Ovitz Testifies About 'Difficult Days' at Disney
By Paul Thomasch
GEORGETOWN, Del. (Reuters) - Former Walt Disney Co. President Michael Ovitz conceded he knew little about running a public company and called his short tenure fraught with "difficult days" as he testified in a shareholder lawsuit over his $140 million severance pay.
As Ovitz took the witness stand on Tuesday as the central figure in the 1997 shareholder lawsuit, he described a company where he was resented from his first day on the job by senior executives who refused to answer to a new boss.
Ovitz, between references to celebrities ranging from Dustin Hoffman to Janet Jackson (news), also blamed several of his setbacks during his short tenure at the company on Disney Chief Executive Michael Eisner.
Eisner, he said, failed to back him on deals including a stake in Yahoo Inc. (Nasdaq:YHOO - news), the Internet portal, and a venture with Sony Corp (NYSE:SNE - news) (news - web sites)., while he also declined to back up Ovitz when he had disagreements with other top executives.
"There were a lot of difficult days," Ovitz said of his brief role as the company's president.
Ovitz lasted 14 months in the job but was awarded a $140 million severance package by the board of directors -- an amount shareholders want returned to the company.
In their 1997 lawsuit, Disney shareholders accuse the company's board of directors of failing to scrutinize the hiring and firing of Ovitz, whose tenure as president was marked by infighting and turmoil. Along with the board, Ovitz and Eisner are named as defendants in the lawsuit.
Ovitz's highly-anticipated testimony began with a detailed review of his career before he came to Disney, which he said began when he worked as a teenage tour guide and culminated at Creative Artists Agency, the talent group he founded.
Answering questions between taking notes and sipping from his bottle of water, Ovitz told the court that he and Eisner had spoken about the Disney job for some time before he finally joined in 1995.
Even though he and Eisner had been close friends and believed Disney to be "the best entertainment company in the business," Ovitz said he harbored deep concerns about the corporate culture.
"I had a 25-year relationship with Michael Eisner. We spent an enormous amount of time together socially and professionally," said Ovitz. "I trusted him 1,000 percent."
But Ovitz said he knew little about running a publicly traded company. At one point, he said, he told his new boss: "I need a year of education."
Even before his first day of work, Ovitz added, he became concerned about the chilly reception given him by other top executives. At Disney, he said, "they are not particularly sensitive to human beings."
Ovitz recalled during his testimony that at one point he and two other top executives had brainstormed a strategy to sell Disney's newspaper holdings and either divest its radio holdings or add to them.
When the three executives met with Eisner, however, Ovitz said he was the only one willing to speak up. "I expected ... everyone would jump in enthusiastically about the joint recommendations. But the room went silent. I think Michael thought I had lost my mind."
He added: "I was disappointed. I was a little hurt because I thought those two gentlemen sandbagged me."
At other times during his four hour testimony, Ovitz digressed into discussions about African and Chinese Art, travel tips, the creative process and architecture. He even occasionally sparred with his own attorney.
"I want to go on the record and say it's my lawyer making fun of me," he said at one point when his attorney cut him short.
Ovitz, the first defense witness, is due to return to the witness stand on Wednesday.
By Paul Thomasch
GEORGETOWN, Del. (Reuters) - Former Walt Disney Co. President Michael Ovitz conceded he knew little about running a public company and called his short tenure fraught with "difficult days" as he testified in a shareholder lawsuit over his $140 million severance pay.
As Ovitz took the witness stand on Tuesday as the central figure in the 1997 shareholder lawsuit, he described a company where he was resented from his first day on the job by senior executives who refused to answer to a new boss.
Ovitz, between references to celebrities ranging from Dustin Hoffman to Janet Jackson (news), also blamed several of his setbacks during his short tenure at the company on Disney Chief Executive Michael Eisner.
Eisner, he said, failed to back him on deals including a stake in Yahoo Inc. (Nasdaq:YHOO - news), the Internet portal, and a venture with Sony Corp (NYSE:SNE - news) (news - web sites)., while he also declined to back up Ovitz when he had disagreements with other top executives.
"There were a lot of difficult days," Ovitz said of his brief role as the company's president.
Ovitz lasted 14 months in the job but was awarded a $140 million severance package by the board of directors -- an amount shareholders want returned to the company.
In their 1997 lawsuit, Disney shareholders accuse the company's board of directors of failing to scrutinize the hiring and firing of Ovitz, whose tenure as president was marked by infighting and turmoil. Along with the board, Ovitz and Eisner are named as defendants in the lawsuit.
Ovitz's highly-anticipated testimony began with a detailed review of his career before he came to Disney, which he said began when he worked as a teenage tour guide and culminated at Creative Artists Agency, the talent group he founded.
Answering questions between taking notes and sipping from his bottle of water, Ovitz told the court that he and Eisner had spoken about the Disney job for some time before he finally joined in 1995.
Even though he and Eisner had been close friends and believed Disney to be "the best entertainment company in the business," Ovitz said he harbored deep concerns about the corporate culture.
"I had a 25-year relationship with Michael Eisner. We spent an enormous amount of time together socially and professionally," said Ovitz. "I trusted him 1,000 percent."
But Ovitz said he knew little about running a publicly traded company. At one point, he said, he told his new boss: "I need a year of education."
Even before his first day of work, Ovitz added, he became concerned about the chilly reception given him by other top executives. At Disney, he said, "they are not particularly sensitive to human beings."
Ovitz recalled during his testimony that at one point he and two other top executives had brainstormed a strategy to sell Disney's newspaper holdings and either divest its radio holdings or add to them.
When the three executives met with Eisner, however, Ovitz said he was the only one willing to speak up. "I expected ... everyone would jump in enthusiastically about the joint recommendations. But the room went silent. I think Michael thought I had lost my mind."
He added: "I was disappointed. I was a little hurt because I thought those two gentlemen sandbagged me."
At other times during his four hour testimony, Ovitz digressed into discussions about African and Chinese Art, travel tips, the creative process and architecture. He even occasionally sparred with his own attorney.
"I want to go on the record and say it's my lawyer making fun of me," he said at one point when his attorney cut him short.
Ovitz, the first defense witness, is due to return to the witness stand on Wednesday.
