STORMING THE MAGIC KINGDOM

In the war of succession at Disney, the directors have split into two camps. One side favors Dennis Stanfill, former head of 20th Century Fox; the other side backs film executives Michael Eisner and Frank Wells. Stanfill’s supporters are outraged when the Eisner-Wells faction takes the battle ‘to the streets.’ They fight back in kind.

DURING THE SUMMER OF 1984, WALT DISNEY PRODUCTIONS had been so battered by shareholders hostile to its management that it had become virtually crippled. Disney’s board of directors believed that the major stock owners--who by then included not only Walt Disney’s nephew Roy E. Disney but also financiers Sid Bass of Texas and Irwin Jacobs of Minneapolis and arbitrageur Ivan Boesky--would cease their disruptive agitation only if Ron Miller, the company’s chief executive officer, stepped down. And on Sept. 7, 1984, the directors unanimously asked him to resign.

Before that meeting, Disney’s chairman, Raymond Watson, had interviewed Michael Eisner, then president of Paramount Pictures, to see whether he was interested in replacing Miller. Watson also talked to Frank Wells, the former co-chief executive of Warner Bros. Eisner and Wells had both been recommended by Roy Disney, who together with his financial adviser, attorney Stanley Gold, had joined the Disney board early in the summer. Watson had been so taken with Eisner that he told him that he was going to recommend that Disney’s board hire him as chief executive.

However, a majority of the board, led by its senior outside director, Philip Hawley, declared that it wanted a chief executive with more “corporate experience,” and the directors formed a screening committee to review all the possible candidates. Hawley, for one, thought that Dennis Stanfill, the investment banker who had headed 20th Century Fox, should be put in charge at Disney. He suggested that Eisner and Wells be offered second-tier jobs. Shortly after the board meeting, Watson, at Hawley’s urging, did ask Wells whether he would accept such a position; Wells, insulted by the proposal, said no.

The offer also outraged Gold, who advised Wells that if he wanted the top job at Disney, he would have to pursue it vigorously; no one was going to give it to him. Gold and Wells were friends; they went running together most mornings. And the morning after Wells had rejected Watson’s proposal, Wells and Gold met for their customary jog. As they set out through the Hollywood Hills, Wells said he had made up his mind; he would actively seek a top position at Disney. With that, the stage was set for the contest to succeed Ron Miller.

IT WAS PHIL HAWLEY, with his constant refrain about “corporate experience,” who was the primary obstacle on the board to both Michael Eisner and Frank Wells, and in the aftermath of the “insulting” offer to Wells, the dispute over Ron Miller’s successor assumed for Stanley Gold the dimensions of a personal struggle. It became a contest of wills. It became Stanley Gold versus Phil Hawley.

On Friday afternoon, Sept. 12, the screening committee met at the headquarters of Carter Hawley Hale, the Southern California retail giant, and Hawley made a strong plea for Stanfill. Stanfill knew his market; “Star Wars,” which had been produced at Fox under Stanfill’s leadership, was precisely the sort of family entertainment Disney ought to be making. Stanfill was smart; he could master the most complex financial reports. He commanded respect on Wall Street. He was well connected. And he was available. “That’s the kind of talent we need here,” Hawley said. “We can always buy creative talent.”

“You’re wrong, Phil,” Gold retorted. “You think creative talent can be bought as a commodity. You see guys like Eisner as a little crazy or a little off the wall. I don’t mean to be difficult with you,” he went on, “but every great studio in this business has been run by crazies. What do you think Walt Disney was? The guy was off the wall. His brother Roy kept him in check.”

Not surprisingly, Hawley disagreed. “I think you’re wrong,” he said. “I just can’t bring myself to accept that. Eisner and Wells are very, very impressive, but they’re divisional. They’ve never run anything but a division.”

“I guess that’s right,” Gold said, “if you call Paramount Pictures a division of Gulf + Western. That’s a billion-dollar division. If you call Warner Bros. a division of Warner Communications. That’s a billion-dollar division.”

Hawley suggested a compromise: to offer Eisner head of production and Wells head of business affairs. He knew as well as Gold, however, that Eisner had already said he would come to Disney only as chief executive and that Wells had turned down a less-than-senior corporate role. Hawley was unyielding in his refusal to recognize the two men as first-rate corporate material.

