COVER STORY : Angst at Disney’s World : All Hollywood’s eyes are on Disney Studios Chairman Jeffrey Katzenberg. How much have Frank Wells’ death and Michael Eisner’s heart surgery changed his future? Time will tell, but his relationship with Eisner is the real story.

Just three weeks ago, Disney Chairman Michael D. Eisner sat in his office atop corporate headquarters in Burbank and for the first time reluctantly discussed what has been on the minds of all of Hollywood--the fate of his studio chairman, Jeffrey Katzenberg.

Katzenberg’s future in the ever-expanding entertainment empire had been the source of intense debate since April, when Frank G. Wells, Disney president and chief operating officer, died in a Nevada helicopter crash. While much of the industry assumed that Katzenberg would step into Wells’ job, based on his decade-long record of success, Eisner said in this candid two-hour interview that he had no intentions of sharing the Disney throne.

Such speculation intensified after last Saturday’s unexpected turn of events--which found the 52-year-old Eisner undergoing emergency quadruple heart bypass surgery. While a Disney spokesman said on Wednesday that Eisner’s position remains unchanged, it’s widely assumed that he now will be forced by events to appoint a second-in-command to help carry the heavy load of running one of the industry’s biggest entertainment companies.

So the spotlight instantly returns to Katzenberg--who is known to covet the crown as Prince of the Magic Kingdom. In his interview, Eisner said that there is no one in the industry he trusts more than the 43-year-old studio chairman, whom he has mentored for the past 20 years since their days at Paramount Pictures.

“He is extremely trustworthy and loyal and very supportive of the whole company--he is very much a team player,” Eisner said of Katzenberg three weeks ago.

But behind the harmonious facade of Team Disney, there exists a complex, tension-filled relationship between Eisner and Katzenberg that many see as a psychological barrier to change.

His friends and colleagues say that despite Katzenberg’s accomplishments, Eisner has never given his close associate the due he has always sought. Indeed, sources say the two have never even discussed the issue of Katzenberg’s future in the post-Wells era. “This is about a withholding father and a son looking for love and recognition from that father,” a close associate of both men said last week.

It was a decade ago that Eisner left as head of Paramount and brought his fast-talking, hyper-ambitious president of production with him to Disney. Together they helped transform the moribund studio--which had only $225 million in revenue in 1984--into the $4.5-billion revenue producer it is today.

As studio chairman, overseeing motion pictures and television, Katzenberg has made contributions to the empire’s animation franchise and other endeavors that would seem enough to make him the obvious heir to the throne. His track record is among the best in Hollywood, even though the studio has been struggling for years to recapture the lost luster of its live-action movie business.

Disney’s latest animated classic, “The Lion King,” has so far grossed nearly $200 million at the box office in just over four weeks, reconfirming Disney’s utter dominance of the feature animation kingdom. Under Katzenberg’s supervision, Disney’s first foray into live theater, Broadway’s “Beauty and the Beast,” is the top-grossing show on the Great White Way. The ABC series “Home Improvement,” produced at Disney under Katzenberg and studio president/TV head Richard Frank, was this past season’s No. 1 TV show.

But achievement isn’t always rewarded generously in the corporate jungle. The untimely death of Wells, who had always served as adviser and the mediator between Eisner and Katzenberg and a confidant to both, compounded with Eisner’s sudden health problems, complicates their relationship even further, sources suggested.

“These two events add an artificial drama to what was already a real-life drama. This situation became much more complicated when . . . the father became vulnerable,” observes one.

At this point Eisner isn’t the only one who’s vulnerable. Friends say that Katzenberg, widely considered a control freak, has been emotionally frayed by the sudden uncertainty surrounding his career. After turning down countless job offers in the past, Katzenberg last week confided to those closest to him that he will leave the company if Eisner passes him over.

Katzenberg refused to be interviewed for this story. And given his powerful position in the industry and the delicate nature of relationships in Hollywood, dozens of his associates and friends also would not speak on the record. But privately there was no shortage of people willing to speculate on Katzenberg’s future, and the unusual dynamic that exists between him and Eisner.

