Hollywood Shuffle
Soon
after taking over Columbia Pictures in 1989, Peter Guber and Jon Peters got
down to the business of establishing their importance in Hollywood: They
redecorated. The producers particularly wanted to impress the studio's new
owner, the Sony Corp. in Tokyo, so they redid their suite in a Japanese motif,
importing Japanese workers to put up cedar paneling over a special kind of mud
used in Japanese wall construction. Unfortunately, Hollywood humidity melted
the mud, and the floors buckled. Guber and Peters fled to new offices shortly
thereafter.
The marriage of Japan and Hollywood worked out
about the same way. Sony, the electronics giant famous for inventing and
marketing products that consumers never knew they wanted, shelled out what
Variety reported to be $6 billion for Columbia, a figure that included
the cost of severing Guber and Peters' existing contract with Warner. Everyone
else in Hollywood was flabbergasted and jealous, while the media dwelled on
fears that a cultural treasure was being gobbled up. In the end, though, it was
the Japanese who were swallowed whole. Five years after the purchase, Sony had
to write off $3.2 billion on its investment, one of the biggest losses in
industry history.
In their book, Hit and Run: How Jon Peters and Peter
Guber Took Sony for a Ride in Hollywood , Nancy Griffin and Kim Masters
outline the colossal arrogance, excess, and self-delusion that led to the
debacle. Their steady stream of malicious, if clumsily written, anecdotes is
nothing if not entertaining. Jon Peters, everyone knows, began as Barbra
Streisand's hairdresser. Here we learn that he also played a critical role in
her sexual awakening--that their marathon fights, followed by sex, freed the
diva to experience a new "assertiveness" in bed. At Columbia, however, he was a
hot-tempered bully, threatening at one point to break a colleague's jaw. On
another occasion, after Streisand confessed that she had never seen an
uncircumcised penis, Peters ordered the couple's driver to come over and drop
his pants. Peters also sent the corporate jet, laden with flowers, to a model
he was courting, and ordered his driver to call ahead to the studio so someone
could be poised to open his car door when he arrived.
Guber--a ponytailed lawyer and technology buff who rose through the ranks at
Columbia--refused to be interviewed for the book. Perhaps as a result, he comes
across even worse than Peters. Most damaging for his future job prospects is
the implicit suggestion that he cynically exploited Sony to advance his own
movies and sybaritic lifestyle, never caring much about the parent company's
long-term interests. With a habit of disappearing during moments of crisis at
the studio, Guber came across to friends as ambivalent, at best, about working
for the Japanese. "They haven't bought me," he told a fellow studio executive.
"They're only renting me for five years." The reader may be most amused by
lesser players like Mark Canton, the credit-hungry head of production at
Columbia, who pathetically asked the producers of A Few Good Men to
thank him publicly at the premiere (they did) and implored Nick Nolte to thank
him if he got a Golden Globe award for Prince of Tides (Nolte won, but
didn't).
There are plenty of problems with the way Hit and
Run is told. It relies too heavily on anonymous sources, and the trade
press has begun complaining that some of its stories are bogus. The editor of
Variety , for instance, has indignantly denied the authors' assertion
that he suppressed publication of financial documents embarrassing to Columbia
Pictures. The book's tone also is relentlessly caustic. Can there ever have
been a more loathsome collection of charlatans, sycophants, and back-stabbers?
Come to think of it, maybe not.
But the book's value lies
less in the anecdotes than in what it has to tell us about how one of the
biggest entertainment deals went awry at a time when the industry was
consolidating everywhere, heading toward domination by a mere six or eight
multinational companies--all of which face the headache of competing fiefdoms.
The Sony-Columbia deal is a cautionary tale, even though larger lessons are not
Griffin and Masters' forte.
One
does wish that they had more to say about Sony and Columbia Pictures' misplaced
faith in "synergy," since the search for that elusive ideal has run so
spectacularly aground in other media deals. It was especially disastrous in the
acquisition of MCA Inc. by Sony's electronics rival, Matsushita, which took
place about the same time. (Matsushita later sold the majority interest of MCA
to Seagram for $5.7 billion.) The MCA sale did not involve the same level of
plunder. In both takeovers, though, the Hollywood side thought that by selling,
it could tap into a bottomless well of capital with which to buy television
networks, record companies, and the like. The Japanese, on the other hand, were
hoping for a new source of "software" (i.e., movies and television shows) for
their digital televisions, compact discs, and other new products. They counted
on the studios to produce it in a reliable way.
Like Guber, Sony refused to cooperate with the authors of
Hit and Run , so we don't get much insight into the thought processes of
the Japanese. Did they have a "mole" in the studio or not? How much did they
know about what they were getting into? We never find out. But we do get
snapshots of the mindset that allowed them to get sucked into the vortex of
financial losses. At one point, Norio Ohga, the president of Sony, joined a
group of executives from Tokyo to tour the set of Who's the Boss? one of
the studio's more successful television shows. All they did was look at the
cameras and ask who made the video tape and what kind of lead density it
had.
The
Japanese may have been confused, but the Americans who supposedly represented
their interests seem frankly guilty of misleading them. If anything, Griffin
and Masters let these characters off too easily. Both Peter G. Peterson, the
prominent New York investment banker, and Michael Ovitz, then-head of Creative
Artists Agency, would seem to have been more interested in making money out of
the Columbia deal than in warning their client, Sony, about the risks, but the
authors are too polite to come right out and say so. Also treated kindly is
Michael Schulhof, the miscast head of Sony's American operations (he had no
background in the movie business). After backing Guber through a series of
disasters, Schulhof eventually admitted that he was unable to get the producer
to change his management style. But the authors do not hold Schulhof
accountable. They do not ask what changes he had in mind, other than getting
Guber to try harder to make better movies at lower cost.
Hit and Run is further undercut by parochialism,
especially evident in its constant use of Hollywood jargon. This is a book in
which executives never approve a movie; they "greenlight" it. Even beyond the
klunky language, the authors fail to transcend their narrow context and explore
what management success in the movie business might have entailed. The only
clear measure of Guber and Peters' misjudgment is their overspending for
antique furniture, yachts, slumber parties at Aspen, and the like, and a
numbing succession of box-office bombs. (Actually, some of the bombs were
pretty good movies, like Wolf and Remains of the Day, while others, like the
much-maligned Last Action Hero with Arnold Schwarzenegger, were failures in an
interesting way.)
With their
backgrounds--Griffin is deputy editor of Premiere and Masters, a
contributing editor for Time and Vanity Fair --the authors should
have been able to tell us a little more about why Hollywood movies are so bad.
Instead, they have written the story of a failure, albeit one with important
consequences for the industry today. Hopefully, people who read the story of
Sony's less-than-excellent adventure in Hollywood will look a little more
skeptically at the vaporous claims surrounding other megamergers in the
communications business. They will have less patience for optimistic talk about
synergy and the marriage of content with distribution. As William Goldman put
it, when it comes to what works or doesn't in Hollywood, "nobody knows
anything."
