27. HARVEY II

ON THE NIGHT OF JANUARY 20, 2002, Universal chairman Stacey Snider was feeling rather pleased. Universal and DreamWorks' coproduction A Beautiful Mind had won several awards at the Golden Globes, including Best Drama. Long ridiculed in Hollywood for being a less-than-serious awards show, the Globes had gained more credibility over the years, and was now considered one of the most reliable prognosticators when it came to the Academy Awards. (People were also willing to admit that it was a lot more fun to drink, eat, and mill around on the smoking patio during the Globes ceremony than remain in their seats during the stuffy Oscars.) That A Beautiful Mind, which since being released on December 21 was on its way to grossing nearly $200 million at the U.S. box office and had received strong reviews, should do well at the Globes was not altogether surprising. Considering its star (Russell Crowe), director (Ron Howard), and Important Subject Matter—the story of John Nash, the schizophrenic Nobel laureate mathematician—the film was what's known as "Oscar bait." But even so, its win at the Globes provided no shortage of joy for Snider, considering what it meant for the film come the "real" awards ceremony in March.

A petite blonde who was always immaculately composed down to her perfectly pedicured toenails and Prada handbag, Snider was one of the most powerful women in Hollywood, having risen through the "D-girl" ranks to become president of TriStar Pictures and then chairman of Universal in 1998, under Universal president Ron Meyer. At both TriStar and Universal, Snider had worked closely with Spielberg, who trusted her enormously. Like Kathy Kennedy, she was a "Steven Girl," a member of his select inner circle. Spielberg had even asked Snider to run Amblin, back before Walter Parkes and Laurie MacDonald took the job. Though she demurred, the two remained close friends and allies over the years.

Like many of the most visible women in Hollywood, Snider's rise had been assisted by powerful men, and not just Spielberg. Her early success came as a development executive for producer Peter Guber, who brought her with him to Sony when he became head of the studio with Jon Peters in the early 1990s. Known as being tenacious and astute with material, Snider was always prepared and rarely seen without an enormous bag bulging with scripts.

Her first stop of the evening, once the Globes were over, was Universale party at Trader Vic's, the Polynesian-themed restaurant in the Beverly Hilton, which serves as the Globes' headquarters every year (the ceremony itself is held in the hotel's ballroom). Afterward, Snider moved on to CAA's post-Globes party at the nightclub Muse, where her glowing mood darkened at the sight of Harvey Weinstein lumbering toward her. Miramax's own Best Picture hopeful, Todd Field's In the Bedroom, had lost Best Drama that night, and Weinstein was not happy. But what had really set him off was a story he'd been told would be running in the New York Post the next day, claiming that Miramax had been badmouthing A Beautiful Mind and saying Nash was an anti-Semite. This was arguably the most potent charge one could lob in Hollywood, given the industry's disproportionately Jewish population. Weinstein was convinced the story had been planted by Universal and DreamWorks.

As Weinstein neared, Snider braced her five-foot-two-inch, 105-pound frame. The Miramax chairman raised a jabbing finger: "You're going to go down for this! Get your house in order. And clean up your act! Or otherwise we will!"

Snider held her ground under the ambush. Later, she recalled, "He was yelling. He was very angry. He wouldn't come down from it. Usually, you can say, 'Let's relax, let's talk about this, we can figure this out.' He just kept going."

Weinstein was convinced that Terry Press, specifically, was behind the Post story. Universal, in his opinion, was also a culprit because of its alliance with DreamWorks on the Golden Globe-winning picture. Finger-pointing abounded. Universal and DreamWorks were convinced that Miramax itself was behind the mudslinging campaign against Mind—which claimed that the film glossed over less glowing aspects of Nash's life. (The studios were also suspicious of the Moulin Rouge! camp—namely Fox and director Baz Luhrmann's representatives.)

