Autumn of the Moguls

by Michael Wolff

  This is, of course, a very fitting place for Eisner to end up. Ovitz, the most powerful man in eighties Hollywood, and, not incidentally, Michael Eisner’s best friend, went to work in 1995 as Eisner’s number two, until, in short order, Eisner turned against him. Out of power, Ovitz, in a lesson that Eisner must replay every day in his own mind, was over and over again—until he ended up in tears in Vanity Fair—ritually crucified.

  But as it turns out, if your goal is just staying in power (unlike other moguls who, foolishly, see being loved and admired as an equal priority), this—the paranoia, the isolation, the denial, the fact that you’ve worked yourself into a corner that you won’t and can’t come out of—may be a good management strategy.

  Here’s the insurmountable hurdle Eisner had to surmount: He did not own, nor could he afford to buy, voting control of Disney—as Murdoch has at News Corp., or Redstone has at Viacom.

  There is, I should mention, a corollary to the mogul exception—if you haven’t gained such voting-class control of your stock, you will surely be overthrown. Pretty much everybody had been except for Michael.

  But Michael created a third way: He couldn’t control the voting shares, but he could obsessively control every other detail and every other person in the company. He could turn Disney into a closed kingdom.

  The elements of this entrenchment strategy involve, for one thing, longevity itself. Indeed, he had been there so long, and had been so amply rewarded (his package of cash and options in 1998, for instance, was worth as much as $600 million a year), that he became Disney’s third largest shareholder (no small feat for somebody who joined the company owning no part of it at all).

  Then there’s the isolation. The flight of several generations of Disney’s senior executives, which is reasonably thought to be a downside of Eisner’s management, also had a positive effect for Michael—it dug him deeper in. Nobody could really challenge him. Nobody had the standing to reason with him. (If the people you trust tell you you have to go, then you have to go—but if you trust no one, you can stay.) And, most clearly, nobody was there to replace him. (Few people saw his would-be heir, Bob Iger, who was promoted from ABC after failing to fix the network, as a true alternative.)

  There were, too, the yes legions. Over time, Eisner managed to pack the Disney board with his personal retinue: his lawyer, his architect, even the principal of his children’s elementary school.

  And there was the vastness of the operation itself—not just the vastness but the dysfunctional vastness. The problems at a failing network (and now at the former Fox Family Channel, which Eisner bought from Rupert Murdoch for $5.2 billion to rerun ABC shows), at a declining animation studio, and with exhausted product lines (every time Disney needed a bump in earnings, it flooded the market with backlist releases) were so deep and intractable that nobody would want to fight you for your job.

  Then, not least of all, there was the absolute knowledge, on everybody’s part, that there were only two ways that Michael Eisner would leave Disney: if he was escorted out or carried out. And nobody was brave enough or big enough to pull that trigger.

  There was, finally, the length of the Disney slump itself as an odd, almost sobering virtue—everybody was used to it. After all, Disney wasn’t in anywhere near the final-days shape of AOL Time Warner or Vivendi. What’s more, it was certainly true, as Eisner constantly repeated, that ABC was—as is always the case with network television—just one hit away from a turnaround. There might always be another Who Wants to Be a Millionaire?(which made ABC and Disney look good before the network’s slavish, and amateurish, four-nights-a-week dependence on the show made all concerned look very bad).

  But it did seem that Michael Eisner, as dug in as he was, was surely now up against it.

  Board member Stanley Gold, who represented Roy Disney and his Shamrock Holdings (one of the company’s biggest shareholders) and who led the overthrow of the former Disney Establishment and helped install Eisner in its place, was after him. Then there was a rebel group of shareholders preparing a fight against him. And, indeed, a lively conference topic was the idea of Mel Karmazin as Michael’s replacement.

  At a hush-hush autumn 2002 Disney board meeting, there were reports of various ultimatums. Among them, the board had to be more independent (although, in something of an Eisner victory, Stanley Gold lost his job as sole chairman of the important governance committee—he now shared the spot with former senator George Mitchell). There were rumors, too, that the board had drawn a line in the sand: Eisner had to name his successor (not Iger) and specify a date for the succession.

  And everywhere, there was the rising dust that precedes other moves. The sports teams were on the block. ABC was suddenly serious about merging, or at least about talking about merging, its news division with CNN (although this would come to naught). There were even rumblings of a Disney sale (rumblings that met with the perplexed question “To whom?”).

  It did seem like it could, really, truly, and finally, be the autumn of the 60-year-old quadruple-bypass chief executive. Or maybe next year.

  “I think Michael is fine,“said Jim Wiatt, without equivocation, as I tried to politely interrogate him over dinner. “Disney is an asset-rich company. Its issues are its issues, but the company obviously has the resources to overcome those problems. Relatively speaking, Michael is in a strong position.”

  “Come on,” I said.

  “Seriously.”

  “Do you really believe that?”

  “I wouldn’t say it if I didn’t believe it.”

  He was hardly defending, but he wasn’t capitulating either.

  It struck me: The weaker everybody else is, the stronger the agents are. Duh.

