First and foremost, the show was rumored to be good. (The Hollywood Reporter noted on May 13 — four days before Disney pulled the plug — that “Sugar Hill” was “getting high fives” at ABC.) It also had an impressive pedigree: Not only did Goldberg of “Family Ties” and “Brooklyn Bridge” fame have a huge ABC hit already with “Spin City” and was overdue for some strokes, but this was to be Sheen’s small screen turn at a time when network TV is in dire need of star power to better compete with cable. Further cementing the show’s near-certain prospects, ABC would have to pay a hefty financial penalty if the sitcom didn’t get at least a midseason pickup.

So what earned Eisner’s personal ire? “Sugar Hill” is produced by Dreamworks; Katzenberg is co-founder of that company. And Disney owns ABC. Reason enough, informed sources say, that “Sugar Hill” is now DOA at ABC.

It’s understandable that Eisner would hit back at Katzenberg where it would hurt the most — in the wallet — since that is precisely where Katzenberg is targeting Disney. Talk about payback. On the one hand, Katzenberg in his lawsuit is demanding $500 million from the Mouse House for what he claims is an unpaid incentive bonus. On the other, his studio stands to lose that sum since a hit show on a major network can fetch as much as $500 million if it runs long enough to go into syndication. All month, there has been considerable eyebrow-raising around Hollywood about the fact that Katzenberg vs. Walt Disney Co. went to court just when ABC was deciding its fall schedule. And, as the trial descended into much-anticipated nastiness, a joke made the rounds that the Fox network now had enough footage for its latest TV special, “When Moguls Attack!”

By the end of this development season, it became clear that Dreamworks already had two shows locked in the ABC lineup: one of the network’s biggest building-block hits, “Spin City,” as well as one of its newest critic-pleasers, “It’s like, you know …” But Dreamworks also had several pilots in contention.

Usually, in the cutthroat world of high-risk, high-reward network TV, success breeds success. So, on the surface, Dreamworks could have expected a proverbial pat on the head from ABC. Instead, it got a knockout punch. “It’s an interesting dynamic, to put it mildly,” one veteran TV producer with ties to ABC noted dryly.

It’s also no secret that, with ABC still lagging behind NBC, CBS and occasionally even Fox in household numbers or desirable demographics, Eisner has been personally involved in every aspect of network programming, including screening every pilot. (In fact, Eisner himself, who started as a 24-year-old junior executive at the network and rose to be a senior vice president before leaping to feature films, is known to joke that he has a sitcom viewpoint that hasn’t changed since “Happy Days.”) For that reason, Eisner would have come under considerable fire if he tried to take his revenge on Dreamworks by, say, suddenly canceling “Spin City” or even “It’s like, you know …” But networks pass with impunity on pilots all the time, including some that spew cash as easily as an ATM. (In fact, ABC has a history of doing that. Even before it was bought by Disney, the network said no to “The Cosby Show” and then again to “Third Rock From the Sun.” Both shows went on to become big hits on NBC.) Especially these days, when the emphasis by parent companies like Disney or General Electric is on in-house or sister studio production at ABC and NBC: In other words, they want to keep the money inside the family.

In an ideal world, the network would take a hit from any source, even — gulp! — Katzenberg. But that’s NOT how it works in Hollywood, a town known as much for the incestuousness of its professional relationships as it is for the vitriol of its personal feuds. Only a naif would think it wasn’t a little easier in this case for Eisner to urge or even order ABC to pass on a Dreamworks sitcom.

A Disney spokesman denied any linkage. “That is an absurd premise. Nobody does things to spite themselves,” said John Dreyer, Disney’s head of corporate communications. “There is a harsh reality in this business,” argues a senior Disney executive, “that no matter whatever is played out among people, the bottom line is if there is a hit show you really believe in, you’ll take it because it means you’ll make money.”

Oh, by the way, did we mention their voices were gleeful?

Still the situation is complex enough to raise several disturbing questions. Were Disney shareholders, already a battered bunch since the stock has slumped, denied a potentially money-making piece of business because of the personal animosity between the company chairman/CEO and his ex-employee? Or is this yet another in what has been a seemingly endless Katz-and-Mouse game to destroy Disney’s pristine image, Eisner’s vaunted reputation and ABC’s synergistic credibility?

