HOUGHTON MIFFLIN HAROCURT
BOSTON NEW YORK
2010
Copyright © 2010 by Nicole LaPorte
All rights reserved
For information about permission to reproduce selections from this book,
write to Permissions, Houghton Mifflin Harcourt Publishing Company,
215 Park Avenue South, New York, New York 10003.
Library of Congress Cataloging-in-Publication Data
LaPorte, Nicole.
The men who would be king : an almost epic tale of moguls,
movies, and a company called DreamWorks / Nicole LaPorte.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-547-13470-3
1. DreamWorks Pictures — History. 2. Spielberg, Steven, 1946–
3. Katzenberg, Jeffrey, 1950– 4. Geffen, David. I. Title.
PN1999.D74L37 2010
384'.80979494—dc22 2009042488
Book design by Melissa Lotfy
Printed in the United States of America
DOC 10 9 8 7 6 5 4 3 2 1
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
II. ROLLING
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
IV. CLOSE-UP
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
Bibliography 447
Notes on Sources 449
Acknowledgments 475
Index 478
The dream is a lie, but the dreaming is true.
—ROBERT PENN WARREN
How do you tell the DreamWorks story? Few corporate figures, politicians, or celebrities are more determined to control what's written about them than blockbuster movie director Steven Spielberg, inexhaustible studio executive Jeffrey Katzenberg, and billionaire music mogul David Geffen. These are the men who, in 1994, founded DreamWorks, the much-touted movie studio (the first created in sixty years), where they labored, in varying degrees of togetherness, until recently. Despite the fact that their products depend on publicity and exposure, and that their carefully tended reputations have been created, to a degree, in partnership with the press, all three rejected my entreaties to interview them for this book. These are not peacocks who drop their plumage for Oprah or Barbara, or nearly anyone, particularly when the story doesn't end with them smiling triumphantly as the credits roll.
As the DreamWorks partners know all too well, journalism in Hollywood is a tricky business. It is often a tool to be enlisted "on background," when there is an ax to grind or an agenda to advance. Media relations in Hollywood often involve unspoken trade-offs. If the powerful get buffed and polished, they give: beneficial "friendships," exclusive scoops, trips on the private jet or yacht. But just as easily as VIPs can bestow favors, so can they take them away. When Claudia Eller, a business reporter for the Los Angeles Times, wrote that DreamWorks was in less than stunning shape, Katzenberg and DreamWorks marketing head Terry Press met with the Times' editor in chief and managing editor, complaining that she treated their company more harshly than others. The point was clear: DreamWorks was not going to take things lying down. To make the point all the more clear, Katzenberg and Press—the latter, at that point, had a close, personal friendship with Eller—stopped speaking to her for several years. DreamWorks' relationship with the press wasn't just convenient, it was necessary. The company, after all, was built on buckets of hype, beginning with its first press conference at the posh Peninsula hotel in Beverly Hills, upon which hordes of media descended to catch the first glimpse of the self-proclaimed Dream Team. As a private company (the animation division went public in 2004), DreamWorks never owed anyone numbers, in the form of balance sheets or quarterly earnings. Its inner workings were always a mystery. So it relied on the press to spin its usually self-glorifying view of its ventures.
Self-aggrandizement was, of course, what one expected from three of the greatest showmen in Hollywood, and if DreamWorks excelled at anything, it was putting on a performance. In its early days, the new venture became famous for its inches-thick press releases and extravagant press conferences—such as the one held in an airplane hangar to announce plans for a state-of-the-art studio (a vision that never came to pass). Spielberg was always front and center as the poster child and a symbol of affability and goodwill. Katzenberg was on hand to explain the brass tacks. And Geffen was a soothing—and intimidating—reminder that an especially demanding billionaire was overseeing the whole operation.
But as the DreamWorks story turned out to be much less than its founders envisioned, all that hype took its toll. By setting the expectations so high, on so many levels—the plan was to be a sprawling, multimedia venture that made better product (movies, TV shows, music) than the rest of Hollywood—it was all but impossible to live up to its promise. Tom Hanks once joked that the inevitable reaction to DreamWorks' first film, given who was behind it, would be: "Is that it?" By the time DreamWorks' live-action studio was sold to Paramount in 2005, the same question could be asked of the entire studio.
There was, certainly, an inspiring nobility in DreamWorks' desire to rewrite the rules. The company's stated mission was to put art first; it was proclaimed the new United Artists, the prototypical inmates-running-the-asylum studio formed in 1919 by Douglas Fairbanks, Mary Pickford, Charlie Chaplin, and D. W. Griffith. But too often the attempt to do more, do better, smacked of hubris and egos that had long ago lost touch with reality as mere mortals know it.
