REWIND TO THE MOMENT that many would call the real beginning of DreamWorks: April 3, 1994, when Disney president and COO Frank Wells died in a helicopter crash. The beloved executive had served as the mollifying glue (a "marriage counselor," as Katzenberg would put it) between Katzenberg and his boss of nearly two decades, Disney CEO Michael Eisner. With Wells gone, things went sour quickly.
Katzenberg had aggressively angled for Wells's job. When he didn't get it, he was gone.
The departure of the forty-three-year-old Katzenberg, who as Disney Studios chairman was known for back-to-back power breakfasts, air kisses, and animation blockbusters, left Hollywood with the sense of a blood feud. Katzenberg's ouster was like "a man being kicked out of his homeland. It was biblical," remarked a colleague. In the aftermath, Disney was a divided territory. In firing Katzenberg, not only had Eisner pulled off an attention-grabbing power play, he was withholding a multimillion-dollar bonus payment that Katzenberg believed was owed him by contract. Now this was high-concept. Katzenberg had not so much worked at Disney as lived the company, seven days a week, for a decade. Now he had been stripped of that identity by the man he had long been driven to please. His own father was distant, complicated. From Eisner, it had always seemed, Katzenberg had been determined to extract what had been missing in that relationship.
Arriving in 1984, after a successful stint at Paramount, where Eisner was COO and Katzenberg head of production, the two had transformed Disney from a has-been studio, where WASPs in pastel cardigans drank gin at lunch and took off early to head for the greens, into a corporation that no longer seemed like an anachronism. Suddenly there were hits, like Down and Out in Beverly Hills and Ruthless People—movies for grownups, with hip plots and carefully leavened spice quotients. Old favorites—classic Disney films—were repackaged and, for the first time, resold. Share prices rose. New divisions and theme parks opened. Katzenberg had a hand in the company's resurgence, but he'd made his true mark in animation. Because of his passionate, sometimes crazed, commitment, the Disney brand was restored, with The Little Mermaid, Beauty and the Beast, Aladdin. And then: The Lion King. Released just two months before Katzenberg's exit, the film broke every record for animated films, grossing $700 million at the worldwide box office and contributing another billion-plus in merchandising and ancillary revenues. With this blockbuster, Jeffrey Katzenberg was beginning to look—a bit too much for some—like the king of the Disney jungle.
Alternately lovable and annoying, Katzenberg is the manic, crazy-making kid-brother type. At fourteen, while other mischief-makers at his summer camp tipped over canoes, Katzenberg—who would come to be known as a bit of a cardsharp—dealt out an illegal hand and walked off with the other campers' allowances. Rather than suffer the subsequent punishment of standing by the flagpole, he cut out.
At Disney, there were no flagpoles and no poker. Katzenberg worked feverishly and expected the same dedication from others. He demanded seven-day workweeks, driving his employees hard ("You never knew if he was gonna hug you or kick you," said Lion King producer Don Hahn). His proven ability to keep to the bottom line had earned him a reputation for stinginess. But Katzenberg had admirers on and off the lot, including a cadre of hard-driving female loyalists. He was the kind of always-on achievement junkie that Hollywood considered its own breed. But unlike some, Katzenberg actually delivered more than lip service, with seemingly never-ending hours in executive offices and editing suites. And he was quick to thank those who sweated it out with him, even if it meant making three hundred phone calls a day.
"Jeffrey really likes to do things that make people feel good," said Penney Finkelman Cox, a producer who worked with Katzenberg at Paramount on Terms of Endearment. "He likes to keep people happy. He never asks of others what he wouldn't do himself." But so single-minded was he that he had no qualms about bending or blurring inconvenient truths when necessary. "He has no limits about what he'll lie about or say," says a source. "That's really his gift." He liked to think of himself as tough and straightforward, and enjoyed playing the role of cutthroat executive. He once told screenwriter Dale Launer that Disney was the best place to work because "Here, we don't stab you in the back. We stab you in the chest!" Launer came to respect Katzenberg, but at first he flinched.
As CEO of the most recognizable entertainment company in the world, Michael Eisner reaped the benefits of his underling's gung-ho enthusiasm. How high could he make Jeffrey jump? There seemed to be no limits. Smooth and perceptive, Eisner was successful at manipulating Katzenberg's ambition. Yet as the years passed, Katzenberg started proving himself wilier than his boss. The bad days began when the protégé began looking for more—of everything, naturally. After the death of Frank Wells, Eisner's number two, Katzenberg seemed the logical successor.
