The Keys to the Kingdom (38 page)

Perhaps feeling overexposed, Katzenberg let Hoberman do some of the talking. He gave an interview, pledging that Disney would loosen up controls on filmmakers—which was certainly his plan at that point. The old Disney wouldn't have hired director Randa Haines (
Children of a Lesser God
) to do a film like the summer of 1991's
The Doctor,
a drama with William Hurt, Hoberman said. But Haines was hired and permitted to make the film her way. Disney wanted a more comedic ending, while Haines preferred a more reflective finish. When both endings were tested, Disney's did better with audiences, but the studio still let Haines have her way. And
though the picture didn't perform, Hoberman said, the studio had “never received more goodwill from a film.”

Even so, Disney hardly sounded like a haven for artists. In many ways, the “new” Disney seemed a lot like the old Disney—only a bit less so. Hoberman said the studio would return to a strategy that it had never abandoned: casting fading stars in cheap movies. He cited, as a case in point, the upcoming thriller
Deceived,
which starred Goldie Hawn. But the studio was also spending big on pictures like
The Distinguished Gentleman
with Eddie Murphy, a film that Hollywood Pictures had in the works for release in December 1992. In the end, these movies had only one thing in common: they didn't work.

“Part of the problem is [Katzenberg's] taste,” said a lower-level studio executive at the time. “People get all over him for these simple feel-good movies. That's who the guy is and that's not going to change. We are a big commercial company and we are not going to make
She's Gotta Have It
.”

Katzenberg was—in theory, at least—delegating more authority. And Hoberman and Mestres were giving more freedom to their creative executives—or so they said. But Katzenberg still swooped in with his myriad opinions. Most of his attention was focused on Hollywood Pictures. In May, for example, Katzenberg pulled the plug on
Evita
in one of its incarnations because Mestres couldn't squeeze another $3 million out of the budget. He also cut back an ill-conceived remake of
Born Yesterday
by knocking out Tom Selleck and Nick Nolte, leaving Melanie Griffith as the only major player. And Katzenberg was so obsessed with Kurt Russell's seedy look in parts of the doomed comedy
Captain Ron
that he almost insisted on reshoots.

“Jeffrey read every single script, gave notes on every script,” says a former Disney executive. “Jeffrey was involved on a micromanagement level in the movies. I remember sitting in a screening of
Straight Talk
with Dolly Parton and he was commenting that he didn't like James Woods's tie. This is the chairman of the motion picture division. There was a very, very short leash.”

Other executives say Katzenberg's involvement may have seemed intense but that it wasn't nearly what it had been. In the past, he might attend eleven previews of a film. Now he showed up at only one—usually when it was too late to do much surgery. “In terms of his attention level and his passion, he was gone,” says one former Disney insider who is close to Katzenberg. “The rap was that Jeffrey was too much in everybody's business, he
didn't share. In an effort to show he could give power to everyone else, he gave too much power to David and Ricardo.”

Katzenberg also had his eyes on other horizons—with Eisner's encouragement. “Jeffrey got involved not just in animation but in consumer products and the parks,” says a former high-level studio executive. “Michael would have him fly down to look at a new hotel. Jeffrey was sort of shadowing Michael, reviewing park attractions, paying attention to [ongoing construction]. He was trying to show everyone, from Frank to the shareholders to the company at large, that he was more than a movie guy.”

Meanwhile, Hoberman and Mestres wrested what control they could. “Each of those guys is a tremendously ambitious person,” this executive says. “Jeffrey was constantly being pushed against the wall to give them a chance to pursue what they were interested in.” But between Hoberman and Mestres, says another Disney film executive who worked with both, there was too much caution and not enough clarity about what moved them. “You couldn't get a handle,” he says. “You couldn't figure out who anybody was, or what their opinion was, or what they wanted…. They were message carriers.” This executive remembers that when he argued with Katzenberg in a meeting, insisting that a project needed a bigger budget, Hoberman chastised him later. “Let that be the filmmaker's fight,” he advised. (Hoberman says he doesn't remember making the remark.)

Hoberman says the real problem was that the effort to ramp up production simply “stretched everybody to the limits.” And despite the best intentions, he adds, the studio could not break its own habits of meddling. “We didn't know how to stop ourselves,” he recalls. But most of all, he sees the studio's problems at the box office as the inevitable valley following the many years of Disney success. “You can't be lucky all the time,” he says.

