The Katz that bit the mouse

Jeffrey Katzenberg glances out of the window of his suite at the Carlton hotel - a ritzy, domed establishment that dominates the Cannes seafront. There's something - a semi-transparent awning of some kind - obscuring the billion-dollar, yacht-studded view across the bay. He giggles. "Kind of a shame having that up there, when someone's paying a gazillion dollars for a room?" The awning turns out to be the bottom corner of a giant banner for the movie Shrek, bolted across the facade of the hotel, to announce its impending participation in the Cannes film festival's official competition. And Shrek, appropriately enough, is the reason Katzenberg is here, basking in the reflected glory of the first animated feature to be selected for the Cannes competition since Peter Pan, in 1953. (The only other was Dumbo, six years earlier.)

As it turns out, Shrek does pretty well at its Cannes premiere; in a line-up habitually short on entertainment-for-the-hell-of-it movies, the story of the ugly green ogre stands out for its unashamed pursuit of laughs. But that's tomorrow; right now, Katzenberg is winding himself up for the big day, and making use of the time by shoehorning a string of journalistic encounters into the afternoon. It's not often you find yourself sharing "face time" - as Michael Douglas memorably termed it in Traffic - with such a big-league Hollywooder as Katzenberg. He's the "little midget", the "golden retriever", the man who put the "K" in DreamWorks SKG, the Katz that bit the Mouse. After decades of graft in other men's shadows, dinky Jeffrey Katzenberg has finally secured his place in the sun.

Which is why this Cannes trip means so much. Having formed one-third of the founding partnership - along with Steven Spielberg and David Geffen - behind DreamWorks, the first new Hollywood studio to make a go of it for half a century, Katzenberg has had his former employers Disney, and before that, Paramount, in his sights for six years. And now he's taken them down.

"Listen," he says. "The last couple of years have, for our company, been pretty amazing. Three years in a row we have seriously competed for the Oscar and won it two out of three times. For a company that's only been releasing movies for four years - we're six years old but have only been releasing movies for four years - I'm really proud of that." Suddenly, without warning, he turns up the volume. "You know, I worked at Paramount for 11 years," he bellows. "I worked at Disney for 10, and I want you to know the last time either of those companies had a movie in competition at Cannes was Days of Heaven in 1979. You were not born yet!" Actually I was, but never mind. This is clearly personal. But Katzenberg isn't angry; he's just making a point, very forcefully.

This is a display of the top producers' art, the skill they all share - not just the know-how to knock out a schedule or fend off payment demands beyond the call of duty, but the ability to communicate perfectly. There is no fuzzy logic, no shades of meaning here: everything is spelled out. It feels like sitting in front of an electric fire, such is the intensity of the pocket dynamo sitting opposite.

A high-pitched laugh introduces another stab at self-analysis. "You're talking to somebody who is exhilarated when they're standing on the edge of a precipice of snow, looking down a 70-degree angle, jumping off a ridge. Maybe it's some sort of a genetic defect. It's part of what's exciting about this business. You know, we're sitting here, a week before this movie is due to come out in the US, and we are about to roll a pair of dice on Shrek. You can pick the biggest yacht out there - and there are some big, big yachts out there - and these dice are significantly bigger than any one of those yachts. Can you honestly tell me, sitting here, whether it's going to be a success or a failure? And if a success, how big a success? Or a failure, how big a failure?" He fixes me with an iron stare. "The answer's no. I've been doing this all my life. And it's true of each and every movie that comes out - you live through that same anxiety and fear. You wait for that moment to be judged, with all the hope and anticipation in the world, and you wait and see how that person in the 15th row with soda and popcorn is going to feel."

Such is his overpowering need to express this anxiety and fear that, for one horrible moment, I expect him to force me to buy a ticket there and then for Shrek's London run. But, in another bewildering switch of mood, he laughs. "What am I gonna do now? I will only see this movie two more times in the next decade. Once will be tomorrow night: half because I have to, and half because I'm genuinely fascinated how an audience of mainly 50- to 60-year-old sophisticated cinephiles" - his voice starts rising again - "in black tie - on Saturday night - at the Palais - that's a cultural experience for me. The other time will be to see how an audience that came to be entertained react to it. That's the most important thing of all." Let it not be forgotten, Katzenberg is a commercial animal.