It seemed to Gold that the mere mention of the creative side of the movie business conjured up in Hawley’s mind images of cocaine and limousines and starlets and hot tubs and est seminars. It was the same view as the one held by Martin Davis at Gulf + Western: that creative types were ultimately irresponsible and untrustworthy. It was a view bitterly resented by Eisner (“I don’t wear a tutu,” he once said. “I don’t snort cocaine and go to wild parties. I can understand a P & L.”).

The meeting at Carter Hawley Hale lasted two hours. In the end, no one’s mind was changed. The committee could not even decide on the qualifications that Disney’s chief executive should have, much less agree on a candidate. Nonetheless, Gold was not displeased. In articulating the philosophical issues surrounding the leadership question at Disney, he had, he thought, made perhaps the best argument of his career.

However, Roy Disney’s supporters on the board were not dealing from a position of strength; indeed, a majority of the board appeared to side with Hawley, and even Ray Watson had dropped his support for Eisner. So Disney and a group of his close friends, known as the “Brain Trust,” sought a compromise. Brain Trust member Cliff Miller, of the public relations firm of Braun & Co., proposed that Eisner, Stanfill and Wells share the office of president, forming a triumvirate. Miller, who had also handled some public relations matters for Hawley, arranged for Hawley and Roy Disney to meet on Sunday morning, Sept. 16, to discuss the idea.

It was not a realistic proposal, Hawley told Disney at the meeting. Both Eisner and Stanfill would certainly reject it, though Wells might not.

Then Disney tried a personal appeal. “Phil,” he said, “I’ve got an idea of how the studio should be run. I’ve had it for 10 years. Everyone else in the family has had a shot at running it his way, and it hasn’t worked. So why not let me have my choice of management?”

Hawley was unmoved. He had, he said, a great deal of respect for Disney’s ideas, but after what the company had been through, Stanfill was, in his opinion, the right man for the job. The fact that Hawley had no personal stake in Stanfill but was simply acting on his convictions, as a director was retained to do, did little to assuage Disney’s disappointment at the rejection.

ON SUNDAY AFTERNOON, Stanfill visited Watson in Newport Beach. Though it was the weekend, Stanfill wore a suit and tie: That was his style, and this, after all, was a job interview.

“I’ve dealt with the corporate world,” he told Watson. “I’ve had corporate experience at Fox.” That experience, he said, would enable him to deal effectively with Wall Street and with all the investors in Walt Disney Productions, be they institutional asset managers or arbitrageurs or raiders. “You’ve got to stand up to the corporate raiders,” Stanfill said. “You’ve got to stand firm. You’ve got to be tough.”

This talk of toughness struck Watson as irrelevant; it was also disparaging to Ron Miller and to Watson himself. What did it mean to be “tough”? Nonetheless, Stanfill was impressive. Without a doubt he could run Walt Disney Productions. And he enjoyed the support of most of the directors.

While Watson met with Stanfill, the Brain Trust convened at Stanley Gold’s house in Beverly Hills. Gold did not believe that he and Roy Disney had many options at this point. They had proposed Wells. They had proposed Eisner. They had proposed a triumvirate of Wells, Eisner and Stanfill. None of the proposals had been accepted. There was one more possibility. The Brain Trust had discussed, on and off, an executive team composed of Wells and Eisner.

“With Frank’s business background and Michael’s creativity, we’d have an unbeatable duo,” Gold said now, rather wistfully.

“OK,” Roy Disney’s wife, Patty, said to Gold. “You’re so smart, do something. Pull it off.”

The board meeting to approve a new chief executive officer was scheduled for Saturday, Sept. 22--six days later. When it came to a vote, most of the directors would side with Hawley, whom they had known for years. Disney and Gold, newcomers to the board, could count on no allies except Peter Dailey, Roy Disney’s brother-in-law, who had become a director at the same time as Disney and Gold. On top of that, there was a certain hostility to Disney and Gold, who some board members believed were responsible for stirring up the trouble at the company in the first place.

“How are we going to get enough votes?” asked Mark Siegel, Gold’s law partner at Gang, Tyre & Brown.

“You’re running scared,” Gold said, summoning some pluck. “We’re going to win it.” He took out pen and paper and compiled a list of the directors, which, of course, no longer included Ron Miller. “We’ll lose Hawley, we’ll lose Lozano (Ignacio Lozano, publisher of La Opinion), and we’ll lose Baldwin (Robert Baldwin, former chairman of Morgan Stanley). (Caroline) Ahmanson’s out of the country, so she won’t be voting. We’ll win all the rest. We’ll win by 9 to 3.”

