For all of Paramount’s success, Eisner’s judgment wasn’t infallible; he turned down the script that became Private Benjamin, a huge hit for actress Goldie Hawn. But such lapses were rare. And in any event, Paramount had so many hits that Eisner didn’t need to waste time lamenting the few he rejected. “It isn’t the movies you pass on that make the difference, but the ones you make,” he said so often that it became a refrain.
Despite his frugality, Eisner was on occasion willing to take financial risks. After two other studios balked at the high projected costs, and even Diller opposed the project on financial grounds, Eisner signed Star Wars writer George Lucas, director Steven Spielberg, and actor Harrison Ford to make Indiana Jones and the Raiders of the Lost Ark. With $240 million in U.S. box-office receipts, it became a “franchise,” a huge hit that spawned a series of highly profitable sequels.
Nevertheless, Eisner was fanatical at keeping costs low to earn a profit, a curiously iconoclastic view in Hollywood, which had a long and deeply entrenched tradition of rewarding talent, agents, managers, and studio executives before anyone gave much thought to shareholders. After the huge success of Raiders, Eisner recorded his philosophy in a twenty-one-page manifesto distributed to Paramount executives. In it, he noted that nearly all of the studio’s profits from 1981 had come from Raiders, an expensive anomaly in the Eisner canon, and he didn’t want anyone at Paramount to get the idea that he was veering from his time-tested strategy that combined high concept and low budgets. “Often the big win comes with a single smash movie,” he wrote. “The intoxication of a blockbuster hit can lead to an easy sense the luck will keep striking. Over the past five years, Paramount has either been number one or two in the motion picture business. Success tends to make you forget what made you successful, and just when you least suspect it, the big error shifts the game. Will success lull us into the fatal bad play?”
Eisner proceeded to make his own priorities clear. “We have no obligation to make art. We have no obligation to make history. We have no obligation to make a statement. But to make money, it is often important to make history, to make art, or to make some significant statement…. In order to make money, we must always make entertaining movies, and if we make entertaining movies, at times we will reliably make history, art, a statement, or all three. We may even win awards…. We cannot expect numerous hits, but if every film has an original and imaginative concept, then we can be confident that something will break through.”
But a low budget could never be its own reward. “An apparently no-risk deal is never a valid reason to produce a mediocre movie,” he continued. “A low budget can never excuse deficiencies in the script. Not even the greatest screenwriter or actor or director can be counted on to save a film that lacks a strong underlying concept. And we should generally resist making expensive overall deals with box office stars and top directors, because we can attract them later with strong material.”
Eisner’s memo became gospel at Paramount, and circulated widely in Hollywood. It established him as something of an analytical genius in the movie business, where few of the great impresarios of the past had ever been able to articulate any kind of formula for artistic or commercial success. And he also led by example. Shortly after issuing the memo, he agreed to make Terms of Endearment only if director James L. Brooks could do it for a low-budget $7 million, and when costs ran to $8 million, Brooks had to find the additional $1 million somewhere else. Eisner’s intransigence led to legendary shouting matches between the two men. In the end, Eisner could easily have afforded to be more generous. The movie was a smash hit, earning over $100 million, as well as the Best Picture Oscar for 1983. But it made a lasting impression on Eisner that Brooks subsequently conceded publicly that the film was actually better for having been made on a strict budget.
If a picture was a huge hit, or seemed likely to be one, others in Hollywood—Diller, for example—lavished praise, relaxed the rules, and sweetened the perks, all to keep the producers and talent happy. None of this came naturally to Eisner. He was stingy with praise. When Diller offered Robert Redford a $750,000 bonus for the successful completion of Ordinary People, Redford’s debut as a director, Eisner was fiercely opposed. He felt vindicated when Redford snubbed Paramount and took his next film elsewhere.
When Eisner arrived at Paramount, knowing little about the movie business, producer Larry Gordon had helped tutor him. Gordon blended Southern charm with keen instincts for popular culture; the two developed into best friends. Eisner’s and Gordon’s sons attended school together, where they were close friends, and at Eisner’s suggestion, Gordon had sent his boys to Keewaydin, where he and Eisner visited them together. Their wives were also best friends and the families lived close to each other in Beverly Hills.
Eisner and Gordon also had a close and successful business relationship: Gordon had an ongoing production deal at Paramount and one of the most desirable offices on the studio lot. The relationship had yielded spectacular profits for Paramount with the smash hit 48 Hrs., starring a young Eddie Murphy in his feature film debut, directed by Walter Hill, and produced by Gordon. But the experience on 48 Hrs., as well as earlier difficulties on The Warriors, foreshadowed future problems. Two weeks into filming, after Eisner and Jeffrey Katzenberg saw the early footage, they met with Gordon and Hill.
Both Eisner and Katzenberg insisted that “Eddie Murphy isn’t funny, and we have to replace him.”
“Who in the hell do you think is funnier?” Gordon retorted.