Weinstein, in turn, felt that DreamWorks was doing its own mudslinging, and badmouthing Miramax to reporters, such as the Post's Nikki Finke. The lobs were constant and ferocious, made all the more so by the media, which was eager to jump in and chronicle every jab. The Internet, which, unlike three years earlier, during the Saving Private Ryan versus Shakespeare In Love face-off, was a major medium, and a major voice, in the Oscar race, speeding up the timetable in which information was dispersed.

The next day, Snider called Katzenberg. She wanted him to know that Weinstein was in attack mode; she also knew that Katzenberg and Weinstein were friends—"Hollywood friends," at least. After hanging up with Snider, Katzenberg called Weinstein. "You can't work this way," he said. "You are endangering my friendship and you must apologize to Stacey." The two men had a series of charged conversations over the following twenty-four hours. At one point, Katzenberg said to Weinstein: "I'm sick of you always pointing the finger at Terry [Press]. You think if it's raining outside, it's Terry's fault."

Weinstein said that he was paranoid about Press and was certain it was she who'd spoken to the Post.

When Katzenberg said Press had told him that she hadn't spoken to Finke in six months, Weinstein didn't buy it. This caused Katzenberg to shoot back: "You are speaking about somebody who's family to me. So you better think before you call her a liar."

According to former Miramax sources, Weinstein wasn't trying to win a Best Picture Oscar for In the Bedroom, though of course that would be nice. Although the film had been a festival darling and was popular with the press, which loved talking to the enigmatic Todd Field, Weinstein had no illusions: what mattered to him was that In the Bedroom be nominated for a Best Picture, which would propel its box-office grosses. After all, a successful awards season "could mean the difference between a movie grossing $5 million at the box office and grossing $20 million." And that $15 million was worth fighting for.

The bloodshed had begun back in December, when Internet sensationalist Matt Drudge had posted a story on the Drudge Report claiming that Nash's sexual interest in men—addressed in Sylvia Nasar's biography of Nash, upon which Mind had been inspired but was not officially based—had been "deliberately left out of the movie!" (Actually, the book chronicles several adolescent crushes that Nash had. Based on the book, Nash might be termed "bisexual" or, most fairly, beyond conventional categorization.) The day after the story in question was posted, Nash's sexuality was discussed and debated on the morning talk show The View. A Beautiful Mind was also taking a beating on FoxNews.com, where columnist Roger Friedman (who'd worked at Weinstein's short-lived Talk magazine) was routinely drubbing A Beautiful Mind while fawning over Miramax's Oscar contenders.

The day after Christmas, USA Today weighed in with a piece titled "It's Beautiful, But Not Factual," in which Crowe was quoted as saying, "What I would consider to be the most interesting parts of [Nash's] life are not going to be part of our movie." The story went on to say that the timing of Nash's schizophrenia was inaccurately depicted, and that the film left out his supposed bisexuality. When Press read the story, she told people that it made her cry.

As the Oscars neared in March, Drudge picked up the anti-Semite thread, writing: "Some Academy members are discovering shocking Jew-bashing passages found in the book on which the movie is based!"

When he read this, Brian Grazer, who produced A Beautiful Mind, thought, "We're dealing with a man who's been schizophrenic for forty years, and now you want to load him up in a wheelchair and push him onto the 405 Freeway? It's so antithetical to the point of the movie, which is to help destigmatize mental disability ... It's so fucked up."

Unbeknownst to Miramax, or anyone else, Universal came close to throwing gas on the fire when an interview between Nash—who was otherwise being kept from the media for fear of what might come out of his mouth—and 60 Minutes' Mike Wallace was arranged. Wallace had struggled with bouts of clinical depression and was known to sympathize with Nash. In one sequence of the program, Wallace interviewed Nash's son, John Charles Martin Nash, whose own schizophrenia had led him to step down from a professorship at MIT. When Wallace asked him why he was no longer teaching, he replied: "Because of the Jews!" The Nash camp said it was his mental illness talking, but it left Universal fearing it was surely all over. Luckily, the sequence was cut from the program, which ended up being, as predicted, a love letter to the Nash family.

