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Disney was also hobbled by its increasingly outdated notion of “family” fare, which had hardly budged in the face of the civil rights movement, the women’s movement, the decline of the nuclear family, and a soaring divorce rate. Disney would not produce an R-rated film. The same year as Tron, the lewd, ostentatiously sophomoric Porky’s grossed $70 million. Walker vowed that if audiences didn’t want the wholesome G-rated family fare identified with Disney, then the company simply wouldn’t make feature films. In 1983, the studio released only three pictures.
As the ultimate arbiter of “what Walt would have done,” Walker’s influence was pervasive. But Miller had been trying to break out of the creative straitjacket by carving out another brand name, Touchstone Pictures, for riskier adult-oriented fare. In 1962, he and Diane had watched To Kill a Mockingbird with Walt and Lillian at their home screening room. When it was over, everyone was moved, and Walt said, “I wish I could make movies like that.” Even Walt had felt constrained by the Disney brand. As he put it in one outburst, “I’ve worked my whole life to create the image of what ‘Walt Disney’ is. It’s not me. I smoke, and I drink, and all the things that we don’t want the public to think about.” Miller had vowed that someday he would make adult films at Disney.
Walker had resisted for years. “We have our image,” he insisted. But once Miller was chief executive, he’d relented. Miller established Touchstone, and tried to bring in some new blood to run it. His first choice was Michael Eisner.
Given his success at Paramount and the attendant publicity, Eisner was an obvious candidate for just about any studio but Disney, which had traditionally resisted hiring outsiders. But Eisner already had two projects under way at Paramount that he’d persuaded Disney to co-finance: a musical version of Popeye directed by Robert Altman and starring Robin Williams, and a medieval fantasy epic, Dragonslayer. Both were troubled projects that ended up losing money. Still, Miller liked Eisner, thought he had a good sense of humor and creative instincts, and asked him and Jane to join him and Diane for dinner at Ma Maison, home to celebrity chef Wolfgang Puck. Diane found Eisner charming, if a little overeager, like a puppy. Afterward they were standing outside, waiting for their cars. Eisner got a grin on his face and leaned toward Diane. “There’s something I’ve been wanting to ask you,” Eisner said. “Is he…”
Diane cut him off. “I know what you’re going to ask, and no. Dad isn’t frozen.” She couldn’t believe Eisner would ask her about the rumor that her father’s corpse had been used for an experiment in cryogenics, which she considered as credible as reports that Elvis was alive. In fact, she told Eisner, Walt had been cremated after dying of lung cancer in 1966.
Despite that jarring note, it was a pleasant evening. Miller liked Eisner, too. They had several subsequent meetings, and Miller suggested that Eisner come to Disney to run motion pictures and television. “Ron,” Eisner responded, “I’m bigger than you right now at Paramount. I make three times as many pictures and do really well. So if I come here, I want to be president and chief operating officer. You could be chairman and chief executive. I’d work for you.”
Miller seemed to like the idea; Walker was planning to step down as chairman the following year. But he realized it would be tough to sell Card Walker on the idea that an outsider could be COO of Disney. Several days later he called Eisner to report that Walker had objected. “You don’t know the theme parks.”
“You can handle the parks,” Eisner suggested. Miller suggested they meet with Walker.
When Eisner arrived, Miller and Walker had just been arguing about Splash, the first live-action film from Touchstone. While Splash was hardly another To Kill a Mockingbird, Miller also had in development more serious fare, like Country, with Jessica Lange, and The Journey of Natty Gann, with John Cusack.
But Splash, produced by a young Brian Grazer and directed by Ron Howard, was certainly breaking new ground for Disney. It starred Daryl Hannah as a voluptuous mermaid. Even though long blond tresses artfully concealed Hannah’s naked breasts, rumors about the film and its subject matter had triggered anxiety among board members. Finally Walker had called Miller. “I’m hearing a lot of things about Splash. Can I see it?”
“Sure,” Miller replied. After the screening, Walker called Miller into his office.
“That’s one hell of a film,” Walker said. “Now, if we just take out six or seven scenes…”
Miller was exasperated. “Card, you just don’t get it.”
