Of Mice and Men (and parking spaces)
Mail on Sunday 9th October 1994
'Walt Disney dreamed dreams other men did not dare dream and we are the keepers of his ghost. We will never forget Disney is about love and laughter, puppies and sunrises.'
Michael Eisner, Chairman of the Walt Disney Company, in 1986.
Off the gridlock from the Ventura Freeway, where the smog from the San Fernando Valley meets the smog from Pasadena, are the headquarters of the Walt Disney Company, the multi-billion dollar business built on the creation of a cartoon mouse in 1928.
It is the dream factory, manufacturing fun and laughter for millions of children around the world. But right now it is not a happy place. A showdown between the chairman and chief executive, Michael Eisner, and his money-making champion Jeffrey Katzenberg — now the ex-chairman of Walt Disney Studios — has left the entertainment giant in financial turmoil and creative trouble, with Katzenberg claiming he is owed $100,000 million. The cause? Not corporate strategy, not artistic differences, but the human factor. This is a morality tale of mice and men... and parking spaces.
On August 25, the day after Katzenberg left or was ousted from the company — a lawsuit is pending, so the details must remain unclear — I was lunching in London with David Green, who directed Buster and was invited to make Wings Of The Apache for the driven and dedicated Hollywood executive. When we got on to the hot gossip, David smiled and said: 'Jeffrey didn't want the $100 million — he wanted the parking space. At that level it's not what's in the bank—it's the pecking order.'
Katzenberg had tried to force his own promotion from the number three job to number two, and been outmanoeuvred by the board. But they may live to regret their coup. For the past decade Disney has been on permanent fast-forward. Now it may be on pause. The thought dismays stockholders in the cash-mouse as much as Katzenberg's departure did his friends Steven Spielberg and pop music mogul David Geffen.'
The effect on share prices was instant — they dropped. But Katzenberg's departure will not just affect investors. It will also change what we see at High Street cinemas, on video and television. Given Disney's importance in children's hearts and minds — its domination of the world's imagination — it will actually affect who we are in the future.
It could have been worse, or better, depending on your point of view. Katzenberg wanted to push Disney's live-action film releases from 40 to 60 a year. He wanted not one annual animated success, such as Aladdin, but two. Now, the question for Disney is: 'How many good ideas can we make?' Well, obviously, as many as they have. But will they have them without Katzenberg?
He was one of the Three Mouseketeers, one of the trio of princes who woke the corporate Sleeping Beauty. In 1984 Disney was a weed-choked backwater always placed ninth on the list of the nine major distributors of films, haunted by the question 'What would Walt have done?' This reliance on the company's founder - - who died in 1966 -meant it had not moved with the times. Mil-lions were invested in animated films such as The Black Cauldron and Robin Hood which had no connection with contemporary audiences and suffered miserably from that lack of communication. The studio had not had a live-action film hit in 16 years. Roy E Disney, Walt's nephew and a wily manipulator, had witnessed the value of his stock drop from $80 million to $50 million. Disney began to explore ways of changing things...
Finally, after much head-hunting, Locan-da Veneta lunches and Morton's dinners, Michael Eisner, Frank Wells (president) and Jeffrey Katzenberg were appointed. And while they paid lip-service to Walt's 'ghost', they embarked on a radical creative programme. In a decade they have turned an ailing company, ripe for takeover, into a $9 billion entertainment giant. The profits from Katzenberg's division have leaped from $2 million in 1984 to $800 million this year. The company's share price in 1983 was $3. Now it hovers around $40. Last year Eisner earned more than $203 million.
And look at the product. This year Disney has the number one television show in America, Home Improvement (seen here on Channel 4 at 6pm on Thursdays). Robert Redford's made-for-Disney film Quiz Show, about game show rigging in the Fifties, is seen as the one to beat at March's Oscars. Disney's last two animated features, Aladdin — which as a spin-off TV series is also hugely successful in America — and Beauty And The Beast are the highest grossing films in history (apart from Jurassic Park). The stage version of Beauty And The Beast, supervised by Katzenberg, is a massive hit on Broadway. And The Lion King is beginning its triumphant world tour.
