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Eisner: Memo Critical of Ovitz Contained Exaggerations
Walt Disney Co. Chief Executive Michael Eisner today ended a week on the witness stand by saying many his own writings criticizing Ovitz were loaded with hyperbole and exaggerated his former second-in-command's shortcomings.
Testifying for the fifth day in a Delaware Chancery Court lawsuit, Eisner sought to downplay his criticisms of Ovitz, especially those in a blistering, seven-page "Dear Michael" memo he wrote to Ovitz but never sent. Eisner said the memo was inaccurate, and written emotionally late at night.
Shareholder lawyers are seeking to expose Eisner's private thoughts about Ovitz to make the case he would have been justified in denying the executive a hefty severance package when he fired him in December 1996. Lawyers value Ovitz's golden parachute at $140 million, and are seeking to recoup $200 million in payments and interest for the company.
Among the things lawyer Steven Schulman noted was Eisner's mention in the memo that Ovitz reneged on his responsibilities to bolster Disney's Hollywood Records label, saying "you never have been in the Hollywood Records offices on the lot."
Today, however, Eisner retreated from that claim.
"I don't know if he's never been in the building, but it's certainly true that he never did what I asked him to do," he said.
Eisner also testified that he did not believe Ovitz used rumors that one-time NBC programming whiz Jamie Tarses was sexually harassed by her boss as a ploy to free her from her contract so she could join Disney's ABC.
His letter suggested otherwise. "Of course the Jamie Tarses hiring and those tactics only made me more concerned that I brought somebody in with questionable judgment," according to the letter, portions of which were read in court.
Likewise, Eisner suggested in his e-mail and in another letter to directors that Ovitz flouted the company's rules about conflicts of interest and reporting gifts.
Today, however, Eisner defended Ovitz's practice of giving gifts to talent, such as the artwork given to "Home Improvement" star Tim Allen after he walked off the set. Eisner argued that the practice saved the company money by keeping talent at Disney.
Eisner was most self-critical about the two-page note he wrote to the co-author of his autobiography about ethics in which he cited Shakespeare and Aristotle. Eisner called the memo, which reflects on the nature of drama and the rise and fall of successful business leaders, a "pretentious" effort on his part.
"Most tragedy comes to those who simply make a mistake," he wrote. "The higher the position of the person making the mistake, the more interesting the fall, and the further the fall."
Asked about the letter, Eisner explained in court that he was trying to explain the drama of Hollywood, where we are "looking every day at people who are falling from grace on a little teeny mistake, not telling the truth of whatever."
He added: "I don't think the Hollywood that was depicted in the courtroom earlier or cliched in books or newspaper articles is the real Hollywood."
Nonetheless, Eisner conceded that the letter is "a little pretentious" and said, "I'm happy it didn't go into the book. It seems a little sophomoric."