The Keys to the Kingdom (30 page)

There were other friendly gestures. When Ovitz wanted to develop a vehicle for his martial-arts teacher, Eisner told his executives to give it a shot. No one particularly wanted to try. “Jeffrey wasn't too sure about the guy and neither was Eisner,” says former Disney executive Jane Rosenthal, who found the instructor “engaging and seductive.” The studio decided to let him do a scene from an upcoming movie—just as a test—with Burt Reynolds directing. “He wanted to do something from Shakespeare,” Rosenthal remembers. “They just wanted to see if he could run and jump.” The test never came together. Eventually, Warner took on the martial-arts teacher, and Steven Seagal became a star.

(Eisner was more helpful in launching the movie career of Arne Glimcher, an art dealer who sold to Ovitz as well as to Eisner. He allowed
him to produce
The Good Mother,
a 1988 film starring Diane Keaton and a still-unknown Liam Neeson. The project, directed by Leonard Nimoy, was a box-office failure.)

Early on, Eisner and Katzenberg decided to make
The Color of Money,
a follow-up to
The Hustler,
the 1961 film starring Paul Newman as pool player Eddie Felson. Fox had made the original but Newman had fallen out with the studio when it was acquired by media magnate Rupert Murdoch, who also owned the tabloid
The Star
. After Murdoch's publication wrote about the suicide of Newman's son, the chances that Newman would reprise Eddie Felson at the studio were nonexistent. Ovitz, who represented Newman, got the studio to give up the sequel and directed it toward Disney.

Ovitz also represented director Martin Scorsese and author Walter Tevis, who had written the novels on which the films were based. Another CAA client was Newman's costar, Tom Cruise, who was coming off the very successful Don Simpson–Jerry Bruckheimer film
Top Gun,
at Paramount. Cruise was on the rise but not yet a megastar. Nonetheless, Disney had to give up back-end profits to get him and Newman. In this case, Eisner and Katzenberg were willing to make the sacrifice. They were looking to bring a little of the old Barry Diller class to their lineup. “Saying you have a Paul Newman, Marty Scorsese movie was better than saying you had Bette Midler and Richard Dreyfuss,” observes Rosenthal, the executive assigned to shepherd the film.

Despite positive reviews, the picture lacked mass appeal. It grossed $52 million. At the time the company was minting money at the box office. Fifteen of its first seventeen films made money, from the modestly successful Barry Levinson film
Tin Men
to more profitable efforts like
Ruthless People
and
Outrageous Fortune
. It was an extraordinary run in a business where consistency is almost impossible to achieve. Even so, Eisner regularly reminded his troops that disaster might be just around the corner. “Don't get cocky,” he told film executives at staff lunches. “It'll all come down. Stay humble.”

E
ISNER AND KATZENBERG
still needed their first blockbuster. To get it, they broke their own rules again and plunged into a bidding war. Not surprisingly, CAA was in the middle. The agency was hoping to get Frank Price, then the head of Universal, to buy the rights to a French film comedy,
Trois Hommes et un Couffin,
as a vehicle for client Bill Murray. Price and Ovitz were strong allies and Ovitz was regularly shipping expensive CAA packages to Price—including several hits (
Tootsie
and
Out of Africa
) and a few dogs (
Legal Eagles
).

But producer Robert Cort, who had a deal at Disney and had just scored with
Outrageous Fortune,
wanted Disney to buy the rights. For this particular film, Eisner was willing to enter the fray. “It's a sitcom!” he exclaimed—which was high praise from him. How much more high-concept could a film get? The story was contained in the English title:
Three Men and a Baby
.

Eisner negotiated against Universal and his rival Frank Mancuso at Paramount. Even though rights for foreign films generally sold for less than $100,000, Eisner agreed to pay more than a million dollars. But key to the deal was the successful courtship of Coline Serreau, director of the French film, who had a great deal of influence over the sale. Eisner promised her a chunk of the profit plus the right to direct the American version.

Disney figured it could save money on
Three Men and a Baby
by casting three inexpensive stars—Ted Danson, Tom Selleck, and Steve Guttenberg—as the male leads. But Serreau resisted the idea of “Americanizing” the script. She simply translated her screenplay, laboring over each idiom. Disney had no intention of putting up with that. “They totally tortured her,” says Rosenthal. “There was always an intent to let her go, though nobody will ever say that.” She left, ostensibly for health reasons, and was replaced
by Leonard Nimoy. James Orr and Jim Cruickshank were brought in to rework the script.

Though the original plan was to open the film at Christmas 1987, Disney could see that the field was getting too crowded.
Terms of Endearment
director James L. Brooks, now reunited with Barry Diller at Fox, had
Broadcast News
coming out. Orion was releasing
Throw Momma from the Train,
a comedy with Danny DeVito and Billy Crystal. Disney decided to gamble by opening
Three Men
at Thanksgiving, a time that had been considered something of a dead zone in the movie business. Katzenberg told his staff that if the picture sold more than $4 million worth of tickets on the Saturday morning after the holiday, he would dance on his conference-room table. That Monday morning, Katzenberg had something to dance about—and dance he did.
Three Men
became the blockbuster that Disney sought, racking up an astonishing $170 million in the U.S. alone. The picture had cost a paltry $11 million.