“What are we going to do?” Siegel asked.

“We’re going to run it my way,” Gold said. “We’re going to run it right down the middle of the street, where they’re uncomfortable and where I’m comfortable. We’re going to put on a political campaign right out there where everybody can see us. I’m tired of being told to be quiet because somebody’s feelings are going to be hurt.”

There was one small problem. Gold did not know whether he had Michael Eisner. Eisner was understandably angry: Walt Disney Productions had left him standing at the altar. He was also the hottest property in town. The networks and other studios all wanted to hire him. The Brain Trust could not expect him to come running when it called. But if a campaign was to succeed, Eisner had to join it.

Wells called Eisner, but it was Sunday, as it had been the first time he had invited Eisner to a meeting, and once again, Eisner was unable to come for a while. His kids had a baseball game. It was after dinner by the time he arrived with his lawyer, Irwin Russell. Gold brought out the grappa and began to lobby.

The conversation lasted two hours. There was considerable discussion of titles and job descriptions. Wells thought that he and Eisner should each be co-chief executive; Eisner would handle the creative side, Wells the business side, but they would have equal status and equal compensation; Watson might even remain as chairman. Eisner, however, was adamant that he be chairman and sole chief executive officer. Things got a little touchy before Wells volunteered to be president, conceding the positions of chairman and chief executive officer to Eisner, provided that the two men would be equals in the sense that each would report directly to the board.

Gold thought Eisner was hooked by then, but Russell kept raising questions. He said Eisner had thought the job was his a week ago, that he had offers from elsewhere, and that if he campaigned for the Disney post, he might jeopardize those other offers. Russell also wanted to discuss compensation for his client. Finally, Gold cut him off. “I just want to know,” he said to Eisner, “Will you commit? Do you want to be chairman and CEO of Walt Disney Productions? It’s the best job in the world. Give me a break. Give me a break .”

“I’ll give you one week,” Eisner said finally. “I’ll do it.” And so the campaign began.

THE NEXT DAY GOLD COMPILED a master chart listing the names of every director and the director’s friends, clients, customers and business associates. He tried to determine the position of each director on the matter at hand, and to identify the vulnerability of each. He called in every marker he had, telephoning friends and industry leaders to persuade them to plead for Eisner and Wells with the directors. He had his law partners at Gang, Tyre & Brown telephone the senior partners at Hufstedler, Miller, Carlson & Beardsley, the firm of director Sam Williams. He also tried to line up support from shareholders. At the same time, Eisner and Wells put on coats and ties and visited each director personally to explain why they should run Walt Disney Productions.

Reaction from the other side was swift. On Tuesday, Gold received a call from Joe Flom, the attorney at Skadden, Arps, Slate, Meagher & Flom who had helped defend Disney against Saul Steinberg’s takeover attempt. Flom was furious. Gold’s efforts, he said, were unprofessional.

“Unprofessional?” Gold asked. “What have I done? I’m trying to persuade people that Eisner and Wells are the two better guys.”

“You’re campaigning ,” Flom said. “I’ve never seen anybody run something like this. If you don’t stop, I’m going to tell Phil Hawley to pour on the coals.”

As the crucial board meeting drew nearer, the pressure on Ray Watson began to mount. Everyone, it seemed, was calling Watson, urging him to support one candidate or another. Richard Nunis, the head of Disney’s theme parks, wrote Watson a letter proposing himself as president. Caroline Ahmanson let Watson know that she favored Stanfill. Gold telephoned every three minutes (it seemed to Watson) to lobby for the Eisner-Wells team. Steven Spielberg called to promote Eisner. Richard Rainwater, who oversaw non-oil investments for the Bass brothers, telephoned in to say that the candidate that the Basses thought Watson should support was Frank Wells.

Although Watson mentioned it to no one, he was still inclined toward Eisner. But Watson also believed that his own inclinations were almost irrelevant. The most important task--Watson’s only real task--was to produce a consensus among the directors and shareholders for the chief executive--whoever it was--and thus finally to put an end to all the internecine wrangling that had made Disney so vulnerable. If Watson could build a consensus around Eisner, fine. But if the consensus formed instead around Stanfill, that was fine, too.