The producer and director held their ground, and Eisner let the production continue. Even after 48 Hrs. grossed $76 million and made Murphy an instant movie star, the ill will persisted between Hill and Eisner. It didn’t help that Eisner and Katzenberg signed Murphy to an exclusive deal with Paramount that excluded Gordon and Hill. When Hill approached Gordon with his next project—a script he had written himself called Streets of Fire—Hill was still so upset over the Murphy incident that he refused to let Gordon submit the script to Paramount. “This is going to get me into terrible trouble at Paramount, especially with Michael,” he told Hill. But the director was adamant.
Figuring it was better to break the news himself, Gordon called Eisner. “Look, I know you’ve heard about this, or you will hear about it,” he said of the Streets of Fire deal. “I just want you to know that it’s going to Universal and there’s nothing I can do about it.”
Eisner’s tone was cold. “If you really wanted to, you could,” he retorted. “You’re just doing this for the money.” Gordon tried to persuade Eisner that because Hill had the rights to his own script, he had no choice, but Eisner wouldn’t relent. Gordon was furious, and refused to give Eisner the script.
Eisner had his staff get a copy, which told the story of a rock musician kidnapped by a biker gang. Eisner read it and said it was terrible. He was gleeful after he saw a preview and pronounced the film a mess. Streets of Fire was a critical and commercial flop. Gordon kept working at Paramount, and he didn’t sense any hard feelings on Eisner’s part.
Gordon brought to Eisner his next project, which was called Brewster’s Millions. Eisner agreed that Gordon could direct it, as long as he worked for scale. Their lawyers started negotiating a deal, but kept running into obstacles. Paramount insisted on tight budget controls and the right to replace Gordon if he failed to meet a myriad of what he considered minor requirements. While Eisner insisted these were reasonable measures to protect the studio’s investment in an unproven director, Gordon was again offended that after his long and successful track record as a producer, he could still be fired from his new project over technicalities. Streets of Fire was then in production at Universal, and Universal executives urged Gordon to do Brewster’s Millions with them. But Gordon said no, he was still negotiating at Paramount.
As time passed with no resolution, Katzenberg called Gordon. It was a Friday afternoon, and Eisner was out of town. “What’s happening with Brewster’s Millions?” he asked. “We need to wrap this u
p. It’s gone on too long. Just tell us, is this on or off? No hard feelings either way.”
Gordon pondered this. “Jeffrey, are you telling me, whether I say yes or no, that nobody’s going to be upset?”
“Absolutely not,” Katzenberg replied. “Just make your decision.”
“Okay then. The answer is no. I’m going to move on.”
“Fine,” Katzenberg said. “Good luck.”
Eisner returned that night, and later that weekend, on Sunday afternoon, Eisner, his wife, Jane, and his father, Lester, walked the two blocks to Gordon’s house to see him. Lester Eisner was recovering from open-heart surgery, and wanted to thank Gordon for recommending a surgeon at Cedars Sinai Hospital. Afterward, Gordon walked back with them. While he was at the Eisners’, the phone rang, and Eisner answered. Gordon overheard his end of the conversation:
“What? Really? He did what?” There was silence, and then Eisner hung up. He glared at Gordon.
“I guess I’d better go,” Gordon said.
“I’ll drive you,” Eisner said. It had begun to rain.
“Don’t bother, I can walk,” Gordon said, but Eisner insisted. They drove the short distance to Gordon’s house, and as Gordon opened the car door, Eisner said, “I want you to know that this is the last time we’ll ever speak. Jeffrey just told me what you did.”
Gordon was stunned. “What did Jeffrey say?”
“I know what happened and I’m not going to discuss it.”
“Let me tell you what happened.”
“I’m never going to speak to you again,” Eisner said.
Gordon got out of the car, slammed the door, and Eisner drove away.
Early the next morning, Gordon got a call from the Paramount lot. “The movers are here to get your things,” a studio assistant told him. “Where should we send them?”
“You’ve got to be out of your mind,” Gordon exclaimed. “Don’t touch anything until I get there.”
When he arrived, boxes were stacked outside his office. He called Paramount’s lawyer to make the point that his contract said he could be removed from the lot only on ninety days’ notice. The lawyer told him that Paramount didn’t care what his contract said. Even though it was heresy for a producer to sue a movie studio, Gordon called his lawyer, went to court, and got an injunction barring Paramount from ejecting him.
Then Eisner banned Gordon from the Paramount commissary. He had the court overturn that, too. Gordon’s contract guaranteed him an office, but it didn’t say which one. He had to move from his luxurious quarters into a dark cramped space. He continued to come to work and eat in the commissary every day for the ensuing ninety-day period, just to make his point.
Eisner honored his vow of silence. When the two men showed up the next summer to visit their sons at Keewaydin, Eisner was standing at the end of a dock on the lake when he saw Gordon approach. Rather than risk an encounter, he dived into the water, still wearing his shoes.
Eisner avoided Gordon for two years, leaving restaurants if necessary, refusing to emerge from his house when Gordon came to pick up his sons. But the following summer, the two were again visiting their sons at Keewaydin, awkwardly trying to avoid each other, when a sudden rainstorm forced the scheduled family picnics into a small cabin. Pressed together in such close quarters, Gordon said to Eisner, “Either we should talk or we should go out into the woods and settle this thing once and for all.” Eisner stared at him for a moment, then said, “Okay, when we’re back in L.A., we can sit down and talk.”
