The Grand Acquisitors

In his study of “the new logic of money and power in Hollywood,” Edward Jay Epstein offers the reader a goodly array of facts, some of them charming and others of them snooze-making. I can’t easily suppress my indifference to the fact that Sony employed seven thousand people in 2003, but I’m mildly charmed to learn that Walt Disney’s Snow White and the Seven Dwarfs was the first movie to gross $100 million, and, also, was the first film to boast a score that became a hit record. Walt Disney, as Mr. Epstein observes, was perhaps the first person to recognize that the way to control actors was to draw them. The never-easy-to-please Ezra Pound could not get enough of Disney’s early masterpiece Perri: sheer genius, he called it.

Of more relevance to power and money was Disney the marketing wizard, who quickly began to license his characters, thereby making the whole world his store, as it still is. Double-barreled geniuses such as Walt Disney are rare in any line of work. Of more relevance to today’s Hollywood are the legions who pursue what Mr. Epstein rather grandly calls “The Learning Imperative”:

Studios are finely tuned learning networks. Faced with a constant stream of reports on how relevant audiences in different markets are reacting to their films and other products, they analyze the various elements—including marketing, stars, and music—and, along this learning curve, adjust their subsequent decisions accordingly.

Which is to say that, like sorcerers of old, they read entrails, with mixed results of course. The cruel truth is that only the public knows what it loves, and then not until it sees it. Giant, hugely expensive flops continue to thud into the theaters season after season; why they were made no man can explain.

Some of these flops are made by the biggest names in the business: Spielberg, Scorsese, anyone. Directors and actors who work steadily are going to have flops; the process of making a film is just too complicated to click every time. Great directors control this process better than do mediocre directors, but no one—whether producer, director, or star—achieves total control.

And the business is slippery in other ways. DVDs now account for huge amounts of income flow, but consider how complicated that can be if the DVDs are being sold through Wal-Mart, as billions of dollars’ worth are ($5 billion in 2003, for example):

Wal-Mart makes it a policy to vet DVDs, videos, and CDs according to its own standards with regard to profanity, sexual imagery, or anything else it deems potentially offensive to “family values.” If the studios want the premium shelf space…they have to take into account its standards.

So the vast retail chains, each of which gets its say, have replaced the wacky old Hays Office, the self-censoring board which accounted for many ridiculous movies in which husbands and wives had to sleep in all those chaste-making twin beds.

When Mr. Epstein talks about “logic” in his analyses of shifting methodologies in the half-dozen big media conglomerates, it seems to me what he’s tracing are shifts in confidence in the vital matter of pulling in audiences for their product. He points out that in 1947 the most Americans customarily went to the movies was once or twice a week. The theaters sold nearly five billion tickets in 1947, as opposed to about one and a half billion in 2003. Where did three billion people go? Well, home to become couch potatoes as they surf through the now nearly infinite choices cable TV provides. When the miniseries of my novel Lonesome Dove aired on CBS in 1989 it got eight hours over four nights; few there are in the networks who now think they can keep an audience for four nights to watch a western. (The last miniseries my writing partner, Diana Ossana, and I wrote, Johnson County War, got four hours on one night.)

Bringing people in is one thing, bringing them back quite another.

In his adroit charting of the confidence flow between the various entities and eras Mr. Epstein kicks up lots of little surprises. The studios had huge confidence when they still were allowed to own theaters and control almost every aspect of distribution, but when the 1948 Justice Department antitrust decree went against them, nixing ownership of or collusion with the theaters, there was a sharp and long-lasting decrease in confidence which has lasted more or less to this day. When, for example, the first of the Pink Panther movies came along MGM was initially reluctant to license the cartoon character, but did anyway and was surprised to find that the famous pink panther made them more money than the movies he introduced.

Any book that sets out to analyze power in Hollywood has constantly to reckon with the fact that there are two kinds of power: ownership or executive power, and Star Power! Mr. Epstein does an excellent crisp job of describing ownership power, but star power is considerably more nebulous. The entertainment business is in itself no more interesting than the oil business, which it in some way resembles (lots of dry holes, an occasional well). The moguls make the money but the stars make the magic—a judgment I doubt Mr. Epstein would disagree with.

I enjoyed Mr. Epstein’s book, but I read it, I confess, with a certain nervousness. A book like that might well contain bad news for screenwriters, a craft I’ve worked at for forty-three years, during which time I’ve done at least one draft of something like seventy scripts, the last fifteen with Diana Ossana. The only project I’ve ever turned down was a remake of Rin-Tin-Tin, a lapse of judgment I’ve regretted ever since. There’s absolutely nothing wrong with Rin-Tin-Tin! Does the new logic of power and money—if it is new and if it’s logic—mean that screenwriters will have a harder time getting work? Well, not that I can find in The Big Picture, mainly because the Grand Acquisitors who collectively own the entertainment business operate so far above us lowly scribes as to scarcely be in the same solar system.

