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).
