The Studio
When three of Hollywoods biggest names announced plans to start a new studio naysayers abounded. Then came all those Oscars.
By Aaron Gell
Just off the 405 Freeway between Marina del Rey and LAX, there lies an unnamed asphalt road lined with neatly spaced palms, which terminates in front of a chain-link fence. Here, an empty guard station marks the spot where the most successful movie director in history once dreamed of being waved through the gates of his own state-of-the-art filmmaking complex.
The fenced-in parcel of dirt and grass, crisscrossed with tractor treads—part of the Playa Vista development—was to be the home of DreamWorks SKG, the film studio founded by the self-described “dream team” of Steven Spielberg, Jeffrey Katzenberg and David Geffen and announced with great fanfare at a crowded press conference back in 1994.
Spielberg still gets wistful when he thinks of the would-be DreamWorks lot, which would have featured soundstages with retractable roofs to let natural light in—each bearing, as he puts it, “a huge, old-fashioned movie marquee, with neon and lights and everything,” indicating the production under way inside. “Oh, it was so romantic!” he recalls with a sigh, sitting on a sun-dappled patio beside the hacienda-style Amblin Entertainment office complex he’s occupied on the Universal lot since 1983. ‘We had designed a studio-by-the-shore, and we had so many…” He pauses and smiles at himself. “It was the best.”
Spend any time with the director—who first picked up a movie camera in pursuit of a Boy Scout merit badge (he eventually made Eagle) and still bubbles over with boyish enthusiasm for moviemaking—and DreamWorks’ unabashedly sentimental mascot, a Norman Rockwell-ish youth casting a fishing line from a crescent moon, begins to seem quite apt. But if Playa Vista is the big DreamWorks fish that got away, it’s also the Great White shark that nearly gobbled the kid whole. In 1999, the company abandoned the project, which Jeffrey Katzenberg now describes as “the single most important thing that we didn’t do.” As he puts it during a breakfast interview at the company’s Glendale campus, “Building Shangri-la in this unbelievably idyllic location was this really exciting and fun idea with absolutely nothing practical about it.” Spielberg eventually came to agree with him. “Once I got it through my thick skull that having a studio was really about intellectual property instead of real estate,” he says, “I was fine.”
Playa Vista is not the only grand scheme devised by the trio in those heady years that petered out. Planned toy and video game subsidiaries never materialized, and a Web site called Pop.com imploded with nary a trace. Meanwhile, the company’s television arm currently has just one series (“Boomtown”) on the schedule, and the music division is only now beginning to hit its stride. “We were probably a little idealistic and naive,” Katzenberg admits. “Many things were much harder than we thought they would be. The good news is, the mistakes that we’ve made were small mistakes and we fixed them quickly.”
The big exception, of course, has been the film studio, which in the last few years has evolved into a remarkably successful enterprise, more than making up for all the ones that got away. Shepherded by Spielberg and his husband-and-wife team of executives, Walter Parkes and Laurie MacDonald, who were joined last year by head of production Michael De Luca, the filmed-entertainment division has taken home the Best Picture Oscar three years in a row, for such distinctive and risky films as American Beauty, Gladiator and A Beautiful Mind (a co-venture with Universal). As for the current awards season, DreamWorks has fielded another crop of strong contenders: Minority Report (coproduced with Fox), Road to Perdition and Catch Me If You Can.
Meanwhile, working out of the company’s serene Tuscan-style animation studio, in Glendale, Katzenberg—the former chairman of Walt Disney Studios, who was credited with rousing the conglomerate’s sleeping beauty of an animation department—created from scratch the only serious rival to Walt’s toon temple, picking up the first-ever Academy Award for an animated feature with last year’s Shrek. Between the Glendale operation, the PDI/Dream Works computer-animation facility in Redwood, California, and a five-picture deal with England’s Aardman Animation, the company currently has nine animated films in development.
DreamWorks has also been prevailing where it counts most, at the box office. Out of just eight films released by the studio in 2002, three of them—Road to Perdition, The Ring and Minority Report—broke the $100 million mark, and Catch Me If You Can is expected to do the same. Overall, the company boasts an average per-picture domestic gross that’s nearly double the industry average. Katzenberg says the studio made a profit last year of $100 million. Although some in the industry would quibble with that number (DreamWorks, being privately held, is not obliged to open its books), Variety editor-in-chief Peter Bart points out, “Even if the company is not as profitable as it claims to be, who cares! Do these guys need the money?”
