As last year’s celebrated spousal-murder trials were finishing up, I was riveted instead by a case in Delaware’s Court of Chancery that involved no physical pain or literal bludgeoning. That’s the one in which Walt Disney shareholders are suing their CEO, Michael Eisner (and seventeen current and former directors), for giving Michael Ovitz an excessively rich deal when the company hired and quickly fired him—more than $300,000 a day in severance for his allegedly incompetent 454 days as president.
My interest is especially avid because I know some of the principals. With Ovitz, in fact, I have what amounts, I guess, to an actual relationship, long and curious and fraught.
The trial resumed last week—and in a nice burst of synchronicity, Eisner’s judgment is figuring in many other conversations right now. There was the glut of nominations at the Golden Globes for Desperate Housewives—the smart, network-saving hit developed on the watch of the ABC programming executives he had fired last spring. Then there is the long, messy Weinsteinectomy: The departure of Miramax’s Harvey and Bob Weinstein from Disney might be resolved soon, just as Oscar nominations will surely go to three Weinstein movies (The Aviator, Finding Neverland, Fahrenheit 9/11) and The Incredibles—also distributed by Disney but produced by Pixar, whose management Eisner has alienated as well.
Ovitz was a Disney board member when he was fired, so he is, in a fine irony, one of the eighteen co-defendants. But unlike the others, he doesn’t consider the case an embarrassment or fret about the looming financial liability if the judge imposes fines or restitution. Rather, it is for him a priceless, desperately welcome opportunity to revise his reputation upward—and, in this zero-sum game, that of his former friend and employer downward.
The argument that Disney’s lawyers have had to make is comically contorted: Hiring Ovitz was entirely prudent … but on the other hand so was firing him after only a year, because he sucked … but on the other hand, so was paying him $140 million in severance, because even though he sucked, he wasn’t so terrible that he could have been fired for cause. The outcome depends upon whom the judge considers the more egregious liar. According to a disgruntled senior executive at Disney, “Eisner lies and lies and lies. He is the biggest liar in the industry.” And in a memo introduced into evidence, Eisner described Ovitz as a “psychopath” who “cannot tell the truth.” I know you are, but what am I? I know you are, but what am I?
The shareholders’ suit claims that Ovitz’s alleged “habitual lying” constituted grounds to fire him without severance. Really? If corporate executives told the truth always, they would be considered fools. When NBC Universal chairman and CEO Bob Wright was asked about getting trounced by ABC’s new hit series this season, he said, “It’s good to see that shows are really popping good numbers.” No, it isn’t. And when Tavis Smiley recently quit his NPR talk show and criticized NPR for its whiteness, the NPR spokesperson said, “We have only the most positive feelings about Tavis.” No, they don’t.
One is sympathetic to the Disney shareholders’ displeasure. Eisner has been averaging around $122 million a year, even as the company’s financial performance tanked. Apart from Ovitz, during the last decade he has expensively driven away valuable executives of every stripe and style—Jeffrey Katzenberg, Gerry Laybourne, Susan Lyne (Desperate Housewives, Lost), the Weinsteins, and now evidently Pixar’s geniuses. How has Disney’s current president and COO, Bob Iger, survived? Maybe because journalists have never portrayed him as visionary or even very interesting, and so his boss never felt threatened. Iger is the only internal candidate to replace Eisner as CEO next year, but he is making a show of good-humored fatalism about his chances. Last year, he ran into his predecessor at an Upper East Side restaurant. Ovitz asked what he was up to. “Waiting around for my severance package,” he said.
At Enron and Worldcom, the misdeeds were the kind adults commit: systematic, technically complex fraud driven by unchecked greed. The Eisner-Ovitz debacle resulted from the sort of emotional, irrational mischief ordinarily made by children. In the mid-nineties, at the pinnacle of Disney’s success, one of Eisner’s friends explained his brilliance to me. “Michael is a 12-year-old boy in a man’s body,” he said with affection—a real-life version of the Tom Hanks character in Big.
But children can also be willful and compulsive, and act in sadistic and self-destructive ways without even understanding why. How else to explain Eisner’s behavior? Instead of responding like a grown-up—before Ovitz was hired, forcing insubordinate executives to report to him—Eisner let his friend come aboard and presided over endless emasculation. If Disney was Lord of the Flies, Ovitz was Piggy.