Miller mentioned his frustrations to Eisner, shaking his head at Walker’s reaction. When Walker joined the meeting, the atmosphere still seemed tense. Walker seemed amenable to the idea of hiring Eisner as president, but his demeanor was nonetheless cool. After they firmed up the terms of his potential employment, Walker said with a note of disdain in his voice, “I suppose your kind of people would need a press release.” Eisner stared at him. Was “your kind of people” a reference to Eisner’s being Jewish? Disney had long been rumored to harbor a streak of anti-Semitism. But Eisner thought not. Rather, he sensed that to Walker, Eisner represented “Hollywood,” the studio culture from which Disney had always stood apart. To Walker, Hollywood was filled with people who were vulgar, publicity-seeking, and flashy, whatever their religion or lack thereof.
“You are a public company,” Eisner replied, “so yes, you will need a press release.”
When he left the meeting, he told his wife, “I don’t think they’re ready for me.”
This, at least, is the version of events Eisner later published in his autobiography (and recounted in interviews with me). Ron Miller, however, maintains that this account is “fiction,” and says that Eisner never met with Walker, and that Walker never said anything about a press release or made any reference to “your people.” The rest of the account, he says, roughly corresponds to events that Miller described to Eisner on the phone.
Whether or not the meeting Eisner described ever occurred, Walker finally gave in to Miller’s arguments on Eisner’s behalf. They summoned a business affairs executive to iron out the details. “We’re calling Eisner right now and we’re making him president and COO,” Miller announced.
The executive was shocked. “You can’t do that. You’ve got to give that job to somebody from within.”
Walker slammed his fist down on his desk. “That’s it,” he said. “We’re not doing it.”
After Eisner and Jane arrived home, the phone rang. “It’s not going to work,” a dejected Miller said. “Card said, ‘We can’t do this.’ ”
Miller felt vindicated when Splash opened in March 1984 and was a big hit, grossing more than $69 million, a new Disney record for a live-action film. But it was too late to change the perception of Disney as undervalued and badly managed. The same day that Splash opened in theaters, Roy Disney sent a short letter to the company marked personal and confidential: “I hereby resign as a director of Walt Disney Productions.” He and Stanley Gold had decided to wage a campaign to take control of Disney from outside the boardroom.
Less than three weeks later, corporate raider Saul Steinberg revealed that he owned more than 6 percent of Disney’s shares and planned to buy up to 25 percent, formally putting Disney “in play,” and vulnerable to a hostile takeover. After the board bought off Steinberg by paying him “greenmail,” and Disney shares plunged, Roy raised his holdings to more than 5 percent. As rumors circulated that Roy himself might make a takeover bid or mount a proxy fight to oust management and directors, Walker, Miller, and Ray Watson (another board member) finally concluded that they had to make some kind of peace with the annoying “idiot” nephew they had so long dismissed as ineffectual. They agreed that Roy could return as a board member of Disney and bring with him two allies, Gold and Roy’s brother-in-law, Peter Dailey. Roy would be granted the title of vice chairman of the board. Now Roy and his allies would have three of the board’s eleven seats—not a majority, certainly, but enough, they thought, to make a difference.
Gold subsequently m
et with Miller to discuss finding a position for Roy at the studio, as well as a top job for Frank Wells. “Ron, you’ve got to get some help,” Gold said.
“I’m attempting to,” Miller said. He had again called Eisner, and said he was trying to resurrect the deal where Eisner would join Disney as COO. This time Eisner was promising to bring Katzenberg with him, too. “I’ve been having conversations with Michael Eisner and we’re very close to making a deal.”
“Do it,” Gold said.
But the next day, Gold called him back. “Ron, don’t sign Michael yet. Just hold off on that.”
Miller assumed Gold was trying to delay so he could keep maneuvering on behalf of Wells. Miller called Eisner the same day. “They’re trying to push Frank down my throat,” Miller told him.
“Who needs a Frank Wells?” Eisner replied.