The fact is that both are impossible to prove. But the rule of thumb in the entertainment business is that, where there’s smoke, there’s usually scorched earth. And far more frequently than in Washington or on Wall Street, rumors in Hollywood turn out to be true. Dreamworks had no official comment. But a source said several executives associated with “Sugar Hill” asked Katzenberg to personally engage in the usual last-minute lobbying that studios routinely do with the networks before schedules are set in stone. Katzenberg apparently declined. Only in the movies is it heroic to champion lost causes in Hollywood.

No one disputes that Dreamworks has a complicated history with ABC. Back in the fall of 1994, the year that Katzenberg abruptly left Disney and founded Dreamworks SKG with partners Steven Spielberg and David Geffen, an early investor in the start-up studio was none other than ABC, then owned by Capital Cities. The $100 million deal for first-look programming allowed fledgling Dreamworks to compete alongside the major studios in the costly arena of TV production, where deficit financing is one of the harsh realities.
Then, six months later, ABC abruptly changed ownership when Eisner and Capital Cities announced their $19 billion merger. Needless to say, the news was unsettling to Dreamworks and, specifically, to Katzenberg, who at the time was battling behind the scenes with Disney for the money he believed he was owed. Then, in the spring of 1996, Katzenberg filed his lawsuit.

It was an uncomfortable, nearly impossible, situation, complicated still further by the fact that Dreamworks was fiercely competing with Disney in the lucrative field of animated feature films at the same time that the fledgling studio was trying to sell its TV shows to ABC. On a personal level, too, things were hellish. At the same time that Katzenberg and Eisner were locked in mortal combat, Katzenberg and ABC president Robert Iger, who’d made the initial investment deal in Dreamworks, still considered themselves good friends.

Nor was it only Katzenberg and Eisner who were involved in the feud. It’s known that Disney vice chairman Roy Disney, Walt’s nephew, fiercely resented Katzenberg during his studio tenure for collecting the kudos on such Disney blockbusters as “The Lion King” even though Roy was the titular head of animation. Geffen’s personal dislike of Eisner is legend throughout the industry (even erupting at one point during an interview published in Los Angeles magazine). And Spielberg dashed Disney’s long-held plans to bring “Peter Pan” to the big screen when he directed “Hook” for Sony Pictures Entertainment.

Want still more? ABC’s entertainment president, Jamie Tarses, went through a well-publicized break-up from husband Dan McDermott, the head of Dreamworks television. And after Ted Harbert jumped, before he was pushed, from atop ABC entertainment when he decided the executive suite wasn’t big enough for both him and Tarses, he signed a production deal with Disney’s archenemy — Dreamworks. (Ironically, his first outing is now ABC’s newest hit show, “It’s like, you know …”)

Presently, the Los Angeles trial of Katzenberg vs. Disney is in recess while the judge considers the first of three phases: whether Katzenberg is entitled to receive interest on the as-yet-undetermined sum of money Disney may owe him. If the judge rules for Katzenberg, then Disney will be under considerable pressure to write a check as quickly as possible since the meter will be running. If not, then Disney could conceivably delay putting pen to paper until doomsday (or its appeals are exhausted, whichever comes first).

Katzenberg, who has been in court every day since the trial began, used the time off to travel to London, where he was beyond the reach of the Hollywood press as of Monday. Eisner, whose only subpoenaed appearance was a full day of grilling on the witness stand, is not expected to return. On Tuesday, he was expected in New York, where the head mouseketeer has made it something of a mini-tradition to sit in the audience in relative anonymity (not counting Disney security) for his network’s annual presentation to advertisers.

Interestingly, the next phase of the trial, known as “valuation,” may not be argued by Katzenberg’s lead attorney, Bert Fields. Hollywood’s top litigator, who roughed up Eisner so effectively on the witness stand, is due in court on June 30 for another high-profile trial that may get even nastier: comedian Garry Shandling’s $100 million lawsuit against his former manager and friend, Brad Grey.

