Disney Settles Katzenberg Dispute, Will Co-finance Films with MGM
Mutual animosity between Eisner and Katzenberg came to a head in 1994, when the CEO refused to promote Katzenberg to second-in-command of Disney to replace President Frank Wells, who had died in a helicopter crash. Katzenberg left the company when Eisner wouldn't give him the job and filed a lawsuit that eventually asked for a total of $581 million in compensation. Disney claimed that Katzenberg's resignation invalidated his employment contract and that he was therefore not owed anything beyond the $117 million he received in 1997. Katzenberg developed several Disney hits, including The Lion King, Aladdin, Sister Act, and the TV series Home Improvement.
Unnamed film-industry analysts mentioned in the July 8 edition of the Los Angeles Times estimate that Katzenberg's total take from the settlement will amount to somewhere between $250 million and $275 million. Both sides in the squabble are forbidden by the terms of the agreement from discussing the actual amount, and they could be fined $1 million for revealing it. The details of the deal were finalized in the office of Katzenberg's attorney, Bertram Fields.
Disney stockholders, including board members Thomas Murphy and investor Warren Buffet, had pushed for a resolution of the case. Because Disney had already set aside about $250 million in anticipation of a settlement, the agreement isn't expected to affect the company's financial future. Katzenberg made conciliatory comments about Eisner, his former mentor and friend, and announced that he was "relieved to have this behind me." Eisner, he said, is "someone who is very smart, talented, gifted, and an excellent teacher." David Geffen called the deal "a good arrangement" in that "both sides were unhappy. Jeffrey got less than he wanted, and Michael had to pay more than he expected."
In other Disney news, the company's Miramax Films unit announced July 7 that it has entered into a mutual-aid pact with Metro-Goldwyn-Mayer to co-finance eight movies. The deal allows Miramax to comb MGM's library of over 5000 films for possible remakes or sequels. Each company contributed one film already in development to the arrangement. MGM's Cold Mountain, based on Charles Frazier's popular novel about a Confederate finding his way home at the end of the Civil War, and Miramax's remake of Harvey, are the two films priming the production pump. One of Hollywood's oldest studios, MGM has been languishing lately. Its co-financing deal with Miramax, and a similar one with Universal Pictures, are expected to have invigorating results.