Of course, the legendary tough guy Ovitz also acted like a flustered child when he signed on despite Eisner’s refusal to back him up. He was apparently too embarrassed or cowed to stand up to his boss-to-be—a reluctance, perhaps, that may derive from lingering childhood status anxiety. Ovitz still makes a point of mentioning that Eisner grew up the son of a Park Avenue lawyer, whereas his own dad was a mere San Fernando Valley liquor salesman.
The senior Disney executives who get lots of press tend to be the ones who get shoved out. And before he arrived at Disney, Ovitz was covered intensely. I had some role in inciting that frenzy—if he is Hamlet, consider the following my Rosencrantz-and-Guildenstern account. When I co-founded Spy magazine in 1986, almost no one outside of show business—including me—had heard of Ovitz or CAA. Then Spy’s pseudonymous Hollywood columnist Celia Brady started her ruthless, well-sourced, singular scrutiny. What made the cat-and-mouse game especially fun was Ovitz’s mania for secrecy. When Spy simply published CAA’s list of clients, the agency was apoplectic. Ovitz told me later that he believed it might actually drive CAA out of business, since it showed that their reputation for hegemony was a sham.
Our first conversation took place when he phoned me after I became editor of this magazine in 1994. “I understand you’ve got a problem with me,” he said right off, cool and steely. It was like a call from a Gambino to a Bonanno. He suggested a sit-down in New York, somewhere private, so I proposed the Century Club. We chatted in one of the Beaux Arts parlors alone, and the only other sound was a man in some distant room (I swear) singing opera. He used my first name frequently, in the Dale Carnegie fashion. He was not scary. He was Willy Loman’s son Biff, aching to sell himself and project gravitas.
“Now I get it,” he remarked as we left. “Bill Murray once invited me here, but I wouldn’t go. He said, ‘Come to my club,’ and I assumed it was some … dive.” It was a charming confession. It made me feel a little sorry for him, as I did again a year later when he grandly introduced me at a party to a TV personality who was already a friend of mine. The next time he called was the morning after I got fired from New York in August 1996. He asked if I’d be interested in running Disney’s magazine division, which then included Los Angeles, W, and Women’s Wear Daily. Maybe, I said, let’s talk.
Which we proceeded to do, sometimes weekly, through the fall. The half-life of my interest in the job was about a week. But it was flattering to be wooed, and my curiosity about Ovitz remained acute.
As with many Hollywood machers, humor came uneasily to him. During a meeting on 57th Street, where he kept an apartment, he told me that he had just come from Disney World, where he was dismayed to see TVs in the gym tuned to non-Disney channels. So he set the manager straight. I nodded soberly. “That was a joke,” he said. I am still not sure if he meant he had been joking with the gym manager, or with me. Another time, I returned his call on my cell phone from a taxi. The connection was perfect, but he asked solemnly, “Are you on a land line? No? Call me back from a land line.” For all his sleek, careful sharkiness, in other words, he struck me as sweet and awkward and insecure—more Napoleon Dynamite than Napoleon.
Now I can look back at my walk-on moment with detailed retroactive knowledge of what else was going on at the time. Ovitz was being kicked out of Disney precisely as he was trying to bring me in. Eisner testified that the “final straw” came at his mother’s funeral in New York, when Ovitz shouted at a driver to clear space for the hearse. The first call to me about a job came days afterward. The following month at a board gathering in Orlando, Eisner told directors that Ovitz was a failure; perhaps Ovitz was down in the gym watching TV at the time. Just when Eisner sent Ovitz a letter proposing a happy-looking divorce, Ovitz decided it was important that I meet with Iger—who seemed, when I appeared, to have no precise idea why we were meeting. Then came the weird “land line” conversation … and then he was out. His power had been all make-believe. His inability to close my little deal was merely another of his failures to get anything done at Disney.
A longtime acquaintance of Ovitz’s who spoke with him recently says he still has a pained, pleading earnestness about his victimization by Eisner and “the Disney press machine,” and longs for the world to understand that he could have been a phenomenal executive—if, for instance, Disney had bought the half of Yahoo he teed up for only $250 million… . And so on. He sounds like someone fired last month or last year, not last century.
When I phoned him for this column, he said the following: “I just called you back out of respect, frankly. Because if I don’t call back, I’m an asshole, and if I do and then won’t talk, I’m a different kind of asshole.”
In 1996, I developed a TV show for Miramax. In 1997, another writer and I sold a screenplay to Walt Disney Pictures. Until a year ago, my wife and I owned Disney stock. And two co-authors and I have contracted with Miramax Books to produce a book about Spy.