The 50th Law (with 50 Cent)

part, but Eisner did not care. Finally freed of Katzenberg’s shadow, he
could relax and now take Disney to the next level, on his own and with
no more distractions.
To prove he had not lost his touch, he soon dazzled the
entertainment world by engineering Disney’s purchase of ABC. The
sheer audacity of this coup once again made him the center of
attention. Now he was forging an entertainment empire beyond what
anyone had ever attempted or imagined. This move, however, created
a problem for him. The company had virtually doubled in size. It was
too complex, too big for one man. Only a year earlier he had undergone
open-heart surgery, and he could not handle the added stress.
He needed another Frank Wells, and his thoughts soon turned to
his old friend Michael Ovitz, one of the founders and the head of

---

Creative Artists Agency. Ovitz was the greatest deal maker in
Hollywood history, perhaps the most powerful man in town. Together
they could dominate the field. Many within the business warned him
against this hire—Ovitz was not like Frank Wells; he was not a finance
guy or a master of detail, as Ovitz himself would have admitted. Eisner
ignored such advice. People were being too conventional in their
thinking. He decided to lure Ovitz away from CAA with a very lucrative
package and offer him the title of president. He assured Ovitz in
several discussions that although Ovitz would be second in command,
they would eventually run the company as coleaders.
In a phone call Ovitz finally agreed to all of the terms, but the
moment Eisner hung up, he realized he had made the biggest mistake
of his life. What had he been thinking? They might have been the
closest of friends, but how would two such larger-than-life men ever be
able to work together? Ovitz was power hungry. This would be the
Katzenberg problem times two. It was too late, however. He had gotten
the board’s approval for the hire. His own reputation, his decision-
making process as a CEO, was at stake. He would have to make it work.
He quickly decided upon a strategy—he would narrow Ovitz’s
responsibilities, keep a tight leash on him, and make him prove himself
as president. By doing so Ovitz could earn Eisner’s trust and get more
power. From day one Eisner wanted to signal to Ovitz who was boss.
Instead of moving him into Frank Wells’s old office on the sixth floor
at Disney headquarters, next to Eisner’s, Eisner put him in a rather
unimpressive office on the fifth floor. Ovitz liked to spread money
around with gifts and lavish parties to charm people; Eisner had his
team monitor every penny that Ovitz spent on such things, and watch
his every move. Was Ovitz contacting other executives behind Eisner’s
back? He would not nurture another Katzenberg at his breast.
Soon the following dynamic developed: Ovitz would approach him
with some potential deal, and Eisner would not discourage him from
exploring it. But once it came time to agree to the deal, Eisner would
give a firm no. Slowly word spread through the industry that Ovitz had
lost his touch and could no longer close a deal. Ovitz began to panic.
He wanted desperately to prove he had been worthy of the choice. He
offered to move to New York to help manage ABC, since the merger of
the two companies was not working out so smoothly, but Eisner said
no. He told his lieutenants to keep their distance from Ovitz. He was
not a man to be trusted—he was the son of a liquor salesman in the San

---

Fernando Valley, and like his father, Ovitz was just a smooth salesman.
He was addicted to attention from the media. Within the company,
Ovitz had become completely isolated.
As the months dragged on in this saga, Ovitz could see what was
happening, and he complained bitterly to Eisner. He had left his
agency for Disney; he had staked his reputation on what he would do
as president, and Eisner was destroying his reputation. Nobody
respected him any longer in the business. Eisner’s treatment of Ovitz
was downright sadistic. In Eisner’s mind, however, Ovitz had failed the
test he had laid out; he had not proven himself to be patient; he was no
Frank Wells. In December of 1996, after a mere fourteen months on
the job, Ovitz was fired, taking with him an enormous severance
package. It was a dizzying and rapid fall from grace.
Finally liberated from this great mistake, Eisner began to
consolidate power within the company. ABC was not doing so well. He
would have to intervene and take some control. He began to attend
programming meetings; he talked of his own golden days at ABC and
of the great shows he had created there, such as Laverne & Shirley and
Happy Days. ABC needed to go back to that earlier philosophy and
create high-concept shows for the family.
As the internet began to take off, Eisner had to get involved in a big
way. He nixed the purchase of Yahoo!, pushed by his executives.
Instead Disney would start its own internet portal, called Go. Over the
years he had learned the lesson—it was always best to design and run
your own show. Disney would dominate the internet. He had proven
himself a turnaround genius twice before, and with Disney now in a
slump, he would do it a third time.
Soon, however, a wave of disasters hit the corporation, one after
another. After being fired, Katzenberg had sued Disney for the bonus—
based on performance—he was due under his contract. When he had
been president, Ovitz had tried to settle the suit before it went to court
and had gotten Katzenberg to agree to $90 million, but at the last
minute Eisner had nixed this, certain he did not owe Katzenberg
anything. In 2001 the judge ruled in Katzenberg’s favor, and they had
to settle for a whopping $280 million. Disney had poured vast
resources into the creation of Go, and it was a terrific flop that had to
be shut down. The costs from Euro Disney were still bleeding the
company. Disney had a partnership with Pixar, and together they had

---

produced such hits as Toy Story. But now the CEO of Pixar, Steve
Jobs, made it clear he would never work with Disney again, deeply
resenting Eisner’s micromanaging. ABC was underperforming. Most of
the movies Disney produced were not just flops but expensive flops,
culminating in the biggest one of all, Pearl Harbor, which opened in
May of 2001.
Suddenly it seemed that Roy Disney had lost faith in Eisner. The
stock price was plummeting. He told Eisner it would be best for him to
resign. What ingratitude, what hubris! He, Eisner, was the man who
had singlehandedly brought the company back from the dead. He had
saved Roy from disaster and made him a fortune, Roy who had been
considered Walt’s idiot nephew. And now, in Eisner’s darkest hour,
Roy was going to betray him? Eisner had never felt more enraged. He
quickly struck back, forcing Roy to resign from the board. This only
seemed to embolden Roy. He organized a shareholder revolt known as
Save Disney, and in March of 2004 the shareholders voted a stinging
rebuke of Eisner’s leadership.
Soon the board decided to strip Eisner of his position as chairman
of the board. The empire he had forged was falling apart. In September
of 2005, with hardly an ally to lean on and feeling alone and betrayed,
Eisner officially resigned from Disney. How had it all unraveled so
quickly? They would come to miss him, he told friends, and he meant
all of Hollywood; there would never be another like him.
• • •