Opening in London last week, Disney's latest cartoon caper is casually anticipated to earn, through cinemas, video and marketing, more than $1 billion worldwide — the most profitable film ever. And it will be no accident. It was in preparation for nearly three years. More than 600 people were involved in the production, and an equally impressive $80 million was spent on their salaries and costs. Eisner has known of every move.
Katzenberg has pored over every page of the script—there's not a musical note he has not seen and approved. With so much money at stake, they had to be hands-on detail men. It's only strange that neither of them noticed how closely the engine of the plot — Simba the lion cub's desire for independence from his father — mirrored the drama they were playing out at Disney.
Until human frailties broke the magic spell, the company's power structure was clear. Eisner was chairman and chief executive of the Walt Disney Company, 'responsible for creative direction of the parent company'. The shadowy Frank Wells was his number two, the president, and Katzenberg was his chairman at Walt Disney Studios, in charge of live action films, television, animation and theatrical productions.
Eisner, 52, and Katzenberg, 43, first met in 1976 at Paramount Studios, which was then being run by Barry Diller. They had a series of successes, including Trading Places, Raiders Of The Lost Ark, Witness and Beverly Hills Cop, as well as the perennial television pimple Happy Days. Eisner was Diller's number two, while Katzenberg was his down-table assistant. But the major player there was Paramount's rhino-skinned Martin Davis. He was the Chief Executive who one day took a long look at Katzenberg and saw a short, wiry dynamo in Hank Marvin glasses. He gave him the appellation 'a little Sammy Click' (referring to author Budd Schulberg's driven Hollywood heel in his landmark novel What Makes Sammy Run?). Davis had other, more derogatory things to say to Diller, who left the company in 1984.
Ironically, but only in hindsight, Eisner was denied Diller's job, the position he so desperately wanted. Huffed, he went to Disney with Katzenberg and Frank Wells, who had been the number two man at Warner Bros studios. They were a hat trick of heavy hitters.
They created theme parks, hotels, basketball and American football teams in California and Florida. More visibly they had, through Katzenberg, success at the movies. Down And Out In Beverly Hills was Disney's first R-rated hit in 1986 and Katzenberg danced on a table singing Zip A Dee Doo Dah. There followed Who Framed Roger Rabbit, The Little Mermaid, Ruthless People, Pretty Woman, and then Beauty And The Beast became the first animated film to win an Oscar nomination as Best Picture.
'The battery was dead and it was 30 degrees below zero,' recalls film historian Richard Schickel. 'Not only did they manage to start the car ... but it turned out to be a Mercedes.' With excellent drivers.
Eisner, 6ft 3in tall with close-set eyes, receding black hair and a generous grin, began his career as a page at NBC TV and has spent all his years in television or film production — or both, as he has for the past 19 years at Paramount and Disney. Frank Wells was his behind-the-scenes lieutenant. Katzenberg was 'the Golden Retriever', the total company player who went out and brought back the goods. He knew about scripts before the writers had photocopied them. He had two breakfasts, one lunch and two dinners every day with writers, agents and directors (lunch was split into three separate meetings). On a four-day holiday in Hawaii he read 14 scripts. He and his wife Marilyn had twins, a boy and a girl now 11 years old, and Hollywood lore says he did that to have a family as efficiently as possible.
Warren Beatty, who made Dick Tracy for him, told me, 'His attitude was: "If you can't come in on Saturday, don't bother to come in on Sunday." ' Katzenberg did a seven-day week, starting at 6.30am and rarely leaving his office before 8pm. Drinking three six-packs a day, a can of Diet Coke was always on his desk when he arrived. (Until 1987 he always drank Diet Pepsi, but the day the Disney amusement parks made an arrangement with Coca-Cola he changed brands.) Every September since he joined the company his family took their holiday at Disney World in Florida. If he spilled his Diet Coke it was on to a Mickey Mouse T-shirt.
