Magazine

Emperor Eisner


DISNEYWAR

By James B. Stewart

Simon & Schuster -- 572pp -- $29.95

(Readers'

Reviews below)

Editor's Review

The Good Impressively researched, sometimes riveting.

The Bad This is a 572 page book crying to be 350 pages; too much detail.

The Bottom Line The juicy details about bad behavior at the Magic Kingdom are astonishing and at times engrossing.

The showdown in the Walt Disney Co. (DIS) boardroom was quick and decisive. It was early 2003, as tensions were mounting over languishing earnings and top executives' failures. But Michael D. Eisner was on the offensive, intent on taking out Andrea Van de Kamp, a board member who was increasingly asking tough questions or siding with Stanley P. Gold, Eisner's harshest board critic. "You are a terrible director," Eisner scolded Van de Kamp in his office. "You're so loyal to Stanley. It's like you've carried his babies."

Staggered by the attack and the news that the nominating committee had purged her, Van de Kamp, a high-powered Los Angeles fund-raiser and head of auction house Sotheby's (BID) West Coast office, tried valiantly at a board meeting two days later to get reinstated. Arguing that she was being banished for exercising independence, she ticked off some of the low points of Eisner's tenure, including lavish exit packages to departing Disney executives, ABC's continued ratings funk, and the company's "terrible relations with Hollywood creative people because of Eisner's arrogance." But Eisner kept control of the board, and Van de Kamp was a goner.

Eisner's victory was short-lived, and soon Disney's board was hit with open revolt. Roy E. Disney and Stanley Gold, who had brought Eisner into the company in 1984, resigned and led the uprising that in 2004 prompted 45% of Disney shareholders to vote against Eisner. What remained of the Eisner myth had vanished. The man who had saved Disney from corporate raiders in 1984 had gone from prince to ogre -- an imperial CEO driven by vanity and insecurity to expel those who questioned him. Indeed, the man who became a corporate hero by reviving the company that Walt Disney built soon felt he was larger than the company itself -- ruling by fiat, pitting rivals against each other, destroying ties with longtime friends and associates, and putting himself above even Disney shareholders and its board.

Such are the images in James B. Stewart's DisneyWar, an impressively researched, sometimes riveting if overly detailed account of Eisner's rise and fall. It's also a story of the near destruction of an American institution. The book draws upon mountains of legal documents from Disney's high-profile lawsuits involving former executives Jeffrey Katzenberg and Michael Ovitz. Stewart, a Pulitzer Prize winner, got an inexplicably high level of access to a CEO under the heaviest pressure of his career.

So armed, the author chronicles Eisner's moves, misstep by misstep. Suspicious of underlings who achieved too much or won public attention, Eisner is shown as installing spies in the offices of key lieutenants and even secretly collecting e-mails to keep track of those he didn't trust. At various points, Stewart writes, Eisner threatened to fire longtime partner Frank Wells, even plotting to replace him with studio chief Jeffrey Katzenberg while at the same time asking superagent Michael Ovitz to help him force out Katzenberg. According to Stewart, Katzenberg's key crime was bringing Disney's animation studio back from near death, then getting too much press credit for it.

Along the way, Stewart suggests, Eisner's hubris harmed the company. Out of pique, he refused to negotiate the terms of Katzenberg's severance deal -- and partly as a result, the settlement ballooned from $60 million to $280 million. He overruled his theme park staff and built a European park outside Paris, in large part because of his college fascination with France, writes Stewart. Lagging attendance and French public resistance to anything Disney have hobbled the park ever since, nearly forcing it into bankruptcy at one point. Eisner thwarted efforts by Miramax co-founder Harvey Weinstein to buy potential bargains such as Bravo! and Independent Film Channel from Cablevision Systems Corp., then wildly overpaid for the ABC Family Channel. His largest mistake: buying ABC, which saddled the company with losses and years of internal management turmoil (CVC). Meanwhile, Eisner's golden gut was tarnished: The company turned away such hits as The Apprentice, CSI: Crime Scene Investigation, and Survivor.

For all of its copious detail, Stewart's book raises as many questions as it answers. How will the negative publicity affect the chances of Robert Iger -- the only internal candidate -- to succeed Eisner, who has said he will retire in late 2006? ("He can never succeed me," Stewart quotes Eisner as saying.) And what about Eisner? He tells Stewart the board "might come to me" with an offer of the chairmanship. Stewart's charges of Eisner's mismanagement won't help the CEO stick around. Of course, in Hollywood, nothing ever ends until the curtain comes down.

By Ronald Grover


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