Eisner and Gold: Unlikely Allies in a Common Cause

12 November 2004

Before the small Delaware courtroom was shaken to its foundations late last month by the premiere of showbiz sockeroo, Disney shareholders versus Disney directors, there was little love lost between Michael Eisner, chief executive of the Walt Disney Company and former director-cum-dissident shareholder Stanley P Gold.

The twosome are unlikely bedfellows. Gold had actively campaigned with another mutineer and former director Roy E Disney for Eisner's removal from the board. Although unsuccessful in that aim, the duo led the shareholder revolt that forced Eisner to relinquish the first segment of his dual role as chairman/ceo earlier this year [WAMN 04-Mar-04].

However, over the hot potato of the hiring and firing of Michael Ovitz, the trio are as united as the Three Stooges. Giving evidence to the court as a co-defendant, Gold testified that Eisner kept him abreast every step of the way with regard to negotiations over Ovitz' recruitment as Disney president.

There had been ten to twelve conversations between the two men about the Ovitz parleying, Gold being well aware of his potential cost to Disney. Said the latter, with understatement worthy of a British world war 2 movie: "I knew it was going to cost us lots of money."

This, along with other details of his conversations with Eisner, he conveyed to Roy Disney. Both men had lobbied in 1994 for the appointment of a senior lieutenant for Eisner, worried that the pressure of the job would impair his performance.

Not only had Eisner recently undergone bypass surgery, Disney had also struck a $19 billion deal to buy CapCities/ABC, greatly increasing the burden on senior management. According to Gold: "He [Eisner] went on and on about 'this is the person who will fit into my scheme of management'".

But Gold did not rely on Eisner's opinion alone. Feedback from his own inquiries indicated that Ovitz was "tough, difficult, but a valuable property," he said.

Nor was the former Hollywood agent the only candidate under consideration for the post, Gold testified. Other names included Disney studio head Jeffrey Katzenberg; the former chairman of Paramount Pictures and Fox, Barry Diller; and quondam US Senator George Mitchell.

Data sourced from Wall Street Journal Online and Financial Times; additional content by WARC staff