Katzenberg's career inside the studio system is a story of persistence, steady advancement, and willingness to take on the tough jobs that underpinned other people's creative impulses. According to Tom Hanks, "Jeffrey is Mr Bottom Line, Mr Brass Tacks. He operates every meeting with a strict agenda; number one on that agenda is that the meeting lasts 22 minutes." Ferocious organisation and tenacity are the traits that recur time and again throughout his working life.

Katzenberg was 14 when he made his first professional bid to be an operator, volunteering to work on the Republican John Lindsay's successful campaign for the mayor's office in New York. Rapidly nicknamed Squirt, the son of a Park Avenue stockbroker eagerly hung around every meeting and strategy session he could - "kind of like a weasel", according to one of Lindsay's aides.

Katzenberg later said he had no idea of Lindsay's politics - he was actually a maverick rightwinger - but just wanted to be involved. In Kim Masters's book The Keys to the Kingdom, Lindsay's deputy explains how his daughter lay dying in hospital after a horse-riding accident, and the teenage Katzenberg got him and his wife to the emergency room by producing a police siren he kept in his car. Katzenberg was also trusted to carry campaign cash around; the unpleasant reputation he earned as a bagman to the powerful came early too. In 1972, Lindsay launched a run at Nixon for the Republican presidential nomination, and was accused of taking a payment from a land speculator over a building project at Yankee Stadium. As a result Squirt, the campaign's unofficial treasurer, suffered three years of investigation by a special prosecutor. No litigation was ever brought, and after Lindsay failed to unseat Nixon, Katzenberg quit politics for showbusiness.

His first idea was to become an agent, but after a brief spell in 1973 at International Famous Agency, he quit again. A year later, the 24-year-old found himself offered a job at Paramount as assistant to wunderkind chairman Barry Diller. A couple of years later, Diller hired another young executive, Michael Eisner, from TV network ABC where he had commissioned the hit series Happy Days. Thus was initiated the most propitious partnership in modern Hollywood: the relationship between Katzenberg and Eisner would last 19 years, but it would end in acrimony.

In 1976, under Diller's leadership, Paramount leapt from the bottom of the major studio heap to the top in a single year. Diller decided to reward Katzenberg by putting him to work in the marketing department, and then Paramount's television division. There he was assigned to Paramount's attempt to revive the old Star Trek series, but when other studios had huge hits with sci-fi films like Close Encounters and Star Wars, Katzenberg was handed $18m and told to come up with a Star Trek movie. Faced with infighting among the old Star Trek cast, massive delays and a director (Robert Wise) who had never dealt with special effects, Katzenberg bust a gut to get the production finished on time. Eisner eventually authorised a total of $45m to spend on the movie (when average budgets were usually closer to $10m). Though disaster seemed inevitable, Star Trek: the Motion Picture confounded even the studio's own staff by taking over $80m at the box-office. Katzenberg had made his mark.

As the 1980s progressed, Paramount turned out a string of influential, successful films: Airplane!, Star Trek 2, The Elephant Man, Ordinary People, Raiders of the Lost Ark. When Don Simpson, then Paramount's head of production, was forced out after the ignominious failure of Grease 2, Katzenberg stepped into his seat and set out with workaholic gusto to implement Eisner's masterplan. Hit after hit followed: 48 Hrs, Terms of Endearment, Indiana Jones and the Temple of Doom. Then, almost without warning in September 1984, Diller left Paramount for 20th Century Fox. Eisner jumped ship too, to become chief executive of the fading Disney company, whose old-fashioned methods meant profits were slumping alarmingly. Eisner lost no time in installing Katzenberg as chairman of the Disney studio.

Huddled up in his Cannes hotel room, Katzenberg is vociferous on the subject of Disney. "I loved every single day that I was there, for 10 years. I loved building the company. I loved the people that I worked with there. I'm very proud of the movies and television shows we made there. The thing I fell in love with was animated films, so when I left there, the one thing that was hardest for me was the thought I would never be able to make animated movies again. And that really is so much of what drove me to want to start DreamWorks. It was a means to an end."

It was at Disney that Katzenberg really blossomed. Time magazine's Richard Corliss wrote that what he did "was to resuscitate the animated feature, a great, dormant tradition that Disney invented and that Katzenberg, 50 years later, helped perfect into a daydream machine that made both money and witty, tuneful, resonant, popular art".