'To do a Katzenberg' is a euphemism for discipline and routine in Hollywood. At 5.30am he works out. His 5ft 7in, 128lb of body, gets attention six days a week. Hanging by his ankles, he holds a 25lb dumbbell under his chin and does 60 sit-ups, lifting his upper torso parallel to the floor. He straps a 5lb weight to each leg and does 75 knee-raises before starting on his upper body. Throughout he reads the Wall Street Journal, Los Angeles Times, New York Times and Los Angeles Daily News.
At Disney, he was obsessive about attention to detail, once writing a memo pointing out that the lavatory at the Hoop-Dee-Doo Revue, at Walt Disney World's Fort Wilderness, did not flush properly. He was also a master of the 10-second telephone call. Every Monday morning he'd make 500 calls sifting for nuggets of information. Ever eager, Katzenberg would make calls en route to his office, which is why he drives an automatic Ford Mustang. He sold his Porsche in 1988 after he almost killed himself trying to change gear and dial at the same time.
'Compared to Jeffrey everyone else in this town is on vacation,' says the admiring David Geffen, and such dedication has certainly earned him the respect of his employees. However, there was a horror side to his personality. Katzenberg's desk was paper-free except for his 'cards' — a 'to do' list, a 'to see' list and a 'weekend list', written in spidery blue felt pen and lined up at right-angles on his desk. 'I dreaded flying with him,' Eisner said once. 'I'd strap myself in and out would come the "Michael Eisner" list.'
Unlike Katzenberg, Eisner is tall, a bit of a Sychobabbler, who says his world view is 'Panglossian'. (Like Dr Pangloss from Voltaire's Candide, he maintains he has an over-cheerful and optimistic view of the world.) He lives in Bel-Air with his wife and three children. His lawyer father was involved in real estate deals with the Rockefellers and money is not new to him.
Katzenberg, the son of a stockbroker, grew up on Manhattan's Park Avenue only a block from where Eisner lived a decade earlier. He was ever the entrepreneur. He shovelled snow from sidewalks for a couple of dollars a time the way his critics would later say he shoveled on the screen'. At 20, he was helping to run New York mayor John Lindsay's presidential campaign. His peers were smoking dope and protesting against the Vietnam war while he was being paid to play host to Fortune 500 executives, senators and kings. 'I never had a normal high school or college environment. I never took drugs. I hate the taste of alcohol. Give me a piece of rum cake and I gag.'
Before their relationship began to tarnish, Eisner said, 'Jeffrey is the spark plug, his people are the fuel, and I'm the road map.' But most Disney staff believe Eisner never totally regarded Katzenberg as a perfect executive. He was the gofer. Eisner was the boss. Not an actor was cast or a script approved without Eisner's OK. He was as strong and solid as Frank Wells. And there was always Katzenberg yapping like a puppy along the corridor.
In the summer of 1993, the Three Mouseketeers went to a business conference in Aspen, Colorado, where Eisner and Katzenberg had what is now a pivotal but disputed conversation. In Katzenberg's view, Eisner told him that if anything happened to Frank Wells, the position of president would be his. Eisner, who has a reputation for being loose with his lips and retracting afterwards, denies he made the suggestion outside Boogies diner on Aspen's Third Street.
Katzenberg had an option to leave Disney last month, but if he did not exercise it he would remain contractually with the company until September 1996, and receive $100 million in bonuses and stock options. He had to make that decision to stay or lose out on the money. He could not have signed on, reneged and collected. Amazingly, Katzenberg wanted more — a new position or he would leave. The $100 million wasn't discussed. But then, it wasn't the issue.
Disney executives now say the partnership of Eisner and Katzenberg had become an open rivalry. They talk of subliminal conflicts and ambivalent psychologies, with 'Simba' Katzenberg seeking to prove himself to father-figure Eisner, and Eisner resenting Katzenberg's ever-increasing power (last year his divisions made 43 per cent of the Walt Disney Company's total profit). Whatever, two events brought their standoff to a head.
