The Keys to the Kingdom (50 page)

But Ovitz was pushing fifty and ready to make a move. It appeared that Matsushita's decision to sell MCA in 1995 might provide an opportunity. Speculation began at once that if there were a change in management at MCA, Ovitz—long an ardent admirer of the company—would love to take over. Some still doubted that he would leave his entirely autonomous perch at CAA, where he wielded influence over all the studios. Even Eisner joked that he wielded only “one-eighth as much” power as Ovitz.

But after Edgar Bronfman emerged as the successful suitor in the MCA deal, all Hollywood assumed that the hiring of Ovitz was certain. Lew Wasserman and Sid Sheinberg made no secret that they were horrified. During their struggle with Matsushita, Ovitz had assured them that he was taking their part and promoting their interests with the Japanese. Now they had learned that Ovitz had at least known about Seagram's interest in buying MCA and might even have helped instigate the deal. “I had at least one, maybe two conversations where Mr. Ovitz purported not to know what was going on when he knew goddamn well what was going on,” Sheinberg says.

While Ovitz sympathizers say he was awkwardly situated and couldn't reveal the truth, Sheinberg thought Ovitz should have dropped out of the discussions and given him and Wasserman some warning of an impending sale. “He would have had no problem with Matsushita, no problem with Seagram, and no problem with us,” Sheinberg says. “He really doesn't know what it is to be honorable and a friend.”

It was a particular humiliation for Sheinberg because David Geffen had warned him that Ovitz was not to be trusted. “I was the guy defending Ovitz in the councils of DreamWorks,” Sheinberg remembers. “When he did what he did to us, they just turned to me and said, ‘Putz!'…They were probably thinking to themselves, ‘How can this guy be such a fool?'…And I guess I was. I really thought Mike Ovitz was a friend of mine.”

Wasserman and Sheinberg's enmity toward Ovitz put Edgar Bronfman Jr. in a tricky situation. It would be unbecoming to show disrespect to Wasserman and Sheinberg—and impolitic. If there were any hope of a
DreamWorks deal—which would be a nice way for young Bronfman to announce himself in Hollywood—alienating Sheinberg was out of the question. At the same time Bronfman was as enamored of Ovitz as anyone who had ever bought into the “most powerful man in Hollywood” myth, and he wanted his own man in charge at MCA.

On April 20, 1995, Ovitz officially declared that there were “no talks and no negotiations” with Bronfman. But by the end of May, it became clear that Ovitz was, in fact, in heavy negotiations for the position. Bronfman knew Ovitz lacked corporate experience, but he felt the agent had a good feel for the industry and its future, and he was convinced that Ovitz would surround himself with a strong team.

Hollywood had always known that Ovitz would have to make the deal of deals. In fact, the elder Bronfmans (Edgar Jr.'s father and his uncle Charles) questioned whether Ovitz was worth the kind of rich package being discussed. The value of the package he sought was said to be as much as $250 million. “What he was asking was ridiculous,” Edgar Sr. says. “I said to my son, ‘He may be better than anybody else but he's not that much better.' My brother said [the same]. I said, ‘Edgar, I've always backed you but not on this.'…Michael sells himself very well. If it had been a reasonable deal rather than an unbelievable, monstrous deal, he probably would have gotten the job—whether Sid and Lew liked it or not.”

At first, the younger Bronfman figured that Ovitz was simply starting from a high number. Among friends, he compared Ovitz with a teenager who asks his parents for a Rolls-Royce expecting to get a Volvo. But Edgar Jr. came to realize that Ovitz was serious. At the same time his own concerns were growing. He began to see how little Ovitz knew about running a public company, and he was becoming weary of Ovitz's paranoia. He found it trying that Ovitz would initiate even a trivial phone conversation by asking, “Are you on a hard line?” Some at CAA later speculated that Ovitz overplayed his hand out of anxiety. An agent is “Teflon,” said one former agent. He could put a client in a movie for $20 million, and if the film tanked, no one would blame him. But an executive would be judged on specific criteria. “He realized that he would be so exposed,” Ovitz's former colleague said.

Finally Bronfman backed away—explaining to Ovitz that his father and brother vehemently objected to his terms. Edgar Sr. says his son later recounted the conversation to him: “Michael got terribly excited and said, ‘But then you're not in charge! You're telling me your father and uncle
won't go for it.' Edgar said, in a calm voice…‘That's not the point. My father and my uncle are very large shareholders in this company.'”

