DreamWorks—the mega-million-dollar brainchild of Steven Spielberg, Jeffrey Katzenberg, and David Geffen—heralded a new age of entertainment empires when it launched in 1994, and their competitive strategy was fierce. For avid business readers, among others, seeing David Geffen in action as he seduces investors like Microsoft's Paul Allen and takes on CAA's Michael Ovitz is worth the price of admission. Their creative battles cost them untold billions on the way to the box office, but this is no rags-to-riches story: in fact, as they grow DreamWorks into one of the most influential film brands operating today, these rich men get richer, even as the stakes get higher.
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THE EMPEROR IN AUGUST
In “the industry,” there are the pictures, and then there is the big picture: the movie-like drama of ambition and retribution that is Hollywood life. In the course of this performance, skinny kids from the outer boroughs are transformed by force of will and sleight of hand into moguls and billionaires. Kings leave the stage against a backdrop of subtle maneuvers. Fathers and sons wage war. Deals and negotiations become dramas staged by players adept at manipulating realities. What motivates them? Of course: money and power. But there is more. They crave the special kind of recognition that comes with ruling their world.
In the fall of 1994, during the warm, dry months when Hollywood's most ambitious project in decades - a new superstudio called DreamWorks - was in its inception, a monarch was preparing for his bows. For much of the previous half century, Lew Wasserman had been chief of MCA/Universal, the town's most formidable entertainment conglomerate. The onetime theater usher was inextricably linked with the myths and the memories, the scandals and the lore that define Hollywood. His grandeur had both intimidated and inspired. Jack Valenti, former president of the Motion Picture Association of America, would refer to him as “Zeus.”
Many of Wasserman's would-be heirs had modeled themselves after the slender man with the bright-white pompadour and signature black-framed glasses. These men had waited in the wings for the old king's inevitable drift from center stage. That moment seemed near at hand. The old guard was fading. For Sale signs announced opportunities. Foreign investors were calling. Ownership had become the obsession. It was not enough now to occupy the corner office; it was necessary to own it, the building, the lot. This was the New New Hollywood. The dealmakers had replaced movie stars as the jet set. Americans consumed box-office rankings with more interest than reviews. Vanity Fair and The New Yorker gave studio executives' exploits the scrutiny once lavished on Elizabeth Taylor's romances and the latest Kennedy rumors.
At the talent agencies, there were whispers: superagent Michael Ovitz, who had built Creative Artists Agency (CAA) into the ruling talent agency, was now positioning himself for his own starring role. He wasn't the only one.
On the morning of October 10, a rare trio - Steven Spielberg, David Geffen, and Jeffrey Katzenberg - drove up the long driveway off North Foothill Road in Beverly Hills. Their destination: the glass-walled mansion where Lew Wasserman lived with his wife, Edie, Hollywood's first lady. It was located, fittingly, next to Frank Sinatra's old place. Here, where the palms sheltered perfect fl owers and the license plate on the white Mercedes roadster read MCA 1, it was almost possible to hear the voices of Old Hollywood, the patter of Bob Hope, the crooning of Bing Crosby. The halls were lined with paintings by Degas and Matisse. But the art most remarked upon by visitors was the portrait of Wasserman by Bernard Buffet, a gift from Alfred Hitchcock.
Walking toward the entrance, the three men would have missed the backyard's ornamental pond, home to hundreds of brilliantly colored Japanese koi, which reliably spawned after visits from President Bill Clinton, for whom the Wassermans had held fundraisers. “You have the same effect on fish as you do on women,” Wasserman once told his friend. (Later, when Clinton asked what could be done to get more movies made in Arkansas, Wasserman replied, “Not much.”)
The visitors were on a diplomatic mission requiring deference and grace. They hoped to present to Wasserman - godfather, benefactor, friend of popes, mobsters, Reagans and Monroes - their plan for the first new Hollywood studio in sixty years. Wasserman's ways were writ large in this town and few had taken more cues from him than the three men now making their approach. Schooled in the arts of éminence grise, they understood what was to be gained through observation of and counseling by the elders, the Lears, Prosperos, and Don Corleones, who tended to exact both obeisance and gratitude in complicated ways.