Watson asked Gold to come to his office at 3 o’clock on Tuesday afternoon.

“I know you’re out campaigning and pushing hard,” Watson said, “and I admire that.” The directors, however, were going to vote for Stanfill. The vote would be 10 to 3. (Unlike Gold, Watson was including Caroline Ahmanson in his count. In the end, Ahmanson, who was in China at the time, did not vote.) Watson was not even sure that Roy Disney’s brother-in-law, Peter Dailey, would go along with Gold, but Watson gave Gold Dailey’s vote for the sake of argument.

“Ray,” Gold said, “in the words of one of the great poets: Go ---- yourself.”

Watson broke into a huge smile. “I didn’t think it was going to work,” he said.

“You think I’m going to quit?” Gold asked. “You think I’m going to quit ? Show me a good loser and I’ll show you a loser. Nine months I’ve been working on this, and you want me to capitulate for the sake of unanimity so that everyone will be happy? You’re crazy. Who put you up to this?”

“Sit still, will you? Don’t holler at me.” Watson was still grinning. “Stan, just sit down.”

When Gold was seated, Watson said: “It was my very own idea to call you in. We have got to have a consensus on the candidate, whoever it is. The Basses are going in one direction, you and Roy are going in another, Phil Hawley in still another. It’s not even clear who the Walt side of the family supports. Let me tell you something, Stan. Even Peter Dailey, your client’s own brother-in-law, is calling me up and suggesting candidates. So I don’t even know where you guys are. Saturday is the day of decision. Whoever can put together a coalition by Saturday will have the job. But if something doesn’t change between now and Saturday, Dennis Stanfill will head this company.”

“Ray,” Gold said, “I’m going to win it, and I’m going to get your goddamned vote. You’re going to lead the vote for me.”

“I only count three votes so far,” Watson said. “And mine’s not among them.”

Gold came away from that meeting with the distinct impression that Watson had dropped his earlier support for Eisner and thrown in his lot with Hawley and Stanfill. It made the odds against his candidates even more formidable. Nonetheless, Gold reasoned, the support of certain major shareholders could change those odds. At the board meeting on Saturday, he wanted to be able to say that Irwin Jacobs, Ivan Boesky, the Basses and all the rest of Disney’s noisy and troublesome shareholders endorsed Eisner and Wells, and that if the board rejected this slate, they risked provoking a proxy fight. Jacobs, who respected both Eisner and Wells and who could never turn down the opportunity to thwart an establishment figure like Phil Hawley, readily agreed to cast his lot with Gold. So did Boesky.

The Basses, however, proved more recalcitrant. Sid Bass and Richard Rainwater had never met Michael Eisner, and they had some of the same reservations about him that Hawley did. They had been told that Eisner was a mere “movie man,” someone who happened to have a knack for picking popular pictures and little more. Eisner was said to lack depth. They thought that Wells, the businessman, should head the company. But Gold argued that under the management structure he envisioned, Wells and Eisner would be equal in that both would report directly to the board. That, Gold said, was the way the company had originally been run, with Walt Disney, the “creative crazy,” serving as chief executive, and Roy O. Disney, the businessman, in the role of president.

At midweek, when Wells himself told Sid Bass that he endorsed this idea, the investor conceded. “I have enough confidence in you that I want you to be CEO,” he told Wells. “And when you say, ‘Make Mike No. 1,’ I have enough faith in you to take your word on it.” Sid Bass then called to tell Gold that he could inform the board that the Basses favored Eisner and Wells.

“Do me a favor,” Gold said. “Call Cobb and make sure he’s got things straight.”

Sid Bass explained that Chuck Cobb was his own man. Cobb, the president of Arvida Corp., had joined Disney’s board when Disney bought the Florida real estate company from the Basses in June. Cobb was thought to be an ambassador for the Basses, but Sid Bass said that although Cobb would listen to advice, he would not take instructions. And Cobb had doubts. He, too, was a hard-asset man, an MBA, wary of Hollywood, where, as they liked to say, the assets left the lot at 5.

Gold called Richard Rainwater at the Bass brothers’ headquarters in Fort Worth.

“Richard, Cobb’s wavering,” Gold told him.

“Stanley, Stanley,” Rainwater said, “have I taken care of my end of this deal?”

“Yes.”