In the most public and humiliating fashion, the deal finally collapsed. “This may be the luckiest thing that ever happened to you,” Edgar Sr. told his son. “You'd have been at each other's throats in six weeks.”

And so Ovitz committed one of the most spectacular balks in the history of the industry. Whatever the reason, every concession he had exacted from Bronfman left him wanting more. “He said to me, ‘Who are they going to get? It's only me,'” said a Hollywood executive involved in the talks. “And they left…. He makes people not want to be with him anymore. He had everything he wanted. It wasn't enough.”

Ovitz tells the story differently. He dragged out the talks, he says, because, in his heart, he was reluctant to leave CAA. “I just didn't want to do it, and I carried the negotiations on too long,” he concedes. “I overplayed it. It was a mistake to carry it out for so long when I knew I wasn't going to leave CAA.” In the end, he claimed, it was he who called Edgar Jr. and backed out of the discussions.

 

THE END OF
the Seagram negotiation left Hollywood agog and it left Bronfman without management. There were reports that Ovitz had met with his colleagues in CAA's screening room and freshly committed to his life at CAA, whereupon his subordinates stood and cheered. But it wasn't quite that simple. Ovitz's associates at CAA had learned a lesson about their leader. Despite rumors in the past that Ovitz might leave, they had chosen to believe his pledges of eternal loyalty. Now they had seen him walk to the door and put a foot out.

It was an uneasy reunion, particularly for five young agents—Richard Lovett, “Doc” O'Connor, Kevin Huvane, Jay Moloney, and Brian Lourd—known around town as the Young Turks. These were hungry youths who had steeled themselves to the idea that they just might have to run things without Ovitz. At news of the likely departure, they had jetted off to a private island in the Caribbean for Memorial Day weekend to ponder their future (only Huvane participated from afar, since he had gone to San Diego instead of joining the others). They considered their options, including setting up a competing shop. They decided to stay and run CAA. Now they were not entirely pleased to learn that the majority shareholder was returning—especially because none of them owned any stake in the agency at all.

Then came the news that Meyer was leaving to work for Bronfman. Ovitz had set something in motion that he couldn't control—and he was the one who had been stranded. “After Ronnie left,” said a former associate of Ovitz, “Mike was left with a coat and a tie and his underwear.” Since the mid-1980s, Ovitz had gradually withdrawn from client hand-holding duties that most agents dread. Meyer had taken on most of the task of administering CAA. (He was fond of saying that he was like the Harvey Keitel character in
Pulp Fiction,
who mops up when the brains got splattered.) “Ronnie was Mike Ovitz,” said one veteran producer. “It was
The Wizard of Oz
. Who's that behind the curtain? Ronnie.”

A return to the direct supervision of CAA, dealing with the petty complaints of spoiled movie stars, was the last thing Ovitz wanted. There were rumors that he was offering the Turks stupendous sums to stick around. And for days, Ovitz applied a “full-court press” on Meyer to change his mind, as a former CAA executive put it. Meyer wouldn't budge. Instead, he urged Ovitz to rethink his own career path. “Quit,” he said. “Go sit on a beach…. Somebody will come and get you.” Soon after Meyer left, Sylvester Stallone—a longtime client—started to get agitated. Ovitz called a Hollywood veteran and said, “What do I do with this guy?”

“Mike, you gotta hold his hand,” the friend replied.

“I can't do that,” Ovitz said.

It was then, at his lowest moment, that his old friend Michael Eisner beckoned.

According to Ovitz, the pivotal conversation came on a Friday afternoon early in August 1995 as the two men and their wives hiked in Independence Pass near Aspen. This time, Ovitz recalled later, Eisner suggested that Ovitz would run the company on a day-to-day basis while Eisner became something of a figurehead. “We are going to be partners,” Ovitz remembers Eisner telling him. “I'll handle the ceremonial parts and you will handle the operational side. You will make the strategic decisions for the company.” And within a few years, Eisner supposedly continued, Ovitz would succeed him as chairman.

Perhaps Eisner actually said those words, or maybe Ovitz simply heard what he wanted to hear. Either way, Ovitz decided that the number-two job at Disney might be the right thing for him after all. True, he had to take the position for far less money than Bronfman had offered to pay. But there were lucrative stock options to be had. And he considered that Disney
was a much bigger company than MCA—a huge company after the acquisition of Capital Cities/ABC. And that ABC deal ensured that there was more than enough work for two men. Eisner had been through quadruple-by pass surgery. Ovitz had seen him so weak that he could barely get out of his chair. There might be room for Ovitz to make his mark after all.

