DisneyWar

by James B. Stewart

Success tends to make you forget what made you successful, and just when you least suspect it, the big error shifts the game.

One reason the Disney live action studio hadn’t had a hit since The Love Bug was because Walker did not believe in marketing and advertising.

When he met with Davis at noon the next day, a press release announcing his “resignation” had already been prepared. Eisner had brought along a copy of his contract, which provided incentive compensation and the forgiveness of the loan on his house in the event that he was not offered Diller’s job if Diller left, a total of $1.55 million. In his eagerness to be rid of him, Davis readily agreed, saying he just needed Eisner to sign off on the press release. Eisner refused. “I want the check for what I’m owed,” Eisner said. “I can’t get a check on such short notice,” Davis insisted. “That’s ridiculous,” Eisner said. “I’ll be back in an hour.” He walked out. Twenty minutes later, Eisner had his check, and approved the press release.

Though the live-action film and animation studios attracted most of the attention, curiously little of the revenue growth actually came from the company’s more creative initiatives. An internal analysis commissioned by Gary Wilson to help understand the company’s burgeoning profit found that nearly all of it came from just three sources: raising admission prices at the theme parks; greatly expanding the number of company-owned hotels; and distributing the animated classics on home video (a technological development that had happened since Eisner’s arrival).

The animators found it disconcerting, but they had to concede that Katzenberg’s broad instincts were almost always right, as opposed to his more specific suggestions, most of which they ignored. It was best for Katzenberg to identify the problems, then let the animators figure out a solution.

Europeans’ vacation habits were dramatically different from Americans’, something that might have been anticipated had Disney relied on European data rather than projecting results from Disney World onto a European setting.

He slapped the script on Vogel’s desk and said, “Here’s your hockey movie. Michael likes it. Go make it.” Then he walked out. After Mighty Ducks turned into a hit, Eisner had Disney buy a professional hockey team and name it The Mighty Ducks. Vogel hoped he might get invited to the opening game, but he wasn’t, nor was he given season tickets, as were some of the film’s production team. He ended up never seeing the team that his movie had inspired.

Lloyd Braun, the thirty-nine-year-old president of Brillstein-Grey Entertainment, was intrigued when he got a call from Joe Roth inviting him to breakfast to discuss Disney’s troubled Touchstone TV studio. Brillstein-Grey had thrived in the year since Ovitz left Disney, producing “Just Shoot Me” and “NewsRadio” for NBC, and the late-night “Politically Incorrect” with Bill Maher for ABC. Braun, a lawyer and manager who numbered Cher and “Seinfeld” co-creator Larry David as clients, was probably best known as the character named Lloyd Braun whom David kept writing into “Seinfeld” plots.

Though he had been operating within this system for much of his career, Eisner had long chafed at the notion that the studio put its money at risk, but that talent earned a guaranteed sum no matter how poorly the film performed at the box office. While this wasn’t an indefensible position, it ignored decades of economic history. Just as autoworkers don’t bear the risk of failure of a new car model, talent in the movie industry had used its leverage to insulate itself from the commercial failure of a film. Eisner may have thought this was unfair, but management controlled the making, distribution, and marketing of films.