Another tactic Universal was pursuing was talking up Howard, who was viewed as a more commercial than awards-worthy director. Howard believed that the reason his Apollo 13 didn't win Best Picture was because he hadn't been nominated as Best Director, and so the cast of Beautiful Mind was instructed to always mention what an "actors' director" Howard was in interviews.

Even the L.A. Times' Patrick Goldstein's column on the unseemliness of the campaigning incited attacks. In response, Miramax's publicists sent Goldstein a ten-point defense of their tactics—the first letter of each point spelled: D-R-E-A-M-W-O-R-K-S.

The reality was that DreamWorks had very little input on the marketing and Oscar campaigns for Mind, given that it was the film's international distributor. But, an aggressive and territorial partner, it had not been completely relegated to the sidelines, either. According to Universal sources, when Katzenberg and Press didn't like one of the trailers Universal had made for the film, which pushed A Beautiful Mind more as a thriller than a drama, they complained to Grazer, championing another trailer that stressed the romance between Nash and his wife, Alicia (Jennifer Connelly).

As attacks on Mind heated up, power plays became beside the point. What mattered more was that the movie needed to be protected. Universal, less experienced in gritty Oscar campaigning, relied heavily on DreamWorks to help fend off bombs.

Press had developed a relationship with Crowe during Gladiator, which paid off when Crowe, almost on cue, became a public relations nightmare in the midst of the Oscar race. Following his Best Actor win at the British Academy of Film and Television Arts Awards in February, Crowe exploded at the show's TV director, pinning him up against a wall and spewing obscenities at him because he had edited his acceptance speech. Press was brought in to clean up the mess and arranged for Crowe to make a public apology. Even so, Universal was certain Crowe had blown his shot at an Academy Award and prayed that the damage wouldn't spread to the other filmmakers.

When the Oscar nominations were announced on March 12, A Beautiful Mind received eight nominations (including Best Picture, Best Director, Best Actor, Best Adapted Screenplay, and Best Supporting Actress) compared to In the Bedroom's five (Best Picture, Best Actor, Best Actress, Best Adapted Screenplay). Amélie, Miramax's French-language film starring the Audrey Hepburn look-alike Audrey Tautou, also received five nominations, and Iris, another Miramax entry, picked up acting nominations for Judi Dench, Jim Broadbent, and Kate Winslet.

The real winner at this stage, though, was New Line's Lord of the Rings: The Fellowship of the Ring, which trounced the competition with a whopping thirteen nominations in categories across the board, from technical achievements to directing (Peter Jackson) to acting (Sir Ian McKellen). If there was a race, it was between Rings and Mind, with Moulin Rouge!—which received eight nominations—as the wild card.

The advantage Mind had was that it was the type of film the Academy loved—a sweeping drama with heartfelt performances that was in no way, shape, or form small. Still, Rings was a not insignificant threat. The last time a film that was nominated in thirteen categories did not go on to win Best Picture was in 1966, when Who's Afraid of Virginia Woolf? lost out to A Man for All Seasons. On the other hand, Rings was a fantasy film, a genre not typically favored by the august members of the Academy. The race was on.

For Katzenberg, the 2002 Oscar race was about one word: Shrek. The showdown this time was with Pixar's Monsters, Inc. for Best Animated Feature. (The other nominee was Jimmy Neutron.) Besides being another Disney versus DreamWorks race, the runoff between DreamWorks and Pixar also demonstrated the utter domination of animation achieved by these two companies by 2002.

DreamWorks hadn't pushed Shrek for Best Animated Feature—that, Press and company assumed, was a given. Rather, they were gunning for more lofty honors. "For Your Consideration" ads for Shrek that ran in the trades touted Mike Myers, Cameron Diaz, and Eddie Murphy for their acting chops, suggesting their vocal contributions to Shrek were on par with, say, Jim Broadbent's performance in Iris or Kidman's in Moulin Rouge! A Best Picture nomination for Shrek was not impossible. Press had pulled it off before at Disney with Beauty and the Beast, the only time an animated film has ever received a Best Picture nomination. In the end, however, Shrek was selected in just two categories: Best Animated Feature and Best Adapted Screenplay.

