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Photograph by Robert Maxwell

Jeffrey Katzenberg Plans on Living Happily Ever After

As a young prince, Jeffrey Katzenberg made billions for the Magic Kingdom, but his ambition got him banished. Now the CEO of DreamWorks Animation has a (smaller) kingdom of his own — and every intention of living happily ever after.

"I'm certain when you came through those gates, your impression was, This is about a micromanaging, hands-in-every-pie, ain't-a-decision-being-made-without-him kind of place," says DreamWorks Animation CEO Jeffrey Katzenberg.

At 59, with his tightly cropped hair and outsize biceps straining against a fine-knit black polo, Katzenberg exudes an aggressive fitness. "The myth," he says, "is a far distance from the reality."

In truth, I had come expecting just that. Katzenberg's Hollywood reputation is one of relentless ambition and a hypercontrolling management style — part Napoleonic bully, part hopeless dilettante. (He famously told a team of animators to fix a ceiling in Beauty and the Beast, saying: "Make it French, like Botticelli.") In the decade he spent running Walt Disney Studios, he publicly waged contract wars with top stars; reportedly faked edit meetings for the press to exaggerate his creative influence; infuriated Disney nephew Roy by claiming, "I'm the Walt Disney of today"; and established a chronic work/life imbalance symbolized by his admonition, "If you don't come to work on Saturdays, don't bother to come in on Sunday."

Computer Generated Cash

Like most people in Hollywood at the time, Katzenberg had no love of animation when he arrived at Disney in 1984. But the failing division was on a long list of tasks new CEO Michael Eisner assigned him. Katzenberg's style immediately grated against the creative culture. "He was a screamer, and he was a shredder and a very tough force to be reckoned with," says Disney's Don Hahn, who worked for Katzenberg as a producer on Beauty and the Beast and The Lion King. After Katzenberg was ignominiously driven out by Eisner in 1994, many in Hollywood were happy to see his back.

But Katzenberg also electroshocked Disney's films out of a stuporous rut, spawning hits from Who Framed Roger Rabbit to Aladdin to The Lion King — a revival that not only reestablished animation as an art form but also drove the studio's revenues from $320 million in 1985 to $4.8 billion in 1994. It was Katzenberg who brought in Pixar, Steve Jobs's graphics shop, as a production house for Disney and green-lighted Toy Story, the first computer-generated feature. Hahn, who directed Waking Sleeping Beauty, an upcoming documentary that portrays the Katzenberg of the period in a distinctly unflattering light, is quick to underline Katzenberg's revivifying effect on the studio: "He brought a candor and a workshopping process and an iterative approach that hadn't been around since Walt Disney was here in the '30s producing Snow White and Pinocchio and Bambi."

Katzenberg's ouster from Disney was ugly, but his many successes had made a big impression in Redmond, Washington. "We saw Disney was turning animated movies into an incredible economic asset," says Nathan Myhrvold, Microsoft's CTO at the time and now a director on DreamWorks Animation's board. "So on the day it was announced Jeffrey was leaving Disney, I got Bill Gates out of a meeting to put a call in to him."

Katzenberg declined Microsoft's offer to create a studio for the company and instead partnered with Steven Spielberg and David Geffen. DreamWorks Animation (which was spun off from Spielberg's live-action division and went public in 2004) is often dismissed as the poor man's Pixar. But it has quietly outperformed its more celebrated rival at the box office, reaping $6.3 billion in sales to $5.4 billion for Pixar (in three fewer years). "DreamWorks Animation is wildly more successful financially," says Geffen. True, nothing in the DreamWorks canon is as poignant as Pixar's Wall-E or as emotionally complex as Up, a fact DreamWorks loyalists seem ready to concede. "Up to this point, I would say Pixar, creatively, has exceeded DreamWorks," says Geffen, who negotiated Katzenberg's $250 million severance from Disney, "but each film gets better and better." Even onetime Katzenberg critics like Hahn admit, "None of us would be here without him. He really invented the modern animation industry."

DreamWorks Animation lives at a crossroads where the Hollywood studio meets Silicon Valley. In the past, the military-industrial complex often drove technological advances, but, increasingly, entertainment — especially animated films — is mapping the frontier. It took 7 terabytes to produce the first Shrek; Shrek 4 will take more than 75.

"I say our movies always have to have five Wow Wees, " says Katzenberg, in something of a Botticelli moment. "What's a Wow Wee? You see it and you go, Wow. Wee." He explains how Chris Sanders, director of the upcoming How to Train Your Dragon, wanted a beast that could breathe fire under water. "I mean, what kind of particle physics would it require for that to happen? Fire in water?" asks Katzenberg. "Our tech team goes, 'Okay, we'll figure it out.' " He grins. "Did anyone here tell you Jeffrey's Law? More is never enough." A chortley chuckle follows.

