The Keys to the Kingdom (27 page)

For Disney,
Down and Out
was a template. The story of a neurotic, wealthy family seduced by a drifter was not going to be a big-budget operation. Mazursky had made some modestly successful films—
An Unmarried Woman
and
Bob & Carol & Ted & Alice
—but he wasn't so much of a
hotshot that his fees would break the bank. His proposal to cast the pricey Jack Nicholson as the rich husband was not met with enthusiasm. Instead, the studio went with Bette Midler and Richard Dreyfuss, who were not exactly A-list stars at the time. Midler, in fact, was almost untouchable coming off the 1982 bomb
Jinxed
. After Katzenberg pointed out to Midler's agent that her career was “in the fucking toilet,” Midler accepted a $150,000 cut from her asking price of $750,000.

Dreyfuss, who had won an Oscar for his role in
The Goodbye Girl
in 1977, was a recovering cocaine addict whose career was in the commode right alongside Midler's. He wanted $1.2 million; he took half. Neither star got any profit participation. It was a strategy that Disney used very effectively: yesterday's stars today. If they got hot and more expensive, they could go elsewhere.

Keeping up the tradition begun at Paramount, Katzenberg was determined to keep the budget down. “Jeffrey was wonderfully ruthless on budget,” says a former studio executive. “He was questioning the size of trucks carrying equipment to [some of the] shoots. Mazursky came out of that meeting and said, ‘Nobody has ever talked to me that way.'”

The picture would be a $62 million hit, eclipsing
Splash
. But if the talent expected some sort of belated thank-you to make up for the company's cheapness going in, they were doomed to disappointment. “I thought a huge gift would be forthcoming,” Mazursky acknowledges wistfully. “But I never got one.” He also nursed some hope that the studio would reward him by backing
Enemies: A Love Story,
a tale about a Holocaust survivor with much less commercial appeal than a broad comedy. Once again, Disney didn't oblige. (Joe Roth, the producer who had made
OffBeat,
agreed to make Mazursky's film a few years later.)

Down and Out in Beverly Hills
was a vulgar romp. If the Disney staffers who had held prayer meetings at the suggestiveness of
Splash
now suspected Disney was damned, all doubt must have been eliminated when Katzenberg pursued the vampy Madonna to star in the studio's next film,
Ruthless People
. In the end, Katzenberg was too much of a tightwad to cast the singer, who demanded a million-dollar fee. Instead, he signed Midler for a $600,000 encore. But the idea of hiring Madonna showed that life had changed forever at Disney. In one letter to the editor, some angry
Los Angeles Times
readers suggested that the notion of Madonna in a Disney movie was “a little like Fritz the Cat co-starring with Mickey.”

Disney hired the Zucker brothers and their partner, Jim Abrahams—the
team that had done
Airplane!
at Paramount—to direct. When the film was screened, executive David Hoberman laughed until he hurt. Early the next morning, he and Jerry Zucker excitedly showed the picture to Eisner and Katzenberg. Perhaps it was too early in the day for comedy, but the two greeted the film with painful silence. Zucker and Hoberman took a walk around the lot, utterly deflated. Their hopes were buoyed when the picture had a well-received test screening in Santa Barbara. In fact,
Ruthless People
would beat
Down and Out in Beverly Hills
with a $72 million gross.

Eisner was a great enthusiast but often he responded glumly to projects that would turn out to be hits. Just as Eisner hadn't much cared for
Grease
or
Flashdance
at first, he laughed only once during a preview of Arthur Hiller's
Outrageous Fortune,
a Shelley Long–Bette Midler comedy. He was silent until the film ended and then turned to Katzenberg. “Burn the negative,” he said. Eisner was naturally a pessimist—and maybe he held back to drive his staff harder. But Hoberman felt that Eisner possessed a kind of “negative brilliance.” If he raved about a project—as he did about Paramount's almost unreleasable
White Dog
—maybe it was time to worry.