Before anyone could relax, a new dilemma was presented. Should Shrek win, who would accept the award before the tens of millions of Oscar viewers? The issue was murky, seeing as there was no acceptance precedent for animated films. On live-action titles, producers accepted. Directors, after all, competed in their own category. But animated films only had one category. So who should claim the glory?

According to Academy guidelines for the new Oscar category, no more than two people could accept the award, and they must be "the key creative talent most clearly responsible for the overall achievement." Given the work he'd invested in Shrek, Katzenberg felt that he should accept the Oscar. But when Geffen heard this, he balked. Press also advised Katzenberg that it was a bad idea. Ever concerned about Katzenberg's public image, Press feared that were he to accept the Oscar, it would confirm claims by some camps that Katzenberg was a credit grabber. More seriously, if word of his intentions got out, Shrek's chances might be diminished.

The conversations with Press and Geffen were hard for Katzenberg. "The one thing Jeffrey wants and hasn't been able to get is an Academy Award," said Sandy Rabins, who had become aware of the dilemma when she received a call one day from Katzenberg, whom she hadn't spoken to since her exit from DreamWorks.

"It was a rainy day and I got an emergency call to run out there, to the Glendale campus," said Rabins, who, as an executive producer on Shrek, had to sign off on forms submitted to the Academy. "Jeffrey said, 'You need to get here, we have to talk about this—talk about who's taking the award.'" Considering the weather—and the subject—getting in the car and driving across town from Sony's Culver City campus, Rabins said, "was the last thing I wanted to do."

When Rabins arrived, she walked into a meeting packed with DreamWorks' top brass. The mood of the room was somber. Press started things off by saying that in light of a recent, unflattering article about Katzenberg, it was an especially bad time for him to be in the spotlight accepting an award. "Terry's speech was like, 'Jeffrey's been screwed and he can't [accept the Oscar],'" said Rabins. "She was kind of defending him, on the one hand—in the way that only Terry Press can do—and on the other hand, saying, 'He can't have it.'"

The discussion then turned to who should get the Oscar, if not Katzenberg.

"There was a big conversation then if we should go to (codirectors) Andrew [Adamson] and Vicky [Jenson] or not," said Rabins.

Given the number of people who had been involved in the film over the course of its life, the decision-making process was not simple. The most obvious choice, to many, was Adamson. But some felt that he was already getting too much credit for a movie that was, by definition, a collaboration. In the end, producer Aron Warner was designated the would-be Oscar bearer.

At Pixar, which was mounting its first-ever campaign, there was already a feeling that Shrek would be difficult to beat. Even before Tony Angelotti, whom Disney had hired as an Oscar consultant, was shown Monsters, he warned Steve Jobs and John Lasseter that Shrek was a substantial threat. Time critic Richard Schickel had declared it the best film of 2001. Even Jobs conceded that Shrek was "a juggernaut."

"Still," Jobs said, "that doesn't mean we can't give it our best effort."

Despite all the weeks of warfare leading up to the Oscars, by the time the Academy Awards weekend rolled around in late March, DreamWorks and Miramax were, at least for appearances' sake—or at least in the Hollywood sense of the term—friends. Weinstein had even showed up at Russell Crowe's room at the Bel-Air Hotel waving his Oscar ballot. "See! I'm voting for you!" At Miramax's annual pre-Oscar fete—a cross between a night of follies and, according to the singer Sting, a "bar mitzvah"—at the uncompromisingly hip Mondrian Hotel on the Sunset Strip, Katzenberg and Weinstein went so far as to dress up like gladiators (a reference to another DreamWorks Oscar movie) for their skit. The gag was this: in light of all their Oscar sparring, the men were receiving anger-management counseling from Snider (played gamely by Christina Applegate). But to onlookers—including Cameron Diaz, Benjamin Bratt, and Ethan Hawke and his then wife, Uma Thurman—the sketch was baffling and shocking. Jaws dropped as Katzenberg and Weinstein rolled through this montage of R-rated jabs:

SNIDER (channeled through Applegate): First it was Saving Private Ryan and Shakespeare In Love, and now it's backbiting about A Beautiful Mind!