A series of recent moves position DreamWorks to maintain this winning streak. In addition to a new $1.5 billion financing arrangement that unlocks piles of mad money for new productions, the company recently inked a development deal with NBC. And a little more than a year ago, DreamWorks brought in De Luca—the former New Line wunderkind responsible for The Mask, Austin Powers and Boogie Nights, and a notorious Hollywood ne’er-do-well (lately reformed)—to manage day-to-day operations. Even company insiders acknowledge having had doubts about how De Luca’s NC-17 reputation would mesh with DreamWorks’ decidedly PG corporate culture, but the arrangement seems to be working. Says Walter Parkes, “There’s a public persona of Mike that you get from, almost, the tabloids, and then there were the people who worked with Mike, who were, without exception, incredibly positive. Besides, you know something? I thought it wouldn’t be the worst thing in the world to kind of shake up this bunch.”
One quality De Luca and his more buttoned-up colleagues share is a penchant for big creative gambles. “They’re dedicated to creative risk here,” he marvels. “That really sets the movies apart from the cookie-cutter thing that happens at other companies.”
This is the studio, after all, that went back to the Book of Exodus for its first animated film, Prince of Egypt—a movie that wouldn’t have gotten past the marketing department at Disney (try picturing the Golden Calf as a Happy Meal toy). DreamWorks also took a chance on American Beauty, a little black comedy about suburban alienation, and turned it into a breakaway hit. It revitalized one of the hoariest genres of Hollywood’s golden age with Gladiator, And it cast quintessential nice guy Tom Hanks as a cold-blooded killer in Road to Perdition, then offed him in the final reel. (Indeed, starring in a DreamWorks film might soon be considered a serious risk factor for early mortality, in light of the grim ends that also befell the protagonists of Saving Private Ryan, American Beauty and Gladiator.) Given the safety-first climate that prevails in Hollywood today, such a string of go-for-broke efforts is extraordinary.
“The pressure involved with releasing movies has pushed a lot of people to the center in their decision-making,” says CAA president Richard Lovett, who represents Spielberg. “But DreamWorks has consistently shown real nerve. That great love of movies we all attribute to the founders of the studios, the DreamWorks people have. They operate out of that same gut instinct.”
“They are phenomenally successful and everyone knows it,” says Mark Gill, former West Coast president of Miramax. “Even their detractors have to admit that they’re brilliant.”
While naysayers are increasingly hard to find, there was a time not long ago when they seemed to be everywhere. Parkes and MacDonald, who’d landed dream gigs running Amblin just a few months before Spielberg asked them to help launch the new studio, were especially dubious. “We did have certain questions about Steven’s judgment,” acknowledges Parkes, himself a two-time Oscar nominee for documentary and screenwriting. MacDonald, who’d previously worked as a vice president of production at Columbia Pictures, was “horrified” by the notion. “I just thought, They have no idea,” she recalls. “I tried to sit down and say, ‘Do you really want to be a studio? Do you realize how we’ll have to run things?’ And Steven just looked at me incredulously and said, ‘Why would we have to do it that way?”’
Indeed, from the start, the dream team promised to reinvent the very idea of a film studio, beginning with an unusually light production slate of around 10 pictures a year and a blurry hierarchical structure devoid of corporate titles. After the initial rush of euphoria wore off, the Hollywood community apprised the studio’s real chances with a collective sneer.
“We’ve gotten negative publicity since the company began,” recalls DreamWorks’ marketing chief Terry Press. “Many, many people wanted these three guys to fail, and they’ve been throwing dirt on us from the get-go.” (According to Spielberg, even the company’s mascot has brought him grief, from animal lovers upset by the aquatic butchery that precedes every DreamWorks picture. “The boy’s not fishing for fish!” the director moans. “He’s fishing for ideas!”)
Of course, given the grandiosity of the trio’s vision and the fact that no new studio had succeeded in more than half a century, a little skepticism was justified. “It was announced in such a blast of publicity,” Bart says, recalling the packed press conference, at the Peninsula Hotel in Beverly Hills, where the three principals revealed their plans before an armada of television crews. “They almost goaded the press to say, you know, ‘Show me.’”