***
The power that Spielberg, Katzenberg, and Geffen wield in Hollywood—and their effective demonstrations of it—breeds extreme fear and trembling in a town that thrives on hyperbole and drama. "There's a very strong fear element," confided one insider who has a long history with DreamWorks. Both Geffen and Katzenberg are known to have long memories when it comes to keeping score, and when an enemy is declared, the war is no mere skirmish. Years before onetime superagent Michael Ovitz was toppled from his perch atop the Creative Artists Agency, Geffen told friends he was going to "destroy" Ovitz, with whom he had a tempestuous past. "Watch me," he said.
Ovitz undoubtedly had a hand in his own fall, but Geffen fueled the process, trashing Ovitz for years and creating the perception that he was very damaged goods; the result of these effective theatrics was estimable. As Ovitz himself loved to say of Hollywood: "Perception is everything." Similarly, when Geffen turned on Bill and Hillary Clinton, after years of serving as the former president's biggest Hollywood donor and champion, it was not pretty. Or private. "Everybody in politics lies, but they do it with such ease, it's troubling," Geffen told New York Times op-ed columnist Maureen Dowd, whose column was considered—at least where Hollywood contributions were concerned—a watershed moment in the 2008 race for the Democratic presidential nomination, turning things in Barack Obama's favor. Dowd neglected to question her source's own credentials as an arbiter of integrity. Not to mention that some speculated that should Geffen buy the Los Angeles Times (a possibility at the time), she would be one of his first hires.
Few people in Hollywood are willing to cross these men, for fear of risking a premature close to a career or some other form of revenge. At one point during my tenure at Variety, where I covered the company, DreamWorks felt I was asking too many informed questions—thanks to a certain source whom I regularly called for briefings. Through a semi-elaborate baiting system—referred to within DreamWorks, by some, as a "massive sting"—the chatty source was identified and blackballed by the studio. DreamWorks employees who divulged too much were met with similar treatment. One former executive confided that when too many stories about the company started showing up in the press, Geffen addressed the staff, laying down threats: "I've got phone records," he said. "I'll go through them and find out who's talking. We'll get you." (Granted, talking to the press is verboten at most Hollywood studios, but at DreamWorks, the fact that it is David Geffen making threats makes it more chilling.)
Katzenberg made dozens of calls, warning sources not to talk to me for this book, a reality that made telling the DreamWorks story a delicate, difficult process. (At times I wondered who was working harder to make contact with people—Katzenberg or myself.) As a result, many of the more than two hundred people I interviewed only felt comfortable under the veil of anonymity, and even they were anxious. I got used to nervous glances toward restaurant entrances, quick exits.
My attempts to change the minds of the DreamWorks' partners about being interviewed were futile. In one of my few conversations with Katzenberg, he expressed his anger that I had set out to "profit" from his "story"—a saga, mind you, that he has spent years sharing with reporters for the purpose of articles and books that have benefited him enormously. But then, the story of Katzenberg's rise at Disney, where he'd been studio chairman under Michael Eisner, shows him in a far better light than his less-than-sentimental education at DreamWorks.
Well into the reporting of this book, I encountered Katzenberg at the premiere of Shrek the Third on a Sunday afternoon in the summer of 2007. He was charming enough about his reticence (perhaps because we were in public, not on the phone), but still firm. Standing in the theater lobby, telling every passing mother and child to enjoy the show, he appeared approachable. When I went up to him and introduced myself, asking, yet again, for an interview, he looked startled for about a tenth of a second and then regained his composure. Digging into the enormous tub of popcorn he was holding, he smiled widely and shook his head: "Not a chance, not a chance." Then he moved on to shake more hands.
One episode in particular stands out when I think about the experience of writing this book. It was a Saturday—a gray, misty spring morning—and I was meeting a source at a restaurant off Pacific Coast Highway. Driving north on the slim coastal strip that outlines the western edge of Southern California, I caught glimpses of surfers in slippery black wetsuits bobbing idly, waiting for the waves. On my right, there was a kitschy Italian restaurant, a dilapidated surf shop, a KFC—the kinds of places that make much of Malibu seem more like a backwater beach town than a setting for Paris Hilton's beach parties.
I pulled into the nearly deserted parking lot. It was still a few hours before noon. As I got out of the car, I spotted a man walking briskly toward me.
"Nicole?" he asked.