WEINSTEIN: I swear on the life of my driver, I never said any of it! (Big cheer from crowd.) But Nash was gay, wasn't he?

KATZENBERG: Hey. Looking at you in that outfit, you oughtta know. (pause) I bought your company.

WEINSTEIN: Yeah. In 1993 with Michael Eisner's money.

KATZENBERG: Lucky for you, back then he still had some.

WEINSTEM: Not that you ever saw any of it.

KATZENBERG (TO APPLEGATE/SNIDER): Does it turn you on when he talks dirty like that?

WEINSTEM: Jeffrey, if you're looking for a three-way, call Barry Diller.

KATZENBERG: Barry, I begged him to take that out. Honest to God, I begged him.

WEINSTEM (SIMILARLY BREAKING CHARACTER): Michael, Jeffrey made me put that line in, I swear.

APPLEGATE/SNIDER: Enough. Now look. This isn't about you ... This meeting is about me. This weekend is about me. The Academy Awards are about me. It's all about me.

Applegate/Snider then explained that she was the daughter of a child psychologist and a marriage counselor and that, borrowing their techniques, the two men should cuddle teddy bears and make up. Not that anyone for a second believed that Katzenberg and Weinstein were truly allies.

"Whenever [Weinstein and Katzenberg] got together in an electric atmosphere, there was a lot of ill will," said one insider. "Harvey looked at Jeffrey as the guy who saved him from oblivion, when Miramax was not doing well financially. But once Jeffrey left Disney, he didn't look at Harvey as the guy he raised, he looked at him as the competition. Those two guys are the most highly competitive executives that live"

The mood at the actual Oscar ceremony was affected by the memory of 9/11, which was still relatively fresh, even for those wearing strapless Vera Wang (no one was immune from security checks). Tom Cruise opened the show by discussing the terrorist attacks. Later, Kevin Spacey asked the audience to stand in a moment of silence for the victims of 9/11. A tribute film to New York City made by Nora Ephron was shown and introduced by another New York dignitary, Woody Allen, a staunch East Coaster who famously never attends the Oscars and who received a standing ovation. "Thank you very much," he responded. "That makes up for the strip search."

Allen's surprise appearance had been orchestrated by Press, who'd flown to New York to personally appeal to the director. The night became all the more historic when Halle Berry and Denzel Washington received Best Actor awards, for Monster's Ball and Training Day. It was the first time that two African Americans had simultaneously won best acting Oscars. Adding to the poignancy was that Sidney Poitier, the first—and only, until now—African American to win a Best Actor award, also received a Lifetime Achievement Oscar.

Nothing could upstage the sight of Berry, Poitier, and Washington clutching their Oscars amid tears. Still, when Nathan Lane—who'd provided the voice of Timon in The Lion King— announced the Best Animated Feature category, Katzenberg was on the edge of his seat. A moment later, when Lane pronounced the monosyllabic word Shrek, Katzenberg was out of it, on his feet, hugging everyone in sight.

In February of 2002, a month before DreamWorks' third straight Oscar victory, Judd Apatow wrote a note to television critics begging them to write more "about our little show," as well as to "pray for us." This time, the little show in question was Undeclared, Apatow's sophomore series for DreamWorks TV, which was a sequel of sorts to Freaks and Geeks, though this time his posse of anti-Socs had matriculated into the halls of higher learning. Undeclared had debuted in the fall of 2001 on the Fox network. Like its predecessor, the show was pure Apatow: unvarnished, funny-smart, and populated by underdogs. "It was like Freaks and Geeks 2," said Joel Madison, a writer and consulting producer on the show.

