LOS ANGELES -- In this summer's Disney blockbuster "The Lion King," a little cub grows up to earn his place on the throne after his father dies. Is it just a coincidence that big kids in Hollywood believe the same story is playing for real inside the Mouse Kingdom?
Hollywood insiders are interpreting tensions over executive succession at the top levels of Walt Disney Co. as a coming-of-age story featuring 52-year-old company head Michael Eisner and his 43-year-old protege, Jeffrey Katzenberg.
This corporate psychodrama has fewer musical numbers than the heartwarming animated version and far more speculation and rumor.
The immediate story line began when Disney's chief operating officer and president, Frank Wells, was killed in April in a Nevada helicopter crash. A former Rhodes scholar and attorney, Mr. Wells had handled the day-to-day operations at the company while Mr. Eisner played the big-idea man. Mr. Katzenberg took the role of creative kid genius as chairman of the movie studio.
After Mr. Wells' death, Mr. Eisner took on the duties of president and relegated operating responsibilities to division heads without appointing Mr. Katzenberg, the heir apparent, or anyone else, to the No. 2 spot.
"It's time for Jeffrey to grow up," said one producer and 10-year colleague of both men. "They're going to have to give him the position or he's going to move away from home."
Questions of maturation, growth and power were thrown to the forefront a few weeks ago, when Mr. Eisner underwent emergency surgery. Rushed to the hospital for a quadruple bypass heart operation, he is expected back in the office in three or four weeks.
As in "The Lion King," the question remains, "Who will run the kingdom if and when the king is gone?"
"The decision on a chief operating officer will be an issue with the stock until it's cleared up," said Ray Katz, entertainment analyst at Lehman Brothers Inc.
Since Mr. Wells' death and Mr. Eisner's surgery, Disney's stock has held relatively steady in the $41-$42 range, closing Friday at $42.375.
While Mr. Katzenberg and Mr. Eisner remain mum on the succession question, Disney spokesman John Dreyer said company officials are satisfied with the post-Wells situation. "We've said since April and we continue to say, 'We have a great deal of confidence in Team Disney,' " Mr. Dreyer said.
But rumor and speculation are running wild in Hollywood. Will Mr. Katzenberg jump ship to another entertainment company if he isn't promoted? Would he be satisfied with increased duties, such as a spot on the board?
Or is it just all hardball negotiating tactics? Have his friends circulated word of his dissatisfaction to in crease his bargaining power when his contract comes up this year?
"Usually, when you've done a good job and your contract comes up, you're positioning yourself to reap new rewards," said Jeffrey Logsdon, financial analyst at The Seidler Cos. in Los Angeles.
Mr. Katzenberg's crucial role as head of the movie studio was highlighted last Wednesday when Disney released its fiscal third-quarter financial report. In the nine months ended June 30, operating income increased 12 percent, to $1.52 billion from $1.36 billion a year earlier.
For the first time in recent history, profits from filmed entertainment have been greater than profits from theme parks and resorts.
Reflecting the success of "The Return of Jafar" in home-video release and "The Lion King" in theatrical release, operating income in the first nine months for this unit increased 27 percent, to $667.67 million from $527.19 million a year earlier.
With tourism down and Euro Disney restructuring, operating income from theme parks and resorts decreased 5 percent, to $528.78 million from $556.53 million.
It was a symbolic triumph of the modern Disney as a television and movie company over the old Disney after 10 years of leadership since Mr. Wells and Mr. Eisner, with Mr. Katzenberg in tow, took the helm.
Before then, the company had stagnated under the unimaginative post-Walt Disney management into a company whose main assets were seen to be real estate. In a shake-up incited by Walt Disney's nephew Roy, who now sits on the board, Mr. Eisner and Mr. Wells were brought in. Mr. Eisner brought along Mr. Katzenberg.
At the time, Hollywood insiders wondered how Mr. Eisner, with a background in movie production, could run such a broad-based company. Today the same criticism has been thrown at Mr. Katzenberg in his bid for more power.
"When Michael came in, did he have experience on Wall Street?" wondered Jon Avnet, director of "Fried Green Tomatoes" and producer of recent Disney hits "When a Man Loves a Woman" and the "Mighty Ducks" movies. "Back then, these analysts speculated he didn't have any experience."
Of course, the naysayers were wrong; the company's operating income surged to $1.7 billion in 1993 from $213 million in 1983. Operating income from the filmed-entertainment division rose to $622 million in 1993 from a mere $2.24 million in 1984.
But after a string of forgettable low-budget productions such as "Blank Check," "My Father the Hero" and "The Air Up There," Mr. Eisner two months ago fired the head of Hollywood Pictures, Ricardo Mestres, who had been a Katzenberg protege. Some believed Mr. Mestres was taking the fall for problems that went further up the ladder. Hollywood Pictures is one of Disney's three filmed entertainment operations.
The huge international Disney successes have come largely from the animation division, the Disney tradition that Mr. Katzenberg revived after years of neglect. The string of record-breaking summer hits beginning in 1990 include "The Little Mermaid," "Beauty and the Beast," "Aladdin" and this year's "The Lion King."
"I can't imagine a team that smart won't stay together," said Robert Cort, president of Interscope Communications, producers of Disney films "Hand That Rocks the Cradle" and this fall's "Terminal Velocity."
Mr. Katzenberg has been described as a "golden retriever" able to attract top-level talent with his tenacity and charisma. But his intensely controlling style also earned the Disney studio a reputation as a difficult place to work.
"Jeffrey has mellowed in the last couple of years. Now he's probably the most persistent person in the film business, rather than on the entire planet," Mr. Avnet said. "There is so much speculation over Jeffrey because he is so singular. I don't think anyone really knows what's going to happen."