“He’s on the program. Don’t worry about what he’s saying to people. Just count the vote.”

“OK, Richard.”

Shortly after that, Gold called Watson. He had an urge to taunt the chairman. “How am I doing, Ray?” Gold asked. “Is it still 10 to 3? Do I have any more votes, yet? Do I have Cobb? Ten to 3--who are you kidding?”

Watson laughed, but Gold’s antics perturbed Wells.

“Why are you calling him and tweaking him?” Wells asked Gold. “You’re making it personal. You’re just asking for Flom and Hawley to come after you with all they’ve got.”

“Come on, Frank,” Gold said. “Relax. We’re going to win it.”

That, however, was still far from certain; Hawley, together with Stanfill, had begun to campaign vigorously, too. The two men called Gold’s partners at Gang, Tyre & Brown to persuade them to change Gold’s mind. Stanfill also visited Gold and Roy Disney to plead his case; they listened politely, but that was more to satisfy the legal requirement that as directors they act with “due diligence” than because they were interested.

Stanfill then called Fort Worth to present his case to Sid Bass and Richard Rainwater. In an attempt to appeal to their more conservative instincts, he described the range of his corporate experience. “The company really needs someone with my qualifications,” Stanfill said.

Gold, however, had been there first. “It’s a hard decision for us, but we’ve given Stanley our word that we’ll support his candidates,” Bass said.

Stanfill was clearly displeased. “Phil Hawley has the support of the board,” he said. “What will happen if I win the vote on Saturday?”

“If you win on Saturday, we’ll start a proxy fight on Monday,” Bass said. “We’ll replace the board and appoint new officers.”

Bass had made up his mind to endorse Eisner and Wells, and he was now throwing himself into the fray.

AS THE WEEK WORE ON, Bass was surprised to learn that Watson had shifted his support (as it appeared) from Eisner to Stanfill. Watson seemed to him to flip back and forth on everything. The guy changed his mind three times in five minutes. He was a project-oriented architect rather than a manager. So Bass called Watson to convey to him the same message he had given Stanfill.

“We’ve talked to all the large shareholders, Ray,” Bass said, “and so far they all say that they want Eisner and Wells. That’s 40% of the outstanding stock. So why are you going through this exercise of considering Stanfill? Don’t do that, Ray. We’ve got the votes to elect brand-new directors. The new directors will fire the guy you’ve just hired and hire the guys we want to hire. Why go through all this pain?”

“A majority of the board is opposed to Eisner,” Watson said.

“Listen to 40% of your shareholders,” Bass said. “Why are you ignoring all of these people? We’ve talked and talked and talked, and you can’t convince us.”

Shortly thereafter, Bass called Gold. “What can I do to help you?” Bass asked.

“You’re doing everything you can,” Gold said. “Just keep up the support.”

“I should tell you something. It’s going to print in the next 30 seconds anyway.”

“What’s that?”

“You can go to the board and tell them your supporters control much more of Walt Disney Productions than they thought. We’ve just bought another million shares of Disney at about $60 a share.”

Bass had decided to send a message directly to the board. Since the Basses already owned more than 5% of Disney’s stock, they had to file a form 13D with the Securities and Exchange Commission each time they increased their holdings by an additional percentage point, and they had bought close to 1% since closing on Arvida. Now Bass told the Disney stock specialist on the floor of the New York Stock Exchange that he would take all the Disney stock that became available. At the end of the week, Bass Brothers Enterprises publicly notified the SEC--and Disney--that they had raised their stake in the company from 5.5% to 8.6% of its outstanding shares.

Watson, meanwhile, had been talking to the representatives of the Walt side of the Disney family. Ron Gother, the attorney for Walt Disney’s widow, Lillian, and his second daughter, Sharon Disney Lund, said that his clients opposed Stanfill (not creative enough) and Wells (a victory for Roy Disney). They were uncertain about Eisner. John Baity, the lawyer for Ron Miller and his wife, Diane, Walt Disney’s other daughter, said that his clients could not support anyone, since they believed that Ron Miller should have the job. That was on Thursday. The board meeting was less than two days away, and Watson believed that he was as far from a consensus as he had ever been.