Even before Apatow was pleading for more coverage for a show that was tanking in the ratings, there had been trouble, as Apatow's creative method, or lack thereof, clashed with the network. On Freaks and Geeks, Apatow and show creator Paul Feig had written a few characters based on the actors playing them. But on Undeclared Apatow was writing virtually the entire show around the kids as they were cast. As a result, until all the actors were lined up, there was no script. When Gail Berman, president of entertainment at Fox, would call Apatow in a panic and say: "We need to see outlines! We need to see pages!" to Berman's disbelief, Apatow would say that he wasn't done casting yet.

Even when there was a script, Berman was unimpressed.

"Judd does what he calls 'vomit passes,'" said Feig, who brainstormed with Apatow about Undeclared in the early stages but then went off to pursue a show of his own he was developing. "He just blurts everything out. It's kind of all there, but it sort of needs to be cobbled together still ... And the networks just can't handle that because they're used to everything that's put in front of them being finished and polished ... You can tell them a million times, 'No, this is just a document,' but they can't process that."

Apatow's casting choices weren't winning him any more points with Fox, which refused to cast Seth Rogen—Apatow's muse and alter ego—as the lead. After long, drawn-out battles, Apatow finally relented, casting Rogen as a supporting character and hiring him as a writer on the show. Apatow's next choice for the lead was Jay Baruchel, a reedy nineteen-year-old from Montreal who looked like he could last about two minutes, tops, in the ring with Woody Allen. This occasioned more fights. When Berman asked to know more about Baruchel, who had little acting experience, all she was told was that he was "this kid." (In the end, Apatow won the round and the kid was cast.)

Tension grew between Apatow and Fox, which prided itself on being "edgy" and "sexy." When Sandy Grushow, head of programming at Fox, told Apatow that he wanted Undeclared to be raunchier, a la American Pie, Apatow complained sorrowfully that, "They want me to be the Spice Girls and I want to be the Pixies."

When Undeclared debuted in September, Spin City remained DreamWorks TV's only success story, and the show that was paying most of the bills. The hope was that Undeclared, along with DreamWorks' other fall launch— Off Centre, a comedy for the WB by American Pie directors Chris and Paul Weitz—would join Spin City in the syndication-bound-series stratosphere. At first, this looked feasible, or at least not impossible: Undeclared was instantly lauded by critics as a breath of fresh air.

But when ratings didn't match reviewers' enthusiasm, Fox began treating Undeclared like a prickly pear, airing it sporadically and running shows out of order. Being put through the ringer for the second time in a row, Apatow was losing his patience, as well as his mind. In December, when Time ranked Undeclared number three in its top-ten list of the best things on television in 2001, saying that it "takes the eccentric sensibility of Freaks and Geeks and applies it to smart, sharply observed coming-of-age stories of self-discovery, romance and beer," Apatow was all the more convinced that Fox was doing him wrong. In a fit of frustration, he framed the glowing review and scribbled out a note to Grushow, who had pulled the plug on him once before (The Ben Stiller Show had also been at Fox). The note succinctly thanked Grushow for, once again, fucking him in the ass.

When Apatow called Justin Falvey, who was now running DreamWorks TV with Darryl Frank (Dan McDermott had left to pursue screenwriting), and told him what he'd done, Falvey panicked.

"Judd! Are you crazy? You can't do that! They'll cancel the show!" Falvey said, and dispatched a PA to go intercept the package.

Around this time, Apatow was also on the receiving end of incendiary attacks. Wanting to have Topher Grace, who starred in another Fox comedy, That '70s Show, guest star on Undeclared, Apatow reached out to the show's producer, Mark Brazill. When he didn't hear back, Apatow e-mailed. Brazill replied by e-mailing him a scathing note, accusing him of having once stolen an idea from a pilot he had made for MTV and using it in The Ben Stiller Show.

"There's a saying, 'I forgive but I don't forget. And I don't forgive,'" Brazill wrote in what became an infamous e-mail exchange. "So, now you know. Although I kind of think that you already did." After Apatow wrote back and denied that he had ever done such a thing, saying "I am not a thief of ideas. I'm sorry you believe differently," Brazill fired off another note. This one said, "Personally, I feel you've made a career out of being a sycophant to [Jim] Carrey, or [Garry] Shandling, or Roseanne. When you weren't ... you were stealing from lesser known comics or leeching off other people's ideas..." The note was signed, "Get cancer. Love, Mark." In a later e-mail, Brazill told Apatow to "die in a fiery accident and taste your own blood."