A few weeks later, Barry Levinson brought Disney its second smash,
Good Morning, Vietnam
. The picture starred Robin Williams in a manic performance as maverick army disc jockey Adrian Cronauer. Ovitz had steered Levinson toward Disney when the director wanted to make
Tin Men,
the tale of rival aluminum-siding salesmen in Baltimore that teamed Richard Dreyfuss with Danny DeVito. Released in 1987, it wasn't the kind of commercial fare that Disney favored, but Ovitz had convinced Eisner that the picture could be made for a modest price. It cost $11 million to make and grossed $25 million. The film brought Disney a modest profit and was one of the studio's few well-reviewed efforts.

Katzenberg found the script for
Good Morning, Vietnam
languishing at another studio and brought it to Disney. But Ovitz didn't want Levinson to make the film. He was concerned that Robin Williams (also a client) wasn't enough of a draw to give the movie a big opening. And he didn't think the script was magical, either. (The film would depend on Williams's improvisational style.) But Levinson's producer, Mark Johnson, believed in the project. He exhorted Levinson to make the film and sealed the deal by taking Levinson to Thailand, where the film would be shot. Levinson loved the trip and had such a good time that he was only too glad to make a movie there.

In fact, Williams was perfectly situated to become a Disney star: his career was faltering and he was willing to work comparatively cheaply ($1 million plus a percentage of the gross, as opposed to the $2 million he had
commanded before). Despite his success on television, his film career had suffered from ill-chosen bombs like
Club Paradise
. Williams was also a recovering addict. With stars like Dreyfuss and Williams, Disney was getting to be known as Hollywood's answer to the Betty Ford Clinic.

Disney again defied conventional scheduling wisdom by opening the film in wide release during January, when most studios dumped their losers.
Good Morning, Vietnam
cost $14 million and became a $124 million hit. When it became clear that the film was going to be a smash, Katzenberg took Levinson and his producer, Mark Johnson, to dinner to celebrate. He handed them envelopes. Both were thrilled: this was Levinson's first blockbuster and it would hardly be surprising for Disney to show its appreciation by tossing him a huge bonus. But a peek inside the envelope showed that Disney was not about to depart from its customary cheapness. There was a check inside, all right, but it merely represented an advance against profits that the studio was sure to owe anyway.

When it came time to negotiate Levinson's next deal, Ovitz sought more money than Disney was willing to pay. The studio's counteroffer was hardly satisfactory. “I was insulted,” says Johnson. “I confronted [Katzenberg] with it and his answer was, ‘It's just business.' It was a ‘this is my nature' speech.” Levinson's next film, done for United Artists, was
Rain Man
with Tom Cruise and Dustin Hoffman. The film was not only an enormous commercial success, grossing $173 million, but Johnson was called to the podium that year to accept the Oscar for Best Picture. It was an honor that consistently eluded Disney.

 

EISNER WAS MORE
interested in the bottom line than making friends or winning gleaming statuettes. And the studio was generating 16 percent of the company's operating income—more than triple its contribution in the year before new management had arrived. And it was part of a bigger pie: in fiscal 1987, the company's operating income was $776.8 million, up dramatically from $291 million in 1984.

“How does one present an 80 percent increase in net income and pretend such an improvement is nothing special?” Eisner wondered in a folksy December 8, 1987, letter to shareholders in the company's annual report. He also noted that he had been tardy in writing that year's missive. “I'd like to say that the only reason for delay in writing this letter is my difficulty in communicating how well we have done without sounding too cocky, too
confident and certainly too proud!…But honestly, my delay has been caused by the numerous ice hockey games in which my 14-year-old son has played over the last two weeks in Southern California…plus college-interview time in four cities for my 17-year-old high school senior.”

Eisner also noted that his mother—who, as he said, had probably wondered in 1955 how her son would ever earn a living—surely was proud of the company's record-breaking performance.

This would be a year remembered in part, Eisner said, because the company had signed an agreement with the French government to proceed with the development of Euro Disneyland. The park, he promised, “will be a great place to visit.” He didn't mention the staggering cost overruns that Euro Disneyland had already incurred.

 

KATZENBERG HAD ASSEMBLED
an eclectic staff of executives. At first, Paramount veteran Ricardo Mestres—controlled and efficient—was the number-two man. Katzenberg filled out the team with David Hoberman, an agent from International Creative Management. A Southern California native, Hoberman had dropped out of UCLA and gotten a job in his father's office—which happened to be at ABC. When he started there as a mail boy, one of his duties was to get Barry Diller's yellow Porsche washed. Eventually, he became an agent. Mestres was one of his closest friends and helped him land a job as a vice-president of the Disney studio.

The baby-faced Hoberman was more emotional than the tidy, tightly wound Mestres—and not nearly as methodical. But he was good at wooing talent and affable enough to make Disney's toughness a little easier to take. “Ricardo's strength was story development and being to Jeffrey what Jeffrey had been to Michael: the best lieutenant,” says Marty Kaplan, then a creative executive in Disney's Touchstone film division. “David was much more the guy for talent relations, out in the world, the guy who could schmooze.” Together, the inside man and the outside man seemingly made a perfect match.

