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FROM THE RICH GET RICHER DEPT.: DISNEY HIRES OVITZ
Published August 15, 1995
Walt Disney Co. announced yesterday that it has hired Michael Ovitz, Chair of Creative Artists Agency which he founded in 1975, to become the No. 2 at the company. Disney Chair & CEO Michael Eisner, a longtime friend, said Ovitz will be more of a partner and oversee all aspects of the operation -- from the film studio to theme parks to Disney's newest acquisition, Capital Cities/ABC. The L.A. TIMES' Bates & Eller call it a "seismic move that dramatically shifts the balance of power in Hollywood." Eisner said Ovitz wasn't hired with the express purpose of being his successor, but added: "If something happens to me, he'd be a pretty good candidate." While salary details were not released, sources said it was likely Ovitz's overall compensation package (with incentives) would surpass $100M. Ovitz had turned down a $250M offer from Edgar Bronfman to become president of MCA (L.A. TIMES, 8/15). FALLOUT AT ABC: Many reports see the move as a demotion for Cap Cities/ABC President Robert Iger, who had been mentioned as a possible No. 2 at the new Disney-Cap Cities company. Iger told the N.Y. TIMES that he was "thrilled" with Ovitz's appointment. While Mark Landler of the TIMES noted that Ovitz would bring programming "flair" to the TV side, he added that Cap Cities/ABC "will probably not get as much attention from Mr. Ovitz as Disney's film studio will" (N.Y. TIMES, 8/15). The N.Y. POST tabs Iger a "loser" in the deal, along with Howard Stringer, the former President of CBS who was lured by Ovitz to run Tele-TV, a Baby Bells-backed entertainment company (N.Y. POST, 8/15). OTHER REACTION: One Disney exec said the move was all the talk in Hollywood: "Ovitz gives us something to talk about other than O.J." (S.F. CHRONICLE, 8/15). PaineWebber media analyst Christopher Dixon: "The way to look at this is the next step in rounding out the strategic management team at Disney. There's no question that his primary focus is going to be film, television and deal-making" (ORLANDO SENTINEL, 8/15). Noting Ovitz's friendship with Microsoft Chair Bill Gates, the WALL STREET JOURNAL says that Ovitz "could help Disney become a bigger player in new media" (King & Landro, WALL STREET JOURNAL, 8/15). AD AGE's Daily Fax notes that the CAA-Tele-TV deal and CAA's ad account with Coke are both up in the air (AD AGE, 8/15). The PHILADELPHIA INQUIRER notes the possibility that Ovitz could lure client David Letterman to ABC when his contract expires (Seplow & Logan, PHILA. INQUIRER, 8/15). NEWSWEEK's Johnnie Roberts: "With the combination of Capital Cities/ABC and particularly the ESPN franchise, you have a great springboard for expansion globally now, and I think you'll see Michael Ovitz wanting to play on that larger arena" ("Business Insiders," CNBC, 8/14). VARIETY's Stephen West: "Mike Ovitz already has been wearing many other hats than just talent agent: He's an investment banker, he's an advertising executive, he's a kind of management deal-making consultant to companies" ("Moneyline," CNN, 8/14).