T
HE DISNEY EXECUTIVES
arriving at Eisner's Bel-Air home on a Sunday afternoon in August 1995 were stunned, angry, and confused. That morning, Eisner had broken the news to his top aides—chief financial officer Stephen Bollenbach, general counsel Sanford Litvack, and board member (and Eisner's personal attorney) Irwin Russell—that he intended to hire Ovitz as president of Disney. When Eisner had phoned with the news, Bollenbach had expressed serious dismay. “Why are you doing this?” he kept asking Eisner. He didn't know Ovitz and he didn't want to; he worried aloud that introducing an outsider would damage the chemistry of the Disney group. “You'll take a really good management team and destroy it,” Bollenbach warned.

If, as Eisner suspected, Bollenbach had imagined himself the heir at Disney, the arrival of Ovitz would be unwelcome news. There had been no great affection between Bollenbach and Sandy Litvack, now the chief of corporate operations and a rival for Eisner's ear. But Ovitz presented a problem to both men. Bollenbach and Litvack were united, for once, in their horror.

Eisner explained that the idea of hiring Ovitz had hit him during meetings at ABC. “You know,” he said, “I always knew how complicated this [deal] was. But it's just come to me how much there is to do. I can't do it all myself.” He needed someone to share creative responsibility for the combined Disney-ABC.

Bollenbach pointed out that Ovitz had no experience running a major public company.

“It's not like he doesn't know about business,” Eisner said, mentioning Ovitz's twenty years running CAA. “He's run a big company.”

“That's not a big company,” Bollenbach shot back. “It's a tiny company.”

Seeing that Eisner had made up his mind, Bollenbach changed course,
suggesting that Disney form a three-man office of the president consisting of himself, Litvack, and Ovitz. Eisner said no; he had seen it tried at other companies—including the then-chaotic Sony Pictures—and it always looked like a “display of weakness,” as if the CEO couldn't decide on a chain of command.

“Well, I won't report to him,” said Bollenbach, whose contract explicitly stated that he would be supervised only by Eisner. Litvack—the fifty-nine-year-old chief of corporate operations who had emerged as Eisner's consigliere after Wells's death—said he wouldn't, either. He and Bollenbach would overcome their previous mutual antagonism to form a daunting welcoming committee.

During this awkward meeting, Ovitz arrived. “We're certainly prepared to work with you,” Bollenbach told Ovitz. But it was clear that he and Litvack did not intend to work for him.

Ovitz was alarmed. “[Eisner] kept assuring me, ‘Don't worry about it. You're going to be the boss,'” he says. When Bollenbach and Litvack refused to report to him, Ovitz expected Eisner to take his part. “I was under the impression that he'd already greased that wheel,” he says. “I sat at the table and I kept looking at him, waiting for him to say, ‘You guys are reporting to him.'” Ovitz and Eisner excused themselves and spoke privately. “We'll work this through,” Eisner told him. “Let's just get through this meeting.” Ovitz didn't challenge Bollenbach or Litvack.

The news that Ovitz was coming aboard did not go over much better with Joe Roth, the studio chief. Roth was on vacation in Martha's Vineyard when Eisner called to break the news. When Eisner told him that Ovitz was coming to the company, Roth was shaken. “We better go take a walk,” he told his wife. “This is not going to work.” Roth resolved to go to Aspen, where Eisner had now gone, to express his concerns about the new arrangement.

Roth thought he should have seen it coming. A few weeks earlier, after the MCA negotiation had collapsed, Ovitz had called Roth and surprised him by sounding depressed. It wasn't like Ovitz to show that side of himself. Offhandedly, Roth had said, “Why don't you come here and be president?” Ovitz had replied: “Nobody asked.” Roth realized that he was being asked, in Ovitz's indirect way, to send a message to Eisner. So he had done so. Eisner didn't sound surprised to hear of Ovitz's call. Now, a month later, Eisner called Roth to say that Ovitz was on his way in.

