Tooth and Claw

updated 04/22/1996 AT 01:00 AM EDT

originally published 04/22/1996 AT 01:00 AM EDT

REMEMBER THAT BOUNCY DUET the warthog and meerkat sing in The Lion King—"Hakuna Matata"? It's a Swahili phrase meaning "No worries for the rest of your days." Well, last week, Michael Eisner, chairman of the Disney fun factory, may have been singing a different Lion King tune, "Circle of Life"—as in "What goes around comes around." For on April 9, Jeffrey Katzenberg, the tightly wound former head of the studio's movie division, stopped just being mad at his former mentor Eisner and started getting even. Katzenberg filed a claim in L.A. superior court, suing the Walt Disney Company for more than $250 million. That represents what Katzenberg claims is his contractually promised 2 percent of profits from the movies and cartoons he handled in his 10 years at the studio, along with his share from all those videos and Little Mermaid dolls.

What's more, he wants Disney to show how it calculates those profits—by opening its books and revealing everything from star salaries to the finances of its beleaguered European theme park. Eisner would sooner plan a company picnic at Universal Studios.

The two executives have now achieved a state of mutual abhorrence. And Hollywood is taking a perverse delight in the battle, which, if it were a pay-per-view event, might be billed as the Micromanager (Eisner even selects carpet fabrics for the Disney hotels) vs. the Phonoholic (Katzenberg, Hollywood lore has it, dials up to 150 numbers a day). As one Disney animator says, "This has almost nothing to do with money and everything to do with cojones." Katzenberg, should he win, would probably plow his bucks into his new, rival studio, DreamWorks SKG, which he founded in 1994 with Steven Spielberg and David Geffen, a mere six weeks after exiting Disney. That would be just his way of saying, "Nyah, nyah, nyah, nyah, nyah!"

Katzenberg, 45, and Eisner, 54, once made an invincible team, starting when Eisner was at Paramount, overseeing such hits as 1979's Star Trek—The Motion Picture and 1984's Beverly Hills Cop. Katzenberg was his loyal assistant, whose tenacity in nailing deals once inspired Eisner to nickname him the "golden retriever." When Eisner went to Disney in 1984, he brought Katzenberg along. But Katzenberg was never No. 2—he was third, behind president Frank G. Wells. When Wells died in a helicopter crash in April 1994, Katzenberg lobbied for a promotion. Given that Eisner was recovering from heart surgery, Katzenberg's timing was poor. In August, Eisner assumed Wells's duties himself and, in effect, told the retriever to go fetch elsewhere.

Katzenberg's DreamWorks deal brought him a moment of one-upmanship, but Eisner stole back the spotlight last July, buying Capital Cities/ABC for $19 billion. One network executive says, "Anyone working with Eisner knew he had to be thinking, 'Let's see Jeff beat this.' " Then Eisner nabbed agent überlord Michael Ovitz for the job Katzenberg had so publicly craved. It was an inspired choice, for back in the days when Katzenberg was still aggressively pushing to get Disney films into production, the Armani-draped wall he most often came up against was Ovitz, who controlled an intimidating roster of stars. When Eisner sent in Ovitz last fall to help negotiate with Katzenberg, talks, not surprisingly, ground to a halt. Insiders believe that the case will be settled out of court, but not in an alley. In Hollywood, even when it's not about money, they fight with wads of cash.


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