The top of the entertainment food chain is an increasingly toxic landscape peopled only by a tiny handful of Grand Acquisitors, all of them present in The Big Picture: Rupert Murdoch (News Corp), Sumner Redstone (Viacom), John Malone (Liberty Media), Michael Eisner (Disney), Barry Diller (various companies), plus a sprinkling of relative youngsters whose mettle has not yet been fully tested, and the occasional renegade such as the financier Kirk Kerkorian, who, for years, has used MGM as his personal badminton birdie.

I don’t suppose any of these gents possesses any more native avarice than John Jacob Astor or John D. Rockefeller or H.L. Hunt or John Paul Getty, but technologically they live in a far more complex world, a world in which they acquire and acquire and acquire, in hopes of capturing that elusive beast, “synergy.” If they can only catch synergy there will be harmony between the various parts of each empire, and Amazons of money will flood in.

Probably AOL and Time Warner thought they had synergy safely in the paddock when the former acquired the latter in 2000—but they were wrong. The mighty merger proved an embarrassing failure, knocking the various executives involved off the leader board.

Edward Jay Epstein is quite good at describing the complex circulatory systems through which revenue flows in these vast entertainment-business conglomerates, which, besides movie studios, publishing houses, and TV stations, also link cable, pay TV, licensing arms, overseas sales, and the like, assuring, in most cases, that even films which do poorly in domestic box office still make plenty of money. The six nearly all-powerful conglomerates are Viacom, Time Warner, NBC/Universal, Fox, Sony, and Disney. They are, needless to say, run by highly—some would say insanely—competitive men, struggling to place their bets on emerging technologies before anyone else can.

As for the theaters themselves, the invention that did more to bring them into profit than any other was the addition of a simple cup holder to every seat in the house. And how to encourage theatergoers to drink more soda pop: just add a little more salt to the popcorn, which will make them thirsty, so off they go back to the concession stand for more soda and perhaps a giant candy bar or two.^*

Theaters like to pull in paying customers and don’t object if these customers enjoy the movie, just so they don’t enjoy it so much that they neglect the concession stand, which has provided the real source of profit to the theaters for, as Mr. Epstein notes, a very long time.

Even as I write, a corporate melodrama of intense interest to students of Hollywood is being played out in a Delaware courtroom: it pits Michael Eisner, the present CEO of Disney, against Michael Ovitz, the former el supremo of CAA, the talent agency he founded with a couple of other escapees from William Morris. What has highly placed Hollywooders rolling in the aisles is the demonstration, shameless on both their parts, of how perfectly Michael Eisner and Michael Ovitz deserved each other—not that that had really been much of a secret.

This story starts in 1994, when the revered Disney executive Frank Wells was killed in a helicopter crash. He had been president of Disney, under Eisner. The able head of production Jeffrey Katzenberg had hoped to succeed Frank Wells, but Eisner shrugged him off. Katzenberg sued Disney, collected $280 million in back pay, and became a partner in DreamWorks, where he still abides.

Michael Eisner is probably not the kind of executive who finds it lonely at the top—or at least he didn’t until he had coronary bypass surgery. I had had the same surgery some years earlier, and discovered that, for several years, there was darkness and void in the chambers of the self, with only a faint echo now and then to suggest that my old self was there somewhere, calling out. I wrote Michael Eisner, describing this void, and he wrote me back, cautiously, as was only fair. I was just a writer, with no reason to conceal my troubles; but he was the CEO of a twenty-billion-dollar company. The slightest suggestion that anything was wrong and the wolves would have been on him in a second. But he did put some of my letter in his autobiography, and even gave me a free copy.

He also hired Michael Ovitz to be president of Disney, perhaps hoping to secure the help that his wife, Jane Eisner, felt he badly needed. Michael Ovitz didn’t provide it. He stayed fourteen months, annoyed everyone in the company, and collected $140 million in severance pay when he left. It is this payment that a group of Disney shareholders have been contesting in Delaware.

Even allowing for the heart surgery, it is still inexplicable to me why these two highly able men took this particular leap. They were not strangers to each other, or to Disney. Michael Eisner must have known that Michael Ovitz was not going to be the new Frank Wells. And, for his part, Michael Ovitz must have realized that being president of Disney, under Eisner, would be about as much fun as being president of Albania.

And yet they did it.

It makes me wonder whether “logic” really belongs in the subtitle of Edward Jay Epstein’s book. It’s a good book, but what I wonder is, who will want all these facts? Not the Grand Acquisitors, surely; nor the players in the studios and the agencies, who are too busy being players to read it. And not the actors and actresses who actually carry, on their often frail shoulders, the whole glorious myth of Hollywood.

As for the general public: forget it. The general public far prefers the tabloid view of Hollywood. Which stars are sleeping with or not sleeping with which other stars: that’s what most people want to know about Hollywood—it’s an honest standard. I pretty much rely on it myself.

Personally I’m just waiting, with my partner, for Rin-Tin-Tin to come around again, as possibly it will. This time we mean to grab it.