But that wasn't, as it turned out, how it played out. Even though Eisner had stood on a snowy Aspen street and promised Katzenberg the title if ... he held back. Katzenberg knew there was trouble when, subsequently, Eisner had a heart attack, requiring surgery, and Katzenberg was not among the first to be alerted. During Eisner's recovery, it was CAA's Michael Ovitz he wanted at his bedside. Unlike Wells, who Eisner said "carried a piece of paper in his pocket that said, 'Humility is the best virtue,'" Katzenberg did not do self-effacement. It was always, no matter what, about Katzenberg. He worked for his own glorification, not the team's. Stories about Jeffrey's magic touch were now regularly appearing in the press; the accounts could make it seem that Jeffrey was singularly responsible for Disney's new direction. (Disney publicist Terry Press, an inveterate "Jeffrey Girl," played a hand in this.) The coverage did not sit well with Eisner and Disney's board of directors.
Eisner had legitimate concerns when it came to Katzenberg. The man whom he famously, and rather patronizingly, dubbed his "golden retriever" could—at the beginning, at least—seemingly will movies past the $100 million mark, land any star, cut any deal. But leading a public company required the kind of cool-headed shrewdness that pacified Wall Street. Jeffrey—whom the Wall Street Journal described as "creative but unpolished"—was pure Hollywood. Eisner rightly judged Katzenberg's tendency toward self-aggrandizement as anathema to the board of directors, especially Roy E. Disney (nephew of Walt). But Eisner's reluctance to reward his longtime protégé was ultimately considered unfair by many observers.
So came the rebellion, during which Katzenberg—more popular than his boss, around town and with the press—played to the balcony, orchestrating coverage, making certain no one mistook him for the villain. The day he was forced to resign, Claudia Eller, a reporter for the L.A. Times, who had been on the Disney lot for a movie screening, was brought into Katzenberg's office by Terry Press. As a stream of shocked executives entered the room offering their condolences, some of them weeping, Eller dictated notes over the phone to her colleagues at the paper. But this was just Act I.
Next move: Katzenberg would strike back, and quickly. It was expected in a town raised on The Godfather—parts I and II. Counseling him was his ally and mentor, David Geffen. A shrewd strategist and brutal foe, Geffen had been encouraging his friend's quest for ascension at Disney, and feeding the press in Katzenberg's favor. But Geffen had misjudged Eisner.
Who could say for certain what game Geffen was playing? Here was a cunning macher who lived to maneuver all the players on the board according to whatever scenarios he was advancing. "People are always calling him, spilling their guts out," said a source. "There is no deal he is not privy to. [And he uses] every piece of information to further himself and his investments." Waves of change were rolling, and Geffen would ride them—to the bank or wherever his preferred destination. He was following the evolving situation not just at Disney, but at MCA, closely. Wasserman's job wasn't what interested him: Geffen, who liked working behind the mirror, had outgrown offices. But if there was going to be a power vacuum, he would help determine who filled it, and Hollywood's future, in which he certainly planned to figure.
CAA's Michael Ovitz, a persistent fly in Geffen's ointment, was getting too big, too full of himself. He had driven stars' prices up to the point that some considered dangerous, and he was starting to broker not just the big deals but the biggest. In 1989, after helping Sony buy Columbia, he had attempted to set himself up as that company's new chief executive. These days he was gazing at Wasserman's post at MCA/Universal, a company he'd helped sell to Matsushita. Geffen, who had a large financial stake in MCA, didn't like it.
Katzenberg and Geffen had met years back, when Katzenberg was an assistant to Barry Diller, then chairman of Paramount. Katzenberg had been charged with meeting Geffen's plane at LAX and, sensing that this was not a man inclined to wait for the Vuitton, had whisked him through customs so fast that Geffen blinked—and saw himself. In Hollywood, nothing beats narcissism for inspiring a lasting relationship.
Katzenberg's battle with Eisner punched Geffen's buttons. How many times had Geffen endured his own battles with ungrateful father figures: music moguls Ahmet Ertegun and Clive Davis, Warner Communications CEO Steve Ross. The six-foot-three, ruddy-cheeked Disney chieftain had grown up with silver and suits, boasted about books he had actually read. Geffen sped through memos, traffic, people. He remained the scrappy Jewish kid from Brooklyn's Borough Park who had kept his ambition upfront and his sexual orientation a secret.
If there was a show to come, Geffen, slugging it out in Katzenberg's corner, would rev it up. And the members of the press were waiting to see just when the story would break. "Ever since Jeffrey stepped down from Disney, we'd been hearing rumblings," said Alan Citron, then a reporter at the Los Angeles Times. There were hints suggesting that Katzenberg would be moving on to something illustrious, possibly a new company. "It was like, OK, when's the next shoe going to drop? We'd been obsessively chasing the story, concerned we'd get beat by the New York Times or the Wall Street Journal."
In newsrooms across the country, the chase was on.