“If this is not cleared up soon, it could become a very dangerous situation . . . Jeffrey could become impatient. And both of these men are of incredible value to that company,” a source who is close to Eisner and Katzenberg said last week.

A close Katzenberg friend, Jim Wiatt, president of the powerful talent agency ICM, agrees: “It would seem to me, they (Eisner and the Disney board) would have to do something soon.”

Eisner was expected to return home by this weekend from Cedars-Sinai Medical Center, where he has been making business phone calls from his bedside for the past week and has been visited at least twice by Katzenberg. Eisner, who plans to be back at work within weeks, has made no public comment since his hospitalization. So it is anyone’s guess if--and when--he will make any major decisions regarding the corporate hierarchy. Katzenberg’s contract is believed to expire within six months, and Eisner may want to move quickly to resolve his future to assure Wall Street that the company’s management remains stable.

Eisner initially declined to be interviewed for this story, specifically because he did not want to fuel any speculation that Katzenberg’s role at the company would be changing. But he later relented, deciding that too much might be read into his silence.

At what turned out to be his last interview before his bypass surgery, Eisner sat at a coffee table in the anteroom of his pastel-colored executive suite, wearing gray slacks and a light blue shirt. He was robust and talkative, though at times defensive during an informal interview that ran four times longer than originally scheduled. Glancing frequently at the corporate publicist seated across from him, Eisner remarked no less than six times, “I know I’m going to regret having done this.”

When asked about the Wells position, he drew a sharp distinction between the demands of running a studio and administering a Fortune 500 company.

“I don’t want Jeffrey at the moment to worry about corporate insurance and that’s what Frank Wells did . . . he kept the machine running,” Eisner said, adding that Katzenberg had always been “spared the day-to-day administrative” duties, and that his “ultimate responsibility is for the creation of product lines in the motion picture division.”

Said Eisner: “Like casting (a movie), I want to keep my stars in star roles.”

It was clear that as much as he treasured Katzenberg as a creative and financial executive, acknowledging that “he has now matured to the point where he is a principal in this company,” Eisner viewed himself as the sole king of the Disney jungle organizationally.

Industry insiders and friends concede that Katzenberg lacks the depth of experience of Wells, a lawyer and veteran studio executive who oversaw strategic, corporate and financial planning and was Eisner’s chief adviser. Unlike the media-savvy and image-obsessed Katzenberg, Wells was also a classic background player. Throughout their time together he was content to let Eisner--with his tousled silver hair and goofy smile that masks a tough interior--seize the spotlight, whether playing the role once filled by Walt Disney in the company’s public relations campaigns or basking in the adulation of the media.

But Katzenberg’s closest allies argue that Disney’s next president doesn’t have to be in the exact mold of Wells. They say that Katzenberg’s keen focus and salesmanship could be used to benefit a creative-based company like Disney--which derives most of its revenue from film, video, television, theme parks and merchandising. They also point out that others inside the company are available to assume the financial management duties.

Many associates believe that Katzenberg, in lieu of an actual promotion, has been quietly grooming himself for broader responsibilities by trading in his casual blue jeans and polo shirts for designer suits and spending more time in the company of corporate executives. Eisner may have been moving to mollify the restless Katzenberg even before Wells’ death by having Katzenberg supervise Disney’s troubled Hollywood Records unit, its burgeoning interactive division and its extremely successful foray into legitimate theater, “Beauty and the Beast.”

Eisner acknowledged Katzenberg’s achievements and “creative discipline” in his interview. But he also said that he wants him to remain focused on the studio--which has been painfully searching for the formula to put the roar back into its flagging live-action business.

As “The Lion King” races toward record-setting returns at the box office and beyond, continuing Disney’s unprecedented string of success in feature animation and driving ancillary business such as merchandising and theme parks, its non-animated movies are more like an albatross.