Brazill eventually apologized to Apatow and peace came—sort of. When Brazill sent Apatow a gift basket, Apatow warned, only half-jokingly, "Don't eat that."

By February, things were looking grim for Undeclared, and Apatow knew it. As a last-ditch effort, he sent his SOS letter to critics along with the show's final episodes. Undeclared wasn't canceled just then—it managed to eke out an off-and-on-again existence for a few more months. But by the spring it was off the air. (Off Centre was also ultimately axed.)

By mid-2002, the fate of DreamWorks TV, too, was looking questionable. Spin City had fallen in the ratings, and after a full, six-year life, was canceled by ABC, leaving DreamWorks bereft of its only hit show. Adding to the blow, Spin City's second cycle of syndication revenue wasn't as high as DreamWorks had anticipated. So much for the notion that everyone could sit back and relax because Spin City was paying the bills.

In recent years, DreamWorks TV had gradually been cutting back. Publicity, business affairs, casting, and production had all been downsized; everything, in fact, had been trimmed except the creative department. But with the studio's deal with ABC about to expire in the summer, even Katzenberg knew it was time to get realistic. In August it was announced that DreamWorks was transitioning from an independent studio to a smaller, more traditional production studio with a first-look deal at NBC. The network would be taking care of DreamWorks' overhead and would receive a majority ownership stake in shows it chose to develop; i.e., future riches from a Spin City—type hit would be lining NBC's coffers, not those of DreamWorks.

Announcing the news, Katzenberg said: "The world has changed. The networks have a much, much stronger hand and are a much stronger force in the development and production of shows for air. You can stick your head in the sand and ignore that at your own peril."

A few more Spin Citys would have likely prevented a change in course. Greater success in television, more so than almost any other division, would have gone a long way to buoying DreamWorks' bottom line, and perhaps could have changed its ancillary-division-dumping trajectory. Instead, DreamWorks TV scaled back and became a traditional production company.

Lest anyone think this setback was anything more than a minor business adjustment, going forward, Katzenberg said, the live-action studio—with Mike De Luca now onboard—would produce between ten and twelve films a year, up from seven to eight, and the animation studio would now be making two to three pictures annually.

Still, there was curiosity as to how stable the company was. The live-action studio was swinging misses again— The Time Machine, though split with Warner Bros., was a disappointment (it grossed $56 million U.S. on a budget of $85 million), as was Woody Allen's Hollywood Ending. In May, Katzenberg's latest (traditionally) animated film, Spirit: Stallion of the Cimarron, also failed to live up to expectations, grossing $73 million in the U.S. and just $122 million worldwide. The experience put him back in the underdog position with Eisner when, a month later, Disney's Lilo and Stitch (also a 2-D film) made $145 million in U.S. box-office grosses and $273 million worldwide.

The failure of Spirit and the success of Shrek should have signaled Katzenberg that CGI animation—and hip, unearnest storytelling—was the way of the future. In March, Twentieth Century Fox had entered the digital fray with Ice Age, a celebrity-studded (Ray Romano, John Leguizamo) CGI film about a group of wisecracking, prehistoric creatures that grossed $176 million domestically and $383 million worldwide. But Katzenberg remained unmoved. He refused to turn his back on 2-D projects and was still very much considered a "2-D guy." During the promotional campaign for Spirit, Katzenberg waxed amorous about the virtues of old-school animation, saying: "It's the difference between an e-mail and a handwritten letter. Whether it's from a loved one or a friend or even a boss, God forbid, there's an emotion that comes through a handwritten letter. There's something that human beings do when we create on a piece of paper, we put something of ourself into that."

Katzenberg, it was clear, was going to keep putting himself into the medium that had made him.