Spielberg renovated his spread in 1989, but five years later he felt he and his expanding brood had outgrown it. So he commissioned architect Harry Newman, who had done the previous renovation, and designer Frank Pennino to add a guest house where “our friends can feel at home with us but at the same time have complete autonomy.” The director also ordered up a study separate from the main house as a “place where I can read scripts, do storyboards and kick off my shoes.”
Spielberg was a big fan of designer Pennino, whom he had tapped to decorate his Amblin offices at Universal. Spielberg liked Newman because the two had developed a short hand on architecture. “He captures my fantasies in a way that doesn’t involve a lot of communication,” the director said. “Harry will take the practical and make it comfortable.”
The interiors of the new structures, like the original, were decorated in the Arts and Crafts style, to reflect Spielberg and his wife’s love of old, lived-in things. Some of the furniture is museum-quality (circa 1904), originally owned by the designer who created them, Gustav Stickley. But Spielberg and his wife are not collectors for collecting’s sake. When other Stickley pieces were unavailable to complement the originals, they had reproductions made.
The floors of the two additions were certainly old, made of recycled 100-year-old pine that had been ebonized to a glossy shine. Spielberg got that decorating tip when he saw the same kind of flooring at friend Calvin Klein’s East Hampton home.
“We shamelessly told Frank we wanted black floors in the guesthouse. It was the first thing we asked for,” the director said.
The study is one large space with low partition walls rather than separate rooms. Spielberg wanted all the light to be natural, so the architect designed a motorized skylight that takes up the entire ceiling.
State-of-the-art electronic equipment is carefully hidden from view in oak cabinets that allow the old-fashioned look of the house to remain intact. The study has an old-fashioned drafting table where Spielberg does his famous storyboards.
Spielberg added two Norman Rockwell paintings to the study, but he realized his children would probably visit Daddy at work and he didn’t want them to damage his artworks. So the paintings were shielded by Plexiglas, “just in case,” he said with a laugh.
Whether he was dreaming up his next blockbuster or contemplating his next videogame move against Robin Williams via modem, Spielberg could survey his surroundings with perfect contentment.
“We couldn’t ask for anything more,” he said.
But you don’t become the most successful director in history by taking eighteen-month-long sabbaticals. Despite his resolution to kick back and play with the kids, Spielberg couldn’t stay away from the glorious grind of filmmaking.
Unfortunately, there was no project worthy of his new seriousness to occupy him. But he had to work.
A few months after backing up a U-Haul to the Dorothy Chandler Pavilion to carry home his Oscar trove, Spielberg was back at Amblin on Universal’s backlot, the happy worker bee.
The only big screen project in the works was a kiddie movie based on a beloved comic book figure, Casper the Friendly Ghost.
Although his official title was executive producer, Spielberg was hands on all the way.
He actively participated in story conferences, during which a round table of gag writers contributed jokes like some shticky assembly line. It was the same gang process that had created the execrable The Flintstones the previous year and resulted in thirty-two writers claiming dubious credit for writing the saga of Bedrock.
One of the older writers at the Casper round table, Lenny Ripps, said, “Schindler’s List would have been a lot funnier if we’d done it this way.”
Buh duh bup.
Spielberg wasn’t very good at coming up with shtick, but he had a million ideas. The same man who had crafted the heart-wrenching images of the Holocaust could be just as resourceful when it came to bringing a ghost to life. At one story conference, it was planned to have a ghost possess an unwitting host by having the specter enter through the victim’s ear while he was sleeping. Spielberg had a better idea. It would be funnier, the director suggested, if the ghost entered through the mouth while the victim inhaled, snoring.
The Spielberg touch remained golden. When Casper opened in the early summer of 1995, it was lambasted by the critics as greasy kid stuff of the worst kind. But it was also the number-one film its opening weekend, grossing a record-setting $22 million in three days and blasting Bruce Willis’s third Die Hard detonation out of first place.