Like so many Disney projects,
Ruthless People
ended with a successful film but a ruptured relationship. Just like Mazursky in the wake of
Down and Out in Beverly Hills,
the Zuckers were upset that the studio never showed its appreciation for their efforts. “We'll get no net profits from
Ruthless People,
” Jerry Zucker said after the film was released. “We won't go on
60 Minutes
and complain that the big, bad studio didn't pay us. We signed that contract. But we didn't want to sign that contract again.”

By the time
Ruthless People
opened, the new Disney was a hit—ruthless or not. Eisner, who had modestly or cautiously declared that his long-term goal was to bring Disney “into parity with our sister entertainment companies,” was moving beyond parity with blinding speed. The stock that had traded below $60 per share when Eisner and Wells took over eighteen months earlier had climbed to $120. And the numbers would only get better.

 

ONE AREA WHERE
Eisner and Katzenberg were slow off the mark was television. At first, Eisner tried to apply the same principles of thrift that were working so well in the movie division. But television was different. Writer-producers wielded a lot of power. Eisner quickly passed on deals with Stephen Bochco, who was about to launch
L.A. Law,
and Jerry Per
renchio, whose Embassy Communications held the rights to
All in the Family, Maude,
and
The Jeffersons
. In both cases, Eisner thought their prices were too rich. Embassy was about to produce the lucrative
Who's the Boss?
and the company became an extremely reliable profit center for Columbia Pictures, which bought it in 1985.

Disney did make a deal with Paul Junger Witt, Tony Thomas, and Susan Harris. They brought the hit series
The Golden Girls
(Disney distributed the show but owned only a piece of it). Disney was so hungry for programming, Witt says, that he and his partners were able to cut an exceptionally favorable deal. But several years later, Disney felt the deal was simply too generous and Witt-Thomas left for Warner. Witt says the parties almost came to terms but the discussions soured when Disney wanted to lock up the contract for longer than Witt-Thomas did. This was a frequent Disney negotiating point, and it didn't ingratiate the studio with many television writers and producers.

In that first year, Eisner seemed to have forgotten whatever he had learned in his years at ABC. “Disney was a laughingstock in the television community, particularly since Michael had been so strong in television,” says Dean Valentine, who spent nine years at Disney and eventually ran its television division. “Michael and Jeffrey would troop in [to network meetings] with great fanfare and make these terrible presentations.”

While his top television staff brought in glossy binders to make their presentation, Eisner would unexpectedly offer his own ideas. In one meeting, a former network executive remembers, “Michael pulled some napkins out of his pocket from Arby's and he'd written down a bunch of his ideas—‘What if we do this?' It was incredible. It fundamentally didn't leave his employees anything to do.”

Back at the studio, executives had other reasons to feel frustrated. “Michael believed very strongly that he could will television to happen the way he wanted it to happen—by using low-cost writers,” Valentine says. Television chief Rich Frank thought the instant success of the
Golden Girls
series created a misconception in Eisner's mind. “Michael thought everything should be like that,” he says. “We wouldn't go out and spend a lot of money on writers…and we would not be willing to [risk as much money on] a show as others would. So it discouraged people coming to us. It was very difficult.”

When Disney got a show on the air, it tended to be a brief victory. Five of the company's first seven shows were instant failures. Efforts to use stars
who were not in their first bloom—such as Ellen Burstyn and Alan Arkin—weren't as effective in television as they were in film. Only
The Golden Girls
and a spinoff,
Empty Nest,
stayed on the air.

Eventually, Disney loosened its purse strings considerably. Katzenberg and Frank convinced Eisner to go on a spending spree of $25 million a year for five years. That produced several deals—including one with Matt Williams, a writer who had helped create the hit sitcom
Roseanne
. Williams delivered Disney its one huge hit—
Home Improvement
. The studio began to perform better in television, with other moderately successful shows including
Ellen, Blossom, Dinosaurs,
and
Boy Meets World
. But the studio never became a juggernaut, and Eisner, after perusing the results of a ten-year study of Disney's performance, reportedly complained that the company could have made about as much money overall by investing in certificates of deposit.