 

PERHAPS IT WASN'T
fair that
Billy Bathgate
became emblematic of what was wrong at Disney. It was far more expensive than most Disney films, and far more ambitious.
Billy Bathgate
was one of the highest-voltage packages the studio had ever put together. Katzenberg had been a fan of
Ragtime,
and when executive Adam Leipzig told him that E. L. Doctorow was finishing a novel about a young boy's relationship with gangster Dutch Schultz, Katzenberg remembers that “the old golden retriever's tail shot up in the air.” Disney made a preemptive $1 million offer. “It had everything in it,” Katzenberg says. “It was an adventure, a coming-of-age story, this
incredible world of corruption as seen through the eyes of an innocent. It seemed so phenomenally cinematic.”

Katzenberg got playwright Tom Stoppard to write the screenplay and hired Robert Benton, who had the Oscar-winning
Kramer vs. Kramer
in his credits, to direct. The star was the notoriously finicky Oscar winner Dustin Hoffman. The plan called for the entire film to be shot, expensively, in New York. Marty Katz, then the head of physical production, says it is axiomatic in the movie business to avoid New York because of expenses imposed by union rules. “There are three rules of production: you don't take a New York crew on location, you don't shoot in New York at night, and you don't build sets in New York,” Katz says. “We did all three.”

Hoffman, as deliberate as Warren Beatty any day, wasn't at all bashful about making his opinions known while the picture was being shot, remembers Katz. “Dustin was very particular—an absolute fanatic about everything being right,” he says. “He was standing there at the camera while Benton directed. He would give input. Benton was an Academy Award–winning director and a smart man. I was a little surprised.”

“I knew it was a disaster from the first day,” says another executive who worked on the film. “Because from the first day's dailies, you could hear Dustin's voice yelling, ‘Action.'”

Initially, Katzenberg told Katz to give Benton a lot of room to work even though the director had never dealt with a period film on this scale. But one day Katz strolled into a production office and noticed an enormous pile of unpaid bills sitting on someone's desk. Those expenses, he realized, probably hadn't even been tallied yet. The picture could be spiraling out of control.

“Unfortunately, it was true,” he says. “We had to replace the entire production and accounting staff.” Already, Disney was millions over budget on the film. But the studio didn't bring down the hammer. It continued to spend lavishly on sets, laying on a level of detail that, at least in Katz's opinion, wasn't necessary. “If you build a closet, and it's supposed to be a cedar closet and you build it out of real cedar so the actors can get the scent—that's a bit much,” Katz says. But Hoffman wanted to smell cedar and he did. (The closet scene hit the cutting-room floor.) There was such attention to detail that matchbook covers and coasters were printed for scenes in a nightclub even though they weren't really visible in the film.

Eventually, Benton started to get fed up with Hoffman's help. The production moved to Saratoga, New York, to shoot scenes that didn't involve
Hoffman, and Benton let the actor know that he didn't need to come along. The production then moved to Brooklyn, where Hoffman showed up to offer advice. Benton took him aside and asked him not to do it again. Hoffman reportedly felt betrayed and said he would confine himself to acting only from that point forward.

But when Benton finally delivered his first cut to the studio, Katzenberg began to panic. The picture was what was sometimes called “a feathered fish”—a picture that lacks a cohesive concept. It was neither a love story nor a gangster movie. Hoffman told Katzenberg, “Jeffrey, you will not make your money back, you don't have a chance, if there isn't work done on this picture.” Disney pushed back the film's release date and told Benton to go to work.

When the director returned with a revised cut, it was still so problematic that Katzenberg considered firing Benton, who offered to quit. Katzenberg declined but asked him to collaborate with Hoffman to improve the film. By now, Hoffman was working on
Hook
with Steven Spielberg and said he didn't have time, even when Katzenberg offered to move the entire operation from New York to Los Angeles, where
Hook
was shooting. At last Hoffman agreed to put in a weekend—far less than the six weeks Katzenberg had requested—with Benton, Katzenberg, and an editor.

By the time they met in May 1991,
Billy Bathgate
had been in production for a year and wasn't getting any cheaper. Hoffman wanted to do extensive reshoots but Katzenberg balked. Most of the changes would have to be made in the editing room.

Just as Benton was setting to work, his son was involved in a serious accident in Italy. He left the country on the very day that Tom Stoppard arrived to look in on the project. Stoppard made several suggestions that Benton ultimately adopted. As Benton reshaped the film, Hoffman once again felt excluded. He was particularly angry when he found out that a trailer for the film was playing in theaters even though he had been told that Disney had not yet set a release date. At that point Hoffman stopped speaking to Katzenberg. And he declined to do any publicity for the film.

