still popular in 2000–01, but not nearly as big as it had been the season before. We could see the diminishing returns, but we didn’t have good shows in development. Rather than making major changes in order to revitalize Entertainment, we leaned harder on this one show to carry us. We put it on five times a week as a way of competing against NBC, which was prospering with its “Must See TV” Thursday night, and CBS, which had found its legs again with Survivor and CSI.
In a matter of a couple of years, we’d slipped from being the most-watched network on television to the last of the “big three,” and we were barely holding on to that as Fox continued to grow. I take some of the blame for that. I was running ABC, and I supported putting Millionaire on several nights a week. It was an easy fix for ABC’s troubles, but when it started to sink, our deeper problems were laid bare.
By late 1999, the strain of running the company on his own was taking a toll on Michael. He was growing more isolated and insecure, more distrustful and critical of the people around him. He knew he needed someone to help shoulder the burden, and he was feeling pressure from the board to signal that, after sixteen years at the top, he was at least beginning to think about succession. It wasn’t an easy thing for him to do. After the Ovitz fiasco, Michael was wary of naming a second in command. He recognized that he couldn’t keep things going as they were, but he didn’t want to deal with the complications of dividing responsibility and sharing decision making and having to involve someone else in his various goings on.
Michael’s reluctance to name a number two had consequences throughout the company. It was clear he needed help, but because he wasn’t filling the number two position, others moved in to try to occupy the void. Sandy Litvack, our general counsel, was promoted to vice chairman and began to see himself as a de facto COO. Strat Planning, which was now being run by Peter Murphy (no relation to Larry Murphy, his predecessor), got involved in more day-to-day decision making rather than looking at long-term strategy. There was a landgrab for authority and a blurring of boundaries and responsibilities, which had destructive effects on company morale.
For months, Michael was hot and cold toward me. He’d depend on me, and I’d think it was just a matter of time before he named me COO. Then he’d keep me at arm’s length, and I’d be back to feeling unsure about the future. In August of ’99, I took my first-ever two-week vacation, renting a house on Martha’s Vineyard with Willow and our now almost two-year-old son, Max. Tom Murphy called me on the first night of our vacation. He’d been at a dinner in Los Angeles with Michael and a few other Disney board members the night before, and in a discussion about succession, Michael said that I would never be his successor. Tom was “horrified,” as he put it to me, especially since he’d exhorted me to stay years earlier during the merger negotiations. “Pal,” he said now, “I hate to give you bad news, but you need to leave Disney. Michael doesn’t believe in you and he told the board you cannot succeed him. You need to quit.”
I was devastated. Over the last several years, I’d dealt with the constant frustration and distraction of having to report to Michael Ovitz. I’d worked incredibly hard to integrate ABC into Disney, making sure that our people were valued and respected and helping to initiate an assimilation process that hadn’t been thought through on the Disney side. I’d designed and implemented an entire international structure for the company, which required being away from my family for trip after trip, traveling constantly for over a year. Through it all, I’d always been a defender of and a loyalist to Michael, and now I was being told again, twenty-five years after my first boss had told me back in 1975—I “wasn’t promotable.”
I told Tom I wasn’t going to quit. I was due a bonus at the end of the year, which I wasn’t going to walk away from. If Michael was going to fire me, I needed to hear it from him directly. I hung up the phone and gathered my composure. I decided not to tell Willow while we were away. She was a prominent anchor on CNN at that point, cohosting Moneyline, an hour-long financial-news program. Her career was soaring, but the job was intense, and on top of the professional demands on her she somehow had been able to find the time and energy to be a wonderful mother to Max. She needed a break, and so I kept all that I was feeling to myself until we were back home in New York.
Then I waited for the shoe to drop. In September, I was at the headquarters in Burbank when Michael asked to see me. I was certain it was the end, and I walked into his office steeling myself for the blow that was coming. I sat down across from him and waited. “Do you think you’re ready to move to L.A. permanently and help me run the company?” he asked.
It took me a moment to absorb what he was saying. I was confused, and then relieved, and then unsure that this was something I could trust. “Michael,” I finally said, “do you have any idea how inconsistent you’ve been with me?” He was asking me to move my family out to California and for Willow to give up a huge job, not four weeks after telling a table full of people that I would never be his successor. “You have to be straight with me about what this is,” I said.
His reaction was more candid than I expected. He said he wasn’t sure I would want to move back to L.A., so that was a concern. The bigger issue, though, was that if he named me COO, he’d be “competing with myself,” he said. I assumed he meant that the board would have someone to turn to if they wanted to replace him, but I was never really certain.
“Michael,” I said, “I have no intention of gunning for your job or doing anything to undermine you.” I told him I would love to have the chance to run the company someday, but I didn’t see that happening in the near future. “I’ve never imagined you leaving,” I said. “And I can’t imagine the board wanting you to leave.” It was true, I couldn’t. We weren’t in the smoothest waters, but at that point, there wasn’t a crisis of confidence around Michael. He was still one of the most respected CEOs in the world.
