Chapter 71 – The Disney King
After Aaron Anderson left, Disney President Frank Wells stepped into Michael Eisner's office.
"How was the kid?" Wells asked.
Eisner leaned back, his expression unreadable. "Smooth. Ambitious. Strong-willed, maybe even controlling. But confident—very confident."
Wells nodded. "That's high praise, especially considering how young he is. And I'll admit, his instincts aren't bad."
"Forget him for now," Eisner said, frowning. "He's cozying up to Sony these days. Ever since the Japanese conglomerates entered Hollywood, the balance has shifted. Columbia–TriStar alone is planning to release more than forty films this year. If Matsushita finalizes its acquisition of MCA–Universal, competition will only intensify."
"Exactly," Wells agreed. "Columbia–TriStar has been striking distribution deals left and right with independent producers. They're flush with cash, and they're willing to give filmmakers unusual freedom. No wonder so many are lining up to work with them."
Sony's deep pockets had upended Hollywood's compensation system. The old guard studios disliked it, but there wasn't much they could do.
Eisner's tone flattened. "What's the status on Jeffrey's contract renewal?"
Wells shook his head. "He's deeply dissatisfied with his current compensation—especially that two-percent share of film profits we agreed to years ago. By Disney's accounting, most films still look unprofitable. Which means no bonuses, no options. He's not buying it."
Disney's financials told another story. Since Eisner, Wells, and Katzenberg had come over from Paramount, the studio had soared. The animation renaissance was in full swing, the home video market was booming, and Disney's film division was the most profitable in Hollywood.
A key player in that surge was Bill Mechanic. After joining from Paramount, he had spearheaded international distribution and home entertainment. He ended Disney's reliance on Warner Bros. for overseas releases by establishing Buena Vista International. On the home video side, he pioneered direct sales partnerships with big-box retailers, turning VHS into a goldmine.
The results were staggering: box office climbing, VHS sales exploding, and merchandise profits pouring in. Eisner himself, between salary, bonuses, and stock options, was now earning more than $50 million annually.
By contrast, Katzenberg's pay was mostly fixed salary, with little tied to Disney's soaring profits. That two-percent profit participation was supposed to bridge the gap, but Disney's creative accounting made it worthless. He was furious.
"He wants seventy-five percent of your package," Wells said evenly. "Salary, bonuses, stock options—the lot."
"Impossible," Eisner cut him off without hesitation.
"I'll keep negotiating," Wells said carefully. He knew Eisner would never concede, but Katzenberg was not someone easily dismissed. That profit-participation clause was in writing. If Katzenberg chose to fight it in court, it would be messy.
Convincing him to extend his contract and drop the two-percent claim was critical.
Wells glanced at Eisner. Could the Disney king be moved? The studio's animation revival had Katzenberg's fingerprints all over it. Losing him might derail everything.
This year, Katzenberg had also shepherded Disney's most successful live-action film to date—Pretty Woman.
"Euro Disney is the group's top priority right now," Eisner reminded Wells. "It opens in two years. The timeline cannot change. And keep an eye on the boardroom. Some of our executives are getting restless."
As Disney's Chairman and CEO, Eisner commanded near-absolute authority. Backed by major shareholder Sid Bass and the Disney family's Roy E. Disney, with Frank Wells firmly at his side, his word was law inside the company. No one dared challenge the "King of Disney."
But Pretty Woman's unexpected triumph, contrasted with Dick Tracy's costly disappointment, had emboldened a few voices in management. Some began to question Eisner's judgment, whispering that perhaps he wasn't always right.
The King of Disney would tolerate no such heresy. His authority was not to be tested.
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Leaving Disney, Aaron Anderson drove to Jennifer Connelly's home in the Dell neighborhood of Hollywood.
"You just came from Disney," Jennifer said, handing him a glass of water. "Do they have a project they want you on?"
Aaron shook his head. "No, they're sniffing around about pulling me under their wing—short term."
"And what do you think?" she asked.
"Not interested. I'll build my own distribution arm, when the time is right."
With his memories of the future, Aaron knew distribution was the key. Production companies like Carolco or Castle Rock could develop ambitious projects, but without distribution, they always depended on the big studios for cash. Independent outfits that tried to do both—produce and distribute—often collapsed under the weight. Orion Pictures was the cautionary tale.
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Meanwhile, across town at CAA's Beverly Hills headquarters, agency chairman Michael Ovitz had just seen off Masahiko Hirata, Panasonic's Executive Vice President and CFO, who represented company president Akio Tanii.
The planned Panasonic acquisition of MCA was running into fresh obstacles.
Sony's purchase of Columbia–TriStar had gone through the previous year—Heisei Year 1. Now, in Heisei Year 2, Panasonic hoped to follow suit. But U.S. political and public opposition to Japanese takeovers of Hollywood was growing stronger.
CAA president Ronald Meyer knocked and entered. Seeing Ovitz slumped in his chair, he sighed. "Barry Levinson's new project Bugsy—TriStar is willing to finance it. But Warren Beatty cannot be the star. Absolutely not."
Ovitz rubbed his forehead. "Then replace him. Quickly. Eisner was furious over Beatty's disaster with Dick Tracy. Disney lost heavily on that film. Eisner called him a washed-up Hollywood boar. To smooth things over, I pitched Disney another mob biopic—Billy Bathgate. Promised them Dustin Hoffman in the lead. That calmed Eisner down a bit."
CAA would even stack the cast with cameos from its A-list talent to sweeten the deal.
"As for Warren Beatty," Ovitz sneered, "let the junior agents handle him. He's no longer entitled to premium resources."
Meyer nodded. "TriStar's on board with Bugsy, but there's a problem. For Hook, Mike Medavoy insists on Julia Roberts as the female lead. He's turned down every actress we've put forward from CAA."
"Fuck," Ovitz spat, slamming the desk.
The name stung. Julia Roberts should have been CAA's next marquee star. Instead, thanks to Beatty's blunders, she had jumped to ICM—becoming their prized client.
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