But thinking up shtick for a spectral figure wasn’t enough to occupy Spielberg’s febrile mind for long. On October 12, 1994, in a gilded conference room at the Peninsula Beverly Hills Hotel, right next door to Mike Ovitz’s CAA, Steven Spielberg, ousted Disney president Jeff Katzenberg, and billionaire record mogul David Geffen announced the formation of what Katzenberg modestly called the “Dream Team.”
Incorporated with a $2 billion influx of cash, the official name of the company was DreamWorks SKG, the initials standing for the three founders, Spielberg, Katzenberg, and Geffen.
There were many reasons for the inauguration of this much heralded event, but as with most phenomena in Hollywood, the motivating force was ego.
Jeffrey Katzenberg was out of a job, and he wanted a new, even splashier one than head of film production at Disney. In August of 1994, Katzenberg had been unceremoniously dumped at Disney by his ungrateful boss, Disney chairman Michael Eisner, with whom he had worked for almost two decades, first at Paramount and then at the Magic Kingdom.
Katzenberg headed the mythically successful animation department at Disney and the mythically inept live-action film division as well. Under Katzenberg’s anal control, the animators had cranked out one huge hit after another, climaxing with the billion-dollar-grossing epic about a bunch of talking animals in Africa, The Lion King. The film had been the highest grossing picture of the year and Disney’s biggest money-maker ever. Having grossed $700 million at theaters, The Lion King took in an additional $450 million within two weeks of its release on video.
Katzenberg’s track record with real-life actors and human stories was not so eminent. He was responsible for one flop after another, including such disappearing acts as Cabin Boy and Honey, I Blew Up the Baby.
Although Eisner and Katzenberg together had propelled Disney from an industry joke in 1984 (remember The Black Hole?) to the most successful studio in Hollywood ten years later, the two men had always had a troubled relationship that some compared to a tyrannical father and a rebellious son.
While some industry observers accepted the Pop Freud interpretation, others posited a simpler explanation, one closer to the bottom line. Wells, an MBA, had an extensive business background. Katzenberg had always been involved on the creative end, picking film projects not portfolios.
One industry heavyweight, however, begged to differ with that conclusion. In a rare interview in Los Angeles magazine, David Geffen attributed the phenomenal growth of Disney over the last decade to Katzenberg, not Eisner. “Eisner is responsible for EuroDisney and Hollywood Records,” Geffen said of the conglomerates’ two most embarrassing failures. “Katzenberg is responsible for everything else.”
When the number-two man at Disney, Frank Wells, died in a plane crash, Katzenberg, showing little sentiment—or tact—immediately started lobbying for the job by studiously drawing up a three-page list of reasons why he deserved the number-two job now vacant. On August 24, Eisner summoned his underling to his office. Before Katzenberg could even pull out his list, Eisner told him flatly he wasn’t moving up to number two.
Katzenberg had said, in effect, “Please, dad, please, can I have the car?” Eisner told him to take the bus.
Humiliated, Katzenberg had no other option than to leave the studio he had enriched to the tune of billions of dollars thanks to hand-drawn characters on acrylic.
Katzenberg didn’t sulk. He wasn’t the most kinetic executive in Hollywood for
nothing. Within six days, he had signed up two of the biggest names in Hollywood for his new effort. Time magazine, commenting on Katzenberg’s mojo, did a variation on the Spanish proverb, saying, “Revenge is a dish best eaten in public.”
The deal began when word of Eisner’s ingratitude spread. Spielberg called to console his close friend Katzenberg. The director was in Jamaica, vacationing at the home of his protege, Robert Zemeckis. Spielberg had given Zemeckis his first break by producing his script for I Wanna Hold Your Hand, then gave him an even bigger break by letting him direct Back to the Future.
While Spielberg was trying to think up nice things to say to soften the blow of Katzenberg’s dismissal, Zemeckis in the background shouted out a concrete suggestion: “Why don’t you guys do something together?”
At first Katzenberg thought it was a joke. “We were teasing, I guess,” he later said. “But there was a moment when it went from a playful and fanciful idea to a great idea.”
Spielberg was intrigued by the pairing from the outset. For years he had rented space on the backlots of Warners and Universal. As he grew older, he became tired of renting. He wanted to buy.
