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Walt Disney Company - Disney war

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Walt Disney Company Disney war

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The dramatic inside story of the downfall of Michael EisnerDisney Chairman and CEOand the scandals that drove Americas best-known entertainment company to civil war. When You Wish Upon a Star, Whistle While You Work, The Happiest Place on Earththese are lyrics indelibly linked to Disney, one of the most admired and best-known companies in the world. So when Roy Disney, chairman of Walt Disney Animation and nephew of founder Walt Disney, abruptly resigned in November 2003 and declared war on chairman and chief executive Michael Eisner, he sent shock waves through the entertainment industry, corporate boardrooms, theme parks, and living rooms around the worldeverywhere Disney does business and its products are cherished. Drawing on unprecedented access to both Eisner and Roy Disney, current and former Disney executives and board members, as well as thousands of pages of never-before-seen letters, memos, transcripts, and other documents, James B. Stewart gets to the bottom of mysteries that have enveloped Disney for years: What really caused the rupture with studio chairman Jeffrey Katzenberg, a man who once regarded Eisner as a father but who became his fiercest rival How could Eisner have so misjudged Michael Ovitz, a man who was not only the most powerful man in Hollywood but also his friend, whom he appointed as Disney president and immediately wanted to fire What caused the break between Eisner and Pixar chairman Steve Jobs, and why did Pixar abruptly abandon its partnership with Disney Why did Eisner so mistrust Roy Disney that he assigned Disney company executives to spy on him How did Eisner control the Disney board for so long, and what really happened in the fateful board meeting in September 2004, when Eisner played his last cards DisneyWar is an enthralling tale of one of Americas most powerful media and entertainment companies, the people who control it, and those trying to overthrow them. It tells a story thatin its sudden twists, vivid, larger-than-life characters, and thrilling climaxmight itself have been the subject of a Disney classicexcept that its all true.;pt. 1. The wonderful world of Disney -- pt. 2. Disenchanted kingdom -- pt. 3. Disneywar.

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Picture 1
Also by James B. Stewart

Heart of a Soldier
Blind Eye
Follow the Story
Blood Sport
Den of Thieves
The Prosecutors
The Partners

Picture 2
SIMON & SCHUSTER
Rockefeller Center
1230 Avenue of the Americas
New York, NY 10020

Copyright 2005 by James B. Stewart
All rights reserved,
including the right of reproduction
in whole or in part in any form.

SIMON & SCHUSTER and colophon are registered trademarks of Simon & Schuster, Inc.

Designed by Dana Sloan
Picture Editor: Alexandra Truitt, pictureresearching.com

ISBN-13: 978-0-7432-8390-8
ISBN-10: 0-7432-8390-2

Visit us on the World Wide Web:
http://www.SimonSays.com

To Benjamin

Contents
Cast Members

THE DISNEY FAMILY

Walt Disney (19011966)

Lillian, his wife (18991997)

Diane Disney Miller, their older daughter

Ron Miller, former Disney chief executive, Dianes husband

Sharon Disney Lund, their younger daughter (19361993)

Roy O. Disney (18931971)

Edna, his wife (18901984)

Roy E. Disney, their son

AT TEAM DISNEY HEADQUARTERS, BURBANK, CALIFORNIA

Michael D. Eisner, chief executive officer (1984 ) and chairman (19842004)

Frank Wells, president and chief operating officer (19841994)

Michael Ovitz, president (19951997)

Robert Iger, president and chief operating officer (2000 )

Larry Murphy, chief strategic officer (19891998)

Peter Murphy (1998 )

Gary Wilson, chief financial officer (19841986)

Richard Nanula (19861994, 19961998)

Stephen Bollenbach (19951996)

Tom Staggs (1998 )

Sanford L. Litvack, general counsel and vice chairman (19912000)

Alan Braverman, general counsel (2003 )

Zenia Mucha, senior vice president, corporate communications

ON THE WALT DISNEY CO. BOARD OF DIRECTORS

George Mitchell (2000 ) and chairman (2004 )

Michael Eisner

Robert Iger

John Bryson

Judith Estrin

Ignacio Lozano Jr. (19812001)

Monica Lozano

Robert Matschullat

Leo ODonovan

Gary Wilson

Roy E. Disney (19842003)

Stanley Gold (19842003)

Reveta Bowers (19932003)

Thomas Murphy (19952004)

Sidney Poitier (19942003)

Irwin Russell (19872001)

Robert A. M. Stern (19922003)

Andrea Van de Kamp (19972003)

Ray Watson (19732004)

AT THE WALT DISNEY STUDIOS

Jeffrey Katzenberg, chairman (19841994)

Joe Roth (19952000)

Peter Schneider (20002002)

Richard Cook, chairman

David Vogel, president, Buena Vista Motion Pictures Group (19981999)

Nina Jacobson, president

Stan Kinsey, chief financial officer (19841986)

Jeffrey Rochlis, executive vice president, Imagineering (19841989)

Rob Moore, executive vice president, operations and finance (19872000)

Bill Mechanic, president, international theatrical and worldwide video (19841993)

AT WALT DISNEY FEATURE ANIMATION

Roy E. Disney, chairman (19842004)

