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Eisner says his peace

Mouse exec tries to mollify in final day on stand

NEW YORK — On his final day of testimony in the Delaware shareholder trial, Michael Eisner tried to keep up his conciliatory tone as he faced another day of exacting cross-examination.

In almost self-deprecating fashion, Eisner said he didn’t actually believe everything bad he wrote about Ovitz in memos and notes he fired off during Ovitz’s brief, 14-month run as Eisner’s No. 2 in the mid-1990s.

“I wrote a lot of stuff, much of which I shouldn’t have,” Eisner testified Friday.

The normally lofty Mouse House chieftain even had some kind words for home: “I don’t think the Hollywood that was depicted in this courtroom earlier or that is cliched in articles or written in books is the real Hollywood,” he said. “I think the real Hollywood is the Hollywood that exports the greatest export outside the United States including the aircraft business.”

Eisner, whose voice turned raspy during the marathon questioning, spent the same amount of time on the stand as did Ovitz earlier in the high-profile trial.

Mouse House shareholders are trying to prove that the Disney board never properly vetted Eisner’s decision to make Ovitz his No. 2 and that it was egregious for the board to award Ovitz a $140 million golden parachute considering what a bad job Ovitz had done almost from the start — if Eisner’s own memos were to be believed.

Differences from the start

“We started having differences right from the beginning, which I attributed to some misguided over-enthusiasm,” Eisner wrote in a Nov. 11, 1996, memo to Ovitz, who left Disney the following after a 14-month stint as prexy.

In the memo — which Eisner never actually sent — the Disney topper accuses Ovitz of grandiose behavior and shirking his duties all along the way.

Attorney Steven Schulman, who is representing Disney shareholders, asked Eisner on Friday if he believed in what he had written.

“Half and half,” Eisner said in a joking tone, trying to lighten up the mood.

Ethics lesson

Attorney asked Eisner if he was thinking of Ovitz — known for being a high-flier — when writing a December 1995 memo about the importance of being ethical. Eisner wrote that he learned to be like “Caesar’s wife” from Frank Wells, the former Disney chair who died in a helicopter crash.

Eisner testified that he doesn’t remember Ovitz being the subject of the memo, which was addressed to Tony Schwartz, who co-wrote Eisner’s biography “Work in Progress.” He said he vaguely remember sending a copy to Ovitz, who wrote back that the memo was pretentious.

“I think his note was well taken,” Eisner testified. “I don’t think the memo succeeded,” he added.Schulman also grilled Eisner about Ovitz’s penchant for giving lavish gifts (See page 1). Eisner indicated Ovitz hadn’t violated company policy.

Didn’t understand biz

During this same line of questioning, Eisner admitted that Ovitz didn’t really understand the studio biz even if Ovitz was one of the most powerful players in Hollywood — a point Schulman was all too happy for Eisner to make.

“I have a different philosophy than he had, and I don’t think his was exactly wrong considering the environment from which he came,” Eisner testified. “I don’t think his was necessarily wrong, but I have a different philosophy.”

Eisner said Ovitz didn’t always have the best sense of what a good deal meant for Disney, including when Ovitz proposed striking a TV-movie deal with Barry Levinson in early 1996. Ovitz had previously been Levinson’s agent.

‘Making expensive movies’

“I was not anxious to pay the money that Michael Ovitz was recommending or was present for Barry Levinson to make an overall deal with Disney,” Eisner said. “He was actually a close friend of mine too, but he was just too expensive…. Levinson had been making inexpensive movies, but now he was making expensive movies. I pointed out that he’s over making tiny movies, therefore let’s not deal with him.”

During his testimony, Ovitz said Eisner continually criticized proposed deals he thought would boost Disney.

On Friday Eisner said he couldn’t exactly recall Ovitz’s suggestion that the Mouse House acquire Putnam Publishing.

Eisner also downplayed suggestions that he was upset with Ovitz over Disney’s “Kundun,” which angered the Chinese government. Ovitz helped engineer the deal for the pic, directed by another former client, Martin Scorsese.

“Did Michael Ovitz portray himself as an expert in Far Eastern affairs?” Schulman asked.

“I wouldn’t say he would portray himself that way. But I was aware that he knew martial arts and knew he’d made a couple of deals in Japan,” Eisner testified.

Schulman revisited an email Eisner wrote in May 1996 praising current Disney prexy Bob Iger, who then headed up ABC, which had just been purchased by Disney.

‘Problem is Ovitz’

“Of course the one problem Bob and I both have is Michael Ovitz. He does come between the two of us. And finally Bob simply told me. Ovitz was his problem,” Eisner wrote in the email to former Disney shareholder Sid Bass.

Eisner also disputed that he had been overly concerned about a trip to the Caribbean Ovitz and his family had taken on Disney’s dime just as Ovitz was exiting.

One notable flare-up occurred Friday when Schulman peppered Eisner with questions about the day when Eisner and Ovitz attended a performance of “Rent” in New York in May 1996. Eisner has said he was worried about Ovitz’s mental health and was thus afraid to fire him.

Chancellor William Chandler, who is presiding over the trial, told Schulman to move on after Schulman and Eisner got into a spat over the storyline of “Rent,” a retelling of “La Boheme.”

“You said it was or wasn’t as depressing as ‘La Boheme’ … you said it was a ‘spirited rock opera,’ or words to that effect,” said Schulman, noting that “Rent,” as spirited as it is, addresses the AIDS epidemic.

“There’s no AIDS in ‘La Boheme,’ ” Eisner responded. I think we were told to move on by the judge. …I’m not going to argue about AIDS.”

Skedded to take the stand today is former Disney chief financial officer Stephen Bollenbach.

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