Even Katzenberg--the very model of the relentless, modern industry predator, fiercely pursuing his prey with a laser-like focus, a steel-trap mind and killer drive--has been unable to break through the morass of such forgettable, one-note comedies as “Cabin Boy” and “Holy Matrimony,” which have dominated Disney’s slate for several years.

“Sure, I’ve been happier with the animated product. . . . In an area of the company where we’re not doing well, I’d like to improve it,” said Eisner, conceding his unhappiness with the studio’s live-action movies during the last half of his and Katzenberg’s 10-year reign at Disney.

Despite its problems, Disney remains one of the most profitable studios of all time. The filmed entertainment division, which includes TV and video, generated $622 million in operating income for the fiscal year ended Sept. 30, 1993, on gross revenue of $3.7 billion. And profits have steadily gained over the past decade. The division has become a more significant part of Disney’s operating income. A recent Barron’s survey showed that it accounted for 36% of income last year, compared to 22% in 1990.

When asked how he expected Katzenberg to be able to shoulder both new responsibilities at the same time he is charged with fixing what is broken at the studio, a confident Eisner said, “I know he can do it all.”

Now, of course, the more critical question becomes what if Katzenberg were to be appointed to the presidency of Disney: Would the corporate duties overshadow his much-needed expertise at the studio? Those mounting issues will undoubtedly add strain to what is already widely observed as a tense relationship between Katzenberg and Eisner.

Those close to Katzenberg say he likens his relationship with Eisner to his marriage to his wife, Marilyn Siegel, in that both relationships have endured the normal ups and downs but they remain deeply committed. Katzenberg likes to say, “I’ve been married to the same woman and the same man for 19 years.”

In his interview, Eisner denied rumors that he and Katzenberg frequently spar, saying, “We disagree on occasions . . . we’ve never had a fight!” Some find that hard to believe given their competitiveness.

Disney’s recently departed international president, Bill Mechanic, now president of 20th Century Fox, says: “They’re perfectionists. They feel that with their record of success, they both have something to offer the process. . . . They bicker, but there’s a basic level of respect.”

Both had something to prove when they came to Disney in 1984--Eisner that he was capable of running a major corporation after spending his career in TV and film, and Katzenberg that he possessed the skill and maturity at age 33 to run a major Hollywood studio.

Both succeeded beyond expectations by building on Disney’s trademark family entertainment franchise. In 10 years, Disney rose from a $2 billion a year company to an $8 billion a year behemoth with tentacles reaching throughout the globe.

It is probably safe to assume that living with such success has made both Eisner and Katzenberg hypersensitive to failure. This may be a cyclical business in which every studio has its ups and downs, but Disney’s live-action problems stand in stark contrast to its multibillion-dollar success in feature animation. Since Disney is the industry’s only brand-name family movie label, the company still clings to an image of purity and infallibility.

Personally for Katzenberg, who by nature is very controlling about how he is publicly perceived, any failure is particularly embarrassing. Privately, people close to the studio chief agree that Katzenberg is so personally intertwined with his work that it’s impossible to separate the two. He lives and breathes the business--rising before dawn to begin his workday, and trading in information like a frantic commodities broker. By his very actions, Katzenberg lends insight into the inner workings of Hollywood, from what ends up on the big screen to the labyrinthine process that gets it there.

The New York-born Katzenberg, son of a Park Avenue stockbroker, can still pass for a grad student with his compact, wiry frame, starched preppy clothes and hyperactive, Diet Coke-slugging style. His reputation as a spunky, take-charge guy goes back to the 1960s, when Katzenberg was a teen-age advance man for New York Mayor John Lindsay for seven years. After brief stints as a talent agent and producer’s assistant, he went to work in 1975 opening mail for Hollywood mogul Barry Diller, then the tough New York-based chairman of Paramount Pictures.

Seven years later, Katzenberg, a college dropout, was shipped to Hollywood, where he rose through the ranks to become Paramount’s president of production under Eisner. People still remember Katzenberg’s resourcefulness. He once managed to get a plane that was already taxiing on the runway to stop and turn around and pick up his Paramount bosses.

