It's a Small World After All

By RICHARD CORLISS

A few weeks ago, at a Las Vegas video convention, Jeffrey Katzenberg, chieftain of the Disney movie jungle, was joined onstage by an adult lion to tout The Lion King, the most successful film in the company's history. Suddenly the beast wrapped its paw around Katzenberg's thigh. The audience gasped, the trainer scrambled, and the wiry mogul wriggled free, raising his arms in victory.

As it turned out, Katzenberg escaped the jaws of a lion but got devoured by a mouse. Last week the empire that Mickey built announced that Katzenberg, 43, was resigning Sept. 30, when his contract with the company expires. Chairman Michael Eisner, 52, had rebuffed his longtime protege's plea to succeed the late Frank Wells as second-in-command. And rather than stay as czar of all the % rushes -- supervising Disney's huge, 40-film-a-year slate, including the bijou animation unit -- Katzenberg walked. Joe Roth, the former movie boss of 20th Century Fox who was running the Caravan unit at Disney, assumes Katzenberg's responsibility for the live-action films. Roy Disney, Walt's nephew, and Peter Schneider will be in charge of animation.

"Michael never wanted a No. 2 person," says Richard Frank, who runs the TV unit at Disney. In fact, Eisner, who underwent a successful quadruple-bypass operation two months ago, was looking not to share power but to disperse it -- to impose a system not of hierarchy but lowerarchy, with division heads getting more power. "We're a large, multifaceted, multinational company," Eisner says. "We just all felt we had to decentralize, to run it in the divisional route."

That's a pretty dry way to describe the termination of one of Hollywood's most successful professional marriages, which in the decade since the two men came to Disney pushed company revenues from $1.4 billion to $8.5 billion. And if last week's climactic conversation were dialogue in a Disney script, Katzenberg would tell the writer to punch it up. It went like this:

Michael: Hi!

Jeffrey: Hi!

Michael: How ya doin'?

Jeffrey: Great. It's too bad we can't work together.

Michael: Yeah.

Katzenberg calls it "the most pleasantly comfortable and unstressful conversation we've had with each other in a year."

Still, the last week was an emotional bath for both men, who have worked together for 19 years, ever since Katzenberg joined Eisner at Paramount Pictures. "Bittersweet is a good way to describe our parting," says Eisner. "I wished that Jeffrey were 10 years younger and didn't have the normal and natural ambition to move on." He felt he was at an executive-clock- ticking moment, and those things happen.

Hollywood went seismic over the news. The town regards Katzenberg as the most demanding boss and the keenest people pleaser in the business. People wondered why Eisner, if he didn't want Katzenberg to run Disney's business side as Wells had, didn't simply redefine the job and take the younger man on as a junior partner -- instead of what he will surely become, a ferocious competitor.

"I think Jeffrey should have been given anything he asked for, based on his mountain of accomplishments at Disney," says Steven Spielberg, who is co- owner with Katzenberg of Dive, the scalding-hot new Century City eatery. ! "But I don't think he's feeling bitter about it. He's looking forward to an exciting future."

His past is nothing to be ashamed of, either. At his departure, Disney had the year's biggest movie hit (The Lion King), the highest-rated TV show (Home Improvement), the No. 1 soundtrack (The Lion King) and the top-grossing Broadway show (Beauty and the Beast). Katzenberg was the best at a lot of things -- including making a distinctive kind of bad movie. The typical Disney live-action film, like The Mighty Ducks or even the solar-plexus hit Pretty Woman, was a concoction of heavy sentiment and broad comedy designed to appeal to the lowest common spectator.

But, hey, every studio boss makes those films. What none of the others did was to resuscitate the animated feature, a great, dormant tradition that Disney invented and that Katzenberg, 50 years later, helped perfect into a daydream machine that made both money and witty, tuneful, resonant popular art. The kudos he took for this renaissance rankled Roy Disney, who, according to a former studio executive, "had a personal vendetta" against Katzenberg that may have spurred last week's departure. But, as a company insider says, "Jeffrey made a difference in the way animated films are made today. He fulfilled the same role that Walt did in the early days, challenging and cajoling people to do better work." Jeffrey is not a great storyteller, but he knows a great story when he hears it. The next one, due out in June '95, is Pocahontas, but for years the cartoons will bear Katzenberg's stamp. Last week, when he told his daughter Laura, 11, about his departure, she fretfully asked, "What will happen to Pocahontas?" He assured her, "Pocahontas is gonna be the best ever."

One audience that Katzenberg could not sell was the Disney board of directors. "We were looking for a person -- one person or a number of people -- to support Michael Eisner," says Raymond Watson, chairman of the board's executive committee. "Michael didn't want to give Jeffrey what he wanted: involvement in the overall policy of the company, which is what Frank Wells had. Frank could negotiate a contract, meet with the president of General Motors and work out a deal, that sort of thing." The implication is that Katzenberg couldn't. Another board member says, "Look, there are thousands of people involved in the animation unit. We don't think we're going to miss much of a beat. As for live action, our record hasn't been all that good, so we may luck out and find that we can do better."

The Katzenberg camp would dismiss these charges. For 40 quarters in a row, the studio has been within 1% of 20% growth in earnings and revenues. Katzenberg freely admits to being the stingiest executive in movies. But, as he says, "I'm a builder, not a presider," and it was that restlessness that led him to agitate for the No. 2 job.

Two weeks before the announcement, Katzenberg knew it was over. "I knew it wasn't going to work, and I said as much to him." Eisner nonetheless asked him to come up with a proposal that might save the marriage. "So I put together a list of four pages," Katzenberg says. "It took me several days. I dealt with the movie studio, then the company, then the outside world -- things that would reinvent the company, as Michael has often said he wants to do. I met with Michael last Wednesday to discuss them. And you know, that envelope is still in my briefcase. We never got around to the conversation."

Katzenberg still speaks of Eisner with affection and respect. "For 19 years," he says, "Michael has been my mentor, teacher, No. 1 champion, my boss and my friend. I just wanted him to take me as his partner, to bring me into his inner circle. I did not want his job. I was prepared to be his No. 2 guy. This was a teacher and a student, and now the student asked to be a teacher's assistant. It's been Eisner & Son, and that's how Michael wanted it to remain."

Katzenberg, who waxes ecstatic over the allegorical import behind the cartoons, is asked to explain the allegory of his traumatic week. "It's about a father not being able to accept a son," he says. "I still don't understand it, and it's hard to reconcile."

But when he looks ahead, the old enthusiasm returns. "There's a gigantic shift in the world of entertainment, and as I try to find my future in it, I've decided only to have one rule, and that is: there are no rules. Maybe I should start my own company. Maybe I'll work for a company where I own one share or a big equity stake. Maybe I'll go over to Dive and make sub sandwiches." As of Oct. 1, he is at leisure. "I'll take a 60-day pit stop -- and I'm sure I'll be incompetent at that. I want to rest and recharge, make sure there's enough traction on them wheels." Or perhaps, as he told Eisner in a friendly chat at week's end, "I'll start up a company, and later you'll buy it. Then I'll end up working for you."

/ For now, though, the Katzenberg era at Disney -- one of phenomenal growth, an eerie stability and that amazing revival of the precious cartoon heritage -- has ended. Oh well, as the Lion King would say, hakuna matata. Not to worry. Eisner will reinvent his company, and soon, perhaps, Katzenberg will invent his own. For the moment, he's in the hot seat. His former colleague -- and future competitor -- is sitting in the Katzenberg seat.

With reporting by Patrick E. Cole and Jeffrey Ressner/Los Angeles