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Greed in the mouse house

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Special to The Times

Disney War

James B. Stewart

Simon & Schuster: 572 pp., $29.95

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Men in suits behaving badly: It’s a relatively new, relatively hot, journalistic subgenre, pioneered by, among others, James B. Stewart, who has now turned his unquestionable talents -- he’s a smooth writer and an indefatigable reporter-researcher -- to that most fascinating of media conglomerates, the Walt Disney Co. Ever since a section of “DisneyWar,” detailing Michael Ovitz’s rise and almost instant demise at the company, was published in a recent issue of the New Yorker, it has become, to borrow a current term of art from the movie business, an “event” volume. Lawsuits have been threatened. Newspapers have run stories about this or that portion of its contents. The publisher has moved up release of the book to today and embargoed reviews of it.

Reading it, even in a not-quite-final version, one is riven by the experience. On the one hand, this portrait of the executive suite as rat’s nest has an undeniably hypnotizing effect; you eagerly turn the pages -- almost every one of which contains a new betrayal, a new example of human wretchedness. On the other hand, at a certain point in the book, men behaving badly become men behaving predictably, therefore tediously.

Also, in some sense, irrelevantly. By this I mean that however their ferocious internecine battles work out, the successes and failures of their company -- and to some degree the content of the products they want us to attend or purchase -- are determined by megahistorical forces rather than by the microhistory of managerial shenanigans. Since so far all their disputes have ended up in civil rather than criminal court, no large social harm can be attributed to them; they kill only one another. Since the movies and television shows they decide to produce are, on the whole, neither better nor worse than those of their competitors, no major aesthetic consequences arise from their activities. The “content” Disney “provides” remains in the same narrow, mostly banal, range that prevails in the rest of American pop culture.

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It could be argued, I suppose, that, because Disney’s stock is widely held, its failures harm the economic well-being of millions, but that’s true of the shares of less glamorous companies about which no one is writing books. In any case, as Stewart observes, if you bought $10,000 worth of Disney shares 21 years ago, your stake today, given the growth of the company in those years, would be worth $225,000, which gives a slightly false ring to all the recent whining about its profits and governance.

Back in 1984, when Stewart’s tale begins, Disney was a nice little $2-billion company. It no longer made many hit movies, but it had its steadily profitable theme parks and a prospering line merchandising junk to children. Above all, it had the sacred Disney name, guaranteeing to the nation that it would reliably purvey a stream of morally inoffensive, mildly entertaining works, that were much prized in what we had not yet learned to call the red states. But corporate raiders were eyeing the place, most of them thinking not to expand it, but to break it up and sell off its parts, which were thought to be worth more separately than as a bundle.

The company decided its only choice was to grow or die. Out went the chief executive, Disney’s son-in-law, Ron Miller (a nice guy paralyzed by Walt’s PG legacy), in came Michael Eisner, late of Paramount, Frank Wells, late of Warner Bros., and Jeffrey Katzenberg, also from Paramount. Nothing was sacred to these guys. Walt had once had a conniption when someone pointed out to him that an attractive woman Fred MacMurray was supposed to encounter in “Bon Voyage” was -- well, er, kind of, you know -- a prostitute. Within a decade the new Disney had one of its biggest hits with “Pretty Woman,” in which Julia Roberts starred as a hooker with a Girl Scout’s soul.

What was perhaps more important about the film was that it was one of a long line of what Eisner called “singles and doubles,” low-budget, high-concept, mostly comedic pictures that were a little edgier than previous Disney products. The vast majority of these films were modest -- occasionally immodest -- box office successes. They restored profitability to the motion picture division without stirring outrage among the company’s traditional customers. It turned out that the world had changed a little more than Miller had guessed. At the same time, another sacred portion of the bottom line changed when low admission and parking fees at the theme parks were raised without customer resistance. Suddenly Eisner’s “20/20” goal -- annual rises by those percentages in both revenues and stock price -- was consistently attained and, for a decade, Disney was a Wall Street favorite and Eisner and his “team” were geniuses.

It happens all the time in show business -- though not always so spectacularly: an executive comes along who is, for a time, magically attuned to the zeitgeist. Irving Thalberg, Darryl Zanuck, Harry Cohn, among others, had such periods in the olden days. Barry Diller, Alan Ladd Jr., Frank Price, Robert Daly and Terry Semel enjoyed similar successes more recently. To be sure, these men had to worry about only one thing -- the movies -- which made their jobs easier than Eisner’s. Even so, all eventually succumbed to the unwritten law of the industry: These moments of mastery pass as quickly and as mysteriously as they arrive.

This is a matter that does not much concern Stewart. He’s a reporter, not a media philosopher. For example, he observes -- without making enough of it -- the fact that the business of marketing and distributing movies began changing about the time Disney’s new management took over and reached its tipping point a decade later. You could no longer make much money running down infield grounders. Now it was home runs (or blockbusters or “tent poles”) that ruled the business. They made the profits even on successful Disney live-action films look paltry. This change was the result of many factors -- the rising significance of foreign markets, the rise of home video, to name only two -- that were beyond the control of Disney’s executives. Indeed, the frugal Eisner resisted the financial risks blockbusters demanded.