"Yes, hi." We shook hands. "Thanks for agreeing to—"
"Not here," he said brusquely. "Too many people. Come with me."
I followed him as he walked to his car and signaled me to get in. "Damn Malibu," he said. "You can't go anywhere without seeing people."
Starting to feel nervous myself— What the hell have I gotten into? —I nonetheless opened the door and got in the car. He pulled back on PCH, and for the next two hours, I listened to my source as we sped along the California coastline—past a dreary, industrial-looking naval base in Ventura County, then back south, past Pepperdine, then north again.
When I was finally dropped off, my head was aching from so much time spent in such a small, tension-filled space. Nearly numb with exhaustion, I got in my own car and drove to Neptune's Net, a fish shack popular with the Harley-Davidson crowd. After ordering a grilled cheese and a Diet Coke, I opened my notebook. For the next hour I sat in an orange linoleum booth, among heavy-metal T-shirts and tattooed arms, reviewing my notes and recalling the trepidation of my source. Driving home, I still couldn't determine what it was I was getting into, but I was overcome with a sense of resolve. There was no question as to whether there was a good story here.
Why bother banging my head against the fortress wall? More than a few people advised me not to write this book, including fellow journalists, who warned me that I'd never eat lunch, dinner, or breakfast in this town again. But with each slammed door, I became more determined. As stated, DreamWorks used the press to its advantage whenever possible. But what about a story without the DreamWorks spin? That's the story I set out to write.
The DreamWorks tale reveals the movie business just as it is, at the industry's highest levels, where its most fleet-footed operators do their thing. At the heart of the book is a mystery. Just what happened, given the massive amounts of money involved, the unprecedented combination of talent, the confidence of so many observers (and the DreamWorks partners themselves)? A glance at the cast reminds us that DreamWorks' team was comprised of three players driven by ambitious self-interest and accustomed to living, first and foremost, according to that self-interest. Spielberg was the center around whom DreamWorks revolved. But his agenda frequently led to imprudent, money-losing ventures (the aforementioned state-of-the-art studio; nonmovie divisions such as video games and arcade centers, which fizzled). Most damaging to DreamWorks' bottom line, the director's most commercially successful films were directed for other studios. Anyone who expected Geffen or Katzenberg to be able to keep him wholly vested in his own company was quickly set straight. A studio head by name, perhaps, Spielberg was always an artist first, and he expected to be treated like one.
Then there was Katzenberg, an ambitious, self-promoting studio executive, who imagined himself as an infallible animation maestro, and whose quest for revenge against Disney (and especially Eisner) after his break with that company too often became a guiding principle at DreamWorks. In 2005, wanting to beat the DVD track record of Pixar's The Incredibles (Pixar then had a distribution deal with Disney), Katzenberg overpredicted sales of Shrek 2 DVDs, leading to class-action lawsuits and a Securities and Exchange Commission investigation of DreamWorks Animation. Both were ultimately dropped, but DreamWorks Animation's stock has yet to fully recover from the debacle.
One of Katzenberg's strengths was running a movie studio, as he had done at Disney and, before that, Paramount. Yet he was exiled from DreamWorks' live-action studio by his partners, who didn't trust his creative instincts (his record in live action was far more mixed than in animation). The live-action studio, it was made clear from the get-go, was Spielberg's turf. To run it, the director relied on his trusted friends, the husband-and-wife team of Walter Parkes and Laurie MacDonald, whose highbrow taste fit with his hopes to win Oscars. But the couple had virtually no studio experience; both were self-proclaimed creative types who were, first and foremost, producers (Parkes was also a screenwriter).
As for Geffen, here was a shrewd operator who, according to his biographer, had tried to buy up his employees' stock before selling his own company. Geffen was relied on as the "business guy." But, having already secured his legacy and wealth (he was a billionaire when DreamWorks was formed), he had no interest in dealing with the innumerable headaches of a sprawling multimedia start-up. He took care of Spielberg's business, tended to investors, and masterminded partnerships and deals. But he rarely appeared fully engaged until things hit rock bottom, or he felt he had been intolerably wronged. (Ask Paramount executives about this phenomenon.)
These were not groupthink guys, or team players. They were lone wolves who came together and locked arms in the face of crisis and catastrophe, but who otherwise tended to their separate fiefdoms. They were performers who knew how to dazzle, rich men accustomed to spending other people's money. They knew how to make the story sparkle, at least from the outside. But what about behind the façade?