Even though he had been forewarned, in a way, the whole arrangement
seemed to Roth like a freak development, and one that could hardly bode well for him. When he got to Aspen, he told Eisner, “The area in which the guy has become famous is in my area. And we operate the business from a completely different point of view. At Fox, I never bought packages. I developed material and hired talent later. And I'm afraid he's going to try to change the business I'm running.”

Eisner assured Roth that Ovitz's goal was to make it on the corporate side of the company. In the last several years, Ovitz hadn't even been that interested in the movie business, Eisner pointed out. At that point Ovitz joined the two for lunch and offered further assurances that he had no intention of meddling in Roth's affairs at the studio. Privately, Roth still told Eisner, “I'm concerned this isn't going to work.”

“It has to work,” Eisner replied. If Ovitz caused Roth problems, Eisner suggested, Ovitz would be the one to pay.

Roth returned to Martha's Vineyard, where he found a message from entertainment attorney Jake Bloom, calling from a boat in Italy. Roth, already annoyed that his vacation had been disrupted, reluctantly returned the call.

“I'm calling on behalf of Brad Grey,” Bloom said when Roth reached him. “Mike [Ovitz] has called. He's going to buy [Grey's] company.” Grey was a partner in the Brillstein-Grey television production company, with shows including the Garry Shandling program on HBO. Bloom said Grey wanted a film production deal just like Roth used to have before he ascended to studio chairman. That was asking a lot. Roth's deal had given him “puts,” the right to make certain films without the studio's approval.

Roth called Ovitz. “What's going on?” he demanded.

“We can give him a Caravan deal, right?” Ovitz asked.

Roth blew up. “Nobody gets ‘put' pictures!” he said. “[Grey] is a manager! He's a packager! You're going to give him the opportunity to make what he wants to make?”

Roth's next call was to Eisner. “Six hours,” he said.

“What do you mean?” Eisner asked.

“It took six hours for my fears to come true.”

 

AS EISNER AND
Ovitz met the press to announce that Ovitz was coming to Disney, many reporters thought Ovitz seemed uncomfortable. And Eisner couldn't resist tweaking the new number-two man at Disney. In one
phone interview, a reporter whose relationship with Ovitz had never been good suggested that confusion could be avoided during the conversation if questions to Ovitz would be addressed to “Mike” while Eisner could be referred to as “Michael.” Ever sensitive to his image, Ovitz said he didn't want to be called “Mike.” But Eisner cheerfully chimed in. “That's a good idea,” he said. “He's been trying to graduate to ‘Michael,' but I think he should be ‘Mike.'” Before the conversation ended, Ovitz had become so exasperated that he hung up. Eisner, remaining on the line, was obviously amused by his new number-two man's discomfort.

Asked in another interview if Ovitz was Eisner's successor, Eisner stopped short of the ringing endorsement that he might have offered a true partner. “We haven't discussed succession at the company,” he said, “but he's the number-two man, and if something happens to me, he'd be a pretty good candidate.” Of course, Ovitz didn't quite have the Frank Wells job. He was president of the company, but not its chief operating officer. And he didn't report to the board—he reported to Eisner.

Roth's fears were quickly justified. Within short order, he had deals with Sean Connery, Martin Scorsese, and the producing team of Frank Marshall and Kathleen Kennedy—all thanks to Ovitz's intervention. And those were just the ones that Roth decided to accept in the name of getting along. He managed to resist at least half a dozen others. To Roth, it seemed that Ovitz didn't understand that all these deals would simply pile on overhead without producing much. But he wasn't surprised. CAA was a business about taking a percentage of other people's earnings. Disney had a bottom line to worry about.

Ovitz remembers things differently. Roth was defensive in the beginning, he says, but Ovitz believed that Roth eventually recognized that he genuinely didn't want to be in the movie business. If Roth took deals with Scorsese and others, Ovitz says, that was his choice.

 

AS OVITZ TRIED
to settle into his new job, Roy Disney fired off a memo indicating that animation chief Peter Schneider would continue reporting to Eisner. Ovitz found himself almost immediately surrounded by entrenched and resentful coworkers, and he had no clearly defined responsibilities. “He struggled with just what he was supposed to do,” Bollenbach said later. “He had a huge problem setting an agenda. He just showed up for work the first day trying to make things happen.”

Ovitz also believed that he should keep in touch with his former clients, even though it became clear to him that his many conversations with the talent that he had represented irritated Eisner. “Eisner wanted me to cut them off,” he said later. “Eisner hates talent. When I took Cruise or Seinfeld to dinner, he criticized me. He didn't care about me winding down relationships.”

