For his first ten years as CEO, Eisner did a really good job. For the last ten years, he really did a bad job. And the change came when Frank Wells died. Eisner is a really good creative guy. He gives really good notes. So when Frank was running operations, Eisner could be like a bumblebee going from project to project trying to make them better. But when Eisner had to run things, he was a terrible manager. Nobody liked working for him. They felt they had no authority. He had this strategic planning group that was like the Gestapo, in that you couldn’t spend any money, not even a dime, without them approving it. Even though I broke with him, I had to respect his achievements in the first ten years. And there was a part of him I actually liked. He’s a fun guy to be around at times—smart, witty. But he had a dark side to him. His ego got the better of him. Eisner was reasonable and fair to me at first, but eventually, over the course of dealing with him for a decade, I came to see a dark side to him.

Eisner’s biggest problem in 2004 was that he did not fully fathom how messed up his animation division was. Its two most recent movies, Treasure Planet and Brother Bear, did no honor to the Disney legacy, or to its balance sheets. Hit animation movies were the lifeblood of the company; they spawned theme park rides, toys, and television shows. Toy Story had led to a movie sequel, a Disney on Ice show, a Toy Story Musical performed on Disney cruise ships, a direct-to-video film featuring Buzz Lightyear, a computer storybook, two video games, a dozen action toys that sold twenty-five million units, a clothing line, and nine different attractions at Disney theme parks. This was not the case for Treasure Planet.

“Michael didn’t understand that Disney’s problems in animation were as acute as they were,” Iger later explained. “That manifested itself in the way he dealt with Pixar. He never felt he needed Pixar as much as he really did.” In addition, Eisner loved to negotiate and hated to compromise, which was not always the best combination when dealing with Jobs, who was the same way. “Every negotiation needs to be resolved by compromises,” Iger said. “Neither one of them is a master of compromise.”

The impasse was ended on a Saturday night in March 2005, when Iger got a phone call from former senator George Mitchell and other Disney board members. They told him that, starting in a few months, he would replace Eisner as Disney’s CEO. When Iger got up the next morning, he called his daughters and then Steve Jobs and John Lasseter. He said, very simply and clearly, that he valued Pixar and wanted to make a deal. Jobs was thrilled. He liked Iger and even marveled at a small connection they had: his former girlfriend Jennifer Egan and Iger’s wife, Willow Bay, had been roommates at Penn.

That summer, before Iger officially took over, he and Jobs got to have a trial run at making a deal. Apple was coming out with an iPod that would play video as well as music. It needed television shows to sell, and Jobs did not want to be too public in negotiating for them because, as usual, he wanted the product to be secret until he unveiled it onstage. Iger, who had multiple iPods and used them throughout the day, from his 5 a.m. workouts to late at night, had already been envisioning what it could do for television shows. So he immediately offered ABC’s most popular shows, Desperate Housewives and Lost. “We negotiated that deal in a week, and it was complicated,” Iger said. “It was important because Steve got to see how I worked, and because it showed everyone that Disney could in fact work with Steve.”

For the announcement of the video iPod, Jobs rented a theater in San Jose, and he invited Iger to be his surprise guest onstage. “I had never been to one of his announcements, so I had no idea what a big deal it was,” Iger recalled. “It was a real breakthrough for our relationship. He saw I was pro-technology and willing to take risks.” Jobs did his usual virtuoso performance, running through all the features of the new iPod, how it was “one of the best things we’ve ever done,” and how the iTunes Store would now be selling music videos and short films. Then, as was his habit, he ended with “And yes, there is one more thing:” The iPod would be selling TV shows. There was huge applause. He mentioned that the two most popular shows were on ABC. “And who owns ABC? Disney! I know these guys,” he exulted.

When Iger then came onstage, he looked as relaxed and as comfortable as Jobs. “One of the things that Steve and I are incredibly excited about is the intersection between great content and great technology,” he said. “It’s great to be here to announce an extension of our relation with Apple,” he added. Then, after the proper pause, he said, “Not with Pixar, but with Apple.”

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