By 1984, Eisner had left Paramount and brought Katzenberg along as studio chief. They helped build a nonexistent live-action movie division into a successful business during their first five years with a string of comedy hits that included “Down and Out in Beverly Hills,” “Three Men and a Baby” and “Good Morning, Vietnam.” The new regime followed an untraditional strategy of putting faded stars and TV actors in inexpensive, high-concept projects that were hatched in-house.

Disney evolved from what box-office analyst Art Murphy calls “a half-sized major” studio living off a few reissues a year of its animated classics in 1984 to the No. 1 market share position in 1988 with 18 releases. “Nobody had ever done that,” Murphy observes.

After five years, the live-action winning streak that powered the studio’s growth had all but ended, as Disney refused to keep pace with the escalating salary demands of major stars and directors.

But no one seemed to notice. Because by then Katzenberg, along with animation heads Roy Disney and Peter Schneider and a top-drawer team of animators, had revived the studio’s animation division by creating a new world of icons for kids with 1989’s “The Little Mermaid,” 1991’s “Beauty and the Beast,” 1992’s “Aladdin” and now “The Lion King.”

At the heart of Disney’s live-action strategy was a continuing effort to cut costs. In 1988, it created Hollywood Pictures to help pump up the volume from Touchstone Pictures and Walt Disney Pictures. Ricardo Mestres, a Katzenberg protege, was put in charge of the new division, whose mandate was to churn out inexpensive high-concept movies for adults.

That formula subsequently failed at both Hollywood and Touchstone, with a few exceptions such as “Joy Luck Club” and “What’s Love Got to Do With It.” While the trademark Disney family label has had modest hits like “Homeward Bound” and last year’s sleeper “Cool Runnings,” it too has had its share of duds, including the recent comedy “Blank Check.”

About two months ago, Eisner lost his patience with the continuing dismal performance of Hollywood Pictures and ordered Mestres fired. Many industry insiders believe that Mestres was the fall guy for the studio’s more emblematic problem of generally losing touch with its live-action audience.

Eisner admitted that he absolutely shares responsibility for Disney’s problems and is personally involved in helping Katzenberg find a solution. “You have to allow for failure,” he said. “Even if it’s a long period of time . . . I can deal with this failure and I understand that we have to move on.”

That said, Eisner stressed that even though his studio chief was taking on added business responsibilities, he wanted Katzenberg even more involved in the details of movie-making.

Ironically, it was highly publicized criticism of Katzenberg’s hands-on meddling in creative matters, such as giving extensive script notes to filmmakers and deciding what actors should wear on screen, that caused Katzenberg to step back and assume a more macro-management role.

Over the last two years, he began delegating more to the division heads and three months ago put his top lieutenant, David Hoberman, in charge of all three movie units so he could concentrate on his broadened mandate.

Katzenberg no longer signs off on every project in development, but is still clearly the final say behind what movies get made.

Hoberman’s promotion, clearly, if not coincidentally, may have come at the perfect time for Katzenberg if he is fated to move into the president’s position.

Regardless, Eisner said he did not want Katzenberg straying too far from the creative front lines. When he was in the trenches at Paramount, Katzenberg earned the nickname “golden retriever” for his ability to hunt down and deliver scripts to his masters faster than anyone in town.

“He is still the best golden retriever I ever met,” Eisner said three weeks ago. “He’s the best person to follow through on a project, an idea or slate of ideas . . . that is his main attribute.” In the early stages of their relationship, Eisner says, “I did 100% of the thinking and he was the one to get something done.” Nowadays, Eisner says Katzenberg “not only gets it done, he comes up with the idea.”

Producer Joe Roth, who was chairman of 20th Century Fox before bringing his Caravan Pictures to Disney, also praises Katzenberg’s “incredible focus of energy.” Says Roth: “If you need something done, he gets it done.” When the Hollywood Records’ soundtrack to Caravan’s upcoming Keenen Ivory Wayans movie “Low Down Dirty Shame” needed songs, Katzenberg took pop star Janet Jackson to dinner to persuade her to contribute to the album.