But it’s one thing for Fields, who is defending Grey, to try to discredit a celebrity like Shandling, whose public persona is that of a loser anyway. It’s another thing entirely to poke fun at the perennially most powerful man in Hollywood (though this year, Eisner was replaced by News Corp. chairman Rupert Murdoch on the just-published Premiere magazine pecking order). Strange, then, that suddenly, in the midst of the courtroom banter between Fields and Eisner, a dwarf other than Dopey and Sneezy was making news in connection with the hallowed name of Disney.

Through the morning and, after breaking for lunch, well into the afternoon, the 70-year-old Fields — whose claim to fame is that he has never lost a trial for clients like Tom Cruise, James Cameron, Warren Beatty and Dustin Hoffman — tried to trip up Eisner at every twist and turn of a labyrinth of facts. Using as arsenal not only Eisner’s pre-trial deposition but also subpoenaed notes from Eisner’s autobiography (published last fall to lackluster sales), Fields elicited only a mind-numbing series of “I don’t knows” and “I don’t recalls” as they hopscotched from exhibit this to memo that, hour after hour.

By 3 p.m., even the journalists were no longer able to stifle their yawns. And just when it appeared that Eisner and Fields were in danger of becoming an Abbott and Costello act (“What page are we on?” “Which memo are you looking at?”), the lawyer shuffled the papers on his podium, paused for dramatic effect, and asked Eisner: “Did Mr. Katzenberg grate on you?”

It was as if a rush of cold air had swept through the stuffy courtroom (actually, a mock courtroom inside the offices of the two law firms representing both sides, since this is a private proceeding being heard before a retired judge). Journalists, and even the judge, leaned forward expectantly in their chairs.

Eisner hunched lower. Katzenberg stared at his boss. Fields continued, asking Eisner if the part of Katzenberg’s 1988 Disney contract giving him a “super-bonus” on top of a dizzying array of discretionary bonuses, incentive bonuses, stock options, stock grants and a $5 million Malibu beach house had irked him for the next five years.

“A lot of things irked me on various occasions,” Eisner replied uncomfortably. “I don’t think it irked me for five years.”

With that, Fields started reading from a document in which Eisner was saying about Katzenberg’s super-bonus, “It continued to irritate me for five years.”

Eisner quickly moved to downplay the strength of the words being repeated back to him. “I wouldn’t say I stayed awake nights worrying about it,” the Disney chairman explained.

The journalists had begun to smile.

Then Fields launched a rapid-fire series of questions, all based on Eisner’s book notes as transcribed by co-author Tony Schwartz. After each attack, Eisner’s face grew redder and redder.

“Did you say Mr. Katzenberg was the ‘tip of your pomp-pom’?”

“Did you say Mr. Katzenberg was your ‘retriever’?”

“Did you tell Mr. Schwartz that you ‘hated’ Mr. Katzenberg?”

More than one journalist began to worry that Eisner, who had had quadruple bypass surgery in 1994, might require medical assistance.

Then Fields dropped his not-so-small bomb. “Did you say, ‘I think I hate the little midget’?”

The throng of media was at first stunned into silence. Then they came to life. Several reporters began laughing so hard they couldn’t write. Now all eyes turned to the 5-foot-4 Katzenberg, who sat granite-faced. Then the eyes moved to the 6-foot-3 Eisner, who in a menacing voice spit back, “I think you’re getting into areas that are ill-advised.”

Later, Fields would tell reporters, as proof of Eisner’s total arrogance, that he had never been threatened by a witness he was questioning.

“If you pursue this line of questioning, it will put in the public record those things that shouldn’t be in the public record,” Eisner said ominously, adding that it would be worse for Katzenberg than for him.

“But didn’t you say on more than one occasion that you ‘hated’ Mr. Katzenberg?” Fields insisted.

“I did not hate Mr. Katzenberg. I still do not hate Mr. Katzenberg. And if I said it, it was probably out of humor, or gross impropriety,” responded Eisner, the fluorescent lighting now shining full-force on his glistening bald spot.
“But it’s not in your client’s best interest to pursue that line of questioning.”

