The Keys to the Kingdom (25 page)

In
Captain EO's
case, several executives on the Imagineering team were hostile to the presence of outsiders from the start, says writer-producer Rusty Lemorande. “Eisner's first take was they were these genuises,” Lemorande says. The mandate was to use them as much as possible. But when the
filmmakers tried to get Imagineering to perform tasks like set construction, the division stuck to the high hourly rate it routinely charged outsiders who hired the Imagineers as consultants.

Katzenberg, who was overseeing the making of the
Captain EO
film, tried to get the division to charge a lower rate but couldn't, so such jobs were routed to contractors instead. To Lemorande, it was clear that the Imagineering team could not understand why Lucas and his crew had been brought in to do theme-park work at all: “The attitude was, ‘Just give us a movie and we'll know what to do with it.'” But
EO
was supposed to be a wild, three-dimensional show with fiber-optic illusions, lasers shooting across the theater, and smoke effects—a radical departure from the old Magic Journeys Theater that had occupied the same space.

The producers hired renowned designer John Napier, who had just had a stunning success with the musical
Cats
. He built an enchanting miniature theater in scale to demonstrate the effects that would be in the show. Most of the project was supervised by Katzenberg, but Eisner came to view the work in progress. Just as Eisner leaned down to peer into the miniature theater, Napier drew on a cigarette and blew in a puff of smoke to simulate the foggy, magical mood that the finished piece was intended to have.

“It was a fairyland in there,” Lemorande remembers. “Eisner lifted his head. He had this glow, like a child. He said, ‘Whatever you need, it's done.'…When he saw that theater was going to be like no other theater on the planet, he knew it was worth it.” When Napier wanted to lift the ceiling in the existing theater to eliminate an interfering beam, Eisner approved the additional expense. He knew that this was one of his first creative moves at a Disney theme park, and it had to be good.

Nonetheless,
Captain EO
was nearly a disaster. Coppola's footage proved to be completely out of sync with Jackson's throbbing rock performance and lacked the energy of a high-speed space chase. (Meanwhile, Coppola had moved on to directing
Peggy Sue Got Married
and Lucas was mired in making the megaflop
Howard the Duck
.) Lucas hid the
EO
footage from Disney and made his associates take a vow of silence: no one was to breathe a syllable about the extent of the problem. And it was huge. The piece lacked structure and story line—a whole new dance number had to be added. Lemorande and Jackson labored to salvage the project with extensive recutting and reshooting. At one point they had to use a spray-painted ball cock from a toilet as a stand-in for the head of a puppet, Minor Domo. The original had vanished and they were out of money.

Though Disney had hoped to use Imagineering for special-effects work, Lucas got his own shop—Industrial Light and Magic—to fix the film. ILM rushed through the job. Lemorande told Katzenberg that the work was delayed because of Lucas's perfectionism. By the time Disney executives saw the footage, he says, “they loved it.”

When
Captain EO
opened in September 1986, its premiere attracted Jack Nicholson, Jane Fonda, Whoopi Goldberg, and Debra Winger. Clearly, Disney was hipper than it had been in years. Only one major person was missing. Michael Jackson, miffed that his trademark crotch-grabbing shots had been cut (they were considered inappropriate for a Disney attraction), was a no-show. Eisner, however, didn't want to disappoint the crowd. The eccentric pop star was present, he told the audience. It was just a matter of penetrating his disguise for the evening.

Star Tours also instantly attracted huge lines when it opened a few months later, in January 1987. Lucas had gotten Disney off to a tremendous start. As it turned out, Frank Wells and Disney attorney Robin Russell had signed him to a killer deal. Lucas had given Disney the rights to his
Star Wars
and
Indiana Jones
characters in perpetuity for $1 million a year. At the time the theme parks had no characters other than Disney's. Lucas wanted a permanent home for his creations. But as it became clear that Disney had made a tremendous bargain for itself, Lucas began to feel resentful. “There was quite a bit of bad feeling that is still there today,” says a source familiar with Lucas's thinking. “I think George still feels that Frank Wells and Michael Eisner took advantage of him.”

