Mistrial of the Century

Not only did Ovitz’s No. 2, Ronnie Meyer, wind up taking the MCA job, but Ovitz was trying to regain control at CAA. All through August, Ovitz had met with the top dozen or so agents within his agency trying to dole out power and money. Now more than ever, Ovitz wanted to cash out and continue his career somewhere else.

Enter Eisner. The Disney chairman had to know about all of the above. So why did he pay so much?

ONE REASON, THE SHAREHOLDERS’ ATTORNEYS could have claimed, was the long and lucrative financial relationship Ovitz and Eisner shared. Since 1975, Eisner again and again put himself in the position of throwing money at Ovitz to help the agent professionally and personally. They had met when both were fledglings in the TV biz. Even Eisner loved to tell the story how just after CAA was formed by five young television agents from the William Morris Agency, he helped put the agency on solid financial footing. Then head of prime-time entertainment programming at ABC and thinking William Morris too powerful, Eisner ordered all of his people to "go out and create a new piece of business" with CAA.

Later, when Eisner was promoted to president of Paramount Pictures, Ovitz almost immediately pressed Eisner to hire TV writers Rick Eustis and Michael Elias to pen a feature script. The Paramount president agreed, but when he suggested it at a Paramount meeting, his executives rebelled. "Television people can’t write movies; it’s a different thought process," his exasperated production executive Don Simpson complained. "You’re just being prejudiced against television," Eisner replied. "You better believe it," Simpson replied smugly. "It’s a different world."

Eisner backed down. But if he couldn’t throw Ovitz business, as he had at ABC, then he would make sure his people at least met the CAA president. "We were welcomed with open arms at Paramount," recalls then–CAA literary honcho Tony Ludwig. "They always read our scripts, always took our meetings. They always helped us, even though we had nothing to help them." But soon, CAA and Paramount were deep in business together on several John Belushi projects. So important was his connection to Eisner that Ovitz even took Eisner’s side against the comic.

After Eisner took over as chairman and CEO of Disney, there were even more deals between the two men (The Color of Money; Good Morning, Vietnam) and eventually too many to count. Eisner even helped out Ovitz by hiring his brother Mark. In 1986, when then Wall Street Journal reporter Michael Cieply (now movie editor at The New York Times) was preparing a front-page profile on Ovitz that first outed him as "the most powerful individual in Hollywood," the CAA chieftain tried to scare Cieply off the story, fearing it would make him too much of a target. At one point, Ovitz even enlisted the help of Eisner, who warned Cieply, "If you write this story, it won’t be good for you." And in 1989, when a distraught Ovitz begged Eisner to defend him against accusations that he threatened screenwriter Joe Eszterhas with career annihilation for wanting to leave the agency, the Disney chairman took the unusual step of calling members of the media and proclaiming Ovitz’s innocence. Eisner’s wholehearted defense got the press off Ovitz’s back and single-handedly saved Ovitz’s bacon.

Now, as far as the defense goes, Eisner's spinners should have spun that he deserves an award for hiring Ovitz, not a trial. How, with one move, Eisner removed a hugely destructive thorn from Disney's and Hollywood's collective side. Hollywood might have been faced with financial ruin since Ovitz would have jacked up the prices of stars and directors even higher in movie and TV deals. Instead, Ovitz's departure from CAA leveled the playing field in Hollywood overnight, affecting not only the future fortunes of other talent agencies and studios and networks, but also everything entertainment-related. Why, Eisner probably saved Disney in the short term 10 times the $140 million pact given to Ovitz and billionsin the long run.

Let’s also not forget, the defense lawyers should be telling the court, that after Disney's purchase of ABC, Eisner needed to shore up Wall Street’s shaken confidence in his health by immediately hiring a helper to run the newly gargantuan enterprise. As to why Eisner didn’t know in advance that Ovitz wouldn’t be a good fit at Disney, the obvious fact that they’d been friends for over 25 years, that their wives were nearly inseparable, that their families always spent vacations together in Aspen, Hawaii or the Mediterranean, may have camouflaged the reality that these two men hadn’t faced off on a business deal mano a mano in at least a decade. Sure, their surrogates had been butting heads deep in the trenches of everyday agency-studio warfare (with Eisner coaching Katzenberg behind the scenes to "Do it more!"). But though the two men knew each other intimately, they had lost touch professionally after becoming gods on Mount Hollywood.

With much of the testimony focusing on the $4.8 million in expenses that an outside auditor said Ovitz charged the company, Eisner’s lawyers should stop and say, "So what?" The report ultimately identified only $140,000 out of that sum which Ovitz owed the company. Pennies compared to the fraud at Enron, Global Crossings, Adelphia et al. Heck, Hollywood only makesmovies about toga parties; it doesn’t live them like Dennis Kozlowski at Tyco. The defense lawyers should read into the record pages from Christopher Byron’s recent tales of CEOs gone wild, Testosterone Inc. The stuff about former CEOs Jack Welch (the adulterer from General Electric), Ron Perelman (the bully of Revlon) and Al Dunlap (the dictator of Sunbeam) is like a vial of Viagra for corporate-malfeasance junkies and makes Ovitz’s pettiness, even sexed up by the plaintiffs’ lawyers, look like limp-dick talk. In fact, maybe there’s a new genre for this kind of courtroom sideshow: corporate porn.

Now that’s entertainment.

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