“The Moguls of Minutiae”

By Richard Natale

From:
Los Angeles Times Calendar

Wanted: Talented executive to run major film studio. Candidate must have creative vision, financial acumen,
knowledge of movies, TV, video, international markets and changing technology. Ability to deal with
$20million stars who think of themselves as auteurs, touchy directors who demand last edits of threehour films
and boxofficemad press ready to pounce on the latest misfire essential.

Salary negotiable. Excellent severance benefits.

What. no takers?

Of course that's not really the case but the fact is that the job of studio chief doesn't hold the same appeal for
Hollywood power types that it once did. And that may come into play as shakeups and rumors thereof at the top
of major studios begin

The relative calm in the upper echelons of the major studios in the past couple of years was shattered recently
by the abrupt departures of Universal head Frank Biondi Jr. and film studio chairman Casey Silver. Neither
position has been filled.

Universal chairman Ron Meyer assumed their duties, a move that's being viewed as a shortterm strategy as
studio owner Edgar Bronfman Jr. searches for another senior executive – possibly from the top ranks at one of
the other studios. And if that happens. it could start a game of musical chairs at the top, especially since the
entertainment industry gossip mill is already grinding overtime about a number of other potential vacancies.

For example, Warner Bros., the industry’s longestlived studio regime, headed by Bob Daly and Terry Semel, has
come under scrutiny lately, owing to a string of expensive flops ("The Postman," "The Avengers," "Soldier") at
the otherwise stable and profitable entertainment division of media giant Time Warner.

The focus is now on Semel, who is seen as possibly jumping over to Universal. though he recently met with his
senior staff and assured them he's staying put – which, of course, only served to further rumors of his departure.
Another example is MGM/UA, whose prolonged economic difficulties have placed its chairman, Frank
Mancuso, under the microscope. His future, as well as that of the company, is being closely followed by the
industry. MGM's owner, Kirk Kerkorian, reportedly initiated discussions recently with veteran senior executive
Sid Sheinberg, formerly of MCA, about returning to the executive suite. The talks were said to be inconclusive.

Running one of the seven major film studios has always been a tantalizing proposition, rich in history as well as
financial and creative rewards. The opportunity to carry on the legacy of Hollywood legends like Louis B.
Mayer, Darryl F. Zanuck and Jack L Warner has quickened the pace of many a neophyte mailroom employee at
the William Morris Agency.

But that's changed. Despite the relative stability at most studios. rising production executives now aspire to be
more like industry icons Samuel Goldwyn or David O. Selznick – firstrank producers who actively participate
in making movies and leave the administrative headaches of running a studio to others.

"Most people who are working in the studio system today want to get to the top, but they don't want to stay
there," says Tom Pollock, who was studio chief at Universal before Meyer took over and now is a selffinanced
independent producer. "It's a means to an end, which is usually producing movies."

As virtually all the major studios are now entertainment divisions of multimedia conglomerates, the parameters
of the job have expanded and the number of obvious qualified candidates is shrinking. The few logical
candidates for running a studio, like DreamWorks' Jeffrey Katzenberg and David Geffen or Brian Grazer of
Imagine Films, are ensconced in their own entertainment companies that offer all the advantages and few of the
drawbacks of being a studio head.

The studios' infatuation with agency bigwigs has been tarnished after Michael Ovitz's disappointing
performance as Disney's No. 2 executive behind Michael Eisner and Meyer's still inconclusive reign at
Universal. Ovitz and Meyer gained power and fame as heads of Creative Artists Agency in the '80s.

"The rules (of running a studio] have changed," says Disney chairman Joe Roth. "In the 1970s, when most of
the business was domestic theatrical, you made a movie for $2 million or $3 million and opened it in America
and then it played on television. That was the bulk of the revenue. The person who ran the studio was trained
creatively in TV and movies. He didn't need an extensive background in business and marketing."

Back then there was no video business, or cable. The international market was an afterthought. The country had
yet to be overrun by multiplexes. Most films were carefully and slowly rolled out over a period of months. Even
wide releases like "Jaws" and "Star Wars" were launched in a few hundred theaters, not a few thousand.