Even his biggest competitor, Warner Bros. Co-Chairman Robert Daly, concedes: “Jeffrey is one of the best executives in the movie business.”

In spite of Disney’s bad rap with talent that’s not drawn on cels, Katzenberg has always been an irresistible magnet for actors, directors and writers. “When Jeffrey gets on the phone and calls talent, they love it. He’s absolutely seductive,” says Jerry Katzman, William Morris Agency president.

But some say Katzenberg’s tenaciousness can also work against him. “Once he decides he loves something, whether it’s a good idea or bad idea, he gets fixated and can be extremely persuasive to get people to do things they don’t want to do,” says one colleague.

In a business sense, one Hollywood insider points out, “Jeffrey doesn’t get blinded by his passion--which is both a tremendous strength and enormous weakness because he doesn’t gamble. This is such a crapshoot business, I wonder if his allegiance to the corporate culture at Disney hasn’t sometimes prevented him from taking creative chances you need to take.”

Katzenberg’s vow more than a year ago that Disney would release 50-60 movies a year, including those that Miramax distributes, also has drawn fire on and off the Burbank lot.

“The films start cannibalizing each other in the marketplace,” acknowledges a Disney executive, to which a producer adds: “When a studio puts out 40 to 60 movies a year, certain pictures, especially smaller movies, are going to get trampled on. It becomes a Friday-night business. If you don’t do big business on Friday night, by Monday morning’s marketing meeting they’re moving other pictures into your slot.”

The Eisner-Katzenberg volume strategy is aimed at building up Disney’s library, which was small by industry standards when they took over. “Our leverage is volume,” Eisner explained. “As the industry became content-starved, our strength became being a volume company. . . . The question is, how do you keep up volume and keep your quality up? Our goal is to keep our volume and enhance our quality.”

As much head scratching and rethinking of its low-budget, high-volume filmmaking strategy goes on behind the Disney gates, one of the ways Katzenberg has already moved to reverse the creative shortfall in live action is by diversifying Disney’s movie lineup. In the last several years, the studio forged deals with key creative producers, including Roth, Andy Vajna (Cinergi Productions) and prestigious filmmakers Ismail Merchant and James Ivory (“Howards End”). Disney’s 1993 purchase of scrappy Miramax Films, which releases such provocative films as “The Crying Game” and “The Piano,” was considered a bold and smart move by the historically conservative studio.

For the past two years, Katzenberg has desperately sought to mend fences with Hollywood’s creative community, given the ill will that was created by Disney’s notorious tightfisted and controlling ways with talent. High-powered agents were particularly irked over Katzenberg’s widely leaked 1991 “memo,” a 28-page scolding of the industry’s runaway spending on high-priced stars and scripts and Disney’s own indiscretions in losing sight of cost controls.

“When they started out, in their initial two or three years they were great with talent--they really took care of them,” recalls one high-powered agent. “Then Jeffrey started getting hard-line and very combative and he alienated everybody in town. The consensus in the community was that Disney was resistant to creative freedom. They drove writers and directors nuts. Nobody wanted to work there.”

A top Hollywood businessman suggests that Disney’s fiscal prudence was “ultimately what got them into trouble. Because finally, at the end of the day, too many small movies don’t add up to anything. They tried to break the star system, but they failed.”

But with his usual perseverance and engaging personality, Katzenberg has all but willed top talent back under the Disney tent with promises of more freedom and even more money in some cases. He has even made amends with the town’s most powerful agent, Creative Artists Agency Chairman Michael Ovitz, who said recently that while at one time “Disney was not especially interested in our established clients, that’s all ancient history now.”

Though still very risk-conscious, Disney is paying market prices in some cases and has put out the welcome mat to such directors as Robert Redford (whose “Quiz Show” comes out this fall), Tony Scott (soon to shoot the $50-million action film “Crimson Tide,” with Denzel Washington and Gene Hackman), “Home Alone” creator John Hughes (who will make the comedy “The Bee”) and Mike Newell (“Four Weddings and a Funeral,” “Enchanted April”).