 

AL CHECCHI WAS
the Bass brothers' man on campus. A Harvard business school graduate and former treasurer for Marriott Corp., Checchi was there to ease whatever residual anxiety the Basses had about Eisner and Wells as businessmen in general or as hotel operators in particular. He later acknowledged that Eisner may not have been happy to see him at first, but Eisner could hardly be inhospitable to a Bass emissary. Eventually, the two men formed a bond—helped by the fact that Checchi's ultimate ambitions clearly lay outside of Disney. But a top-level insider says Checchi never got close to Wells. “Al thought Frank was not up to the job,” this observer says. “And at [the beginning], he probably wasn't. But as the team molded, he became an important cog.”

Checchi soon introduced Eisner to his mentor, Gary Wilson, who was
Marriott's highly remunerated chief financial officer. Wilson was a Wharton-educated executive whose expertise was in the hotel business. Eisner was impressed with Wilson and gave him a deal that made him the best-paid chief financial officer in U.S. history. Unlike Checchi's, Wilson's ambitions could easily have included running Disney—and he acknowledged as much when he met with Eisner and Wells. At the time Wells said he intended to leave after five years to make another attempt on Everest. If all went well, it was implied that Wilson could step into Wells's position. Among his first duties, Wilson went to Europe to scout locations for a new theme park and the hotels that would surround it.

Checchi spearheaded another prong in the Eisner-Wells thrust: hotels. Disney had thousands of acres awaiting development in Florida. When Eisner and Wells had first met with the Basses, Checchi explained that Disney had to develop its real estate, adding hotel rooms that would be profitable themselves and would also feed tourists to the Orlando park. Checchi introduced Eisner and Wells to his old boss, Bill Marriott. Checchi's plan was for a partnership in which Marriott would build more than a dozen hotels with almost twenty thousand rooms. This decision eventually brought a $1.5 billion lawsuit from the Tischman Corp., which had a signed deal with Ray Watson granting it exclusive rights to build hotels on the Orlando property.

The Marriott deal collapsed when Eisner began to suspect that it was too generous to his prospective partner. Why shouldn't Disney build its own more imaginative hotels instead of letting Marriott keep the money? Eisner tested his theory by demanding that Marriott sweeten the deal by committing to build a $70 million pavilion at Epcot. “When they agreed so quickly, I knew it must have been a great deal for them,” Eisner said later. That was enough for him.

Eisner and Wells dumped the deal and started building—with the plans that had been developed with Marriott. Tischman got to construct two hotels. Eisner, fascinated by architecture, stipulated that Disney would control the design. The commission went to postmodern architect Michael Graves, who came up with two fanciful plans: the 1,509-room Dolphin and the 758-room Swan, each topped with large renderings of the animals for which they were named.

Tischman was not the only company that had to fight to hang on with the new regime. Walt Disney had pioneered corporate sponsorships, getting companies to kick in funds toward the construction of Disneyland in
exchange for the right to advertise themselves or shop their wares on the premises. Such deals were throwing off almost $100 million a year by the time Eisner and Wells arrived. Pete Clark, the executive who was responsible for negotiating these arrangements, said Wells was amazed that such deals existed: “He called Michael and said, ‘Do you know that companies pay us to be part of the parks?'”

But Wells caught on fast and quickly decided that there was still plenty of juice in those lemons. Wells squeezed; for example, he got Kodak to ante up for
Captain EO
and for theater renovation at the parks. In a twist on corporate sponsorships, Disney came up with corporate partnerships; for example, in exchange for putting in money for
Captain EO,
Kodak's contract to run an exhibition at Epcot was extended and Disney agreed to consider using Kodak's new line of copiers.

Disney wasn't bashful about breaking up with some of its old friends. At Gary Wilson's prodding, a long-standing deal with Eastern Airlines ended when the struggling carrier couldn't meet Disney's demands for richer terms. Delta was promptly ushered in, paying $40 million over ten years and agreeing to shell out for future projects. That was good enough to make Delta the official airline of Disney World. By 1985, Disney was getting $193 million from its various corporate partners—about twice as much as the company had been getting before Eisner and Wells arrived.