“Didn’t you say to Mr. Schwartz about Mr. Katzenberg, ‘I don’t care what he thinks. I am not going to pay him any of the money,’” Fields countered.

This was the bullet, and Eisner looked as if he had been hit. He said in a bare whisper, “I would say again: in anger, if I said that. That’s all.”

With that, Fields ended his questioning. The judge immediately ordered a break. The journalists ran out of the room to call their editors. Even normally staid business affairs executive Helene Hahn, who had followed Katzenberg from Disney to Dreamworks, could not stop giggling as she burst into what looked like a jig.

And when the day was over, America Online teased its court coverage with the headline: “Disney’s Eisner: Midget-Hater?”

If only the sitcoms on ABC were so funny. Suggested a top TV producer, not completely in jest, “Maybe Bert should run their comedy development division.”

A collaboration between Disney and Blue Cross and Blue Shield to help teach kids to “fight bad habits,” the Epcot attraction and tie-in app and Web page featured buff, virtuous characters Will Power and Callie Stenics squaring off against nemeses like the lazy, grotesque “Lead Bottom” and the self-explanatorily named “Glutton.” Apparently, when a company famed for its meticulous crafting of exactly what children want and one of the largest health insurers in the nation pool their talents, they come up with “Fat people are bad.”

Earlier this month, Tony Jenkins, regional market president for Blue Cross and Blue Shield, told the Orlando Sentinel that “Our challenge was to tell that story in a fun, engaging way, which is what Disney does better than anyone.” So imagine Disney’s surprise when some patrons did not take kindly to their “fun, engaging” message. As Weighty Matters blogger and assistant professor of family medicine Dr. Yoni Freedhoff told the Calgary Herald, “It’s so dumbfounding it’s unreal. I just can’t believe somebody out there thought it was a good idea to pick up where the school bullies left off and shame kids on their vacation.” On her “Dances With Fat” blog, Ragen Chastain condemned the “Disney Fat Shame Ride” and admitted she “couldn’t stop the tears” when she’d heard about it. And nutritionist and author Marion Nestle tweeted, agog, “You can’t make this up.”

It didn’t take long for the Magic Kingdom to do some hasty damage control, taking HabitHeroes.com “down for maintenance” and closing the exhibit just three weeks after it launched. The mouse is currently remaining conspicuously silent on whether it will return.

With 12.5 million children and teens now obese, the health problem in this nation is a real and growing one, one that will play in serious long-term health problems like diabetes and heart disease and short-term ones like bullying. Kids – and parents – need direction and encouragement to make healthy eating choices and develop an active lifestyle. But like Children’s Healthcare of Atlanta’s similarly in your face campaign, the Habit Heroes approach compounded the problem by making it seem like emotional, cultural, genetic and economic factors can be overcome with simple “Will Power” and a few broccoli spears. Worse, it demonized the obese, equating size with poor habits. Kind of ironic for a place that entices visitors to “Satisfy your sweet tooth at Storybook Treats” or “Wake up with treats like freshly made funnel cakes and delicious waffle sandwiches.” You want to promote good heath? Start by looking at your own sugar and animal fat-laden menus. And go on by respecting children of all shapes and sizes. Because they’re the ones who trust in the mouse to see them not as Lead Bottoms and Gluttons but as princesses and pirates. As beautiful.

Sterling Holloway, who provided the classic Pooh voice in the ’60s, has been dead almost 20 years, but Jim Cummings (who also voices Tigger) has amiably filled the role in numerous lower-budget Disney productions and sounds uncannily similar. With John Cleese as narrator, Craig Ferguson as Owl and Jack Boulter as Christopher Robin, this production also has the right degree of authentic British-ness. (It’s somehow fine with me that Pooh, along with Bud Luckey’s Eeyore, sounds a bit more American.) But the real star of “Winnie the Pooh” is the imaginative animation, which features not one but two classic Disney surrealist sequences and a bit of playful postmodernism: Pooh frequently interacts with Cleese’s narrator, or wanders out of the Hundred Acre Wood into the paragraphs of the book, accidentally bringing letters and punctuation marks back with him.