By the time it was over, the film—originally budgeted at $38.5 million—cost nearly $60 million. “Jeffrey was so embarrassed by the amount it cost that the figure was not allowed to appear on even internal memos,” says one executive. “It was whited out like a Pentagon budget.”

When the film, unfocused and uninvolving, was released in November 1991, it was roundly trashed by critics.
Newsweek
's David Ansen acknowl
edged that the novel “seemed to have all the right stuff for a blockbuster both popular and prestigious.” But in the film, he concluded, “all the elements are in place…and nothing ignites.” The supposed central character, played by the young Loren Dean, had become “an amiable cipher,” while Hoffman played Dutch Schultz “as if he were Willy Loman's maniacal uncle.”
The New Republic
was even less charitable, deriding the movie as banal and saying that Benton's attempt to do a gangster film “is to Martin Scorsese as a pickup truck is to a Ferrari.”

Without the critics' support, Disney had an absolute debacle on its hands. The film lost more than $50 million—the biggest single failure of Katzenberg's career.

In Katz's analysis, Katzenberg had been burned by trusting the talent, just as he had done with
Dick Tracy
. “He respected the body of work that Benton had done and he respected Dustin Hoffman,” says Katz. “He thought he had a group that would deliver the goods…. He did what everyone said he should do. He wasn't being passive. He picked up the phone and said, ‘Don't you think…?' and ‘Maybe we should…' but he didn't say, ‘You have to, or we will.'”

“There are films that you launch and they have their own guidance system,” Katzenberg says. “There's nothing you're going to do along the way that can really change the course of where they're headed.” In the case of
Billy Bathgate,
he says, “everything about it seemed great, and the soufflé never rose.”

A
GRIM JOKE AT
the Disney studio during the summer of '91 held that the July rerelease of the animated
101 Dalmatians
was “an act of Walt” to help the studio through a long, cold summer. But in fact, Walt was merely tuning up for the real act of salvation, which would be the November debut of
Beauty and the Beast
. The picture would save the studio's year.

When they had picked up their Oscars for
The Little Mermaid,
Howard Ashman and Alan Menken were already at work on
Beauty and the Beast
. Katzenberg had imported a team of British animators, Richard Purdum and his wife, Jill, to develop and direct the film, but the Purdums wanted to animate in a style that would break the Disney mold. They were soon on their way back to London. Kirk Wise and Gary Trousdale, two young men who had worked on a short film at Epcot center, were brought in as acting directors and wound up staying. Don Hahn, the
Roger Rabbit
producer, was riding herd again.

By now, Katzenberg had landed in animation with both feet. “All directors working under Jeffrey on these things are in the same position,” said story supervisor Roger Allers. As Brenda Chapman, a member of the storyboarding team explained, “They're in the second seat.”

And Katzenberg acknowledged that his life had changed. “I have been seduced by this, completely and utterly,” he said.

“He liked the people, for one thing,” animator Ron Clements remembers. “He said the people he had to deal with most of the time in live action were different from the people in animation. Animators are more quiet, easygoing, introverted people. They like the art, the craft. They're not people whose egos are going rampant. And Jeffrey would comment that animation had a more fun, relaxed kind of atmosphere—and was sincere, I think, in a way.”

In the early going on
Beauty and the Beast,
Katzenberg had a secret. The brilliant Howard Ashman had confided that he had AIDS. No one was to know; he wanted to continue his work. So when Katzenberg ordered a team of animators to camp out in a hotel in Fishkill, New York, to work with Ashman at his home, they all assumed that the songwriter was being a prima donna. Finally Ashman's illness became apparent.

There were times when he could only work confined to his bed. He listened to recording sessions through speakers. He became so weak that he could barely make himself heard. Eventually, Menken had to sing parts that Ashman normally vocalized.

In March 1991, Katzenberg and David Geffen—who had produced
Little Shop of Horrors
—paid a final visit to the dying Ashman. “David Geffen in that room with Howard Ashman is one of the real inspirational things I have seen,” Katzenberg said later. “Things poured out of David in his love for Howard at that moment. He talked about miracles, told Howard he was a man who inspired people to believe in magical things, that he had to believe, that maybe it wasn't over, that he should never give up.”