But time was running out for Miller. With other corporate raiders accumulating Disney shares and a takeover threat still looming, Gold argued forcefully that the best takeover defense was new management. Miller didn’t help matters by separating from Diane over an affair with another woman. It was hardly an endorsement of Disney’s much-vaunted family values, and although Miller and Diane subsequently reconciled, it cost Miller the support of Lillian, his mother-in-law, and the Walt side of the family at a critical juncture. When Walker finally retired as chairman, the title went not to Miller, but to Ray Watson, a real estate developer who had advised Walt on Disney World and who had little experience in the movie business. On August 17, the board named a committee of outside directors to review the company’s current management. Seemingly oblivious to the fact that he would be the target of the committee’s scrutiny, Miller endorsed the idea.
After the meeting ended, it fell to outside director Philip Hawley, chairman of the Los Angeles department store chain Carter Hawley Hale and a personal friend of both Ron’s and Diane’s, to break the news to Miller that it was an all-but-foregone conclusion that the committee would be asking for his resignation. Miller was stunned. He left the room, then returned with Ray Watson, whom he considered an ally. Miller asked if what Hawley had said were true. Neither Watson nor Hawley said anything. Then Miller broke down and cried.
“What should I do?” he asked, once he’d collected himself.
“I think you ought to get a lawyer to protect your interests,” Watson said, “because you’re too good-hearted a guy, Ron.”
After returning from Vermont and the phone conversation with Roy Disney, Eisner met with Stanley Gold and Frank Wells at Gold’s home in Beverly Hills on a Sunday evening. It was Wells who had suggested they approach Eisner about coming to Disney. “Whatever else you do, get Michael Eisner,” Wells had told Gold. “He ought to be running that company. He’s hot. He’s got a track record. You do everything to get him, and I’ll help.”
Gold said that what he had in mind was for both Wells and Eisner to join the company, Wells as the top business executive, Eisner the creative head of the company. Just how this would work wasn’t clear. After his experience under Diller at Paramount, Eisner didn’t want another number two job. But Wells indicated he wouldn’t mind reporting to Eisner. While Eisner said he’d be enthusiastic about coming to Disney as chief executive, he alluded to recent articles in the Los Angeles Times that suggested that the reporter, Kathryn Harris, had a source in the boardroom. Eisner strongly suspected that Gold had been leaking to the press. He warned them that he would not tolerate boardroom leaks in any company where he was in charge. “I want you to give me your word, Stanley, that you will never breach the secrecy of board deliberations.” Gold said that was fine with him, and in any event he denied being Harris’s source.
Ray Watson had initially been cool to the idea of Eisner, but Gold worked hard to sell him on the combination of Eisner and Wells. Still, there was resistance from some board members who wanted a more seasoned industry veteran like Dennis Stanfill, former head of Twentieth Century Fox. Eisner met with Watson two weeks later to seek his support. He felt comfortable with the unassuming, even-tempered Watson, who managed by consensus. The two discussed their mutual interest in architecture, and Eisner stressed what an impression Pinocchio had made on him when he took Jane and his son Breck to see it at a Bronx, New York, drive-in. “You guys are ripe to be turned around in movies and television,” Eisner told Watson. “You’re in the same position that Paramount was when I started there, and ABC before that. There are enormous opportunities to ramp up production. The Disney brand name is still a unique, largely untapped asset.”
The next day, Wells called Eisner to report on his own meeting with Watson. Watson had been cool to the idea of co-chief executives, so Wells had stepped aside in Eisner’s favor. “You need creativity more than anything else,” Wells had told Watson. To Eisner, he said, “I think you’ve got the job.” In the cutthroat world of Hollywood, it made a deep impression on Eisner that Wells would sacrifice the top job on his behalf.
Watson wrote his fellow board members that hiring someone with Eisner’s reputation and track record “would instantly provide us with the substance and image to show to the world we mean business when we say we are going to turn this company around,” and by doing so, ward off any more hostile takeover offers. A few days later, Watson called Eisner to tell him the board was meeting the next day to remove Miller, and that he would recommend that Eisner replace him. Watson would stay on for the time being as chairman, which was fine with Eisner as long as he was named sole chief executive.