Wasserman, whose brass knuckles had long been replaced by polished fingernails, was the undisputed Hollywood paterfamilias. Yet time was finally having its say. Eighty-one years of age, he had been hospitalized for cancer, but the state of his health was not the only thing under scrutiny by observers. Once the master of the negotiating table, Wasserman had been slipping since 1990, when he had, albeit reluctantly, sold MCA to Japan's Matsushita. Call it a disaster - “the dumb thing I did,” Wasserman admitted. It took time for those accustomed to his flamboyant imperiousness to adjust to the fact that Lew Wasserman and his deputy, MCA president and COO Sidney Sheinberg, were lacking what Hollywood most prized in its patriarchs: absolute control.
Wasserman's guests hoped to inherit part of his legacy. They had large ambitions that had only recently converged on the idea of creating, together, a company, and their joining forces in this new venture would have a major impact on Hollywood, and major implications for Wasserman. Geffen's and Spielberg's respective music and film companies, Geffen Records and Amblin Entertainment, were under the MCA/Universal umbrella. Spielberg, who called Wasserman his “guardian angel,” had barely left the Universal lot since, as a college kid self-conscious about his “schnoz,” he'd sneaked past the gate using a briefcase as a prop. Anything vaguely resembling a defection on Spielberg's part would not be welcome news to the studio. There was enough trouble with the Japanese.
Picture a sunny California day with Steven Spielberg whizzing through the Universal lot. His sports car hits a speed bump and he bangs his head. By the next morning, all the speed bumps on the lot have been removed. The vignette, perhaps apocryphal, suggests the lengths to which MCA/Universal had been willing to go to make Spielberg feel protected and at home. The director was closest with Sheinberg, who got him his first directing job (on TV's Night Gallery), in 1969. But according to Connie Bruck's When Hollywood Had a King, the director maintained that it was Wasserman who had saved him when guest star Joan Crawford found out he was a first-timer. “I could tell,” recalled Spielberg, “that Joan was going to . . . raise hell. Lew had been her manager, he was the one who got the call.”
Wasserman told his diva to behave, as it was she who was in danger of being replaced. “From that day on,” said Spielberg, “Joan Crawford treated me like King Vidor.”
Wasserman, who believed in investing in the best, had been prescient. Since his beginnings, from Jaws and E.T. on, Spielberg had brought in billions. As a director, he alternated between extraterrestrial fare (Close Encounters of the Third Kind), thrill rides (the Indiana Jones series), and dramas (Empire of the Sun, The Color Purple). As a producer, he offered family fun (Back to the Future, The Goonies, Gremlins). His maturation held further magic: the previous year, his movies had won ten Oscars, three for the year's highest-grossing film (Jurassic Park), and seven for the most acclaimed (Schindler's List). Never had he been more revered.
Spielberg called MCA his “homeland,” and so Wasserman and Shein berg had made it, building a $4 million complex on the Universal lot to house his production company, Amblin. Homey and eucalyptus- shaded, it was modeled on George Lucas's Skywalker Ranch, and was similarly awash in splendid gadgetry. Spielberg, seemingly satisfied and quite productive, rarely left home. His life was as comfortable as his stonewashed jeans; his contracts were off the charts, and included an enormous portion of back-end grosses, a percentage of a movie's ticket receipts. On Jurassic Park, he took no money upfront, but received 15 percent of the first-dollar gross, or fifteen cents on every dollar off the top that went to Universal.
No money upfront was risky, but Spielberg fl ops were rare. E.T. and Jurassic Park remain among the top twenty of the highest- grossing movies ever. Because of this track record, he and Universal basically split the profits on films he produced. When Jurassic Park grossed $914 million worldwide, Spielberg took home about $300 million, as much as Universal. Spielberg also received extraordinary revenues from ancillary rights (namely, home-video profits) and merchandising. And in a deal unheard of anywhere else in Hollywood, he was granted 2 percent of ticket receipts from Universal theme parks, which amounts to $30 million a year.