  12

  KURT AND

  HARVEY

  Harvey Weinstein is, oddly, a sentimental favorite in New York. He is far from a mogul—his company, Miramax, is a Disney division; he works for Michael Eisner—but he has wildly exaggerated mogul attributes.

  He is obese and grotesque, with a W. C. Fields nose, pockmarked face, and menacing eyes. He’s a thug too—he’s threatened all kinds of people. He’s thrown punches and grappled with people in public. He’s a tsunami of PR agents. He’s always trying to buy off reporters with favors and charm. He’s a great and gross manipulator.

  On the other hand, he is generally thought to have good taste. In a world of prefabricated, plasticized movies, Harvey’s (Shakespeare in Love, Gangs of New York, Chicago, etc.) are, well, less plasticized—less overtly Hollywood.

  So the fact that he is not a corporate mogul—not one ounce of boardroom slickness—but rather a street mogul, and that he’s ethnocentrically New York, and that he makes movies that recall the days of Cinema, endear him to many people, especially those who don’t have to deal with him.

  He’s a kind of kitsch.

  Kurt Andersen was his interviewer over dessert after the first day’s banquet dinner.

  I believe that this involved a certain sort of irony on Kurt’s part—that he might appear to take this lug seriously—but a further part of the irony is that he would never admit to it.

  Kurt had been one of the creators and editors of Spy magazine in the late eighties. Spy, being in the somewhat scabrous and satirical tradition of the British Private Eye, had, as much as any publication, identified and ridiculed the behavior and mores and customs of the mogul class. It had seemed, like Private Eye, to have occupied an entertaining and, for various powerful people, dangerous cultural and political space.

  Spy was certainly among the more emblematic magazines of the era and yet it failed—through a combination of bad luck and too-large ambitions.

  Its principals did not, however, fail with it. Kurt became a heavyweight member of the media and cultural class in the city—running New York magazine for a period, writing a cultural commentary column for the New Yorker, publishing a very long novel about the media industry, and becoming the confidant of moguls, including Barry Diller, for whom he worked as a cons
ultant.

  Kurt truly knows everyone—and you would be nobody too important if you did not know Kurt.

  One of Kurt’s other partners at Spy was Graydon Carter, who, in a vast, strange, postmodern-type reversal, became the longtime editor of Vanity Fair, the publication most attentive to, and most central for, the mogul class.

  Kurt and Graydon, who, before Spy, were protégés of Walter Isaacson at Time, certainly have a major position in the creation of the modern mogul myth. They helped create it by opposing it, and then by joining it. From radicals to conservatives. Communists to anti-Communists. They were media neocons in a sense.

  But not without some self-consciousness.

  It was impossible to tell, really, if Kurt respected Harvey Weinstein or was making fun of him.

  And because he was maintaining that fine line, it was impossible to build a case for him having sold out, or for all of us having capitulated to the strength and overbearingness and big money of these guys. Kurt had an ineffable way of maintaining his distance. It was a model that many people followed.

  We were all just locked in our orbits around each other.

  It was raining by the time the dinner finished and there were no cabs on Wall Street. I had to negotiate a ride home in a big white limo.

  13

  TERRY, PETER.

  AND JEFF

  Steve Rattner was presiding in the green room on the second morning, while Brian Roberts—who, with his father, Ralph Roberts, controlled Comcast, the cable giant—was being interviewed by Charlie Rose on stage, and while the members of my panel congregated. Rattner was a collegial and convivial presence. All the relationships were seamless. Rattner along with Terry Semel and Jeff Bewkes and Peter Chernin all seemed just like guys at a businessman’s breakfast.

  Semel and Rattner were talking about Brown University, where Rattner had gone and where Semel’s daughter was going (it was de rigueur for Hollywood royalty kids to go to a good eastern college—ideally, an artier one).

  Everybody was talking jocularly about doing business together and buying each other. And everybody was joking about not knowing what we were going to talk about, which masked some anxiety.

  Certainly I would be looking for some public breach, some way to channel through to the unbusiness-like sense of dread and confusion that I knew they must feel. They must.

  This was a big opportunity—and I hoped not to waste it.

  On a practical level, if the media business lost the confidence of guys like this—the ultimate and real managers—the façade would really start to crack. And I had no doubt that beneath it all they were no longer confident—except now what had to be done was to get beyond their habit of putting on a suit every day and showing up at the office and having great perks along with the moment-by-moment joie de vivre of running things.

  I had to appeal to what I suspected was, for each of them, an innate sense that they could run these companies more reasonably than the moguls they had had to work for.

  Bewkes—like everyone else at AOL Time Warner—surely felt this.

  Semel, the longtime head of Warner Bros., had been fired by Jerry Levin—and undoubtedly felt done in by mogul spite and incompetence.

  And even Chernin had to harbor some normal person’s antagonism to Murdoch. (Indeed, Chernin contributed to Democratic candidates.)

  On the other hand, as career employees (although Semel now was, in his retirement years, finally running his own show), they must have a large measure of complacency. That would be hard to shake. Indeed, the “burdens of scale,” which undoubtedly gave these guys an amount of daily grief, also gave them their jobs.