In his quest for the next Wow Wee, Katzenberg has built DreamWorks into an incubator that funnels new technology ideas to commercial partners. Together with HP, DreamWorks developed a chip that allows for true color calibration across various devices (phones, TVs, and computers), which led to a DreamColor series of monitors, notebooks, and printers that HP now sells to the public. Back in 2003, DreamWorks CTO Ed Leonard led a team that created a teleconferencing system that became Halo, which HP licensed and now markets against Cisco's TelePresence. "There are a lot of products of this relationship," says HP CEO Mark Hurd. "We did Halo in a collaborative way, so DreamWorks people in Glendale can easily make a film with their tech colleagues in Redwood City. We've subsequently sold a lot of those systems and just released SkyRoom, which basically brings Halo down to the desktop. We now have the opportunity to scale from a PC footprint."

Similarly, Intel is using DreamWorks to pilot its new Larrabee chip. "It's literally going to be the biggest change since the invention of CG animation," says Katzenberg. "Our artists are painting with a blindfold, and this chip is going to allow them to take off that blindfold and practically render in real time. We're only just imagining how it's going to change our creative process."

"Let's face it, he's a geek," says Intel CEO Paul Otellini. "He loves his technology. That curiosity allows him to exploit areas in his industry that haven't been exploited."

By Hollywood standards, the Katzenberg of today stands out for his seeming normalcy. Despite a reported net worth in excess of $800 million, he drives a black Prius — himself. A number of his top executives have been with him for more than a decade, a lifetime in his business. And while he routinely consorts with A-list starlets, he has been happily married to his wife for 34 years. "We were in Rome promoting Shrek and I said, 'Let's stay another day,' " says Cameron Diaz, calling from the Boston set of a film she's doing with Tom Cruise. "Jeffrey is like, 'Can't. I have reservations at Cut at 8 with Marilyn. It's our date night.' He left Rome early to have dinner with his wife."

It seems that the years — or at least the grinding battles that have filled them — have had a tenderizing effect on Katzenberg. In describing his creative director, Bill Damaschke, Katzenberg says something it's hard to imagine his old self ever admitting: "Bill is the student who has become better than the teacher. Today he is much more the creative driver here, and more often than not, I find myself wanting to hear his notes, his critique, before my own." Katzenberg also talks about the importance of treating people well not only when they arrive but also when they leave. "It's more important to roll out the red carpet for people who move on," he tells me. "There is a nomadic tribe in animation, and when people want to work for Jim Cameron or work for [Peter Jackson's] Weta, I have to be okay with that. When Lucas started up Star Wars again, I bet we had 25 people who left to go to Industrial Light and Magic because the idea of working on a Star Wars is a dream come true for them. I don't like losing talented people, but we treated every one of them as best we could and no one left us in the lurch."

It's a far cry from the man described by Alec Baldwin in 1991 as "the eighth dwarf — Greedy. "Animation stories are generally coming-of-age stories, and, ironically, he's come of age," says Hahn. "He's turned into this mature talent."

Toward the end of our time together, I ask Katzenberg if he harbors any resentment about the way he was treated when he left Disney. "Michael Eisner firing me is the best thing that ever happened in my career," he responds, looking out over the koi pond meandering through the DreamWorks campus. "David Geffen has been like my older brother and partner for 35 years. He said, 'You really owe it to yourself; go sit down with someone and have some analysis.' I said, 'I don't wanna, David. I don't want to know these things about me that are really screwy.' David says, 'Everyone has demons, Jeffrey. Everybody.' Okay, I accept that. But I don't know what my demons are and I'm not interested."

Some say ambition is Katzenberg's unconquerable demon, that he will never be satisfied running a studio that produces only five movies every two years. More cynical critics say Wall Street has DreamWorks in its crosshairs and all of Katzenberg's happy, contented talk is just his way of positioning the company to get more from the market.

Katzenberg is dismissive of the chatter, but he does say he likes to fantasize about what it would be like to have other people's jobs. "I think it's a healthy thing to do. I saw Rupert Murdoch the other day and said, Would you like to be Rupert Murdoch? And I went, No, I don't think so. Would I like to be Steve Jobs? No. I admire him like crazy, but I don't envy him. I don't want Mark Hurd's job at HP. I couldn't do Mark Hurd's job — I don't have the talent or ability."

As the sun sets over the back side of the Hollywood Hills, casting the surrounding palms in silhouette, I ask if he still wants the job he yearned for so many years ago.

"Do I want to be Bob Iger? Bob is doing an outstanding job running Disney. I'm happy for him," he says before pausing for a moment. "But actually, I wouldn't want that job. No. I'm doing exactly what I want to be doing."

Photograph by Robert Maxwell

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