In those first months, Bollenbach claimed, he and Litvack looked on in dismay as Ovitz busied himself with a string of marginal projects. A scheme to buy the Los Angeles Lakers basketball team fizzled. An effort to buy the Seattle Seahawks football team blew up in Ovitz's face when other owners signaled that they might block the proposed move to Los Angeles. Ovitz's most ambitious project, a plan to consolidate Disney's far-flung operations in a single place where executives could mingle and exchange ideas, fell flat after staffers calculated that the lot would have to stretch across several miles. That would hardly foster the creative intimacy Ovitz envisioned.

“You can't suck up company resources doing things that are meaningless,” Bollenbach finally told Ovitz. He suggested that his new colleague sit down with briefing books and familiarize himself with the details of company operations. “Let's you and I take a day, a day and a half, and I'll go through all this with you, go through a budget, and you'll understand this business,” Bollenbach remembers telling Ovitz. “His response was, ‘Great. I can't thank you enough, let's set up a meeting.' That conversation occurred twenty-five times. And we never had the meeting. The point was, Michael Ovitz didn't understand the duties of an executive at a public company and he didn't want to learn.”

But perhaps Ovitz didn't think he would benefit much from a Bollenbach tutorial. Ovitz was being shoved into a corner and Eisner wasn't helping him to get out. “He had his minions go out and say I did a terrible job,” Ovitz says. “I found it interesting because I had no job to do.” So he searched for projects that would have an impact. And he felt he made some contributions. He worked hard at helping Disney put its stamp on ABC's Saturday-morning cartoon lineup, for example, and Eisner acknowledged his efforts in a handwritten note.

But such positive experiences were the exception. Roth wasn't the only manager who was resisting Ovitz's moves. Ovitz complained to Roth, in fact, that he wasn't being permitted to run anything. “This is a really unfriendly place,” he would say. He had warmed up to the animators and Imagineers, expressing admiration for their creativity. To him, it seemed as
though they were starved for recognition. He hoped to build a facility to house a warehouseful of cells and other animation artifacts; he didn't think the company's archives were being adequately cared for. But Eisner seemed disinterested and the plan faded away.

It wasn't long before Roth could see that the great partnership between Eisner and Ovitz wasn't working. “Why don't you give him a business to run?” he asked Eisner. But by now, Eisner's unhappiness was becoming manifest.

“If I thought that would work,” Eisner replied, “I would do it.”

 

OVITZ WORKED DESPERATELY
to seem as though he had Eisner's ear—literally. He often whispered to Eisner, both at meetings and public events. “That was Ovitz's little power trip,” Bollenbach said later. “It was so clear Michael Eisner was uncomfortable with it…. I told Eisner, ‘You gotta stop this. You look crazy.' He said, ‘I know. Someone else told me that, too.'”

Bollenbach, one of several at Disney who found their path to advancement blocked, didn't dally long: he left in February 1996 to become chief executive of Hilton Hotels. But when he was still at Disney, he said, he saw that Eisner quickly realized he had not hired an equal. “He was disturbed that Ovitz didn't come in and relieve him of the burden. He came in and created a new one. He was also offended by the Ovitz style in terms of staff: having six or seven secretaries, whatever he had; having drivers sitting outside when it was clear he wasn't going to need them. Eisner was horrified. He would tell me, ‘I've known [Ovitz] for twenty-five years, but after he came to the company, I don't know him at all.'”

But Ovitz's behavior was hardly surprising. He was just as mysterious and imperial as he had ever been. In many ways, Eisner's decision to hire Ovitz hadn't made much sense. He didn't seem to be in the market for a successor or even a close ally. One after another, managers had fallen out of favor and ultimately left as it became clear that there was no room for advancement. “[Eisner] is not looking for it to work,” says a senior Disney manager. “He's not out canvassing for someone to be his confidant.”

So why did Eisner hire Ovitz in the first place? It is a question that Ovitz has asked himself again and again without reaching a conclusion. Others also speculated on Eisner's motives. “Michael Eisner bought into the mystique of Michael Ovitz,” says a former Disney executive. “What
actually happened at the crux of it was that Eisner believed everything he came to read and hear about Ovitz—that he was really the biggest, bestest, smartest, most entrepreneurial person in Hollywood. That's what he thought he was buying. And he learned the truth within days.”