In Walt Disney Co.'s The Lion King, rituals of leadership and succession form the backdrop for an animated epic. At Disney's Burbank (Calif.) headquarters, the same drama has been playing out for real since Frank G. Wells, the company's president, died in a helicopter crash earlier this year.

The Disney theatrics took yet another stunning turn on Aug. 24: Jeffrey Katzenberg, the talented and powerful chairman of Walt Disney Studios, announced he would leave the company when his contract expires at the end of September. Katzenberg had asked to be promoted to president and chief operating officer, say industry executives. When Disney Chairman Michael D. Eisner demurred, Katzenberg opted to bolt.

WRONG BRAIN. A Disney source says Eisner resisted Katzenberg's overture because he viewed the studio chief's creative talents as too close to his own and preferred an operations brain for his second. But Katzenberg's departure couldn't come at a more awkward time. Eisner had quadruple coronary-bypass surgery in July. And while sources say he has returned to the office, Eisner's illness and Wells's death have prompted fears that Disney doesn't have an adequate succession plan.

Eisner is moving quickly to allay those fears. "I am totally healthy. I'm 52 years old," he says. "What I need is help, not succession." Though he still will not appoint a president, Eisner notes that Disney's board has developed an undisclosed succession plan should his health take a turn for the worse: "This is not a one-man show."

More to the point, Eisner announced a split of Disney's studio into separate television and motion picture divisions. Joe Roth, a film producer who ran Rupert Murdoch's Twentieth Century-Fox Film studio, will head the movie unit. And Disney's studio president, Richard Frank, will head TV. Frank will also be responsible for Disney's nascent telecommunications business.

Still, no amount of box-shuffling will compensate for the loss of Katzenberg. The 43-year-old executive is the architect of Disney's immensely valuable franchise in animated films. The Lion King alone has grossed $251 million so far this summer. And analysts say movies such as Aladdin and Beauty and the Beast, which both grossed hundreds of millions in theater and home-video sales, have become the primary engine for Disney's growth. "They're still going to make animated movies," says John Tinker, an analyst at Furman Selz Inc. " don't know how critical Katzenberg was to the process."

Disney can ill afford to lose its animation edge now. Attendance at its theme parks in Anaheim, Calif., and Orlando may drop 2% to 3% in 1994, says Tinker. And while EuroDisney has seen its attendance rise this summer, the troubled park is far from out of the woods. Tinker dropped Disney from his list of recommended stocks on Aug. 18.

With Eisner and Katzenberg at loggerheads in the past few months, executives were already buzzing about where Katzenberg may go next. Atop the list: Sony Corp.'s Columbia Pictures, which has been slumping lately. But a top executive at a rival media company says running another studio would not necessarily advance Katzenberg's career: "Jeffrey clearly wants a job of corporate significance." For Eisner, Katzenberg's loss is more than a significant problem.

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