Marty Davis, Eisner’s boss at Gulf+Western, was visiting Los Angeles that same week, and the next day he summoned Eisner to discuss his Paramount contract. Before Davis could begin, Eisner said, “I think I’m about to be offered the job as president and CEO of Disney.” It was satisfying to be able to turn the tables on Davis like that, after all the bad things he’d heard from Diller. Davis was obviously surprised. “I won’t stand in your way” was all he said.
As Eisner was meeting with Davis, Miller appeared before Roy, Gold, and other members of the Disney board at the studio, knowing that he was about to be formally relieved of his position. “Don’t you have something to say to me?” he said. “Aren’t you men?”
Silence was the only reaction.
“I’m very disappointed in this,” Miller continued. “I’ve given my life to this company. I’ve never worked anywhere else. I’ve made progress with this company. I think I’ve taken great strides in leading it as far as it has come. I feel like this is a betrayal.” Miller glared at Roy in particular, who as usual said nothing. Then he turned to Gold. “Don’t you have anything to say, Stanley? You talk so much all the time. You’re really the ringleader of this.” Gold, too, remained silent. Then Miller left, and the board voted unanimously to ask for his resignation.
With Watson’s memo recommending Eisner on the table before them, the directors turned to the issue of Miller’s replacement. Gold expected Watson to promptly nominate Eisner and for the board to confirm him. Instead, director Phil Hawley proposed a screening committee to consider a wide range of candidates, adding that it was essential that Miller’s replacement have “corporate experience,” a pointed reference to the fact that Eisner had never run a business on his own. “Okay,” Watson said. “Fine.” Gold was stunned. The old guard had turned the tables yet again.
At Paramount, Eisner waited for the call from Watson. As the hours passed, his confidence waned. Finally, late in the afternoon, Wells called. “How do you feel?”
“How should I feel?”
“Hasn’t anyone called you?” Wells broke the news that Miller had been fired, but no successor had been named. Eisner had a sinking feeling. He regretted having spoken to Davis. He hung up, left the studio, and drove to see Gold at the Shamrock offices. “He doesn’t have the guts to call you,” Gold said, saying that Watson had meekly accepted Hawley’s proposal. “No decision was made on you.”
“What do you mean?” Eisner asked, incredulous. “Last night Ray told me I was in.”
That evening, Eisner attended a dinner in Davis’s honor at Diller’s house. It was a bitter pill, having to pay homage to the man he thought he’d vanquished that very morning. To make matters even more precarious, Diller took Eisner aside to confide that he was leaving Paramount to take the top job at Fox. When Diller’s news broke the next week, Davis summoned Eisner and Katzenberg to New York.
After having told Davis about the Disney offer, Eisner hardly expected to be offered Diller’s position. Still, it was a shock when, after they arrived in New York, Katzenberg called him at his hotel at 2:00 A.M. The next day’s Wall Street Journal had just been delivered to Katzenberg’s hotel, and in it was an article reporting that Frank Mancuso, Paramount’s head of marketing, would replace Diller as chairman. It quoted Davis at some length discussing his unhappiness with Paramount’s “market share” and failure to place more new television shows on network schedules. Eisner realized that he was about to be fired.
When he met with Davis at noon the next day, a press release announcing his “resignation” had already been prepared. Eisner had brought along a copy of his contract, which provided incentive compensation and the forgiveness of the loan on his house in the event that he was not offered Diller’s job if Diller left, a total of $1.55 million. In his eagerness to be rid of him, Davis readily agreed, saying he just needed Eisner to sign off on the press release. Eisner refused. “I want the check for what I’m owed,” Eisner said.
“I can’t get a check on such short notice,” Davis insisted.
“That’s ridiculous,” Eisner said. “I’ll be back in an hour.” He walked out.
Twenty minutes later, Eisner had his check, and approved the press release. He left the building and walked across town to the Park Avenue headquarters of Chemical Bank, where he and his parents had long done their banking. He deposited the check and demanded that it be credited immediately to his account, rather than wait for it to clear. He worried that Davis would try to void the check before it cleared.