Chapter 244: Michael Eisner

In the morning, Arthur left the Montrose Hotel and met Disney Chairman Michael Eisner at a café on Hollywood Boulevard.

"Arthur, long time no see," Michael Eisner said with a smile.

"It has been a while," Arthur replied, taking a sip of his coffee.

Michael Eisner looked at Arthur:

"Don't you want to join Disney? Disney is willing to exchange shares and cash for Galaxy Films. Then, you would oversee Disney's film and television entertainment business, including Buena Vista International, Disney Pictures, Touchstone, and Hollywood Pictures.

Disney Animation too. You would become the chairman of Disney's movie group, responsible for all film and television production, distribution, and the home entertainment market.

In the future, as you grow, you might even take over the entire Disney company!"

Arthur was unmoved. "My Galaxy is doing so well now. Why do you always think I would want to sell?"

Suddenly, Arthur's eyes lit up. Isn't Jeffrey Katzenberg currently managing Disney's film and television business? This was Michael Eisner trying to push out Jeffrey Katzenberg and looking for a replacement!

Michael Eisner continued, "Galaxy's films are indeed strong, but now Galaxy's weaknesses are also obvious. The overseas distribution channels need to be established.

The home entertainment market channels are unstable, the consumer goods market is even weaker. Galaxy's revenue is too dependent on the movies themselves: box office, videotapes, and cable TV.

But you also understand, if a movie's box office performance is not ideal, it greatly affects the price of videotape and cable TV rights!"

Arthur looked at Michael Eisner, "Disneyland Paris, which opened in the suburbs of Paris this year, doesn't seem to be doing well. Visitor numbers are below target, Disneyland Paris has seriously overspent, and is burdened with high debts.

Time Warner offered 1 billion dollars to buy half of my shares, and I refused. What makes Disney think it can swallow Galaxy now?"

Galaxy Films is not like those B-level and C-level independent distributors like Miramax, New Line Cinema, Rysher Entertainment, Savoy Pictures, and Trimark Pictures.

Galaxy is now a near-major distributor that can compete head-to-head with the Big Six studios in the market!

Michael Eisner pondered for a moment. The cable TV shares, movie rights, and other assets Galaxy currently holds, with only over 400 million dollars in debt.

A price of 2 billion dollars is not low for Galaxy, and it's also Disney's psychological price.

"Arthur, Disney is now one of America's film giants. In the animation business, we have no competitors. It won't be easy for Galaxy to surpass our market share!"

"Animated movies," Arthur smiled. "The just-released Aladdin is indeed good, another animation feature comparable to last year's Beauty and the Beast. As for live-action movies?"

Arthur took another sip of coffee, the meaning clear without words!

Disney's eagerness to acquire Galaxy was obviously due to Galaxy's strong performance in live-action movies. The Big Six studios each release 30 to 50 movies a year; Galaxy has how many? Less than ten, and all based on performance.

Michael Eisner sighed, "Galaxy is not yet a member of the MPAA, and you have significant conflicts with CAA. Wolves are eyeing you; there will be plenty of setbacks in the future!"

Arthur smiled, "Mr. Eisner, I heard you and Michael Ovitz have known each other for years and were neighbors when you were young. Do you think, given his current position and status, he would dare to confront me directly? Would the other partners at CAA allow him to oppose me?"

Michael Eisner shook his head, "Now is the era of capitalism; he poses no threat to you. Moreover, due to your conflict, Ovitz's days at CAA are not going well!"

Michael Eisner had talked to his old friend Michael Ovitz, hoping he would leave CAA and join Disney to help him, thereby replacing Jeffrey Katzenberg at Disney.

However, Michael Ovitz hadn't agreed yet, but the issues with Jeffrey Katzenberg at Disney were complex, especially with the current success under Katzenberg's leadership of Disney Animation.

If a successor were to be groomed, Ovitz had recommended the current head of 20th Century Fox Films, Joe Roth; Because Joe Roth intended to leave 20th Century Fox to establish an independent film company!

"Galaxy's financial situation is good now, and all its businesses are developing rapidly," Arthur Smith said, finishing his coffee. "The future is bright. If I sold Galaxy now, I would slap myself even in my dreams!"

Not to mention anything else, just finding a boss with strong control, Arthur couldn't stand it. When did a time-traveler have to be a subordinate?

With his wings fully grown, Arthur no longer had any reverence for these Hollywood tycoons. They didn't have more money than him, nor more ideas. Disney would ultimately become his stepping stone!

Animated movies, Pixar Studios, which he previously acquired, was about to produce its first animated feature. Let Disney Animation have a few more years of glory, but once Pixar's first 3D animation is released, why would he still worry about Disney's 2D hand-drawn animations?

The conversation between Michael Eisner and Arthur Smith yielded no results. Returning to Disney's headquarters in Burbank, Eisner ran into Disney President Frank Wells.

"What's up?" Michael Eisner inquired.

Frank Wells looked serious. "Katzenberg's contract with Disney has a one-year option period remaining. He authorized his lawyer to ask, according to the 2% profit from movies you mentioned earlier, how much his bonus would be. He might leave Disney in 1994!"

Michael Eisner's face turned grim. The contract with Jeffrey Katzenberg had been too hastily drafted.

If calculated that way, Katzenberg's bonus last year would exceed 10 million dollars. Adding the previous ones calculated in a "snowball" method, it would be a significant figure.

Michael Eisner smiled, "Notify the lawyers to reply to him that if he leaves in 1994, he will get no bonus other than his salary. Also, have the lawyers ask Katzenberg about his specific intentions, whether to stay or leave."

After speaking, Michael Eisner left quickly, leaving Frank Wells alone.

Frank Wells shook his head, understanding the conflict between the two but still firmly siding with Eisner, as he had the support of Disney's board, especially major shareholder Sid Bass; Forcing Jeffrey Katzenberg to resign while paying him less severance was always Eisner's plan!

*****

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