  Still, I could try to move them—or get them to reveal how far they themselves had moved—to accept what more and more people inside and outside their companies were saying was plain and incontrovertible: that synergy was alchemy. That putting companies together and making more money because these companies could do business with each other—the very concept—was asinine. Relatively speaking on the level of spontaneous generation or cold fusion.

  The problem with approaching this head-on was that you were asking people to say in public they had been duped, or that they were dumb. Also, and this was the even trickier point: they were dumb. They had many virtues, but the capacity for abstract thought was not one of them.

  We lumbered out onto the stage—me leading the way, Chernin in a dark suit and tie, Bewkes slightly less somber, and Semel in sleek salt-and-pepper hair, rimless glasses, and open-necked shirt. The four of us uneasily lined up in mock easy chairs, and then were magnified on a large video screen behind us.

  “I have a personal interest question,” I began innocently, as though there weren’t three hundred people in front of us waiting for the answers to their deep business questions. “Do you guys, like, have TiVos?”

  This was my set-up question. It was always interesting to get media producers to talk as media consumers—to see if they would have the same complaints as everybody else.

  But they all looked at me vaguely. They were somewhat aware of having TiVos at home, but on the other hand the larger truth struck me that they probably didn’t spend all that much time at home.

  “I have one,” said Semel, with some uncertainty.

  “I have one,” said Chernin, putting up his finger.

  “I haven’t hooked it up,” Bewkes said.

  “Don’t you find,” I said, pursuing what seemed to me to be an interesting and obvious point, “it’s like fifties television again, everybody fights over the TiVo as though there’s only one television in the house?”

  Silence. Dead silence. Like this was a serious fruitcake sort of observation.

  “Not really,” Bewkes said.

  “You must have a TiVo experience,” I said, struck by how they had all not personalized their technology; I didn’t know anyone with TiVo who didn’t go on at length about how it had dramatically changed their TV habits.

  “Yeah, well, we’re all trying to figure out how to use it first,” said Semel—who ran a technology company—about what was among the most important and unsettling technologies in the media business.

  “All right,” I said, like the talk-show host who’s lost the laugh. “So, Jean-Marie Messier, Jerry Levin, Bob Pittman, Thomas Middelhoff?”

  “Is this a Karnak question—looking into your future?” said Chernin.

  I continued: “Unlucky guys, bad apples, tragic figures, or cautionary tales?”

  There were titters and slight guffaws in the audience—the comedy and nuances of failure were an unexpected and, I think, guilty pleasure for this crowd.

  My panelists all tried to avoid eye contact with me.

  “Each one is different,” said Semel finally.

  “Who is the most tragic?” I continued, knowing none of my panelists was going to talk tragedy.

  Bewkes made a noise—a throat clearing—and everybody looked at him.

  “I’m thinking,” he said.

  “These are guys—you know them, you’ve worked with them, possibly you’ve admired them,” I pressed, “but they’ve failed, they’ve been written off, they’re out, they’ve been disgraced—so what do you think? You can’t just think nothing.”

  I was assuming some quality of introspection here, that each of these guys had seen their colleagues fall and that it must weigh heavily on them. They must be dealing with this in the middle of the night. How could they not? The burden of this must be huge, the depression unavoidable. But in fact, they all seemed genuinely surprised by the question—even baffled. It seemed almost to be an eccentric question to them.

  Semel finally delivered a careful answer: “They all went down slightly different paths, not necessarily for the same reasons. At the end of the day somebody like Jerry Levin had a very long and very successful run and he believed in the concept, as I do as well, that if you’re going to be in the product-making business and control a lot of forms of distribution that the idea of being together with AOL was concept
ually a good idea—”

  “Yes, but,” I interrupted, “don’t you find yourself saying if it could go that wrong so quickly for them without any kind of warning signs that it could happen also to me? How could you not?”

  I might as well have been asking whether they believed in reincarnation.

  I was the one who must have seemed foolish—vastly misunderstanding what business was about. Some guys got whacked, some didn’t. Some messed up, some cleaned up the mess. Life went on.

  The system was what it was, and you’d be crazy to overly personalize it.

  “I don’t think AOL was a good idea,” interjected Chernin, hastily, to clear up any possible misunderstanding.

  I pressed: “What I’m trying to get at here by evoking these guys who loom over the business—guys who were absolutely credited with knowing better than anybody what to do at a given period of time—is to suggest the possibility that none of us here know where we’re going. That we’re proceeding blind in ways that are really serious and ridiculous….”

  Unlikely, I realized, that they would all, at this moment, admit to being random elements of a kind of media chaos theory.

  “I think online and media is a good idea,” said Bewkes, feeling forced, it seemed, to give a brief defense of AOL and to deflect my larger, weirder question. The silence of the audience made me wonder if they too—all these Wall Streeters—might not also wonder where I was going with this weird, meaning-of-life stuff.

  Chernin, Bewkes, and Semel all immediately dove in and defended some vague principle about technological convergence and the importance of distribution and the benefits of owning what you needed to own to control your business—clearly better to defend the basic order than to admit that there was no order.

  “But hold on,” I said. “What you’re saying now isn’t any different from the assumptions made by the aforementioned gentlemen who are no longer with us.”