The meeting ended inconclusively. Michael didn’t offer me a title. He didn’t put any formal plan in motion. I went back to New York and waited to hear more, but it didn’t come up again until a month later. We were attending the London premiere of the stage production of The Lion King, and Michael suggested that I fly back to L.A. with him to talk about my future. I was scheduled to fly to China from London, however, and so we agreed I’d come to L.A. a few weeks later to hash out the details.
In early December, Michael finally made a proposal for me to become president and chief operating officer and a member of the Disney board. This was an undeniable vote of confidence, and came as something of a shock, given the conversation with Tom a few months earlier.
I quickly negotiated a deal on my own with Sandy Litvack, who in addition to his quasi-COO role was still our general counsel. Sandy wasn’t happy about my ascendancy. The day before the announcement, he called me to change the agreement. I’d be executive vice president rather than president and COO, he said, and the board seat would be eliminated. I told Sandy it was president, COO, and a member of the board or nothing. He called me back an hour later to confirm all three, and we announced the next day.
Professionally, it was an extraordinary opportunity. There was no guarantee that I’d someday become CEO, but at least I had a chance to prove myself. Personally, it was another difficult move. My parents were in their late seventies
by then and needed more help than ever. My daughters were twenty-one and eighteen years old, and I didn’t want to live on the other side of the country from them again. CNN agreed to let Willow anchor her show from L.A., focusing on the technology and entertainment industries, but it was a difficult thing to make work. Though Willow was incredibly supportive, as she has been every step of the way, it wasn’t lost on me that here I was, a decade later, asking another wife to sacrifice her own career in some way in order for us to move to Los Angeles in the service of mine.
I also could not have anticipated in a million years what was to come—for Disney, for Michael, and for me. As is so often the case in life, the thing I’d been striving toward was finally here, and now the hard times were about to begin.
CHAPTER 6
GOOD THINGS CAN HAPPEN
I’VE OFTEN SAID that Michael “re-founded” Walt’s company. When he took over Disney in 1984, its glory days were a distant memory. The company had been struggling since Walt died in 1966. Walt Disney Studios and Animation were in terrible shape. Disneyland and Walt Disney World were still popular, but they were also responsible for nearly three-quarters of the company’s income. In the last two years before Michael came on, Disney’s net income fell by 25 percent. In 1983, the corporate raider Saul Steinberg tried to take Disney over, the latest in a series of takeover attempts that the company barely survived.
The next year, Roy Disney, Walt’s nephew, and Sid Bass, Disney’s largest shareholder, brought in Michael as CEO and chairman and Frank Wells as president to reverse the company’s fortunes and maintain its independence. (Michael had been running Paramount, and Frank was the former chief of Warner Bros.) They then hired Jeffrey Katzenberg, who’d worked under Michael at Paramount, to run Disney Studios. Together, Jeffrey and Michael revitalized Disney Animation, which restored the brand’s popularity and spawned huge growth in consumer products. They also invested more attention and resources in the Disney-owned Touchstone Films, which then produced several live-action, non-G-rated hits like Ruthless People and Pretty Woman.
Michael’s biggest stroke of genius, though, might have been his recognition that Disney was sitting on tremendously valuable assets that they hadn’t yet leveraged. One was the popularity of the parks. If they raised ticket prices even slightly, they would raise revenue significantly, without any noticeable impact on the number of visitors. Building new hotels at Walt Disney World was another untapped opportunity, and numerous hotels opened during Michael’s first decade as CEO. Then came the expansion of theme parks, with the opening of MGM-Hollywood Studios (now called Hollywood Studios) in Florida and Euro Disney (now Disneyland Paris) outside of Paris.
Even more promising was the trove of intellectual property—all of those great classic Disney movies—just sitting there waiting to be monetized. They began selling videocassettes of the classic Disney library to parents who’d seen them in the theater when they were young and now could play them at home for their kids. It became a billion-dollar business. Then came the Cap Cities/ABC acquisition in 1995, which gave Disney a big television network, but, most important, brought in ESPN and its nearly hundred million subscribers at the time. All of this illustrated that Michael was a remarkably creative thinker and businessman, and he turned Disney into a modern entertainment giant.
After he made me number two, we divided our responsibilities, giving him primary oversight of the Walt Disney Studios, as well as Parks and Resorts, while I concentrated on the media networks, consumer products, and Walt Disney International. Other than Animation, which he didn’t really let me in on, Michael gave me access to much of his thinking and decision making. It’s not an exaggeration to say that he taught me how to see in a way I hadn’t been able to before. I had no experience with the creative process that went into building and running a theme park, and had never spent time visually imagining a visitor’s experience. Michael walked through the world with a set designer’s eye, and while he wasn’t a natural mentor, it felt like a kind of apprenticeship to follow him around and watch him work.
