Park Ave. to Disney, Eisner Tells His Tale

The man who presides over one of Hollywood’s premiere storytelling machines is finally telling his own story.

Michael Eisner wrote “Work in Progress”--due in bookstores today--over the protests of his wife, Jane, who argued that people who write books at mid-career are “unduly vain” and that privacy should be “cherished and protected.”

While his passion to write the book won out, Eisner admits that his wife’s apprehensions caused him to exercise more restraint than he otherwise might have.

“I probably would have gotten all my anger out, taken too much credit for things and been too arrogant--gotten myself in trouble,” Eisner said.

Starting from his childhood, growing up in a wealthy Park Avenue family, the book weaves through Eisner’s storied career that began as a page at NBC and included top posts at ABC and Paramount Pictures.

During 14 years at the Walt Disney Co., Eisner has presided over one of the biggest business turnarounds in history, building the company into a worldwide entertainment giant, and becoming one of the wealthiest executives in history.

In the book, the 56-year-old chief executive talks about his 1994 heart bypass operation, the death of Disney President Frank Wells in a helicopter crash and his falling out with his former studio chief Jeffrey Katzenberg. Eisner also discusses the disastrous tenure of super agent Michael Ovitz as his No. 2.

Q. Disney’s stock has taken a beating this year. Are you concerned about the timing of your book?

A. I like the timing. I mostly like it that the book is going to come and will be then behind me.

Nothing goes up forever, and everybody should know it. We rose 3,200% or 3,300% since 1984. You know, we make bad movies, we make bad television shows, we make bad books--we fail just like anybody else. We’ve been succeeding more than we fail. We hope to succeed again more than we fail.

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Q. You’re not disheartened by the company’s stock performance?

A. Failure reduces envy, and in that respect, people may like us better. They don’t like people who never fail.

If a bad time means that we’re only making an enormous amount of money as a corporation rather than an obscene amount of money, I would say that I can adjust to those failures pretty easily.

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Q. Is the market reacting to a specific problem at Disney?

A. The market was extremely overpriced for all businesses and is adjusting to that having nothing to do with Disney. I don’t think about the company quarter to quarter. I think about what is the company going to look like five years from now and 10 years from now.

So I’m not the slightest bit upset about the slight sell-off of Disney stock. To me, it’s healthy. I think it should happen to most American industries to keep prices more in line with realities of the world and we’ll build from there.

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Q. Do you have any concern that some of your businesses, particularly theme parks, are overly susceptible to recession?

A. We’ve always been both a recession-resistant company and somewhat prone to oil fiascoes because if you can’t get inexpensive gasoline, people who might ordinarily drive to Florida for Disney World may put off their trips. We’re maybe in the best of all possible worlds in that we have half our assets in the movie business, which is relatively resistant.

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Q. Are you confident that you can return to the 20% annual growth that you achieved for so long?

A. I think over a rolling five-year period of time this company even with the size that it is can have a return in the 15% to 20% basis. I’d like to think we can do 20%. It may be that as big as we are that we’d be happy with 17% over five years. I haven’t yet made the decision to make our goal less than 20%.

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Q. You were very close to people like Katzenberg and Ovitz, then there was a severe break. Is that something that is bound to happen in the entertainment business, or does that say something about your particular management style or you personally?

A. It happens in every business and in every walk of life and in politics and, unfortunately, in families. The entertainment business is highly charged because there is the ability, like in the oil business, to make a lot of money. So greed becomes part of the process, envy becomes part of the process, and relationships become Shakespearean.

I’ve generally had a very long relationship with a lot of people in the entertainment business.

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Q. Do you have any regrets about Ovitz, who was a close friend for 25 years when it didn’t work out professionally?

A. I have regrets that the whole thing happened. I have regrets that it seemed to be a doomed partnership. I have regrets how I handled it. I’m sure he had regrets how he handled it. The fact of the matter is, we were friends. I wish we could be friends again, and I think we will be.

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Q. Surely you must have less conciliatory views toward Katzenberg and DreamWorks, since that company is going after specific Disney markets.

A. No. You know what? I’d really just as soon they do well. He has every right to try to make it on his own. He’s got good partners. It’s irrelevant to this company whether he succeeds or doesn’t succeed. He’s not going to hurt our franchise no matter how successful he is. Yes, they do raise the price of animated films today. So does Warner Bros. and Fox. I suspect that the best non-Disney animated film will come from somebody we all haven’t even talked about at lunch. I don’t know who that is. Walt Disney came out of nowhere. Steven Spielberg came out of nowhere. I’m much more nervous about that person in Columbus, Ohio, I haven’t met yet.

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Q. You didn’t address the issue of succession in your book.

A. I think I addressed it completely. I talked about maybe 20 different executives, most people haven’t heard of at least in the public realm, many of whom could be my successors. I think I showed the company has a vast bench. There is a succession plan in the company. We just haven’t announced it to the public, or even announced it inside.

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Q. Is there one individual?

A. Not one that I’m going to tell you.

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Q. Is there one that you won’t tell me?

A. Other than the fact we believe strongly you should come up through the hockey operations and--I’m taking my cues from other media companies--I have a son who’s a goalie.

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Q. So if we put you on a gurney and asked you to give us the two names of the people who should succeed you, who would that be?

A. Anders Eisner and James Murdoch.

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Q. Who do you see as your most formidable competitors in the entertainment business?