“I grew up and began to foster children and have a large family,” Spielberg said of his growing realization that he needed roots. “I have five children. I felt I was ready to be the father of my own business. Or at least the co-father. It benefits me because the idea of building something from the ground up, where I could actually be a co-owner, where I don’t rent, I don’t lease, I don’t option but actually own—that appeals to me.”
The duo’s biggest personnel coup was securing the services of the richest man in Hollywood, record mogul David Geffen, who had discovered such platinum groups as the Eagles, Guns N’ Roses, and Nirvana. He also had a nifty sideline, producing blockbuster movies like Risky Business and Interview With the Vampire.
With typical insouciance, Geffen explained his participation in the dream team as simply a way to do something different with his money. “Steven and I have tremendous amounts of money. You can’t spend or even use most of it; it’s just on some financial statement, and other people are playing with it. So I’m not in this because I need or want to make another billion; that would have no value. It’s all in the doing, all in the journey,” he said.
Spielberg had agreed to participate partly out of loyalty to an old friend, Katzenberg, whom he felt had been mistreated by Eisner. But Spielberg was even more loyal to older friends. Planning to fold his company Amblin into DreamWorks, he first sought his old mentor Sid Sheinberg’s blessing. Actually, it was more like permission. The director didn’t mince words when he told Sheinberg, “Sid, if you don’t want me to do this I won’t. You don’t even have to explain yourself. You can just say, ‘No.’ I’ll call Jeffrey and David.”
What a guy!
Actually, Sheinberg’s blessing may have been a blessing for the executive himself. Since his boss Matsushita sold MCA-Universal to liquor magnate Edgar Bronfman Jr., Sheinberg may soon find himself out of job. If that happens, no doubt, his old protege will be there waiting at the studio gate with a fat contract and an executive suite at DreamWorks.
Of the troika, Katzenberg took the biggest gamble. Each man agreed to put up $33 million—lunch money for the billionaire director and record mogul. But Katzenberg, a former studio employee and wage slave, had to mortgage everything he owned to cough up his share of the investment.
“I have not just figuratively bet the ranch. I have literally bet the ranch,” Katzenberg said with mangled syntax. “My entire net worth is riding on the success of this company.”
Everyone with a checkbook rushed to join the Dream Team. Chemical Bank gave them a $1 billion line of credit. The Korean electronics giant Samsung tried to get in on the deal, but Spielberg nixed the conglomerate’s participation when the chairman of the company seemed more interested in semiconductors than celluloid. The biggest contributor was Paul Allen, cofounder of Microsoft, who kicked in half a billion dollars in return for a mere 20 percent stake in the company.
Allen’s erstwhile partner, Bill Gates, belatedly signed on to create interactive computer videos with the Dream Team. The man who had conquered his phobias toward snakes and insects was at first fearful of meeting with the enfant terrible of software.
“We were a little reluctant to meet him and get into business with him because his reputation preceded him. People warned me about the jaws of the shark. But when he walked in the room, I saw someone my mother would like. He’s a haimisher guy. What he said sometimes flew over my head, but his enthusiasm was pretty kinetic,” Spielberg recalled.
The director was even more bullish on his biggest investor, Paul Allen. “I hugely related to him the second I met him. And he knows how to take a vacation. I’d just taken a year off, so the first thing we began talking about when we met was boating.”
If Spielberg and Geffen needed a challenge, they got one by forming such an iffy proposition. No new studio had succeeded since Mary Pickford, Douglas Fairbanks, Charlie Chaplin, and D. W. Griffith had formed United Artists. And that was back in 1919.
Since then, the history of Hollywood was littered with the wreckage of wannabe ministudios like First Artists (Barbra Streisand, Paul Newman, and Sidney Poitier’s baby), Orion, the Ladd Company and another state-of-the-art dream factory with high hopes, Francis Coppola’s Zoetrope. Even Spielberg’s biggest fan, Sid Sheinberg, offered some sobering statistics about DreamWorks’ viability: “I share the view of the world that they’ll have great children. I also know that the reality is that 50 percent of all marriages in America end in divorce. So, we’ll all wait and see.”
