DISNEY'S STUDIO CHIEF STEPS DOWN

DAN ALAIMO

BURBANK, Calif. -- Jeffrey Katzenberg just couldn't wait to be king.

The 43-year-old chairman of Walt Disney Studios resigned Aug. 24 after failing to get the No. 2 post of the Walt Disney Co.

He had headed the studio for 10 years and has a month left on his contract. Frank Wells, the former president and chief operating officer of the parent company, died in a helicopter crash last April and the opening has not yet been filled.

Collaborative teamwork is a hallmark of Disney's corporate culture, so day-to-day decisions may not be hindered by Katzenberg's departure. But succession at the top of the company became a major issue when Michael Eisner, chairman of the Walt Disney Co., underwent heart surgery in July. Highly regarded for his creativity and cost cutting, Katzenberg was closely involved in the studio's long list of animated musical hits, including "The Lion King," "Aladdin" and "Beauty and the Beast."

But lately, the company has produced an even longer list of low-budget, live-action box-office flops. However, most made money when released on home video. Disney is reportedly the movie industry's most profitable studio, with video revenues making a big contribution.

During the Video Software Dealers Association in Las Vegas in July, Katzenberg harshly criticized deals such as that between MCA/Universal and McDonald's under which videos are offered for a low price with a food purchase. Now MCA is one of the companies where press reports said Katzenberg might be headed. But Katzenberg said he has made no commitments. "I haven't talked to anybody and the only plan I've made is to take my family to Disney World next week," he said. "There are lots of challenges ahead." Eisner said that there are no plans to fill Wells' position. Katzenberg's departure was "inevitable," and the No. 2 slot "was not a job that suited his talents," said Eisner. Wells' job had involved more business-oriented decisions than creative work. Katzenberg denied that he was specifically looking for the president's job and said what he really wants is new opportunities and more responsibility. "At the end of the day this was not about a new job title. People have never really understood that. It's about me looking for bigger challenges," he said. Katzenberg's responsibilities will be split among three people: Joe Roth, former chairman of 20th Century Fox and current chairman of Disney's Caravan Pictures division, will become chairman of a new division, Walt Disney Motion Pictures, in charge of live-action movies; Richard Frank, who is now president of the Disney Studios, will become chairman of Walt Disney Television and Telecom-munications, also a new division; and Roy Disney, company vice chairman and nephew of Walt, will be in charge of feature animation. All will report to Eisner.