Redford, whose next movie is also committed to Disney, said that though he had heard “all the stories about how Disney brutalized talent, how they kept ‘B’ and ‘C’ lists (of talent) and were cheap and interfered, I can tell you I’m three-quarters of the way through the journey on ‘Quiz Show’ and my experience has been absolutely wonderful.”

Even Ovitz, known for his tumultuous relationship with Katzenberg in the past, agrees that things have improved. “Jeffrey is a pleasure to do business with,” the agent said. “He is responsive, accessible and someone who will give you a quick answer. I would rather do business with Jeffrey Katzenberg, even if he doesn’t agree with my point of view, than someone with less knowledge who is slower in getting you an answer--that is death for an agent.”

Not everyone is sold on the new Katzenberg. While Ovitz and CAA President Ron Meyer won’t discuss it, one CAA star who still refuses to do repeat business with Disney is Robin Williams, who is fuming because he says the studio wrongly used his voice as the wisecracking Genie in “Aladdin” to merchandise the film’s products.

Redford’s experience notwithstanding, another key filmmaker gripes that “the creative environment is worse than ever. They squish and squash the creative life out of you because they have no insight when it comes to art.”

Some industry skeptics argue that Katzenberg’s less controlling stance is reserved for the “A” list only and may never trickle down to lower-echelon talent.

“One of the reasons they had trouble attracting first-class filmmakers is you have to give up control and Jeffrey Katzenberg finds that one of the most difficult things,” observes Marty Bauer, president of talent agency UTA. “But as he grows as a human being he’s trying to cope with that frailty . . . I think it remains to be seen (if he backs off) but that’s his intent.”

Katzenberg’s cozying up to stars and agents has been another source of tension with Eisner. “It was helpful for Herman Melville to give notes to Nathaniel Hawthorne,” he said. “My note to Jeffrey Katzenberg would have been to ignore all these people.” Eisner added: “As we become more user-friendly, I feel we’ve become less effective. I would encourage Jeffrey Katzenberg to be more detail-oriented. . . . When he was involved in the details and not caring what CAA, ICM or the L.A. Times thought, he did it great.”

While it’s hard to find anyone in Hollywood who doesn’t respect Katzenberg’s talents, many question his creative instincts for picking live-action movies today’s audiences want to see.

A powerful Hollywood lawyer who greatly admires Katzenberg says, “Jeffrey is the best executivein the business and he has no taste.”

But to Katzenberg, creating art for art’s sake had never been a priority. Harvey Weinstein, who along with his brother Bob sold New York-based Miramax to Disney 16 months ago, says, “I don’t think Jeffrey wants ‘Blank Check’ to be his legacy.” Yet Weinstein recalls phoning Katzenberg after seeing the movie to ask, “What the hell is this?” Katzenberg’s response: “That’s about $15 million in corporate profits, my friend.”

But Weinstein is quick to defend the studio chief: “I don’t think he personally has low-brow taste . . . but he’s in charge of an operation that has to make a lot of money and when you have to pay those kind of bills, you’re appealing to a different common denominator.”

Katzenberg, for his part, recently assured a close associate that Disney’s commitment to a higher level of quality is real, and that “it’s not good enough anymore that our films simply make money. They have to have some creative reason for being.”

Movies aren’t the only thing Katzenberg is reassessing. Some have observed that after turning 40 and suffering the loss of several close friends and associates, including lyricist Howard Ashman, the studio chief is placing more emphasis on his personal life with his wife and their 11-year-old twins, Laura and David. The couple now takes yearly Mediterranean cruises. The family has a getaway ski house in Deer Valley, Utah, and spends its traditional two weeks each Christmas in Hawaii. With their main residence in Beverly Hills, the Katzenbergs also have an extravagant beach house in Malibu.

Diller, who socializes with Katzenberg, says, “He has the full complement--his wife and his children and his friends. . . . Jeffrey very much has a life.”