Of course the Mouse has been relentlessly cashing in on A.A. Milne’s dimwit ursine hero ever since acquiring the rights from Milne’s widow in 1961, and much of that output doesn’t bear (ha!) thinking about: Piglet and Tigger got their own spinoff movies; there were Christmas and Thanksgiving and Valentine’s Day specials and a seemingly endless series of tot-oriented “Winnie the Pooh Learning” and “Winnie the Pooh Playtime” titles. Let’s not even bring up “Franken Pooh.” Well, you can forget about all that stuff; Anderson and Hall have banished the insipid primary colors, not to mention the third-rate outsourced animation, and this film has the lovingly crafted, storybook feeling that was once Disney’s specialty.

“Winnie the Pooh” feels like a turning point in the brief tenure of Walt Disney Animation Studios head John Lasseter — whose other company, Pixar, effectively destroyed Disney’s old in-house animation unit. Lasseter has said frequently that Disney Animation should have its own identity, one that draws on the company’s glorious past and doesn’t simply ape Pixar’s success, and maybe now we can see what that means. “Winnie the Pooh” doesn’t look or feel anything like a Pixar movie, and it is specifically not trying to be a “kidult” crossover success, after the fashion of almost every Pixar production. But it also feels mercifully free of the combined calculation and sloppiness that have plagued so many Disney features in recent years, and one could argue that the painstaking attention to animation and storytelling reflect Lasseter’s stewardship.

Let’s take to the way-back machine for a minute. Ever since the Walt Disney Co. began its partnership with Pixar, then an upstart digital-animation studio run out of an industrial park in Emeryville, Calif., the Mouse’s own in-house animation unit has struggled to keep up. Actually, that’s being euphemistic; what really happened was that Pixar kicked Walt Disney Feature Animation’s butt so badly that the division was ultimately dissolved and renamed. In 1995, “Toy Story,” the first Disney-Pixar release, grossed $354 million worldwide, which represented at least a tenfold return on its production costs. Walt Disney Feature Animation also had a big hit that year with “Pocahontas,” which premiered outdoors in New York’s Central Park and went on to its own $300 million-plus worldwide take. (Mind you, it also cost several times more to make than “Toy Story” did.)

Not even Lasseter, who co-founded Pixar and directed “Toy Story,” would have predicted 16 years ago that Pixar would go from one massive success to the next, becoming one of the most beloved brands in entertainment history, or that “Pocahontas” was the last big hurrah, or next-to-last, for Walt Disney Feature Animation, which had created such massive hits as “The Little Mermaid,” “Beauty and the Beast” and “The Lion King.” When Pixar released “Toy Story 2″ in 1999, another huge worldwide hit, WDFA’s big release was “Tarzan,” a wildly expensive production (not to mention an entirely forgettable film) that probably ended up in the red. Disney’s in-house studio had one more sizable hit, with “Lilo & Stitch” in 2002. But that movie earned $100 million less than Pixar’s “Monsters Inc.” had a year earlier and took in less than one-third the worldwide gross of Pixar’s huge 2003 hit, “Finding Nemo.”

At that point the writing was on the wall: Pixar engaged an enormous public with cutting-edge animation technology and appealing characters and stories, and reaped untold billions in box-office receipts, tie-in merchandise and ancillaries. Disney’s in-house animation studio, on the other hand, was an embarrassing albatross. There were straight-to-video quickies, cashing in on existing properties in the most unfortunate Disney tradition: “Mickey’s Twice Upon a Christmas” and “Mulan II” and “Tarzan II” (with “new songs by Phil Collins,” apparently meant as an inducement). The last release under the aegis of Walt Disney Feature Animation was “Chicken Little” in 2005, a work of supremely crappy-looking fake-Pixar animation that features 11 credited writers and Zach Braff in the title role. I would have been happy to completely forget that movie’s existence. (In fact I had, until now).