Initially, perhaps the biggest question was whether a “pure content play”—an entertainment company without a library of material and multiple distribution channels—could survive in a media business dominated by sprawling conglomerates. As Katzenberg recalls, “The hardest part of this was to live with that sort of gray cloud of doubt hanging over you day in and day out. Every day you wake up and all the naysayers are saying, Well, fundamentally, the idea is flawed.”’ He adds, “Now, of course, the pendulum has swung the other way—smaller is better.”
The early skepticism only mounted when two years went by before the first DreamWorks’ release, an unremarkable action film called The Peacemaker. It didn’t help that Spielberg—with the assistance of Parkes and MacDonald—was at the same time fulfilling preexisting commitments to create megahits like Jurassic Park and Men in Black for rival studios, and that his first DreamWorks film was the historical drama Amistad.
Fortunately, Geffen had always insisted on a $2 billion business plan that would enable the company to survive years of misfortune. “What I said was if we didn’t have enough money to be able to fail consistently for six or seven years, we shouldn’t begin,” he explains. “If you don’t plan for that, you can be taken out of the game, and one thing the three of us have in common is that we’d rather die than fall.”
Nevertheless, in 2000, the company did come within a hair’s breadth of insolvency. “It was a difficult, uncomfortable year,” Katzenberg admits. “The fact that El Dorado bombed at the height of our investment cycle was a little dicey.”
As it happened, American Beauty and Shrek were already in the pipeline and DreamWorks’ major investor, Paul Alien, the Microsoft billionaire, is an admirably patient man. Still, as the company struggled, the whispers could be heard around town: Why didn’t Spielberg just cook up one of his boffo hits, something along the lines of, say, the Indiana Jones franchise, and put the company in the black once and for all?
Simple: He tried. “It’s all kismet!” he declares. “The idea of making a movie about a shark that eats people off of Long Island could have been a monster laugh riot. You don’t really know whether these ideas are going to embarrass you or spread joy throughout the world. But I just thought, why should I change the way I worked at Universal, when I made Schindler’s List, a film everybody assumed no one would come to see? That’s the freedom that existed in our lives, and we thought it should continue to exist.”
And ultimately, if that freedom leads to the occasional misstep, it also makes DreamWorks one of the only places in town where bottom-line concerns remain secondary to creative ones. As Parkes points out, the studio is an industry anomaly in that “it’s actually owned and run by people who make movies for a living.” It may seem incredible, given Hollywood’s well-established reputation for enthusiastically littering the cultural landscape with mindless drivel, but the Dream Works team really does operate out of a giddy love, first and foremost, for the art of cinema. As Spielberg put it when the studio was announced, “I want to create a playground.”
He seems largely to have succeeded, building an operation that nurtures the creative impulses not only of outside talent but of its own top businesspeople (which may explain why, of 37 executives hired in the early days, 34 are still with the company). For instance, in addition to her usual marketing duties, Terry Press supervised the interior design of the DreamWorks offices in New York and Redwood City. Spielberg remains as dedicated as ever to making films. Parkes and MacDonald have continued to act as producers as well as executives, doffing one hat for the other with notable agility. And Katzenberg claims to devote a full 98 percent of his time to his great love, animation. Geffen, who admits he’s relieved to have put his management days behind him, acts largely as, in his words, “a strategic support and devil’s advocate.” Ironically, the only one in the bunch whose duties might qualify him as a “suit “is the guy least likely to wear one: Mike De Luca.
Entertainment lawyer Bert Fields, who represented Katzenberg in his punishing lawsuit against Disney and has also worked for Spielberg and Geffen, calls them “the least cynical people I know,” adding, “Steven is certainly an idealist and an artist before anything else, and Jeffrey is just having a great time. They don’t have to worry about a board of directors, they don’t have to cover their bottoms. They just worry about making good pictures.”
Although it was far from certain that these three formidable talents could actually work together, in practice, they seem to treat one another with uncommon respect. “Each of them has a definite function, so it hasn’t been a problem,” says Jim Wyatt, president of the William Morris Agency. “Seemingly, it’s a perfect partnership. It’s kind of a model for how stuff should work.”
The peace is no doubt assured, at least in part, by that fact that Katzenberg, the only one of the founders with experience actually running a studio, seems to relish working for the other two. “I think every day, Jeffrey gets up and is very grateful to Steven and David for letting him do this,” Press says. “He’s out to impress them. Because, remember, he needed a job, not them.”
