Former uber-agent dubbed a 'cancer'
NEW YORK — Two former Walt Disney board members testified Thursday that hiring former president Michael Ovitz was a coup — and that firing him was unavoidable as, Thomas Murphy said, the exec became a “cancer” eating at the company.
And plaintiff’s lawyer John Rediker produced a document indicating Disney, which had tried to unload Ovitz on Sony, also suggested he join the State Dept. as a trade rep for President Clinton.
The proceedings have grown increasingly repetitive as the trial draws to a close, but their inherent contradiction remains intriguing: Never has one individual been so publicly maligned by people trying to prove he deserved every penny of a severance package worth $140 million.
The trial, which started Oct. 20, could wrap as early as next Monday or Tuesday as lawyers plow through testimony from the remaining three witnesses. Court will reconvene in January with testimony from a few expert witnesses and summations — likely followed by submissions from both sides to the judge to bolster their cases. Chancellor William B. Chandler III is expected to deliberate for several months before issuing a ruling.
Glad to see him go
Murphy, founder of Capital Cities and chairman of the merged CapCities/ABC which Disney acquired in 1996, said he was delighted to learn Ovitz was leaving the company but felt the former uber-agent’s contract should be honored. Under the pact, Ovitz could have been denied severance only if he had been terminated for cause — defined as gross malfeasance or negligence.
“He was a big Hollywood guy, he signed a good contract, and he should get paid on it,” Murphy said.
Asked if he thought Eisner’s friendship drove the payout, Murphy all but scoffed. “Let me tell you about Michael Eisner. There are only two things he is interested in his life, his kids and Disney. He is very tight with money. He wouldn’t have given (Ovitz) a dollar unless he thought he had to.”
Former director Ignacio Lozano, a member of the board’s compensation committee when Ovitz was hired, said his reaction when he heard Eisner was negotiating with Ovitz was “Wow, let’s sign him up before he changes his mind.”
“Why?” asked the lawyer.
“Because he was well known as the most powerful man in Hollywood and the CEO of a very successful talent agency, which he owned and ran.”
No personal interview
He said he was surprised Ovitz was considering giving up his position and fat paycheck at CAA. He said he never felt he needed to interview Ovitz personally.
Requested by Rediker to describe the commonly used Black-Sholes model for evaluating stock options, which made up the bulk of Ovitz’s compensation package, Lozano said, “I don’t really understand it. It’s much too complicated for me.”
And asked if it made him uncomfortable that Eisner was hiring a close friend to the company with such a rich package, Lozano said no. “I probably would have felt more comfortable if we were hiring a friend than if we were hiring a total stranger.”
“Well, at least he knows him.”