DisneyWar - The Battle for the Magic Kingdom

Disney may be well-known for its dazzling theme parks, oh-so-cute cartoon characters, and its commitment to family values, but life at the company under Michael Eisner was anything but a fairly tale. As James B. Stewart describes in this book, Eisner's reign as the ruler of the magic kingdom was characterized by a particularly self-serving style of management, and several misadventures which cost the company's shareholders millions of dollars. But for Eisner, the story ends happily enough - even if he has lost his kingdom, he can still hold onto the millions he made during his years at Disney.

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Even though the contract spelt out the requirement clearly, Eisner refused to pay up, and eventually the matter went to court. The matter was finally settled out of court, and Disney ended up paying Katzenberg 280 million dollars. Ironically, if Eisner had agreed to honor the contract in the first place, Disney would have ended up paying up a much, much smaller sum. The hiring and the subsequent firing of Michael Ovitz is another incident that cost Disney heavily, both financially and in terms of credibility. Ovitz was one of the most successful agents in Hollywood, and Eisner's best friend. Although he had no prior experience working in a large public company, he was hired by Eisner in 1995 to be the president of Disney. However, given Eisner's reluctance to groom a possible replacement for himself, Ovitz was given little to do, and all his proposals and projects were scuttled by his boss. After fourteen months, Ovitz was fired by the board, with a 140 million dollar severance package - about 10 million dollars for every month he spent with the company. These were not the only blunders that cost Disney and its shareholders. Eisner himself was lavishly paid even after Disney's growth stalled, and became one of the wealthiest people in the United States.

The book also deals at length with Disney's acquisition of Miramax and its troubled relationship with the Weinstein brothers, the acquisition of Capital Cities/ABC, the ill-advised purchase of the Family Channel, and Go, its disastrous foray on the internet. However, to give Eisner credit, he did not fall for all the fads that were prevalent during the heyday of the dotcoms. Unlike Gerald Levin of TimeWarner who led his company into a disastrous merger with AOL, Eisner kept Disney out of the clutches of eager suitors from the digital world.

One of the striking characteristics about Eisner is his extreme insecurity. For many years, he refused to name a successor, and when someone came to be perceived as a possible successor, he would immediately begin to run him down in front of the board and the media. Anyone who was successful at Disney soon found himself (or, in at least one instance, herself) on the way out. He would constantly undermine the authority of his subordinates, especially those who could possibly outshine him, even going to the extent of asking the subordinates to spy on their bosses.

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