Insiders and observers stunned as Disney turns into a big spender


What's come over Disney?

First, it publicly apologizes to Robin Williams. Then it shells out $6 million for Sharon Stone to star in "The Last Dance." And along the way it bids $3 million for an unfinished novel called "The Horse Whisperer" for Robert Redford and nearly $2 million to acquire feature film rights to a series of graphic novels about Jack the Ripper.

This from a studio where penny-pinching and battling agents almost became an art form? This from a studio that became synonymous with low-budget, high-concept movies? This from a studio actors often fled for higher pay and more artistic freedom?

It has now been three months since turbulence began at Disney with the rancorous departure of longtime studio chairman Jeffrey Katzenberg and the naming of producer Joe Roth -- the onetime movie head at 20th Century Fox -- as his successor.

In that time, Mr. Roth and his top filmmaking executive, David Hoberman, have engineered several big-money deals in an attempt to change the creative community's perception of Disney.

"The Disney company had a persona to it that said, 'We're going to do business the way we want to, regardless of what the marketplace says,' " Mr. Roth said. "I would not call [what we are now doing] a seismic shift. We're going to do business the way we want. If we have to pay market price in order to do a particular piece of business, so be it."

Added Mr. Hoberman: "If someone wants to say we're loosening the purse strings and going crazy, I'd say that's not true. All we're doing is paying market price for things and trying to get some good material. Maybe we wouldn't have paid $3 million for a book two years ago, but if we think there is a movie there, and there were four studios in the running for it, we'll go after it."

Some believe Disney Co. Chairman Michael Eisner is behind the company's about-face on deals for A-level talent and material. Those sources question whether this aggressive new posture is Eisner's backdoor way of repudiating Mr. Katzenberg, who was known for his tightfisted, controlling ways with talent and filmmakers. Before he left, though, Mr. Katzenberg had already set on a course of making bigger films, after the studio suffered years of flops with formulaic comedies made for a price.

Mr. Roth stressed that Disney will still make its share of high-concept, modestly priced movies but noted that the studio will be cutting the number of films it releases. "Of those," he said, "there will probably be a higher proportion that will be packaged in more high-profile way."

In a wide-ranging interview, Mr. Roth and Mr. Hoberman both said that they do not see "seismic" changes in store for the studio under their leadership, and they insisted that the upheaval that followed Mr. Katzenberg's departure is beginning to subside.

"October was better than September," Mr. Roth said, "and November is better than October."

"Thank God," chimed in Mr. Hoberman.

"It's now: 'Let's get down to the job,' " Mr. Roth added.

But insiders say the Disney lot is still trembling from the aftershocks, which could reverberate for months.

The tension there has yet to subside. Some of Mr. Katzenberg's devotees are said to be restless. After initially being told by Mr. Roth that they could get out of their contracts early, they discovered that Disney would not let them leave.

"I think because Jeffrey was so involved with so many people at the company, there probably is some restlessness going on," said one filmmaker on the lot. "But I also think it's probably wise for the company to say everyone is staying put. . . . However, you'll likely see some movement over the next six months to a year."

Power and prestige

Then there is the matter of clashing egos. Only last spring, Mr. Hoberman, then president of Touchstone Pictures, was promoted by Mr. Katzenberg to president of motion pictures, overseeing all three Disney divisions. His power and prestige were enhanced enormously. Today, the question is how long he'll remain now that the spotlight is shining on Mr. Roth.

"He was given the keys to the kingdom and then had the rug pulled out from under him," one Disney insider said of Mr. Hoberman. "David is determined to keep his image in this town. He wants to keep the perception of power."

Some say Mr. Hoberman is biding his time, waiting for the right high-profile job to open up elsewhere. Until then, Disney has no plans to jettison him, because his contract is so lucrative. "Disney is not going to buy out Hoberman's contract," one insider said. "It's a five-year deal, and with stock, probably worth $2 million a year. That's a $10 million buyout. Unless he decides to leave, everybody is going to be playing happy-happy."

In their joint interview, Mr. Roth and Mr. Hoberman tried to dispel rumors that they cannot work together and that Mr. Hoberman secretly chafes under Mr. Roth's supervision.

Mr. Roth said he has given Mr. Hoberman increased responsibilities in marketing and distribution while Mr. Roth's job has expanded from supervision of live-action films to include that of the marketing and distribution of Disney's animated movies, the company's live theater endeavors, its record company (Hollywood Records) and oversight of Miramax Films.

As for how he and Mr. Hoberman interact, Mr. Roth said: "There are overlapping responsibilities. We're partners. David is exclusively responsible for getting all those raw materials together, and then we are partners in what movies are actually going to get made. He is doing all of that. I'm doing a piece of it. On the other side, I am in charge of the business of the company."

As to who actually green-lights Disney movies these days, Mr. Roth replied: "It's not really clean," but he noted that he and Mr. Hoberman collaborate on which pictures to make, whom to make them with and how big the budgets will be before any decision is reached.

"Right now, Dave and I are in the middle of the first campaign that we're working on together -- 'The Santa Clause,' " Mr. Roth said. The film, starring TV's Tim Allen, debuted with $19 million at the box office last weekend.

'A speeding train'

Then there is Mr. Roth himself. Some say he seems overwhelmed by the responsibilities of running a studio as huge as Disney. He himself likens it to "trying to catch up to a speeding train."

Some have noticed that under Mr. Roth, the studio has become "very compartmentalized."

"There used to be open access to Jeffrey under the old structure," one source said. "Now, the middle ranks and even some of the upper-middle ranks of executives do not have a tremendous amount of interaction with Roth. I imagine that's David's desire. He wants to preserve whatever possible dignity he can."

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