In my time as Michael’s number two, we opened Disney’s Animal Kingdom in Florida and Hong Kong Disneyland and California Adventure in Anaheim. I walked miles upon miles with him in advance of the opening of those parks—and in existing parks, too—getting a sense of what he saw and what he was constantly looking to improve. He would walk down a path and look out into the distance and immediately identify nuances, like landscaping that wasn’t lush enough, or fences that encroached on important views, or buildings that seemed either out of place or out of style.
These were great teaching moments for me. I learned so much about how to manage the business, but more important, I learned what the creative and design essence of our parks should be.
Michael would also allow me to accompany him on his many visits to Walt Disney Imagineering, located on a sprawling campus in Glendale, California, just a few miles from our studio lot in Burbank. Imagineering has been the subject of many books and articles, and the simplest way I can describe it is that it is the creative and technical heart of everything we build that isn’t a film or TV show or consumer product. All of our theme parks and resorts and attractions, cruise ships and real estate developments, all of the live performances and light shows and parades, every detail from the design of a cast member’s costume to the architecture of our castles emanates from Imagineering. It is impossible to overstate the creative and technical brilliance of Disney’s Imagineers. They are artists, engineers, architects, and technologists, and they occupy a place and fulfill a role that is unmatched anywhere else in the world.
To this day, I find myself awed time and time again by their ability to envision something fantastical and then make it real, often at a scale that is enormous. When I visited Imagineering with Michael, I’d observe him critiquing projects large and small, reviewing everything from storyboards detailing the experience in one of our attractions to the design of a stateroom on a soon-to-be-built cruise ship. He’d hear presentations about upcoming parades, or review the design of the lobby of a new hotel. What struck me, and what was invaluable in my own education, was his ability to see the big picture as well as the granular details at the same time, and consider how one affected the other.
As the scrutiny of Michael intensified in the upcoming years, he would often be accused of being an oppressive perfectionist and micromanager. For his part, he’d say, “Micromanaging is underrated.” I tend to agree with him, but to a point. Thanks to my years working for Roone Arledge, I didn’t need to be convinced that the success or failure of something so often comes down to the details. Michael often saw things that other people didn’t see, and then he demanded that they be made better. That was the source of so much of his and the company’s success, and I had immense respect for Michael’s tendency to sweat the details. It showed how much he cared, and it made a difference. He understood that “great” is often a collection of very small things, and he helped me appreciate that even more deeply.
Michael was proud of his micromanagement, but in expressing his pride, and reminding people of the details he was focused on, he could be perceived as being petty and small-minded. I once watched him give an interview in the lobby of a hotel and say to the reporter, “You see those lamps over there? I chose them.” It’s a bad look for a CEO. (I should confess that I’ve caught myself—or have been caught—doing the same thing a few times. Zenia Mucha has said to me, in a way only she can: “Bob, you know you did that, but the world doesn’t need to know, so shut up!”)
In early 2001, every media and entertainment company was feeling the ground shifting beneath its feet, but no one was sure which way to run. Technology was changing so fast, and the disruptive effects were becoming more obvious and anxiety-provoking. In March of that year, Apple released its “Rip. Mix. Burn.” campaign, telling the world that once you purchased music, it was yours to duplicate and use as you wish. A lot of people, inclu
ding Michael, saw that as a mortal threat to the music industry, which would soon threaten the television and movie industries. Michael was always a staunch defender of copyrights, often speaking out on the issue of piracy, and the Apple ad really bothered him—so much so that he targeted Apple publicly, testifying before the Senate Commerce Committee that Apple was flagrantly disrespecting copyright law and encouraging piracy. This didn’t sit well with Steve Jobs.
It was an interesting time, and marked what I saw as the beginning of the end of the traditional media as we knew it. Of great interest to me was the fact that almost every traditional media company, while trying to figure out its place in this changing world, was operating out of fear rather than courage, stubbornly trying to build a bulwark to protect old models that couldn’t possibly survive the sea change that was under way.
There was no one who embodied that change more than Steve Jobs, who in addition to running Apple was the CEO of Pixar, our most important and most successful creative partner. In the mid-’90s, Disney had made a deal with Pixar to coproduce, market, and distribute five of their films. Toy Story was released in 1995 under a previous deal. It was the first full-length digitally animated feature film—a seismic creative and technological leap—and it grossed nearly $400 million worldwide. Toy Story was followed by two more successes: A Bug’s Life, in 1998, and Monsters, Inc., in 2001. Taken together, those three movies grossed well over a billion dollars worldwide and established Pixar, at a time when Disney Animation was beginning to falter, as the future of animation.
Despite the artistic and financial success of Pixar’s films, tension built up between the two companies (mostly, between Michael and Steve). When the original deal was made, Pixar was still a startup, and Disney had all the leverage. Pixar gave away a lot in the deal, including ownership over all the sequel rights to their films.