Current Sony Pictures chairman John Calley formerly served in a senior executive capacity at Warner Bros. in
the 1970s, along with Frank Wells. He says that when Wells moved on to Disney in 1984, he told Calley (then
an independent producer), "You have no idea how much things have changed. What we were doing was
kindergarten by comparison."
When he returned after 13 years to United Artists, Calley says it took a great deal of startup time to deal with
the various businesses that didn't exist a decade previous. He has made the transition to Sony by divvying up
responsibilities with his senior management, including Amy Pascal, Lucy Fisher and Gareth Wigan. But few
studios have a similar degree of depth and breadth in their production ranks.

"Running a studio has become a very difficult job," Calley says, "requiring a broad spectrum of experience that
a lot of people don't have. There was a time when, if you ran a studio and talked to the right guys every day, you
pretty much knew what was going on. But now the individual components of the business – marketing. home
video, etc. – have become so big that the generalist has largely disappeared.

"It's difficult for any one person to be a film executive and an expert manager."

There are still a few career executives in the studio system – Pascal, Fox's Tom Rothman, Disney's David Vogel,
Warner's Lorenzo di Bonaventura, New Line's Michael De Luca and Universal's Stacey Snider (who recently
got bumped up to head of production with the departure of Silver). "But it's not a growing breed," says former
Fox senior executive turned producer Laurence Mark.

“The whole notion of being a career executive has gone away. When you realize (studio executives) all have
backend production deals, you realize there’s another agenda going on.”

At one time losing your perk-filled studio job was a badge of shame. But that has quickly turned around as
former executives like Scott Rudin (Fox) and more recently, Alan Ladd Jr. (MGM), established thriving careers
as independent producers. They are part of an evergrowing list of former studio heads who have become
independent producers including Pollock (Universal), Leonard Goldberg (Fox), Mike Medavoy (TriStar), Mark
Canton (Sony), Jon Peters and Peter Guber (Sony).

The major studios seem to be in a constant state of future shock. The daunting responsibilities of senior
executives entail managing several new layers of bureaucracy, supervising various divisions, such as marketing,
distribution and merchandising, each with large staffs of their own.

And each passing year produces a new stratum – the Internet, DVD, HDTV – each with its own experts and
staffs. The 20th Century Fox Richard Zanuck ran in the 1960s was a boutique by comparison to the subsidiary
of Rupert Murdoch's international giant News Corp. it is today.

"There were no legions of assistants and executive assistants, and all those people you have to stumble over to
get to first base in the business today. We had a very tiny staff," says Zanuck.

"There was no such thing as a vice president, and if there was, there was only one. We met every morning at
8:30 for a halfhour coffee meeting. And everything emanated from that meeting."

That all changed in the 1970s, according to one producer. As studios like Paramount grew. so did the number of
executives. "When I started out, there was a head of production, two or three vice presidents and a story
department," says a former executive turned producer who asked not to be named. "Then they added creative
executives, directors and a cadre of other individuals.”
With corporatization has come increased accountability, says Leonard Goldberg, who ran 20th Century Fox for a
time in the 1980s. The film divisions of such corporations are usually loss leaders, the least profitable segment
of the overall business.

As other corporate giants like CocaCola, Matsushita and now Seagram came to realize, the making of movies is
an expensive, imprecise science.. Yet the corporate parent holds the film company to the same business
standards, including a precise accounting of predicted annual revenue and profit flow.

"CocaCola (which had Columbia and TriStar) knows within a few trillion cans how many Diet Cokes and
regular Cokes they are going to sell annually," says Goldberg, now an independent producer. "But except for
one or two sequels, we have to start fresh every year."

As executives climb up this steep ladder, assume greater responsibilities and acquire "yes" power, they find
themselves further and further removed from the films they greenlight.

"Everything's compartmentalized." says producer David Ladd, a former MGM/UA production executive. “The
marketing, legal and production departments are all different entities. There's no vertical integration as there
was in the past. where a studio head had control of every part of the process."