That same day, Chuck Cobb arranged to meet Watson to discuss, Watson assumed, the strengths and weaknesses of Stanfill and the Eisner-Wells team. Instead, Cobb announced that he wanted to be the chief executive of Walt Disney Productions. One of the reasons he had agreed to the merger of Arvida and Disney, he said, was the possibility of one day running the combined company. He conceded that he had not been with Disney long enough for the directors to recognize his qualifications and that this raised an obstacle to his quest. But, he went on, “where I come out, Ray, is that none of these other people should become chief executive. You should become CEO, but say you’ll only do it for a short time, 18 months or so, until you find the right person. By then I’ll have emerged as the natural candidate.”

Watson could scarcely believe what he was hearing. “There’s just no way, Chuck,” he said. “It’s just never going to fly. I am not a candidate for this job. I’m the wrong person for it. And I don’t like the idea of an interim leader. We’re trying to solve a problem, not drag it out.” Nevertheless, Watson went on, he would do what the consensus wanted. If a consensus believed the company could be saved by what Cobb was proposing, he would go along.

“I’m going to talk to the Basses,” Cobb said.

Cobb flew to Fort Worth that afternoon and presented his idea. But Richard Rainwater and Sid Bass said that they couldn’t support Cobb’s proposal.

That evening, Watson telephoned Bass at home. Watson, who wanted to approach the subject indirectly, started off by asking about titles for Eisner and Wells.

“Which one should be chief executive?” he asked.

“Just ask them,” Bass said.

“You don’t care?”

“Look, they’re going to run the company. If they can’t make a decision like that, then we’re dead.”

“Can they run as equals?”

“I’ll tell you what, Ray. I’m very opposed to the concept of a joint CEO. That is madness. There’s got to be something wrong with someone who agrees to share the job.”

“Do you think we should delay?” Watson asked, trying to hint at Cobb’s proposition without raising it explicitly.

Bass said again that he supported Eisner and Wells. The two men talked several times that evening, and Bass finally became impatient with the circular conversation. As a result, perhaps, Watson was left with the impression that Cobb had at the very least persuaded his acquaintances in Fort Worth to entertain his proposition if he could round up additional support for it--that Bass, would agree to a postponement if others believed that it was necessary. Things weren’t coming together, they were flying apart.

THE BRAIN TRUST’S EFFORT had all the frenzy of a political campaign. Gold was working 20 hours a day, rising at 4 in the morning and going to bed at midnight. He and his team gathered every morning to put together a status report. By Thursday, they had commitments from four of the 13 directors. They needed three more for a majority.

“The key is Card Walker,” Gold told the Brain Trust. Walker, the former chief executive of Walt Disney Productions, had only one vote, of course, but Donn Tatum, the former chairman, and Dick Nunis, the other Disney executive on the board, could be counted on to vote with him. If those three votes were added to the votes of Roy Disney, Gold, Peter Dailey and Cobb (whose support Gold assumed he had), the total came to seven. But Walker had so far remained noncommittal. Wells, Gold said, would have to persuade him. Walker was intensely loyal to the Walt side of the Disney family. And Ron Miller’s resignation meant that not a single member of the Walt side of the family had a seat on the board. That imbalance would be redressed if Gold resigned in favor of Diane Miller or Sharon Lund to promote unity. “I’ll give up my seat on the board if it’ll make peace,” Gold said.

But Walker had gone on a fishing trip to Arizona. On Friday, with less than 24 hours before the board was scheduled to meet, Wells flew there in Roy Disney’s private jet to talk to the retired chairman. That same afternoon, Eisner, who had made a powerful presentation to director Sam Williams the day before, drove down to Newport Beach to try to persuade board member Ignacio Lozano to vote with Roy Disney and Gold.

On Friday night the Brain Trust gathered on the patio of Gold’s home in Beverly Hills to await word from Wells. The telephone rang about 7 o’clock. Wells was calling from the jet.

“Bingo!” he said. “Card’s committed to us. He wants to move the nomination, and he wants to give the speech tomorrow. He says he’ll work on it all night.”

“A winner!” Gold shouted to his assembled friends. He turned and kicked a huge trash can off the patio. It sailed into the yard.

Five minutes after the conversation with Wells, Eisner called from the telephone in his car. He was driving back from Newport Beach, where he had been unable to change Lozano’s mind.

“It doesn’t matter,” Gold said. “We’ve won.”

“I can’t believe it,” Eisner said. “I can’t believe it.”

“Do me a favor,” Gold said. “Be here tomorrow morning at 6, and we’ll see if we can cut a deal. I need contracts to take to the board.”

