Who Will Take Over Disney?

Disney’s The Lion King may rule the summer box office, but inside Team Disney the question is: Who will rule the Magic Kingdom?

Last week, Hollywood was stunned by the news that Disney CEO Michael Eisner had undergone emergency quadruple heart-bypass surgery at Cedars-Sinai hospital in Los Angeles. While Eisner is expected to recover, it will be weeks before the 52-year-old executive is back behind a desk. But his illness couldn’t have come at a worse time: Since the death of financial whiz and second-in-command Frank Wells in a helicopter crash last April, Eisner has been running the $8.5 billion company alone. And now there is growing pressure on the convalescing CEO to name his heir apparent.

The obvious choice is studio chief Jeffrey Katzenberg, 44, the man responsible for reviving Disney’s critically acclaimed animation division. But Katzenberg has little corporate experience, and the personal relationship between him and Eisner has often been characterized as more professional than personal. Insiders say that even Roy Disney, vice chairman of the board and Walt’s nephew, has voiced concerns about Katzenberg’s ability to fill Wells’ shoes as the company’s financial troubleshooter.

”The irony,” as one producer notes, ”is that Jeffrey has made the animation division staggeringly profitable (its last three movies, Beauty and the Beast, Aladdin, and The Lion King, have a combined gross of more than half a billion dollars to date). It’s a far more attractive part of the company than Euro Disney or any of the corporate planning divisions.” And indications are that if Katzenberg isn’t given a bigger post, he will bolt for another company. ”If Jeffrey doesn’t get the job,” predicts one attorney, ”he’ll leave, Wall Street will respond negatively, and it will severely depress the stock.”

One solution may be to reorganize Disney’s executive duties. ”They may have to redefine the job,” says one insider. ”There could be two people serving as a vice-this-or-that. But Michael will try hard to make it work. He’ll give Jeffrey something, if not the whole enchilada.” At Disney, they still believe in happy endings.