A. The same list of obvious candidates. Bill Gates. Rupert Murdoch. And then that unknown person from Columbus.

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Q. Bill Gates is not somebody many people would think of when you mention the entertainment business.

A. I think he’s the No. 1 competitor. Bill Gates is in the Information Age. He’s got all the cash flow one needs. He’s got great wealth. And he’s got something that nobody else has--he has great youth.

And by the way, he’s a terrific guy, he’s smart, and I think what he’s done is fantastic, which is why he makes me nervous.

He’s a big competitor, and so is AT&T--when; they merge with TCI. So much about the media age is about delivery. Getting what you make to the audience and the consumer. AT&T; and Bill Gates are getting it there.

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Q. But you’ve always been an advocate for content.

A. Which is why I think we’re going to stay around. Which is why they can’t do it without us, I hope. Which is why we are also protecting ourselves. We bought ABC. We are also a distributor. But by and large, we’re content.

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Q. You’ve had a number of top executives who’ve left, including Steve Bollenbach, Richard Nanula and others. Do you take any responsibility for their leaving?

A. Every one is a different situation. I think it is a compliment to our company that we are the No. 1 company on the wheel-o-dex of all the headhunters. If I was running another company, I would be looking at these people.

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Q. If you’d offered Nanula the presidency, he might have stayed.

A. I think he would have stayed. But, I could get anybody to stay on that basis. You have to offer it to the one person you think is right for that job at that time.

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Q. And nobody has been right?

A. It’s not that they’re not right. It’s that there’s no need to fill that job right now.

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Q. At Paramount, you were known for holding costs down on movies. At Disney, now you’re spending more than ever.

A. We did make “Raiders of the Lost Ark” and “Star Trek” at Paramount. In those days, those two movies were outrageously expensive and were nerve-racking. [At Disney] we make all sorts of small pictures, particularly with our Miramax brand. We also make event pictures. “Armageddon” turns out to be monumentally successful.

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Q. But, spending $150 million on one movie must make you nervous.

A. Yes, it makes me extremely nervous. It’s a little easier now because we have other sources of revenue.

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Q. Is the market that Nickelodeon built a missed opportunity for Disney?

A. I can’t say I wouldn’t like to have the success that Nickolodeon has. You have to ask at what cost. When we were in a position to acquire Viacom, we decided it would not enhance our brand in the end and we should do the Disney Channel. I think they’ve matured, and if they were then what they are today, we probably could have done it. But back then, we felt it was a mistake. It’s not what you don’t do that counts, it’s what you do do. We miss opportunities all the time.

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Q. Is the regional sports network Fox knitted together a missed opportunity for ESPN?

A. Regional sports are basically owned by the teams. Most of the revenue, if not all, goes back to the teams. It has never been part of the ESPN portfolio. We’ve always been a national sports franchise. So, for us it didn’t make sense. Of course, neither did buying the Metromedia stations, which [Murdoch] proved did make sense because the economy was extremely strong and he got Barry Diller to run that network and we passed on Metromedia stations incorrectly.

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Q. In the book, you mention several deals that nearly happened but didn’t--NBC and CBS among them. Are there any you wish you had done but didn’t?

A. The only deal that in hindsight would have been a good deal would be Viacom. I didn’t have the foresight that Sumner Redstone had.

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Q. You often get criticized for your level of compensation.

A. I came to the company at exactly the same compensation I had at Paramount. I’ve never had another dime as far as a guarantee. My compensation totally depends on our performance. Yes, I have done well, but our company has gone from $2 billion to $70 billion and most of the people that own equity in our company are thrilled.

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Q. In the book, you talk about wanting to prove yourself to your father. Do you feel you had accomplished success in his eyes?

A. Oh yes. But that doesn’t change--we have a song in “Lion King,” “He’s In You”--it doesn’t matter. What happens between [birth] and [age] 5 is pretty important, so all those desires about satisfying your parents and doing well are part of your being. The fact that you may do well doesn’t mean that you’re not always trying to do well.

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Q. How did your heart problems change you?

A. I eat completely healthy. I exercise. I think it would be a good experience if everybody could go through it without having to actually go through it because--although you still sweat the small stuff--after you [do], you say to yourself, “Why did I sweat the small stuff?” There are things I will not put up with any longer that I used to put up with. I say “Life is too short” and mean it.

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Q. From your schedule, it doesn’t sound like you’ve slowed down at all.

A. Just the opposite. I’m also glad that what I had, I woke up from and was cured, so to speak. People that have cancer and have all sorts of other diseases have the sword of Damocles not only over their neck but halfway through their neck. I just have it kind of hanging up there somewhere kind of warning me.

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Q. What compelled you to write the book?

A. It started off as a blueprint for change that Frank Wells and I thought was necessary. It ended up a kind of mountain to climb, and I had a good time doing it.

And I figured if I wrote the book, I could force [coauthor] Tony Schwartz to find my girlfriend from Dennison [College] who dumped me and then got married without me knowing it. I thought we were almost engaged. I was dreaming that she would be pumping gas somewhere, looking at what she lost. When Tony found her, she was married to the same guy, had two or three children. She thought it would never happen with me, and she never contacted me after that because she thought it would be improper. She was extremely classy. I was pinned to this girl for two years; I guess I had good judgment.

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Q. Do you care how much the book sells?

A. Yes and no. I hope it doesn’t sell a copy and nobody ever talks about it again. At the same time, I hope it sells more than [former Chrysler Chairman Lee] Iacocca--which is typical of me having a complete conflict about almost everything.