Disney did revive its Sunday-night movie, though the show was a poor performer—decimated by the unstoppable
60 Minutes
. But getting the show on the air was a moral victory for Eisner. Eisner and Rich Frank cut the deal with Fred Pierce, Eisner's former boss at ABC. Frank remembers that Eisner had a bad back at the time. In the midst of one meeting, Pierce started offering advice about exercises that could help. Frank looked on with surprise as the two men stretched out on the floor for an impromptu training session.

There was a good deal of discussion about who should host the program, acting as the new voice of Disney. Should it be Cary Grant, Lowell Weicker, Walter Cronkite, Roy Disney, or Mickey Mouse? “Walter Cronkite made no sense,” says Marty Katz, who ran physical production at Disney. “Cary Grant wasn't going to do it. Roy looked like Walt, but he couldn't talk.”

One day Eisner returned from Orlando and called Katz into his office. “I want to show you something,” he said. He showed Katz a tape that Eisner had made secretly of himself talking about the studio. “What do you think?” Eisner asked.

“It's out of focus, the lighting is horrible—it doesn't do you justice,” Katz replied diplomatically. “Do you want me to do a better version?”

“Tell me what you think,” Eisner persisted.

“Others do it,” Katz said. “You could be brought to be as good as them.”

“You think so?” Eisner replied. “What about my hair?” Eisner's hair—always troublesome—was abandoning him.

“We do this with movie stars all the time,” Katz said.

“Keep pursuing other names,” Eisner said at last. “I've been talking to Jane…. I don't want to do it but I guess I have to do it.”

Eisner maintained that he took on hosting duties with great reluctance, but some studio executives had the distinct impression that he wanted to do it from the start. The taping of a test reel was to be secret, so Katz assembled a crew that included Jane Eisner as executive producer and one of his executive team as an assistant director. Jane sat in a trailer and watched as Eisner attempted take after take. She was not bashful with her criticisms. “We finally got Michael to stop moving his hands so much, to feel more relaxed,” Katz says. The consensus was that Eisner could pull it off. He recruited Michael Kay, who had done political commercials for Senator Bill Bradley, on the theory that Kay knew how to make a nonprofessional look good on television. He also went on a diet, dropping about fifteen pounds.

Some were put off by Eisner's decision to step into Walt's role as host of the program. “Among a lot of Jews in my generation, there's a tremendous anti-Disney feeling,” says
Star Trek
producer Harve Bennett. “How a New York Jew can say, ‘I'm going to be Walt Disney incarnate'—that defines a kind of ego need.” Though Bennett thought it took guts to try, he also found the exercise to be “like jerking off in public.”

But others believed that Eisner saw the role as rightfully his. “Michael had dreams of being Walt Disney the Second,” says one of his former colleagues. “That was what he saw for himself.”

Television executive Valentine says Eisner may have expressed a wish to be the second Walt, but that wasn't exactly what he meant. “There were many things about Walt Disney that Michael wanted to replicate: his status, his creative-figurehead role,” Valentine says. “But I don't think there's any room in Michael to want to be anything other than Michael. He wanted to be Michael Eisner the First—not the second of anything.”

 

IT DIDN'T TAKE
Eisner long to get into serious bonus territory. In his first full year as chairman and chief executive, Disney reported a 15 percent return on shareholders' equity, almost double the previous year's performance. With his salary and bonus, Eisner cashed in that year to the tune of $2.12 million. The following year, his bonus alone was worth $2.6 million, bringing his total compensation to $3.4 million. And that wasn't counting
the value of his stock options. The numbers continued to soar as the company's performance broke one record after another.

It took until 1988 to demonstrate the real magnitude of Eisner's deal. That year, he became the $40 million man—America's highest-paid corporate executive. Aside from his salary and $6.8 million bonus, he had realized $32.6 million from the company stock-options program—and he still had a paper profit of $50.5 million on his remaining options. Right behind him was Wells, who netted $32.13 million.

Eisner must have been deeply satisfied to see that his compensation put him on the best-paid list three spots ahead of Martin Davis, who cleared a paltry $16.25 million. And Barry Diller, who was still working for Rupert Murdoch at Fox, didn't make the list at all.