Peter Schneider, president (19851999)

Thomas Schumacher, president (19992003); president, Buena Vista Theatrical Worldwide

David Stainton, president

John Lasseter, animator (19791983)

Ron Clements, animator

John Musker, animator

Howard Ashman, lyricist (19861991)

Alan Menken, composer

AT WALT DISNEY PARKS AND RESORTS

Richard Nunis, chairman (19911998)

Judson Green, president and chairman (19982000)

Paul Pressler, president and chairman (20002002)

Jay Rasulo, president

Al Weiss, president, Walt Disney World Resort

Philippe Bourguignon, chairman, Disneyland Paris (19931997)

AT WALT DISNEY IMAGINEERING

Martin Sklar, vice chairman and principal creative executive

Peter Rummell, chairman (19851997)

AT THE MEDIA NETWORKS GROUP

Anne Sweeney, co-chairman

George Bodenheimer, co-chairman

Angela Shapiro, president, ABC Family (20012003)

AT ABC ENTERTAINMENT

Steve Burke, president, ABC Broadcasting (19971998)

Steve Bornstein, president, ABC Inc. (1999); ABC-TV Network (20012002)

Patricia Fili-Krushel, president, ABC-TV Network (19982000)

Alex Wallau, president, ABC-TV Network (20002004)

Ted Harbert, president (19931996); chairman (19961997)

Jamie Tarses, president, ABC Entertainment (19961999)

Stu Bloomberg, chairman (19972002)

Lloyd Braun, chairman (20022004)

Susan Lyne, president (20022004)

Steve McPherson, president

AT ESPN, BRISTOL, CONNECTICUT

Steve Bornstein, president and chief executive officer (19901999)

George Bodenheimer, president

Mark Shapiro, executive vice president, programming and production

AT CONSUMER PRODUCTS

Steve Burke, executive vice president, Disney Stores (19861992)

Andrew Mooney, chairman

AT SHAMROCK HOLDINGS, BURBANK, CALIFORNIA

Roy E. Disney, chairman

Stanley Gold, chief executive

Michael McConnell, managing director

AT CAPITAL CITIES/ABC, NEW YORK CITY

Thomas Murphy, chairman and chief executive (19861995)

AT MIRAMAX, NEW YORK CITY

Harvey Weinstein, co-chairman

Bob Weinstein, co-chairman

AT PIXAR, EMERYVILLE, CALIFORNIA

Steve Jobs, chairman and chief executive officer

John Lasseter, executive vice president, creative

AT DREAMWORKS SKG, GLENDALE, CALIFORNIA

Jeffrey Katzenberg, co-founder

David Geffen, co-founder

Steven Spielberg, co-founder

AT INTERACTIVECORP, NEW YORK CITY

Barry Diller, chairman and chief executive

*Some Disney executives held multiple positions. Generally I have indicated only the most recent or, in a few cases, the position which figures most prominently in the story.

Prologue R oy E Disney pulled his red 1999 Ferrari into the parking lot of - photo 3

Prologue

R oy E. Disney pulled his red 1999 Ferrari into the parking lot of the Bodega Wine Bar in Pasadena. It was late on a Thursday afternoon, November 20, 2003, just a week before Thanksgiving. Roy loved the Ferrari, one of the few conspicuous indications that the modest, unassuming seventy-three-year-old nephew of Walt Disney was one of Americas wealthiest men. The car stood out in the Disney parking lot, where Roy had a space near Michael Eisner, Disneys chairman and chief executive. Because of the car, everybody knew when Roy was at company headquarters.

Roy hated the Team Disney building designed by noted architect Michael Graves at Eisners behest to serve as the Walt Disney Companys corporate headquarters. Though the monumental facade was leavened by bas-reliefs of the Seven Dwarfs in the pediment, Roy felt the building represented everything that was bloated and pretentious in the company that Eisner had created. As he did from time to time, Roy wondered what his uncle Walt would have thought. Walts office was still there, in the modest old animation building. Eisner had used it as his own office before moving to the new headquarters. Now Roy had moved into it, preferring it to the Team Disney building, so barren and vast that he joked he had to leave a trail of bread crumbs to find his way out.

In recent months Roys physical separation from Eisner and other top executives had become more than symbolic. Even though he had brought Eisner to the company almost twenty years ago, he now felt deceived and betrayed by him. Eisner had come to Disney after a dazzling career in programming at ABC and in movies at Paramount Pictures. But Roy now attributed Eisners earlier great successes to his partnerships with others: with Barry Diller at ABC and Paramount; with Frank Wells and Jeffrey Katzenberg in the early, amazing years at Disney. Since Wellss tragic death in a helicopter crash in 1994, and Katzenbergs acrimonious departure soon after, responsibility for Disney had been Eisners alone. In Roys view, the results had been disastrous. As the financial performance and creative energy of the company ebbed, Eisner had clung to power with a King Learlike intensity, convinced that he and he alone had the creative instincts and managerial skills to shepherd Disney into a twenty-first-century world of giant media and entertainment conglomerates. Indeed, Eisner claimed the mantle of Walt himself, appearing each week on TV screens in the nations living rooms as host of The Wonderful World of Disney, just as Walt had.

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