Lasseter has been at the helm of the reconstituted Walt Disney Animation Studios for almost five years, while continuing to run Pixar, and the results of this seemingly contradictory role are still a bit unclear. The first two Disney features made on his watch, “Meet the Robinsons” and “Bolt,” felt way too much like Pixar movies, with substandard animation and the rough edges sanded off. I’m aware there’s a critical constituency for both films, but that didn’t extend far into the public, and both were box-office flops. With the hand-drawn “Princess and the Frog” and the digital “Tangled,” Disney tried to breathe new life into its classic tradition of adapting fairy tales. Neither performed as well as expected, but they displayed more craft, integrity and audience appeal than any other Disney animated feature in years. (“Tangled” was reportedly so expensive to make that even its worldwide gross of almost $400 million might not have returned a profit; “The Princess and the Frog” failed to click with American audiences but did well overseas.)

It’s almost not worth mentioning that “The Princess and the Frog” was artistically and financially eclipsed by Pixar’s “Up,” and that “Tangled” was obliterated by the astonishing billion-dollar worldwide gross of “Toy Story 3,” the biggest animated feature in history. The same thing is likely happen again this summer; even though many Pixar-friendly critics have turned against Lasseter’s “Cars 2,” audiences don’t seem to mind. But coming as it does after those two films, “Winnie the Pooh” feels like more than a small summer surprise that will utterly charm 3-year-olds and 93-year-olds. It feels like a Walt Disney animated film, in the best possible sense of that term, and another significant step toward restoring that company’s dignity and sense of purpose.

It’s Pixar Animation Studio’s first fairy tale fantasy, and it marks yet another change of pace for the venerable dream factory. “What we want to get across [with the teaser] is that this story has some darker elements,” director Mark Andrews tells EW. “Not to frighten off our Pixar fans — we’ll still have all the comedy and the great characters. But we get a little bit more intense here.”

The film will use the voices of Emma Thompson, Billy Connolly, Julie Walters, Kevin McKidd, Craig Ferguson and Robbie Coltrane, and stars Kelly Macdonald as Merida.

2. A tribute to Ryan Dunn that will last a lifetime

“Jackass’” Wee-Man, (aka Jason Acuna) cuts through all the anger and flame wars surrounding his friend’s death and gives him a uniquely touching memorial.

 3. Southwest Airlines pilot loses it on the mic

I don’t know if it makes it better or worse that this guy’s homophobic tirade was supposed to be a private cockpit conversation instead of being broadcast across the entire Texas airspace. Maybe he should get a job doing standup in Nashville?

4. Culture clash

Amazing footage, just uploaded to YouTube yesterday, of a tribe in Papua New Guinea meeting a white man for the first time in 1976.

5. Trippy Disney mashup

Pogo, the foremost expert and creator of Disney remixes, has come out with his latest creation. “Bloom” focuses not on one specific film, but several different animated classics.

Other times, you’re shoving your post-Hannah Montana B-cups in my face so hard that I can almost hear you screaming, “I’m an adult now! Take me and my breasts seriously!” For example: your music videos for “Can’t Be Tamed.”  Or “Who Owns My Heart.“  Or when you pretended to kiss one of your female dancers on “Britain’s Got Talent.” And that’s not even mentioning those party shots of you involving lap dances, salvia and more half-naked, girl-on-girl kissing. Which has less to do with your sexuality, Miley, and more with the fact that you were 17 and acting like Paris Hilton on a bender.

So please forgive me for feeling weird about these new, semi-innocuous stills for your latest film “So Undercover.” If it weren’t for your dramatic history with underwear, these photos wouldn’t seem so bad. But with you Miley, the pictures carry three years of associated guilt and anxiety that the government is going to come arrest me for having child pornography on my computer.

You’re 18 now, which is the age when the sexy vs. too sexy debate usually begins to get interesting for Op-Ed writers and TV pundits. But you’ve been scandalized and scandalizing for awhile now; you’ve made your stance clear about rebelling from your Disney image, and at this point it’s barely news when you walk out of your house in only lingerie. If anything, these photos for “So Undercover” are way more conservative than the bra and short-shorts you’ve been wearing to the supermarket for the past 24 months. (The Supermarket is a hot new club in London, FYI.)

But it still feels weird. Legal, but weird.

Then again, maybe I should just be glad you’re so fond of underwear that you literally spend $3K at a time shopping for panties and bras. It will really cut down on the number of paparazzi upskirt photos we’ll have to see in the future.