Days later, Ashman was dead. He had finished his work on
Beauty and the Beast
. “I don't think there has been anything more difficult, challenging, and ultimately more rewarding to me than having been a patron to Howard Ashman in the last year of his life,” Katzenberg said as
Beauty and the Beast
was in its final stages of completion. “I was a patron to a genius.” When Alan Menken climbed the steps to accept the Oscar for Best Original Song that year, he would be alone.

 

KATZENBERG'S IDEAS DIDN'T
always suit the animators. Some of the jokes he proposed struck them as tedious. But they came to realize that he cared about their projects and sometimes had a certain instinct for what worked. After a
Beauty and the Beast
preview, he urged them to improve the scene where Belle and the Beast first touch. “The moment they actually touch is the moment in which they are saying, ‘I love you,'” he told the assembled group. “You have to milk the hell out of it. I know with every ounce of my being—we should have a tear in our eye.”

Even the animators were having fun now. “People are kind of buzzed about this movie,” said Tom Sito, an animator on the
Beast
team, a few months before the film opened. “You're actually kind of embarrassed to admit you like the footage. You've sold out. You're a company man.”

In July, four months before the film opened, there was a test screening with a recruited audience. Eisner and Frank Wells both sat in. Afterward, Eisner joined the key filmmakers at a Burbank sidewalk café. Wearing a red Columbia Pictures baseball cap, he grilled the nervous group. “What was the general consensus?” he asked.

Peter Schneider, the head of animation, replied. “We feel it's there,” he said. “By and large, it's there.”

Eisner wasn't satisfied. “I am nervous about recruited audiences,” he said. “Even in the biggest hit movies, kids get up and go to the bathroom.” In fact, the kids sat transfixed through the film. But Eisner seemed to regard that as a bad sign.

“We like to think it's because they were interested,” director Kirk Wise volunteered.

“Have you had any problems with the long narration?” Eisner persisted, referring to the film's opening sequence.

“You find it long?” Schneider asked quickly.

“I'm asking,” Eisner said.

“None of the cards [completed by the audience] mention it,” Schneider replied cautiously.

“So you don't think it would be any different with a paying audience?”

Schneider hedged. “We were deceived on
Rescuers,
” he said, referring to
The Rescuers Down Under,
the unsuccessful sequel to
The Great Mouse Detective
. (In fact, Eisner was a proponent of making that film in the first place. “They wanted to do a sequel to something,” Clements remembers. “They felt there was something safe about it.”)

Finally Eisner relaxed a little. “I think this audience loved the film,” he said. “I think they were unbelievably polite. I think the movie's fantastic. My children aren't as polite as those kids. I've never seen kids not go to the bathroom for that period of time.”

No one knew what to say next. Finally Wise broke the silence with a proposed tag line for the film: “You'll laugh, you'll cry, you'll hold your water.”

No one was sure whether
The Little Mermaid
had been a fluke.
Beauty and the Beast
demonstrated that Disney had reinvigorated the medium. After its release in November 1991, it became the number-three movie of the year and the highest-grossing animated film of all time, pulling in $146 million at the domestic box office alone. But that was hardly its only
achievement. In
Beauty and the Beast,
Katzenberg would pull off an audacious goal that he had set for himself. The film would be the first animated feature ever to be nominated for the Best Picture award at the Oscars. In fact, it picked up six nominations and won for Best Original Song and Best Original Score. Whenever it released an animated film, it seemed, Disney could claim that pair of awards at will.

 

EISNER LEANED ON
the success of
Beauty and the Beast
in his message to shareholders prefacing the 1991 annual report. With attendance at the theme parks down because of an ongoing recession and a feature-film performance “best forgotten,” Eisner said he didn't know quite how to write his yearly missive. “Somehow writing about my family, my kids' school or hockey, my sister Margot's job at a museum in New York, or my mother seemed inappropriate this year,” he acknowledged.

Though revenues were up to $6.2 billion, the company's operating income had fallen by 18 percent to $1.2 billion from the previous year. Revenue from the theme parks was off by 5 percent and operating income had taken a 31 percent ($155 million) tumble. The film division had suffered through an abysmal year with profits flat. Overall, Disney's earnings were off by 23 percent.

Still, Eisner pointed to what bright spots he could. Among them was Disney's success in getting eleven programs on the networks, the highest total for any studio. “Aside from my middle son, Eric, getting into college this year and, as of this date, staying in college, our television success has been the highlight of the year for me,” Eisner wrote. (So much for not slipping in a family reference.) Though he couldn't know it at the time, only one of this batch of shows would be a long-term survivor.
Home Improvement
would turn into the biggest television hit in the company's history—a veritable fountain of money.