Katzenberg took on Disney's moribund and resentful animation unit and brought it back to its formidable best. The landmark movie in his career was the 1988 part-animated comedy Who Framed Roger Rabbit? Despite a punishing schedule that Katzenberg imposed on director Robert Zemeckis after the latter demanded the budget doubled, and frenetic arguments with Eisner, who hated Zemeckis's ideas, the studio chief began to like what he was doing. Zemeckis commented later: "I saw Jeffrey transform before my eyes."

Things just got better and better, with Beauty and the Beast, Aladdin and - most triumphantly of all - The Lion King capturing gigantic results and returning Disney to that iconic place at the heart of American popular culture. "One of the things," he says, "that always hurt was every time I heard the word 'cartoon' used to describe animation. I literally tense up. Because it feels pejorative. It feels demeaning. It's placing it into this little ghetto called 'children's stories'. And, you know, for all the years I've been making these movies, I just want them to be movies."

As well as animation, Katzenberg was responsible for Disney's live action division, and he concocted such treacly mainstream hits as Pretty Woman (notoriously amped up from a far bleaker script), Three Men and a Baby, and Down and Out in Beverly Hills. Dick Tracy, Warren Beatty's vanity project, recorded decent figures, but cost an appalling $100m-plus to make and market. And unusually for a player with safety-first taste, Katzenberg splashed out on some boutique brilliance by buying indie giant Miramax. Miramax swiftly repaid his investment with Pulp Fiction, a $100m-plus hit - though the squeaky clean Katzenberg had to tear up Disney's family-friendly policy to release the blood-soaked thriller.

Katzenberg reflects on his record as a movie producer. Though he confessed to having "laughed for 20 minutes" when the Weinstein brothers, Miramax's chairmen, told him they planned to make it, Katzenberg is voluble in his admiration. "Oh yeah, I thought Pulp Fiction was a brilliant movie, really amazing. I love all kinds of movies - but I suppose that doesn't necessarily make me good at making all kinds of movies." If, as they say, "the gut" is a producers' most important asset, what exactly is his taste? "My favourite movies are all over the place. I've been doing this for over 30 years now, and made probably about 500 movies, and you could put them into any genre, any shape, any size: big ones, little ones, expensive ones, stupid ones, brilliant ones?" Man to man then, what's your stupidest movie? "It depends on how you define stupid. Stupid brilliant, or stupid terrible?" Stupid terrible. "Cabin Boy. That was pretty horrible." People really hate Swing Kids, don't they? "I like Swing Kids." He guffaws. "Stupid brilliant? Up in Smoke. Cheech and Chong!"

The fiercely undruggy Katzenberg going ape for Cheech and Chong? Wonders never cease. He's a bit less fanciful on the subject of Dick Tracy, during the production of which unkind observers described him as utterly enraptured by Warren Beatty. But it still doesn't stop him cutting to the heart of the matter. "I love Dick Tracy. Amazing movie. And looked at today, even more brilliant. My question wasn't how good the movie was going to be, but the sanity of making a movie that had to be a blockbuster for it to be even acceptable. That was the thing, the business of Dick Tracy, not the art of the movie."

In 1991 Katzenberg penned a memo while on holiday in Hawaii after the draining experience of Dick Tracy in which he urged the studio to get back to small-scale film-making. The outcome was hardly positive, with Katzenberg being accused of both hypocrisy (the fantastically expensive Days of Thunder was just around the corner) and posturing. (Katzenberg says that Cameron Crowe, Jerry Maguire's writer-director, told him that the memo sequence was directly inspired by this episode.) A wedge had been driven between Katzenberg and his boss Michael Eisner - a separation that widened into outright fissure when Eisner's number two, Frank Wells, was killed in a helicopter crash in 1994. Katzenberg expected to step up to his job; instead, Eisner took over Wells's functions, and Katzenberg was left hanging.

