Jury Hearing Of Hollywood Dispute Shocks Town’s Folks

Courtroom dramas are a Hollywood staple. And what could be better than a drama pitting two powerful moguls against one another, two men who worked side by side for years to build an empire but now loathe each other.

The drama - better than most movies - is a real-life one, pitting Jeffrey Katzenberg against Michael Eisner. And to the amazement of virtually everyone in town - including the two antagonists - the issue is set to go before a Los Angeles Superior Court judge and jury on Nov. 18.

On the face of it, the key issue is money - Katzenberg is seeking damages of about $250 million, insisting that his contract as studio chief at Disney for a decade rewarded him with bonuses based on profits of films and television produced during his tenure.

Eisner’s lawyers have responded that “Katzenberg is simply not entitled to the enormous sums of money he now demands,” largely because he waived his right to future bonuses when he left his job in 1994 instead of two years later.

What’s surprising, even startling, about the acrimonious dispute is that it is to be resolved before a jury rather than settled privately, as had been expected. Hollywood studios and moguls are notoriously secretive, and for good reason. Creative accounting is a virtual tradition here. How much studios actually spend and where the money flows is a mystery.

And it’s rare for a studio like Disney, and wealthy and powerful men like Eisner and Katzenberg, to describe financial arrangements and deals publicly. In Hollywood it’s perfectly normal to reveal the most personal details about one’s life, but not about money.

But money is not the only issue in the clash. The drama, like all good dramas, seems remarkably personal, and perhaps this is one reason why both men have allowed the fight to continue. Katzenberg, now a partner at Dreamworks, quit Disney in August 1994 after Eisner failed to promote him to president to replace Frank Wells, who died in a helicopter crash. As the Disney studio chief, Katzenberg oversaw the production of such enormous successes as “Aladdin” and “The Lion King.”

In denying Katzenberg a share of profits from the films, Eisner is saying in essence that the former studio chief’s role was not quite as crucial as Katzenberg claims. Katzenberg wants money, but also credit and validation. Eisner, still stung by criticism over the more than $100 million he paid out to Michael Ovitz, who left Disney as president after 14 months, says essentially that the money and a large share of the credit are undeserved.