From the start, Eisner and Wells were thrilled to find dozens of opportunities waiting to be exploited all over Disney. Hundreds of Mickey Mouse cartoons were in Disney's vaults and had never been syndicated to television. Eisner and Wells couldn't wait to release Disney's animated classic feature films on video, starting with
Pinocchio.
At the time no one suspected the vast potential of that market—especially for animated films that children would watch again and again. Rich Frank pushed for pricing the videos low enough so that they could be bought by consumers (rather than selling more expensive copies in limited numbers to video stores for rentals). Video would become a staggering source of revenue for the new regime.

Disney was like a deep mine whose mother lode was still untouched. “You could finance a new Disney World by the unused value of our film and television library,” Eisner chortled to the
New York Times
soon after he arrived at the company. “Such a bounty has fallen into my lap. Every day a new asset falls out of the sky. The real estate is just the gravy. There are 40 unused acres next to Disneyland planted in strawberries.”

Wells was similarly incredulous. “I can't believe it,” he marveled to
Disney Channel chief Jim Jimirro. “Every time I open a door at this company, there's money behind it.”

There were so many opportunities at Disney that Wells felt he could never tire of exploiting them. “No one should be this lucky,” he said. “My only wish is that I was thirty instead of fifty-three, not for any other reason than that it would be fun to keep doing this for the rest of my life.”

 

EISNER AND WELLS
may have been smiling, but over in MCA's famous black tower, Sid Sheinberg wasn't happy. It was July 1985 and Michael Eisner had just announced plans to build the Disney-MGM studio tour in Orlando. Sheinberg, the outspoken and cranky president of MCA, was getting angrier by the hour. Since 1981, MCA—owner of the prototypical Universal Studios Tour—had been developing plans for a working studio that would double as a tourist attraction in Orlando. But MCA had been slow off the mark. The company wanted a partner to help defray the expense, expected to exceed $200 million. Unfortunately, the quest had not gone well. Florida governor Bob Graham had asked the state legislature to support the project with a loan, but the proposal had died. Its demise was hastened by a Tallahassee lobbyist named Bernie Parrish, who denied that he was then working for Disney but nonetheless pressured one of the governor's aides to consider whether he shouldn't be considering Disney's interests in the matter.

Now, in 1985, Michael Eisner and Governor Graham stood together as Disney announced its own working studio and tourist attraction. Sheinberg felt that the resemblance to MCA's plan was too close to be coincidental. “Disney's ability to decimate you by acting in a predatory way is chilling,” he said in a memorable interview with the
Orlando Sentinel
. “Do you really want a little mouse to become one large, ravenous rat?”

Sheinberg's anger stemmed partly from an incident a few years earlier, when MCA had turned to Paramount as a possible partner to help finance its studio tour in Florida. “MCA had a relationship with Paramount that was unique in business,” Sheinberg says. It dated back to a bond between MCA chairman Lew Wasserman and Charlie Bluhdorn. Wasserman was Hollywood's powerful elder statesman, the “godfather” who mediated many aspects of Hollywood life, from negotiations with the unions to relationships with Washington. (After all, Wasserman was a former agent whose star client, Ronald Reagan, had done rather well in politics.)

“Bluhdorn loved Wasserman and respected him—worshiped him, literally,” Sheinberg says. During Bluhdorn's day, Sheinberg saw himself and Barry Diller as “custodians of the relationship” between their bosses. Earlier, MCA and Paramount had joined to create the USA Network. So when MCA wanted a partner in the planned Florida theme park, Wasserman naturally turned to Bluhdorn. After a major presentation, Paramount passed. “But we had shared with them all kinds of information,” Sheinberg says.

Then Eisner and Wells went to Disney. “Those guys have a hard road cut out for them,” Wasserman told Sheinberg. “These are friends of ours. You ought to call them up.” Wasserman suggested that something mutually beneficial could emerge. Sheinberg called and told Disney that MCA would love to be “helpful.”

There was no response. Wasserman went back to Sheinberg. “Did you make the call?” he asked.

“Yes.”