With that, Gold drank a big glass of Williams pear brandy, took two Valiums and went to bed.

RAY WATSON SPENT FRIDAY NIGHT at the company apartment near the Burbank studio. At about 8 o’clock, Card Walker called him from Arizona and described Wells’ visit. Although Walker had been leaning toward Stanfill, he liked both Wells and Eisner. He knew that they could run the company capably. Also, Walker knew that the election of Stanfill would prolong the divisiveness among the major shareholders and possibly lead to a proxy fight. Gold had said he would not give up. The company had to go with Eisner and Wells. “It all makes sense,” Walker said. “I’ve a written statement that I want to read at tomorrow’s meeting.”

Watson then called each of the directors. He explained that he intended to recommend Eisner and Wells. A majority of the directors were in favor of the team, he said. And so were the major stockholders. Though he was slightly exaggerating the formal support he actually had for Eisner and Wells, enough of the directors let him know how they intended to vote to verify the outcome. He waited to speak to Phil Hawley last.

“How do you think it’s going to come out?” Hawley asked.

“I think it’s going to be unanimous,” Watson said.

Gold arose at 5:30. Mark Siegel, Eisner and Wells arrived at 6 and quickly reconfirmed the deal that Watson had worked out with Eisner when he had recommended Eisner to the board earlier in the month. Under its terms, which the board later approved, Disney’s top two executives became among the highest paid in the industry. Ron Miller had earned about $500,000 a year. Eisner was to receive a salary of $750,000 a year and a performance bonus that could reach more than $1 million a year. He was also given a $750,000 signing bonus and options on 510,000 shares of Disney stock at $57 a share. Wells was given a salary of $400,000 and a similar, if slightly less grand, package of options and bonuses.

The board met at 10 o’clock on the lot. Watson opened the meeting by raising the issue of the company’s vulnerability. Only if its management enjoyed the support of both the Walt side and the Roy side of the Disney family, as well as that of the Basses, he said, could Disney remain independent.

The Walt side had been informed of Gold’s willingness to resign in favor of one of their members if Wells and Eisner took over, and Ron Gother and John Baity were invited into the room to declare their clients’ support for the Eisner-Wells team. Roy Disney and Gold also spoke. But Chuck Cobb urged the board to postpone a decision. “I think it’s premature,” he said. The board knew little about the candidates’ strategy and goals for the company. It ought to take the time to find out.

Watson disagreed. For the company to go through further weeks of turmoil while the board discussed hypothetical goals would add nothing. Now was the time to decide. And like those who had spoken before him, he favored Eisner and Wells. “This is as close to a consensus as we are going to get,” he said. “It’s important that we show unity.”

Then the inside directors left the room to let the outsiders discuss the matter. The election of Eisner and Wells was a foregone conclusion, however. When the inside directors returned, Card Walker gave his speech nominating the two men. Watson moved that the board make it unanimous. And it did.

“Any other business?” Watson asked.

There was none. In his last official act as chairman of the board of Walt Disney Productions, Watson adjourned the meeting. He then asked Gold to call Wells and Eisner, who were waiting at Eisner’s house.

From an adjoining office, Gold gave the news to Disney’s new management. Then Hawley got on the phone. “I think it’s terrific,” he said. “Obviously there was some conflict here and some difficulty, but I want you both to know you have my full support.”

Although he was to be replaced as chairman of Walt Disney Productions, Watson harbored no bitterness. His ego did not require the position. When he had taken the job, he had not expected it to be more than a temporary, ceremonial post. He had agreed to help see the company through a period of transition. That transition had proved to be far more dramatic, wrenching and profound than he had anticipated. But in the end, Watson felt that he had accomplished what he had been brought in to do.

After the board meeting, Gold and some of the other directors repaired to the Lakeside Golf Club to host a celebratory luncheon for Eisner and Wells. When the meal was over, Gold drove alone to the shore, where he sat on the rocks and stared at the surf for several hours. It was his wife Ilene’s birthday, and Gold had promised to take her and a friend out for dinner. But when he arrived home early in the evening, he begged off, pleading exhaustion. He went to bed and slept for 14 hours. On Sunday morning, he and Frank Wells went running. It was the last time they would run together for a long while. The following day, Wells would start his new job as president of Walt Disney Productions, and he simply would not have the time.