The days of the Louis B. Mayer-style autocrat are over. "Everyone's part of a team. And everyone has a boss."
says producer Pollock.

As the potential revenues from movies have increased, so have the costs of making them. A studio film today
costs $75 million on average to make and market. The kind of instinctual decisionmaking Zanuck says
characterized the era of his father Darryl is impossible today, given the prohibitive price tags. "Passion" is a
word that is no longer applied in the decisionmaking process. The question always asked, says Zanuck is, “Does
it make (business) sense?”

The other major change is the ongoing battle with talent – actors, directors, producers, writers. If Columbia's
Harry Cohn wanted to make a movie, he decided which of his contract players would star in it, write it, produce
it and direct it. "Now the talent is in charge," says producer Mark. "If you can't get a piece of talent, you can't
make the movie. Talent is in charge of how the game is played."

While today's studio head enjoys the kind of remuneration that even Mayer couldn't imagine, creatively the job
is less rewarding. But independent producers, particularly those who come from the studio tanks, are enjoying
unprecedented opportunities to share handsomely in the financial and creative rewards of filmmaking without
an undue burden of accountability.

Many of Hollywood's most prolific producers, such as Grazer, Rudin, Jerry Bruckheimer, Arnold Kopelson and
Joel Silver, are vital suppliers of studio product. Most enjoy gross profit participation on their films and produce
movies that reflect a particular sensibility. Bruckheimer and Silver specialize in noholdsbarred action
adventures; Kopelson's films are slick action dramas with Alist stars; Rudin's films skew toward more
sophisticated material; and Grazer's toward highconcept material with an emphasis on star comedies.
As with Goldwyn and Selznick in the past, these producers have strong relationships with talent, facilitating the
studios' ability to line up stars and star directors for their projects. They have become essential to a studio's
preparation of its yearly slate of movies.

Increasingly, talented studio executives rise through the ranks and depart the studio process – sometimes
voluntarily (Rudin), sometimes not (Silver) for the more handson job of producing. Working within the studio
system is now seen less as a longterm career than as the best preparation for being a successful producer.

As a training ground, the executive suite can't be beat according to Donald DeLine, who recently departed as
production head of Disney's Touchstone Pictures to set up shop at Paramount.

"You develop relationships with important filmmakers and the business practices you learn about how movies
are budgeted and marketed are invaluable," he says.

Grazer, one of Hollywood's leading independent producers, has never been a senior executive but is regularly
shortlisted for studio head vacancies. Grazer, who is partnered with director Ron Howard in Imagine
Entertainment, runs a company that resembles a '70s studio in many respects. With a small staff, Grazer
currently has more than half a dozen films in production and is steering the company more into television.

But he has thus far resisted the lure of running a studio. "What I do now is create television and movies," Grazer
says. “My creative side isn't toxified by having to manage lots of personalities or worry about quarterly
earnings.”

Still, on a good day he'll admit to a certain fascination with the possibility of running a studio. "There's still that
sort of intoxication with the personal challenge to see if you could pull it off. But the circumstances would have
to be right…I'd have to make certain it would be worth it, that I could create the right sort of insulation to allow
me to remain part of the creative process."

Sony's Calley is one of the few studio heads who, through careful delegation of responsibility, has managed to
maintain some creative control. "There's something about shaping a program of pictures that's exciting," he
says. "And if you can be intensely involved in the process, then it's intensely exciting."

For now; Calley prefers to be a buyer rather than a seller. But he has voiced a desire to return someday to more
handson producing. He is preparing the studio for a gradual transition of power. But many other studios don't
have that kind of apparatus in place.

So where will future studio heads come from? According to most senior executives, less and less from the
production ranks and more from the business side of show business. One example is Fox head William
Mechanic, whose background is in video and international distribution.

"Running a studio today is equally business and creative," says one studio production head. "It's not a handson
moviemaking job. If you are unsuited to those business realities, you're not suited to this job. But if the
challenge of running a business that's on the cutting edge of an information revolution appeals to you, these are
great jobs to have." p