“I have sensed in Jeffrey a reflectiveness and maturity I didn’t see before,” says high-powered entertainment attorney Ken Ziffren. “He was a bullet shot out of a gun, but I’d say he’s now more open and more personally vulnerable.”

This is not to say that Katzenberg ever stops inhaling and exhaling the business or has much of a social life outside work. Other than his few close friends in the business like music mogul David Geffen and Steven Spielberg, Katzenberg doesn’t hang out with Hollywood types, unless of course it’s business, or fun for business sake such as his famous all-boy “raft trips,” where the guest list includes other studio heads, executives, agents and actors.

Katzenberg defies the stereotype in other ways as well. He has no use for the screenings and premieres that dominate Hollywood night life. The Disney chief regularly attends movies in Westwood and Century City to experience them with real audiences.

A number of sources interviewed for this article remarked on how few people really know the personal side of Katzenberg. Even Eisner, who said he probably knows him “better than anyone,” agreed that his colleague doesn’t easily reveal himself. Eisner and Katzenberg rarely if ever socialize. “They’re not chums--it’s strictly business with them,” says a longtime friend of both.

Katzenberg and Spielberg have grown especially close in recent years. After collaborating on the 1988 hit “Who Framed Roger Rabbit,” Spielberg says that he and Katzenberg discovered they got along best avoiding the movie business altogether. “We haven’t talked about movies in three years,” Spielberg says. “And we became better friends the moment we stopped. A lot of people don’t believe me when I say Jeffrey can talk for two hours without mentioning film.”

The two movie millionaires went into partnership on a restaurant chain called Dive! whose first location recently opened in Century City. Spielberg says the business came together after he complained to Katzenberg that there were no good submarine sandwiches in L.A. Within a day, Spielberg recalls, Katzenberg had arranged a meeting with a Chicago food service company, which turned the Dive! concept into reality.

Katzenberg’s boundless energy, like his hunger, hasn’t waned with years. This is a guy who doesn’t take breaths between bites, who drives like a crazed teen who just got his license. He still rises before dawn to work out or just plain work, still schedules appointments down to the nanosecond, still reads half a dozen scripts a weekend, still lives by to-do lists on little cards, still burns up the phone lines (recently calling all 600 people who worked on “The Lion King” to personally thank them) and still logs more miles than a flight attendant. Legendary for his quirkiness, Katzenberg is so fond of his supercharged Mustang convertible that he recently bought and stored one of the last of its kind to roll off the assembly line.

Organization is his religion, control his mantra. Aside from color-coding his clothes in his home closets, even his raft trips and corporate retreats are “completely scheduled” and punctuated by “forced fun” activities, as one participant puts it.

Arnold Rifkin, worldwide head of the motion picture division at the William Morris Agency, observes that Katzenberg sits at the control panel even in the wilds of the Colorado rapids. “Only he knew the arrival time of our helicopters. Our exit depended on him. We had no phones, no communications of any sort.”

In honor of David Hoberman’s recent nuptials, Katzenberg threw a Las Vegas bachelor party for a group of his friends, who boarded Disney jets for the Mirage Hotel, where they partied in a private suite. During the festivities, Katzenberg slipped out for nearly an hour. When asked about his whereabouts, he nonchalantly explained that he was meeting with Las Vegas developer Steve Wynn, his and Spielberg’s Las Vegas partner in Dive! “It suddenly struck us that Jeffrey took these fairly influential people to Vegas and parked us in this room for 45 minutes!” recalls UTA’s Jeremy Zimmer, who said that even Katzenberg had a good laugh over it.

For Katzenberg, already at a personal and professional crossroads, the pivotal and unforeseen events of the last 3 1/2 months will force a resolution of his fate.

The further role of fate aside, it ultimately boils down to what Eisner decides to do. Needing to cut down on stress, the convalescing Disney chairman may rethink his workaholic ways and be more ready to share the power and the pressure that goes with it.

In retrospect, his assessment three weeks ago of his own job and Katzenberg’s unbridled ambition was perhaps telling if not ironic. “Jeffrey has a better job than I do,” Eisner said. “He has all the fun stuff.”