Sheinberg wasn’t the only one to sound a cautionary note among all the unchecked predictions of success.
Newsweek implied that Spielberg and his partners had performed a confidence trick of sorts on their fellow investors. For a total investment of only $100 million, Spielberg, Geffen, and Katzenberg own two-thirds of DreamWorks. Paul Allen, Microsoft, and others put up $900 million for a mere one-third ownership. At that ratio of one-third equals $900 million, Spielberg and his partners’ two-thirds ownership is actually worth $1.8 billion, or $1.7 million more than they invested. Without making a single film or cutting a single record, the three principals made a paper profit of $567 million each.
The prognosis for the other investors doesn’t look good. Geffen’s office predicted that DreamWorks would return 20 percent per annum to stockholders. To meet those figures, DreamWorks would have to grow in value to $50 billion in ten years. That’s an unlikely scenario since a major studio like Paramount, with a huge film library and Madison Square Garden among its holdings, is worth a relatively paltry $10 billion. Even Disney is valued at $29 billion, and it owns half of Florida.
But hopes run so high for the company that if there were an initial public stock offering, the other investors probably could sell their stocks at a tidy profit. However, Geffen’s office says firmly there will be no such offering. Why bother when suitors like Microsoft and ABC are begging to be let in on the deal?
Insiders say DreamWorks would be a sure bet if it had Jurassic Park II or The Lion King Returns in the pipeline, but sequel rights to those two hits belong to other studios. Still, optimists feel that Spielberg and Katzenberg can duplicate their previous successes with a whole new franchise of hit television series and films designed to be followed by many Roman numerals.
Spielberg and Katzenberg may be a perfect fit, with each man shoring up the other’s weaknesses. For Disney, Katzenberg has spun out one animated hit after another, beginning with The Little Mermaid and climaxing with the big Lion King. Spielberg’s track record in animation, especially on the big screen, has been mixed. Hoping to capitalize on the dinomania generated by Jurassic Park, the director produced Dinosaurs!, an animated feature that laid an egg as big as a stegosaurus’. Two other features, An Animated Tail and its sequel, Fievel Goes West, both about a cuddly rat, also flopped. His efforts with animation on telev
ision have been slightly better. Despite the collaboration of the live-action cartoon maker Tim Burton (Batman), the Family Dog cartoon, told from the point of view of the household pet, flopped on network television. However, Spielberg has had two huge hits in syndication, Tiny Toons and the delightfully subversive Animaniacs.
Katzenberg can benefit from Spielberg’s live-action prowess, since under the executive’s stewardship Disney had made one embarrassing, low-budget, low-grossing film after another. And alienated half the creative talent in Hollywood with his Scrooge-like bean counting.
Each of the founders of DreamWorks has his area of strength. No one can beat Geffen when it comes to spotting promising musical talent. But Geffen is also a successful film producer, and it remains to be seen whether his powerful ego and Spielberg’s can coexist when they make films together.
The feature film division of DreamWorks has $800 million in start-up money, which isn’t as much as it sounds since the workaholic director plans to produce twenty-four full-length films in the next five years. Katzenberg’s animation division, in contrast, has a relatively paltry $200 million to make his cartoons. The first animated feature, scheduled for Christmas 1998, is The Prince of Egypt, a cartoon retelling of the Biblical story of Moses. Following that will be El Dorado: Cortez and the City of Gold.
Both subject matters, the Bible and a fact-based historical yarn, represent risky departures from the kind of animated films Katzenberg made for Disney. The hits there tended to be based on classic fairy tales (Beauty and the Beast) or politically correct ecological fables like The Lion King.
Although he let his employee go, Michael Eisner may be sweating it out now that Katzenberg has teamed with two powerhouses. Officially, Eisner showed the glacial calm that has made him one of the most feared executives in Hollywood when he wished his new competitors well (but not too well): “Competition ignites and stimulates excellence. And for that I wish them well. I think they’ll do well. And I think they’ll force us to do even better than we’ve done in the past,” Eisner said in a statement.
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