Last Easter Sunday, Frank Wells was killed while heliskiing in Nevada. And last August, Eisner was rushed to hospital for quadruple heart by-pass surgery. Katzenberg should have remembered the love, the laughter, the puppies and sunrises. Instead, he bared his fangs. Frank Wells' office was still empty and Katzenberg kept pushing for that parking space — much to the distaste of a boardroom faction led by Roy E Disney.
Eisner and Wells had talked over every detail when they worked together. The two men were close — so close that when he was arranging Wells' memorial service, Eisner found himself picking up the telephone to ask for Wells' opinion. He didn't want to be rushed. But Katzenberg's contract was running out of time. So Eisner schmoozed him a little, he gave him some of Wells' responsibilities, and Katzenberg sneered at them as 'trinkets'. The 'father-and-son' team was in trouble. Just like Simba, Katzenberg was determined to make his mark, to be independent — to restructure Disney.
Eisner countered by asking for a detailed memo on Katzenberg's strategy, and Katzenberg did his normal seamless job. At 11am on August 24, he took it along to Eisner's sixth-floor office in Burbank. Eisner didn't even look at it. Instead, he handed Katzenberg a press release which detailed his departure from Disney and a restructuring of the company which would split Katzenberg's duties and responsibilities between three men.
He had already appointed Joe Roth as the new live action movie executive at the studio and Richard Frank as the president of their television endeavours. Eisner, along with Roy E Disney, a man Katzenberg had seriously under-rated, would look after the animated films. All except Katzenberg knew about the situation the evening before.
The boardroom battles have had an instant public effect. Without Katzenberg, the most profitable studio in Hollywood has crawled almost to a halt. The animated version of The Hunchback Of Notre Dame has been delayed. No one has replaced Katzenberg at the theatre division. Projects such as Aida, with music by Elton John, are uncertain. Katzenberg's ploys to lure Janet Jackson or Whitney Houston to record for the company's next animated film, Pocahontas, which was scheduled for release in America next summer, have been stopped.
Executives have been told that Disney will now halve its annual film output. Disney's newest and profitable department, interactive games, which was lorded over by Katzenberg, now has no boss as the lucrative Christmas season approaches. The film version of the Sixties TV police series Hawaii Five-O is no longer with the studio. As a studio-lot worker told me: 'We don't know who's staying and who's leaving — we don't know if they know what's going on.'
In a company whose mission is to create an intimate fantasy, perhaps it should be no surprise that personalities play such a key part. But, boy is it personal. Katzenberg was told that he would not be welcome at last week's London premiere of The Lion King, his billion-dollar 'baby', even though Elton John, who composed the film's score, had planned a party specifically for him. Disney animators were stopped from hosting a farewell party for him.
As Katzenberg looks out at the rolling Pacific surf from his Malibu home, he can only witness on television and in print when Eisner increasingly puts down his achievements. As Eisner gets blamed for losing one of Hollywood's hottest talents, he tells his staff: Tm sick of hearing about Katzenberg. I don't want to hear any more about who is happy and who is unhappy and who is staying and who is leaving.' Katzenberg would, Eisner told his staff, probably run a studio or a high-technology department or 'run his deli — I don't know what he is going to run'.
The 'deli' is The Dive restaurant in Century City, which Katzenberg co-owns with Steven Spielberg. Eisner says his onetime friend's ownership of the restaurant and his lack of a college education were major strikes against him getting Wells' job. But Katzenberg still does not want to cut his ties with Eisner. 'That retriever stuff, that's a term of endearment. However anybody else reads it, I know what Michael means.'
Does he? Now that, like Simba, he has acknowledged his mentor's lead, will he be a wiser movie executive? Will he, one day, be a Lion King, too? Well, aren't there always happy endings at Disney?
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