People ask: Was DreamWorks a failure? After all, the studio won several Academy Awards—American Beauty and Gladiator both took home Best Picture. Then there were animated hits like Shrek, which was not only wildly successful (the film grossed $484 million worldwide) but artistically groundbreaking. Spielberg's Saving Private Ryan is one of his best films, and resulted in a Best Director Oscar. But by the time the live-action studio was sold to Paramount, DreamWorks had shuttered or reduced its nonfilm divisions. The dream of being a huge multimedia venture was over, in part because the economics of the company never made sense. There was always enormous overhead even though there was no reliable supply of revenue in the form of a film library. In 2003, in the wake of its most financially disastrous release, the animated film Sinbad, DreamWorks came close to bankruptcy. Paul Allen, the Microsoft billionaire who provided the lion's share of the company's backing (he initially invested $500 million, in 1995, in the company), was called on for help. In 2009 Allen ultimately walked away with an amount estimated at more than $1.2 billion on a total investment of $700 million. Technically, he did not lose money. Nor did he make very much, considering that his rate of return was more in line with a savings account than private equity associated with the likes of Spielberg, Katzenberg, and Geffen. Like so many others, Allen had much, much higher hopes when he signed on to be a part of the dream.
Drawn by the reputations of its principals, and its pledge to be different, employees came in droves to join DreamWorks. They took pay cuts, gave up valuable stock options and the kind of bonuses that are considered standard in Hollywood, in order to proudly serve at a creativity-first kind of place, where there were no job titles and Spielberg sat in residence. Early on, a Utopian environment prevailed. Employees enjoyed the lack of studio bureaucracy: at DreamWorks, if one had an idea, one went and executed it. For a time, it seemed, those ideas were actually judged more for their artistic integrity, as the company attempted to move beyond stale formulas.
But DreamWorks changed, unable to sustain itself according to such ideals. By the end, too many promises were never realized. When the live-action studio was sold, Spielberg, Katzenberg, and Geffen—who had each invested $33 million to found the company—took away $175 million apiece. Employees who were hoping to share in that windfall were disappointed, especially considering Katzenberg's ongoing promise that the troops would ultimately be rewarded for their toil (his justification for DreamWorks' no-bonus policy).
Granted, it wasn't employees who'd ever put money into the company. But, again, the expectation made it feel unfair. There was similar grumbling when certain, but not all, executives profited handsomely in the IPO of DreamWorks Animation, which raised close to $1 billion in its first day of trading. DreamWorks' marketing team, which helped push Shrek riches into the stratosphere, was told that it was not technically a part of the animation studio and thus not subject to the same stock rewards. Meanwhile, Katzenberg's stake in his company soared up to $336 million the day DreamWorks Animation went public; Spielberg's and Geffen's each hit $312 million.
The three kings of DreamWorks represent the last generation of Hollywood raised on the visions of Samuel Goldwyn, Louis B. Mayer, and the other outsize, sometimes outlandish, personalities who built Hollywood. Since then, the landscape of the entertainment business has shifted dramatically; the golden age of those colorful men has been replaced by the corporate age, an era in which movies have more in common with amusement parks and video games than the old classics. But the company came to be in an era of plenty, before Enron and Sarbanes-Oxley, the 2002 legislation that cracked down on accounting practices at public companies and that greatly affected Hollywood, which is mostly owned by New York conglomerates. It was a freewheeling time—eons before the collapse of Lehman Bros. et al.—when money seemed to grow on palm trees. Executives in charge rewarded themselves royally, and got away with it: In 1996 Michael Ovitz was fired from the Walt Disney Company after only fourteen months as its president, and given a $140 million parachute for a job not well done. At Sony, in the early '90s, Peter Guber and Jon Peters became infamous for their pocket-lining prowess.
But the times are changing. Wall Street is not the only industry suffering from a massive hangover. Although the change has gone largely unnoticed by the people who buy movie tickets, fewer dollars are circulating in an industry where agents and executives have, for so long, bumped up budgets by offering astronomical fees for stars. DVDs no longer pay the bills. A hundred million dollars at the box office no longer necessarily signifies a hit. Suddenly, it's not enough to be Spielberg—these days even he's hearing the hitherto unfamiliar sound of the word "no," and has been forced to sustain his company with his own funds—a career first.
An exploration of what occurred at DreamWorks helps us understand how we got from there to this most uncertain time. It's a story of movies, money, and the game of Hollywood as it is played by masters. But most of all it's a candid close-up of the big performers who have made Hollywood into the glorious, awful, magical, and treacherous place it is.
So. Enjoy the show. Turn the page if you want the tale from the beginning.