Katzenberg was as obsessive at Disney as he had been at Paramount. Jane Rosenthal, who joined the staff after working at Universal, thought Disney was like boot camp. She had just bought a new house, but she never had time to furnish it. “You'd go to work in the dark and come home in the dark,” she recalls. Meetings were often scheduled at 6:30
A.M
. and there were Sunday sessions, too. Now Robert De Niro's producing partner, Ro
senthal remembers Eisner, dressed in sweats, dropping by an early Sunday session and remarking, “I'm glad it's you and not me.” At one point, she says, “There was a bomb scare and Jeffrey didn't let us leave.”

Katzenberg often hired newcomers to the business. For instance, Kaplan was a former White House speechwriter and deputy campaign manager for Walter Mondale's unsuccessful 1984 presidential bid. Pete McAlevey had been a
Newsweek
reporter. And there was Lou Kamer, the eighteen-year-old son of one of Hollywood's plastic surgeons to the stars. None had any experience in the movie business.

Katzenberg had blossomed from the put-upon production chief who cheerfully sat on the toilet during overcrowded flights on the compact Gulf © Western jet. Rosenthal had the impression that the relationship between Katzenberg and Eisner had become “a partnership.” Kaplan concurs: “Michael gave Jeffrey lots of authority and Jeffrey used it. That didn't mean Michael stopped sticking his nose in Jeffrey's business. [But] Jeffrey ran that thing brilliantly. Michael saw it and appreciated it but was never disengaged from it.” Kaplan thought the relationship was “usefully antagonistic,” adding, “They were very up front about disagreements…. The tone was set by Jeffrey saying to Michael, ‘You're full of shit,' and Michael saying to Jeffrey, ‘No, you're full of shit.' It seemed healthy. I never thought that underneath there was a level of smoldering resentment. It was an ideal combative-buddy situation.”

Even though he seemed to have gained more of Eisner's trust, it was never clear to what extent Katzenberg had the authority to green-light a picture. (As a practical matter, no chairman at any studio would pull the trigger on a big-budget film without winning the support of the company's chief executive.) But by 1988, as Eisner was spending more time on corporate matters and the theme parks, he expressed confidence in his studio chief. “At Paramount, Jeff brought home the bacon,” Eisner told the
New York Times
magazine in February of that year. “Now he knows how to cook it.” His old boss, Barry Diller, also chimed in: “Jeffrey is doing the only great job in the motion picture business today because he has defined the business for himself.”

Hopped up on junk food and a few six-packs of diet Coke a day, Katzenberg networked furiously. (Katzenberg preferred diet Pepsi but switched when the Disney theme parks struck a deal with Coca-Cola.) He was developing a style, dressed in dark suits, and drove a black Mustang. He was also cultivating his own legend. In 1987, the
Wall Street Journal
described
him as “the most brutal, the stingiest, most compulsive—and possibly the best—deal maker in town.” Katzenberg was particularly appalled when the article illustrated the point by recounting a tale about a childhood watergun fight that ended when young Katzenberg pinned an opponent to the ground “and then squashed the other kid's hand into a pile of dog droppings.” Katzenberg wanted to be seen as tough but this was going too far. He denied the story vehemently.

Katzenberg worked when he played, shepherding various members of the Hollywood establishment on annual camping trips. In August 1989, for example, he took a group that included Don Simpson and various agents from each of the top shops to the Grand Canyon. These friendly competitors spent their time in hot pursuit of Katzenberg's most special guest, Tom Cruise. “It was hysterical watching these producers and agents chasing him around,” remembered one participant. “Then you had an agent from [CAA] making sure no one laid a hand on him. The poor guy could not go up in the woods and have a peaceful sit on the potty without somebody pursuing him.”

At one point the raft carrying Cruise, Katzenberg, Simpson, and screenwriter Nat Mauldin flipped over as they were navigating the treacherous Lava Falls. Mauldin took in lungfuls of water and “looked like he'd seen God,” said one observer. A fellow rafter said his first impulse was to find a phone. “When I saw Jeffrey flipping up in the air,” he joked shortly after the mishap, “I wanted to sell my Disney stock short!”

Katzenberg had indeed positioned himself as a key man at Disney. His staff was supposed to function as a well-melded fighting machine.
Ruthless People
director Jerry Zucker wondered fancifully whether Katzenberg “was so driven because of a small sled with ‘Katzenbud' written on it that was taken from him at an early age.”

Under orders from Katzenberg, Mestres sent a memo to Hoberman and Rosenthal that included a list of agents. In order to help “parcel up the town,” he said, each person was to mark an
A
or
B
next to the names to indicate the quality of the relationship. “We'll map out a complete strategy,” Mestres wrote. “It is essential that you keep [Katzenberg's] list confidential.” (It would hardly do to have the town know whom Katzenberg listed as a “B” relationship.) Each day, Katzenberg started with a list of names—from “Avildsen” to “Zucker”—and rolled through his “relationship” calls. Some days would be devoted to A-list, some to the B-list, some to “other.”