Top 10 Film Industry Stories of 2004: #10: Eisner and Ovitz Go to Court
By Stephanie Star Smith
December 27, 2004
When you come right down to it, Hollywood is a small town.
We’re not talking about the geographic Hollywood - although that isn’t a large metropolis by any standards, either - but the Hollywood of those who make films. And just like any other small town, everyone sticks their noses into everyone else’s business, and it’s always amusing for the town folk when dirty laundry gets aired in public. Except in the case of Hollywood, citizens outside the township also get to watch.
Such was the case this year when Disney shareholders sued former second-in-command Mike Ovitz, soon-to-be-ex CEO Eisner and the company’s board of directors over the $140 million exit package Eisner gave Ovitz after his barely 15 months with the Mouse House. At the heart of the battle is the power struggle between the board, particularly Eisner, and the shareholders over the direction the company has taken of late, and hinges on what shareholders consider egregious lack of oversight in preserving the company’s assets and maintaining the value of stock. But the court testimony also has provided insight into the power struggles not only between the Disney family interests, represented by Walt’s cousin Roy, and the Hollywood power elite, embodied by Eisner and the ousted Ovitz. The testimony has detailed incompetence and corruption, and painted a picture of the top brass at Disney as being at best incompetent and at worst engaging in downright criminal behavior. The suit has dragged on for years, as lawyers for the board, Eisner and Ovitz argued that none of those being sued had done anything illegal, and the shareholders arguing the board needs to be held accountable for its decisions. Especially those to hand more than $100 million to a departing employee who, by all accounts, was a walking disaster waiting to happen.
Who will ultimately win? In terms of the lawsuit, it’s anybody’s guess, but in terms of the court proceeding itself, it’s those watching the drama unfold, regaled on a regular basis with the gossip, backstabbing and revelations of personal details best left behind closed doors. The soap-opera quality of the case coupled with its possible eventual impact on the way not only Disney, but all large corporations, do business make the Battle of the Michaels one of the top film industry stories of 2004.
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