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Mickeys billion-$ boo-boo

My mother used to tell me there were certain questions best left unasked. It’s not that they were stupid or irrelevant, but why stir things up that people would just as soon forget?

So here’s one of those questions: What would have happened had Jeffrey Katzenberg been named to the No. 2 job at Disney some five years ago? How would history have been altered?

I can already hear the groans emanating from the Mouse House. What’s done is done, they’re saying, and they’re right.

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On the other hand, it’s tempting to consider the chain reaction of events stemming from the decision not to promote Katzenberg. Especially in view of the ruling handed down last week that will force Disney to live up to its famous “2%” deal with Katzenberg, and even pay him interest — this despite the fact that he walked away before the expiration of his contract.

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Reading the text of the ruling and adding up the numbers, it’s clear that Michael Eisner’s edict to snub his long-time colleague for the big job shapes up as a billion-dollar decision.

That’s right — a cool billion. Tally up the cost of the Michael Ovitz and Katzenberg settlements and you’re already approaching $ 500 million. Then toss in other assorted factors, such as the sharply higher cost of doing business in the field of animation resulting from the introduction of DreamWorks as a serious new player. That company got into business only after Katzenberg blew out of Disney, remember? When you weigh in the incidentals, the cost of the Katzenberg departure passes a billion on the dead run.

All of which brings us to two more obnoxious questions: Was this the single most expensive executive decree in corporate history? And was it worth it?

Indulge me a selfish footnote: This newspaper would have been a lot less interesting had Katzenberg stayed put. There would have been no stories about the rise and fall at Disney of Ovitz. No lurid details emanating from the Eisner-Katzenberg trial. No breathless accounts of the coming-of-age of DreamWorks.

Life would have been downright dull without the tremors shaking the Magic Kingdom.

On the other hand, Disney stockholders would have been a lot less jittery. Even as Time Warner stock has doubled over the past year, Disney shares have dropped by 35%. That’s not a direct result of the shakeups, to be sure, but there’s no escaping the fact that Disney’s aura of invincibility has suffered a meltdown.

“Michael simply wasn’t comfortable working with Jeffrey any longer,” one high-ranking Disney veteran reminds me. “You had a man with a heart problem who didn’t need the aggravation.”

This is understandable, but was the Michael Ovitz melodrama any less “aggravating?” If Eisner was wrought up about “the little midget,” what were his feelings toward “the little agent” who bailed with a golden parachute worth well north of $ 100 million in return for 18 months’ work?

So let’s re-trace the steps here: Had Katzenberg remained at Disney, DreamWorks obviously would never have happened. Playa del Rey would not be the site of a new studio. Steven Spielberg would not be ulcerating about how to crank up 20 movies a year for his new studio, when he simply wants responsibility for three or four. Indeed, he might have remained at Universal, thus easing the problems of Edgar Bronfman Jr. David Geffen, meanwhile, devoid of DreamWorks, would have had much more time to advise his many friends, including Bill Clinton, on how to run their lives.

Had Ovitz not taken the Disney job, the entire opera involving CAA might never have occurred. Ron Meyer may not have bolted to Universal, though since he and Ovitz don’t talk, it’s safe to assume they are about as cozy as Eisner and Katzenberg. Arguably the Ovitz-Meyer era had run its course, but some theorize that, had they stayed, CAA ultimately would have re-invented itself as a management company, producing movies and TV shows and even handling its own distribution. So much for Artists Management Group.

Had Katzenberg remained at Disney, the town’s animators would not have enjoyed the delicious pay hikes resulting from the DreamWorks competition. During the trial, Eisner’s attorneys attempted to depict Katzenberg’s performance in live-action films as a disaster while the Katzenberg side insisted that, if you consider the full life span of a film, his movies turned a neat profit.

In any case, Katzenberg had planned to move Joe Roth into the top production job at Disney — he’d been ensconced at Disney under a lucrative producing deal — so the sharp recovery in live-action that has taken place under Roth might have occurred anyway.

While Roth and Katzenberg seemed to work smoothly together, Katzenberg surely would have had to make peace overtures to the two animation czars, Roy Disney and Peter Schneider. Both felt that Katzenberg had been guilty of credit-grabbing after the release of “The Lion King” and disagreed with Katzenberg’s basic philosophy of animation.

Most important, of course, would have been Katzenberg’s challenge of orchestrating a peace treaty with Eisner. Could a buffer zone have been established, as has often been done between warring chiefs at other corporations?

In short, was Michael Eisner really that pissed off — a billion dollars pissed off? For a billion bucks, couldn’t they at least have patted each other on the head once a week and forced a smile?

But then that’s another one of those questions my mother advised me not to ask.

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