DisneyWar

1. Michael Eisner's rise to power at Disney and his transformative leadership

"Eisner had not only saved Disney, he had transformed it into the world's leading entertainment company and protected its beloved brand name."

A struggling company revitalized. When Michael Eisner arrived at Disney in 1984, the company was faltering, with its studio and animation division moribund and its assets coveted by corporate raiders. Eisner, along with Frank Wells, embarked on a mission to save and transform the company.

Strategic vision and execution. Eisner's approach combined:

• Revitalizing the animation division
• Expanding into new markets and media
• Modernizing the theme parks
• Aggressive cost-cutting measures
• Leveraging the Disney brand across multiple platforms

Financial turnaround. Under Eisner's leadership, Disney experienced:

• A tenfold increase in market capitalization from $2 billion to $22 billion in just eight years
• Record profits and revenues across multiple divisions
• A renewed reputation as a creative powerhouse in Hollywood

2. The Katzenberg-Eisner partnership: A creative powerhouse with growing tensions

"Katzenberg saw Eisner as a mentor and confidant, though the two almost never socialized."

A dynamic duo. Jeffrey Katzenberg joined Disney alongside Eisner, bringing his prodigious energy and work ethic to the studio. Their partnership was initially highly successful, with Katzenberg overseeing a string of hit live-action films and spearheading the animation renaissance.

Growing tensions. Despite their professional success, the relationship between Eisner and Katzenberg became increasingly strained due to:

• Katzenberg's ambition and desire for recognition
• Eisner's reluctance to share credit and power
• Disagreements over creative and business decisions
• Personality clashes and communication breakdowns

The breaking point. The death of Frank Wells in 1994 brought the Eisner-Katzenberg conflict to a head, ultimately leading to Katzenberg's departure from Disney and the formation of DreamWorks SKG.

3. Disney's animation renaissance: From near-extinction to global dominance

"In Little Mermaid, Beauty and the Beast, and Aladdin, Disney seemed to have conjured up the magic it so often talked about, producing deeply moving, critically acclaimed yet accessible films likely to become enduring classics."

Reviving a dying art form. When Eisner and his team arrived at Disney, the animation division was on the brink of extinction. Through a combination of strategic decisions and creative talent, they orchestrated a remarkable turnaround:

• Investing in new technology (CAPS computer animation system)
• Recruiting fresh talent and revitalizing the creative process
• Embracing Broadway-style musical elements in animated features

A string of blockbusters. Disney's animation renaissance produced a series of critical and commercial hits:

• The Little Mermaid (1989)
• Beauty and the Beast (1991)
• Aladdin (1992)
• The Lion King (1994)

Cultural and financial impact. These animated features not only dominated the box office but also:

• Revitalized Disney's merchandising and licensing businesses
• Spawned successful Broadway adaptations
• Cemented Disney's position as the leader in family entertainment
• Generated billions in revenue across multiple platforms

4. Eisner's strategic acquisitions and expansion of Disney's empire

"By the time he got back to his office, Eisner's feelings of relief were giving way to guilt about the way he'd treated Katzenberg. He realized he'd snubbed him, that he'd not had the courage to explain his decision to him face-to-face."

Building a media conglomerate. Eisner recognized the need for Disney to expand beyond its traditional business lines to remain competitive in the evolving media landscape. Key acquisitions and strategies included:

• The purchase of Capital Cities/ABC for $19 billion in 1995
• Expansion of the theme park business, including Euro Disney
• Growth of the Disney Stores retail chain
• Development of new content distribution channels

Challenges and controversies. While many of Eisner's expansion efforts were successful, some faced significant hurdles:

• Euro Disney's financial struggles and cultural backlash
• The abandoned Disney's America theme park project
• Integration challenges with newly acquired businesses

Long-term impact. Despite some setbacks, Eisner's expansion strategy laid the groundwork for Disney's transformation into a global media powerhouse, diversifying its revenue streams and expanding its reach across multiple platforms and markets.

5. The fall of Frank Wells and the subsequent power struggle

"Frank Wells had been killed in a helicopter crash returning from skiing in a remote area in the Nevada mountains. Only one passenger had survived."

A devastating loss. Frank Wells' death in 1994 was a significant blow to Disney's leadership team. As president and COO, Wells had been:

• A stabilizing force in the company
• A mediator between Eisner and other executives
• A key contributor to Disney's financial success

Power vacuum. Wells' absence created a leadership void that led to:

• Increased tension between Eisner and Katzenberg
• A reshuffling of executive responsibilities
• Uncertainty about the company's future direction

Eisner's response. In the wake of Wells' death, Eisner:

• Initially assumed Wells' titles and responsibilities
• Resisted promoting Katzenberg to president
• Eventually recruited Michael Ovitz as president, leading to further turmoil

6. Ovitz's tumultuous tenure: A Hollywood power player's corporate misfit

"Ovitz knew immediately that he was facing his first major crisis at Disney. Though not sophisticated about matters of corporate management, he knew that to be stripped of legal and financial responsibilities meant he was not really a chief operating officer, and that it left him dangerously bereft of any management authority."

A high-profile hire. Michael Ovitz, known as "the most powerful man in Hollywood," joined Disney as president in 1995, generating excitement and high expectations.

Cultural clash. Ovitz's transition from talent agency to corporate executive was fraught with challenges:

• Resistance from existing Disney executives
• Difficulty adapting to corporate culture and decision-making processes
• Conflicts with Eisner over management style and authority

Failed initiatives. Ovitz's attempts to make his mark at Disney were largely unsuccessful:

• Proposed deals and acquisitions were frequently rejected
• Efforts to reshape Disney's music and publishing businesses were thwarted
• His management style alienated many within the company

Short-lived tenure. Ovitz's time at Disney lasted only 14 months, ending in a high-profile dismissal that would lead to years of litigation and controversy.

7. Eisner's management style: Visionary leadership marred by personal conflicts

"Eisner was not so insensitive as to fail to realize how disappointed Litvack was likely to be at the prospect of Ovitz becoming president. 'He was conflicted,' Eisner later said of Litvack. 'He didn't criticize so much the selection of Ovitz per se…. But he did criticize the need to bring in anybody because it was quote unquote 'going so well.'"

Creative vision. Eisner's leadership was characterized by:

• A strong emphasis on storytelling and creative content
• The ability to spot and nurture talent
• A keen understanding of popular culture and consumer tastes

Strategic acumen. Eisner demonstrated:

• A talent for identifying lucrative business opportunities
• The ability to negotiate complex deals and acquisitions
• A focus on synergy across Disney's various divisions

Personal conflicts. However, Eisner's management style was also marked by:

• A tendency to micromanage and interfere in creative decisions
• Difficulty sharing credit and power with other executives
• Personal grudges and feuds that sometimes influenced business decisions

Legacy. Eisner's tenure at Disney was ultimately a mix of tremendous successes and significant controversies, leaving a complex legacy that continues to be debated in the entertainment industry.

Last updated: January 23, 2025