But that was still in the future. For the moment all Eisner was left to rhapsodize about was the success of
Beauty and the Beast
. “It is amazing how a single creative act can change everything,” he wrote. “[This film] has confirmed that your company still has it! It is that simple because
Beauty and the Beast
is one of the great movies of all time (he said shamelessly). And the products coming out of
Beauty
will be around forever. And the rides emanating from
Beauty
in our parks will be around forever. And some
day, the home video of
Beauty and the Beast
will sell 20 million cassettes worldwide.”

Eisner ended his 1991 letter to shareholders on an upbeat note—slipping entirely back into his usual aw-shucks voice. “I'll let last year fade away as a child's bad report card fades away and others come in good,” he wrote, somewhat awkwardly. “I will simply remember that in 1991, my 21-year-old son Breck directed the three-hour stage play of Shakespeare's
Antony and Cleopatra
at his college and my 13-year-old son Anders sat still for the entire evening and told me it was ‘not bad, kind of okay.'”

For his parting note, Eisner said he and Frank Wells were looking forward to a better 1992. “I am pretty sure it will be far superior to 1991; but one thing is certain, we will open Euro Disney on April 12 at 9:01
A.M
.” Eisner's upbeat tone concealed the anxiety that consumed him. As he knew, Disney was pouring ever-increasing sums into Euro Disney in the rush to get it open on time.

 

KATZENBERG COULD NOT
help being proud of
Beauty and the Beast
. But the cloud to this particular silver lining was Roy Disney, who resented Katzenberg's place in the spotlight. This was a problem that Eisner warned Katzenberg about repeatedly. “Don't forget to take care of Roy,” he cautioned. Katzenberg says he tried to respond. But perhaps it was simply impossible to take care of Roy. When Katzenberg was working with
Premiere
magazine on an article about
Beauty and the Beast,
he implored the reporter to mention Roy Disney's contribution to the film. But the reporter, who had never seen Roy or heard any of the animators mention his name, refused.

And perhaps Katzenberg, who considered himself such an indispensable part of the company, didn't try hard enough to nurture this crucial relationship. One Disney board member says it was simply too late. “He had seven years of history of putting [Roy] down,” this insider says. “Jeffrey's very good at giving you importance when you're important to him…. He doesn't see the big picture.” To this observer, Katzenberg was reaping the fruits of his own disrespect. If Katzenberg expected a congratulatory call from Roy after the film opened, he was to be disappointed.

There were other disappointments. Eisner, who had been criticized for taking a $10.5 million bonus in 1990 while the company was cutting costs, earned a 1991 bonus of only $4.7 million (the amount was based on net
income and return on shareholder equity). He also cut the studio's bonus pool in half, upsetting Katzenberg and some two hundred executives who were affected.

Certainly, the division had turned in lackluster results. But it was also the home of animation, which was now Disney's crown jewel. On the other hand, executives in live action had nothing to do with animation, and Eisner undoubtedly felt they should suffer the consequences of their bad year. But that message wasn't delivered gently. To justify Eisner's decision, Wells wrote a lengthy read-and-destroy memo “that was so nasty and so demeaning of all the executives,” remembers a former high-level studio source. “We didn't expect that, but that was part of his role. That's what he did for Michael.”

The blow was especially heavy because Disney generally paid less than other studios, which meant that its executives depended on bonuses to make up a substantial part of their compensation. Many were keenly aware that Eisner was racking up a fortune through his stock options. And with the mandate to produce more films, the executives felt that they had been pushed to—or perhaps beyond—their limits. “Morale was so low anyway—[the cuts] brought morale even lower,” says Hoberman. “Everybody had worked so hard. It was a very tense time.”

Katzenberg went to bat and, after some bruising meetings with Wells, managed to get some more money for his team, but many remained bitter. “For years, Michael always said the real test will be how we hold up when things are bad,” a studio executive remembers. “Then we saw. When things were tough, he was terrible.”

 

THE OLD DISNEY
formula still had some gasps left. In January 1992, Hollywood Pictures opened its standout hit
The Hand That Rocks the Cradle
. Touchstone would have a welcome smash from Whoopi Goldberg in May 1992 with
Sister Act
. Hollywood would at least make a profit with the sophomoric Pauly Shore film
Encino Man
in the same month. Disney's family label released
The Mighty Ducks,
the first in a franchise that Eisner said was inspired by his son Anders's adventures on the rink. These films wouldn't bring prestige to Disney, but they delivered at the box office.