Katzenberg’s 1994 departure from Disney and the high-stakes courtroom drama that followed is already the stuff of Hollywood legend. Famously hardworking, brilliant and loyal to his boss, Michael Eisner, Katzenberg made a bid for the number two job, and wound up out on the street. A mere two months later, DreamWorks was born.
So however inadvertently, the Disney CEO, in effect, gave birth to one of his most tenacious competitors. “Without Michael Eisner, there’d have been no Shrek,” says Press, the former Mouse House marketing chief. “That’s how l look at it. Because I’m telling you, Jeffrey would have worked for Disney his entire life.”
That Shrek gently but incisively mocked every Disney fairy tale from Cinderella to Pinocchio did not go unremarked in Hollywood. But at this point, whatever ill will Katzenberg might once have harbored for his old boss seems to have subsided. “I am so over it,” he says, sounding a bit like a spurned lover eager to put the past behind him. “I have no anger, no malice, no hostility. I don’t actually care, really, is the honest thing. I see Michael, and it’s totally comfortable to be around him. I wish him well. He’s got a lot of challenges.” As further evidence that everyone really has moved on: Next year, Eisner’s son Breck will direct his first feature, Big Ticket, for Dream Works—an irony Katzenberg clearly savors.
Actually, if the company has any sort of rivalry these days, it’s with Miramax (coincidentally, a Disney subsidiary), with which it has mud-wrestled for Oscar glory for four years running—following the defeat of Saving Private Ryan, a presumed shoo-in for best picture, by Miramax’s frothy Shakespeare in Love. According to Spielberg, the fact that he was able to accept the Oscar for best director and to thank his father, a World War II veteran, for inspiring the film, made the evening complete. But Press, who was responsible for Private Ryan’s Oscar campaign, looks positively ashen when the subject is raised. She considers the loss one of the biggest disappointments of her career, and says she can still remember how Harrison Ford’s announcement of the winner seemed to travel across the auditorium “like a ball of fire” to engulf her. “It was,” she says slowly, “a nightmare.”
The loss put everyone on notice that even in creative playgrounds of the sort Spielberg envisioned, a bit of roughhousing is to be expected. Dream Works has since developed an awards-season campaign operation to rival any in Hollywood—and they’ve taken home the best picture prize’ ever since. Acknowledging the change in strategy, Katzenberg remarks, “Steven has always believed that the Academy process is singularly based on merit. Well, that’s a wonderfully naive notion, but there are politics involved.
“It was a real wake-up call for us,” he continues, “and every-year since then, when we’ve had the movies to offer, we have been very aggressive about supporting and defending them. And last year, with A Beautiful Mind coming under assault, we were ready—and rather than just turn the other cheek, which we did with Ryan, we took the gloves off.”
Nevertheless, while the Dream Works-Miramax competition is intense, both sides insist it’s not quite the grudge match the media has depicted. “There’s not nearly the level of animus or maliciousness that they attribute to either one of us,” says Katzenberg, who, after all, was the one who brought the Weinsteins to Disney in the first place. “There are not five people who are bigger fans or admirers of Harvey than me.”
And Harvey Weinstein is equally conciliatory. “Over the past five years, Dream Works has consistently made the movies I love to see,” he declares. Still, unable to resist a playful dig at Katzenberg’s frugal reputation, he quickly adds, “I’d love to work for them, except Jeffrey wouldn’t offer me more than minimum wage. All kidding aside, David, Steven and Jeffrey have pursued excellence in film making and achieved it.”
With a slate of strong films competing for Academy Awards this year, another pitched battle is already underway. But whatever studio goes home with Hollywood’s big prize on Oscar night, Dream Works’ long-term survival at last seems assured.
“I think we’ve earned a sort of grudging respect,” Press says. “Because the one thing the industry bows down to is success.” And despite the studio’s eccentricities—its fuzzy corporate structure, its conuterintuitive decisions, its romantic infatuations and its growing collection of uncommonly mortal silver-screen heroes—the town seems finally to have accepted the dream team on its own terms.
“People have finally stopped trying to figure us out,” Press says. “They sort of look at us like an errant child, you know?” She smiles. “‘Oh…’ they sort of say, ‘it’s just Dream Works….’”
Source: W
Date: 2/1/2003