Katzenberg remains sanguine about his former boss, and one of Hollywood's bitterest business break-ups, which only emerged from the courts in 1999 after a dispute over how much he was owed. (Though the actual terms of his severance deal remain secret, reliable information suggests he walked away with $250m.) It's from this lawsuit that the "little midget" gibe emanates - Eisner was forced to admit he'd used the insult to describe his former executive. "Now I have almost seven years of perspective on it. Michael and I were together for 19 years, and it was a great partnership and a very rewarding one too - at least it was for me, I think it was for him. As with some marriages, ours grew apart, and I think we became less compatible with one another. The way that separation occurred I have plenty of regrets about. The fact that it occurred was a good thing. Good for him, and good for me." Do you still have a relationship? Katzenberg is strangely uncertain. "It's OK. We run into each other from time to time, perfectly cordial, talk to each other. I put it all behind me several years ago. Because I don't have any regrets. The only regret I have is how we parted company, not that we parted company. It was embarrassing, demeaning, and it was unseemly. To have all that played out in such a public way is not something I have such good feelings about."

Wells's death unleashed a chain reaction that worked Hollywood over. Six months later, Katzenberg's reign as Disney studio chairman was over. Two weeks after that, he was announcing to the press, in the company of two long-time friends David Geffen and Steven Spielberg, that a new studio was being set up. The deal was actually sealed at a White House dinner for Boris Yeltsin in October 1994 where all three were guests. Paul Allen, co-founder of Microsoft, kicked in a $500m stake. But of all three principals, it is Katzenberg who has the most to lose - though wealthy, he is nowhere near the billionaire league occupied by Geffen, and had to mortgage everything he owned to raise the $33m stake each of the founders put in - and the most to gain, since he is the most accomplished studio guy of the bunch.

At DreamWorks, Katzenberg has a special responsibility for animation. "There [at Disney] I ran a $5bn company that had 11,000 employees, and so was something I was able to devote some time to, whereas at DreamWorks it's almost all that I do. Obviously my involvement and participation with it here is significantly different than at Disney. There I was more outside the process - and even though I would pick the movie that would be made, and who we would make it with, the process meant that I was more of an editor, standing outside the process and critiquing. But at DreamWorks I'm on the team, running the plays with everybody."

His first animated film at DreamWorks, Antz, went head to head with Disney's A Bug's Life, with unsavoury accusations of idea-stealing tossed about. His next one, the more traditional The Prince of Egypt, broke the magic $100m mark at the box office. Last year saw a distinct failure, The Road to El Dorado, which barely made half of its estimated $95m budget, and a profitable co-production, Chicken Run, which performed even better than The Prince of Egypt.

Which brings us back to Shrek, a movie that was almost derailed by the death of its original voice star Chris Farley in December 1998. DreamWorks is using Cannes as a platform for its US release, and tomorrow promises to be a busy day. There is an official screening, then Katzenberg will go straight into a press conference to deny the suggestion that Shrek contains unsubtle digs at Disney. (The film's bad guy bears a striking resemblance to Michael Eisner, and the character is named Farquaad - say it fast and you'll see what they mean.) In the evening, a party on the beach will bring together industry power-players with the film's stars. And all the while, Katzenberg won't be deflected from his mission to bang the drum for his favourite kind of movie. "Like nothing else, animation is so purely about imagination. Every single thing you see in Shrek is somebody's dream, somebody's creation. Every single leaf on every single tree. It's fun."

US domestic grosses for selected films produced by Jeffrey Katzenberg

AT PARAMOUNT

As production executive (1974-82)

Star Trek: The Motion Picture (1979) $82m

Airplane! (1980) $84m

Raiders of the Lost Ark (1981) $242m

An Officer and a Gentleman (1982) $129m

As president of production (1982-84)

48 Hrs (1982) $82m

Flashdance (1983) $94m

AT DISNEY

Studio chairman (1984-1994)

Down and Out in Beverly Hills (1986) $62m

Ruthless People (1986) $72m

Three Men and a Baby (1987) $170m

Good Morning, Vietnam (1987) $124m

Who Framed Roger Rabbit? (1988) $154m

The Little Mermaid (1989) $85m

Pretty Woman (1990) $178m

Dick Tracy (1990) $103m

Beauty and the Beast (1991) $146m

Sister Act (1992) $139m

Aladdin (1992) $217m

Tim Burton's The Nightmare Before Christmas (1993) $50m

Pulp Fiction (1994) $107m

The Lion King (1994) $312m

AT DREAMWORKS SKG

Founding partner, 1994-present

Antz (1998) $90m

The Prince of Egypt (1998) $101m

Chicken Run (2000) $107m