Michael Ovitz said on Tuesday that Walt Disney Co. would have made a string of dazzling deals and shrewd strategic moves during his brief tenure as the company's president in the mid-1990s, if only chief executive Michael D. Eisner had not shot down his ideas.

During four hours of testimony in a shareholder lawsuit, Ovitz recounted in great detail his many proposals, which included buying a 50 percent stake in the Web firm Yahoo Inc., signing pop singer Janet Jackson to a recording contract and building a theme park in downtown Los Angeles centered on a Disney-owned NFL football team.

Time and again during his testimony, an exasperated Ovitz said he brought what he thought were brilliant ideas to his close friend Eisner, only to be told they were too expensive or ill-conceived.

"I made a deal with Michael Eisner that I would support him," Ovitz said of his reaction to the multiple rebuffs. "He had final say on things . . . and he did not want me to pursue any of this."

Ovitz took the stand Tuesday afternoon in a case filed by Disney shareholders seven years ago. The shareholders are seeking to recoup a $140 million severance package paid to Ovitz when he left the company in 1996 after just 14 months on the job. They are also seeking about $40 million in interest.

The shareholders contend that Ovitz was a dismal failure as president, succeeding only in alienating other top executives while making little progress on projects assigned to him by Eisner. They said Disney directors never officially approved Ovitz's hiring, failed to fully review his contract and then failed to fire him in a way that would have negated much of the severance package.

Ovitz's testimony will continue Wednesday. He has not been cross-examined by lawyers for the shareholders. After Ovitz completes his testimony, the defense is expected to call current and former Disney directors, including Eisner and actor Sidney Poitier. The case, in its second week, is expected to last about a month.

In addition to providing juicy details about the inner workings and powerful personalities at one of the nation's biggest media companies, the case is being closely watched by corporate directors and lawyers. If shareholders win the case, experts say, it could leave scores of directors open to similar lawsuits arguing that by approving enormous executive compensation packages they failed in their duty to protect investor interests.

Plaintiffs have introduced into evidence scores of memos and other internal Disney documents in which Eisner and others describe Ovitz as untrustworthy and unbalanced. In one memo read aloud in court, Eisner said of Ovitz: "He is a psychopath. Doesn't know right from wrong. Cannot tell the truth."

Ovitz arrived at the small courthouse here midmorning. He spent much of the time before his testimony chatting with reporters.

Once on the stand, he described his long, close friendship with Eisner and the many discussions the pair had over a 25-year period about his coming to work at Disney. But for most of those years, Ovitz said, he was far too busy building his talent management firm, Creative Artists Agency Inc., into a Hollywood powerhouse to consider going to Disney.

Ovitz said his attitude changed after Eisner underwent heart surgery in 1994. He said he visited the hospital every day after Eisner's surgery and finally agreed to sell his interest in CAA to his partners and join Disney as president. From the outset, however, Ovitz described his tenure as excruciatingly difficult, marked by other executives refusing to work with him and Eisner refusing to execute most of his proposals.

Ovitz said he went to Eisner's house just before his hiring was to be publicly announced. He expected a warm embrace from top Disney brass. Instead, he said, Disney's top lawyer Sanford Litvack and then-chief financial officer Steve Bollenbach greeted him by saying they would never report to him. He said Eisner told him there was nothing he could do about the recalcitrance.

"My mind was spinning," he said of the meeting. "I though, 'Is this a practical joke?' I didn't understand any of this. . . . I was flabbergasted."

Despite the rocky start, Ovitz said, he dove into his work with intense vigor, working long days and taking regular trips to Japan, Europe and China to work on projects, including expansions of Disney's recording and books divisions. He said he suggested buying EMI Records, signing Janet Jackson or launching a joint venture with Sony Corp. to improve the music business. Ovitz said his ideas were usually shot down because Eisner did not want to spend the money.

Ovitz said he was close to nailing down a settlement worth around $85 million with Jeffrey Katzenberg, who had left Disney after clashing with Eisner. The deal was rejected. Asked how much the Katzenberg settlement ultimately cost, Ovitz replied: "North of $250 million."

Ovitz peppered his testimony with famous names he tried and failed to bring into the Disney fold, including authors Michael Crichton, Stephen King and Tom Clancy. He told the story of how he charmed Tim Allen, star of ABC television's "Home Improvement," into coming back to work after he walked off the set in a huff. Disney owns ABC Inc.

Ovitz said he had Allen over for dinner and gave him a print by well-known contemporary artist Roy Lichtenstein, who Ovitz said was a close friend until the artist's death in 1997. Ovitz said he was lectured by Litvack about the cost of the print, not praised for retaining key talent.

At one point, Ovitz seemed to acknowledge part of the plaintiff's case, that his hiring was a mistake because he had no experience as an executive at a public company. But he said he told Eisner before joining Disney that he would need at least a year to learn how to do the job. "My instincts are good," he said he told Eisner. "If you teach me what to do, I will be fine."

Michael Ovitz said he proposed what he thought were brilliant ideas, only to be told they were too expensive or ill-conceived. David C. McBride, left, attorney for Michael Ovitz, and Gregory P. Williams, attorney for the Disney directors, arrive at court.