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At which point, two unlikely people rode to his rescue. One was the saintly Roy Disney, Walt’s nephew, who was in nominal charge of animation. He was beloved by the animators and widely regarded as the company’s artistic conscience. The other was Katzenberg, the studio’s head of production. His record in live-action was only so-so. But he loved, and had some gift for, animation. He, perhaps more than Roy, turned out to be the great tent-pole maker and, beginning with “The Little Mermaid” and proceeding through the likes of “Aladdin” and “The Lion King,” he gave Disney the megahits it needed to prosper in the changing movie world. Eisner’s joy at this success, however, was tempered by the fact that Katzenberg was not at all a Disney sort of person. There was something puppyish about him (he was nicknamed “the golden retriever”) -- overeager, a little klutsy, untutored (it weighed on Eisner that he had no college degree), sometimes rude to colleagues and too open with the press, but in Stewart’s pages curiously likable, precisely because he lacked Eisner’s mean and devious spirit. Typically, Eisner would dangle the presidency of the company before Katzenberg, all the while bad-mouthing him behind his back.

Finally, passed over for Wells’ job, Katzenberg left to help found DreamWorks but had to sue Disney for his share of profits to which virtually everyone but Eisner believed he was entitled. At one point, Eisner could have settled with him for $90 million. Instead he went to arbitration and ended up paying Katzenberg almost three times as much. It was the paradigm for the way he handled the Ovitz situation some years later.

How much these doings distracted Eisner from more important matters is impossible to say. Disney’s European theme park was a financial and public-relations disaster; Wells, Eisner’s steady, reliably rational No. 2, died shockingly in a helicopter accident; Eisner himself endured heart surgery and both events made people wonder about succession, especially because Eisner could not bear to think about anyone other than himself leading the company. All of which says nothing about the impact of wars, recessions and, most important, 9/11’s effect on the theme-park business and Disney’s bottom line. More than any decisions taken by “Team Disney,” it was these occurrences that slowed the company’s profits.

People began to wonder: Was this any way to run a publicly held company? Here we must pause to parse Eisner’s character. He is, putting it mildly, an emotionally erratic man, alternately despising and adoring his colleagues on an almost daily basis. Which means that he cannot share or delegate authority to any of them for very long. This was, perhaps, a manageable flaw when Disney was a relatively small company, focused on a few main lines of business. But as it grew to a $48-billion dollar enterprise, it moved beyond his, or perhaps anyone’s, single-handed control. Stewart claims Eisner lost a billion dollars each on three whopping mistakes -- Euro Disney, acquisition of the Fox Family Channel and its Internet startup -- any one of which might have cost a less tenacious executive his job. Worse, the company has lost its ability to generate successful movies internally. All of its really significant hits have been supplied by outsiders -- the Pixar animation studio, whose great “Finding Nemo,” Eisner predicted would flop and with which he has, astonishingly, severed relationships, and by the redoubtable Jerry Bruckheimer, whose incredibly successful “CSI” television franchise ABC, which sank from first to last in the prime-time ratings almost the minute Disney acquired it, rejected.

This failure, apparently, qualifies its president, Robert Iger, to be Eisner’s heir apparent, when the latter leaves the company next year -- in fact, Eisner’s address at the annual shareholder’s meeting today will likely be his last as chief executive. Or not. Stewart repeatedly quotes Eisner as saying Iger is incompetent to run the company. It is Katzenberg and Ovitz all over again -- with Eisner being his usual duplicitous self while Thomas Murphy, Iger’s one-time ABC boss, tells a colleague that Iger has “lost his soul” in his eagerness for Disney’s top spot.

Possibly so. And possibly to no avail. By the end of “DisneyWar” the reader is convinced that Eisner, having received some $770 million from his stewardship of the company, has entirely detached himself from reality. He believes only what he wants to believe, even when contradictory evidence is placed before him in black and white, which means he cannot admit mistakes, cut his losses or, often enough, fully embrace ideas and people who might save him from himself.

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Once or twice, Stewart hints that inherent in his story is a tragedy of Shakespearean proportions -- Eisner as Lear. Or maybe Richard III. But he does not aspire to such grandeur. What we have instead is an exhaustive, ultimately exhausting, report on a hermetically sealed corporate world in which not very interesting people make or don’t make deals, which turn out well or badly, but mainly defend their turf and attend to their own petty interests. Depending on your taste for gossip with a short shelf life, “DisneyWar” is intermittently a fun read. But, in the end, its largest, sub-literate function is to inspire in us a sense of schadenfreude, happiness that our little lives do not force us to contort our spirits the way these financially fortunate, often unedifyingly miserable people are obliged to do.

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Richard Schickel is a contributing writer to Book Review and the author of many books, including “The Disney Version: The Life, Times, Art and Commerce of Walt Disney” and a forthcoming biography of Elia Kazan.

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