But so much was changing, for all the men. Spielberg knew that the Universal of Wasserman and Sheinberg was fading. Yet his own future was still filled with the promise of further ascension.
Sitting in the luxurious den overlooking the sloping backyard, Wasserman listened as Spielberg described a studio of the future that produced movies, TV, music, and more. The perpetual wunderkind was forty-seven years old, bespectacled and with a lightly graying beard. Wasserman took it in, but to him there was presumably something more noteworthy than the new studio. He must have been surprised by Geffen and Katzenberg's seduction of Spielberg, whose interests had never previously involved the risky business of ownership, in an industry of volatile change.
Geffen's involvement with the venture was easier to discern. Like Wasserman, he had started out as an agent. The child of a depressive father and a mother hospitalized for emotional problems after the loss of her extended family in a concentration camp, Geffen was known for his way with talent. The high-voltage currents of artists seemed compatible with his mercurial intensity. He took care of those he represented (Joni Mitchell, Jackson Browne), while screaming down disbelievers and aggressively cajoling the record executives he wrangled into submission. These days, he moved companies (his record label had gone to MCA for 10 million shares of MCA stock, valued at around $545 million). But Geffen had never stopped respecting talent, the soul of the industry, and connecting with those driven souls who possessed it. With the help of Katzenberg he was suddenly in business with the most commercial talent in town: Steven Spielberg. It was a triumphant moment.
Spielberg told Wasserman that he wanted to go beyond formulas and films made to order by marketing departments. MCA was the inspiration, of course, said the director. But MCA was not, at least these days, known for its artistic innovations. Spielberg wanted to go Wasserman one better. He wanted to go everyone one better. He was, after all, Steven Spielberg, accustomed to advancing the game.
The new partners were thinking state-of-the-art, so cutting edge they couldn't quite articulate as yet all that the new enterprise would entail. But it would all come together. Failure wasn't written into the scripts these three worked from. Their falls from grace had been quickly erased from Hollywood's collective memory. They were the glory boys, whose world was part ruthlessly pragmatic, part romance. From themselves they expected, as did many others, only further spectacular feats.
How many callers had Wasserman seen arriving at his gates? Now, here he was, the waning patriarch, shifting into that most unrewarding of roles: benevolent good sport. So he turned up the enthusiasm, taking what was later described as delight in what he was hearing. After being given assurances of the partners' loyalty, and a discussion of MCA/Universal making a distribution deal with the new company, the old tough guy seemed to drift a bit. He showed the men keepsakes, like his drawings by Walt Disney, and began to speak tenderly, nostalgically, about the old days, when defeat was unknown to him, and Hollywood was Hollywood.
Table of Contents
A Note to Readers xi
I Starting UP
1 The Emperor in August 3
2 The End of Magic 9
3 Mr. Spielberg Will See You Now 14
4 Geffen Slept Here 21
5 The Announcement 28
6 E.T., Phone Home 36
7 Animated Characters 44
8 Live Action 60
9 Show Me the Money 69
10 Culture Clash 85
11 The Unthinkable Occurs 101
12 George in Slovakia; Jeffrey in Extremis 108
13 The Not So Long Goodbye 123
14 Of Men and Mice 133
15 Slaves to the Rhythm 148
16 Saving Spielberg 159
17 Bug Wars 180
18 Harvey Baby 196
19 Unexpected Beauty 217
20 The Battle for Oscar 232
21 Nobody's Bitch 247
22 Sword Fights 262
23 Shreked 276
24 Rock and Roll 293
25 Golden Glow 303
26 The Motorcycle Diaries 321
27 Harvey II 335
28 What Sinbad Wrought 349
29 Naked in Public 362
30 In a Snicket 375
31 No White Suits! 382
32 The Geffen Express 401
Epilogue: Three-Way Split 432
Notes on Sources 449
What People are Saying About This
"This rise and fall and clash of the titans account can be a thrilling ride." -The Boston Globe