Eisner came over to Gordon’s house. Minutes into the conversation, they were screaming at each other. “You fucked me on Streets of Fire,” Eisner yelled.
“You’ll never admit you were wrong,” Gordon retorted.
After what seemed like hours of heated argument, they ran out of steam. Nothing was resolved. But they started talking about their kids, their careers. They started talking again on the phone, though the relationship was never what it had been.
Plenty of people had complaints about how difficult Eisner was to work with, but there was no arguing with success. Paramount’s phenomenal track record attracted increasing media attention. After Terms of Endearment won five Academy Awards, Eisner and Diller were the subject of admiring profiles in Newsweek, The Wall Street Journal, and BusinessWeek. New York magazine ran a cover story on Eisner and Diller with the headline “Hollywood’s Hottest Stars,” written by Tony Schwartz. While the New York article was un-sparing in its depiction of Eisner and Diller as tough people to work with (“Paramount is the studio that gives you a green light and then dares you to make the picture”), it also hailed it as “the leading studio in Hollywood…put simply, Paramount has figured out, better than any other studio, how to make the right movies.” It was also one of the first articles to elevate studio executives to the level of stardom previously reserved for actors and directors.
“The one thing you cannot be bad at in this business is choosing material,” Eisner told Schwartz. “Yes, it helps to keep your negative costs down, to keep away from the type and not to grab for stars and not to pay ridiculous prices. But you know what? If you pick the right material, all that pales…. It’s great to have good marketing, and I think we have the best, but you don’t need it to sell E.T., and it won’t help if you’re selling The Pirate Movie [one of Paramount’s rare critical and commercial flops]. This is a business based on ten to twelve decisions a year. They are very important. Nothing else is close.” In other words, what really mattered were the creative decisions made by a studio executive, not the business or financial decisions that anyone with an MBA could figure out.
A quote from Don Simpson, then one of Paramount’s most successful producers, responsible for such hits as Flashdance, captured the creative Eisner in action: “We went into a boardroom at nine in the morning. There were maybe eleven people in the room. At the time, we had absolutely nothing good in development, which is the real estate of this business. Eisner said, ‘We’re going to come up with twenty projects today even if we have to stay here until midnight. Leave if you want to, but then don’t bother coming back.’ Several people looked at him like he was crazy. But by 5:30, we had fifteen projects.”
In one anecdote, Schwartz mentioned that he was at dinner with Barry Diller when Diller “casually” mentioned that he planned to stop in at a midnight screening to see how paying customers would react to Indiana Jones. Schwartz tagged along, and when they arrived at the theater, Eisner and his wife were already there. The next day, Schwartz got a call at his hotel from an unnamed “caller”:
“ ‘I know you went to Westwood with Diller last night,’ the caller told me. ‘Did you realize Diller did that just to impress you? He never goes to check audiences. Eisner, on the other hand, is a maniac. He went to two more theaters after he left you. You’re missing the story.’ ”
The “caller” was Michael Ovitz, founder of Creative Artists Agency, already influential but soon to become Hollywood’s most powerful agent. Since the falling-out with Gordon, Ovitz had become Eisner’s closest friend in Hollywood. Eisner had asked Ovitz to call Schwartz and plant the idea that Eisner was far more important to Paramount’s success than Diller.
Ovitz and Eisner had met when Ovitz tried unsuccessfully to pitch a game show to Eisner while he was head of programming at ABC. Ovitz had annoyed Eisner by sending his wife a lavish bouquet of flowers, which Eisner interpreted as an inappropriate effort to influence his decision. Still, he grudgingly admired Ovitz’s persistence, and Jane didn’t mind the flowers. After the Eisners moved to Hollywood, the two families became close friends, dining regularly at the Palm and other restaurants favored by the Hollywood elite. Eisner often came to dinner straight from his office at Paramount, eager to complain about Barry Diller: Diller was a “horrible person,” he was “immoral,” and worst of all, “he doesn’t even come to work until 11:00 A.M.”
Along with the article about Eisner and Diller, New York ran a sidebar on Jeffrey Katzenberg, in which he
was described as Diller’s and Eisner’s “golden retriever,” a nickname that stuck. But there was no mention anywhere of Martin Davis, the chairman of Gulf+Western, Paramount’s parent company. What Eisner had failed to grasp was that in Hollywood, there were times when the only thing worse than bad publicity was good publicity, especially when it slighted your boss. Davis was incensed over the article.
Eisner barely knew Davis, but he was a type of executive that Eisner had never confronted directly before. Davis took aim at anyone beneath him whose success seemed to pose any threat to his hold on power. He had long toiled in the shadow of Charles Bluhdorn, who had built Gulf+Western from an obscure sugar manufacturer into a force in mining, publishing (Simon & Schuster), and entertainment. Davis was brusque, unpolished, and often vulgar. He had a finance background and had little understanding of or respect for the creative process. After Bluhdorn suffered a fatal heart attack at his home in the Dominican Republic in 1983, Davis succeeded him. From his office atop the Gulf+Western building in New York, Davis badgered Diller to get rid of Eisner.
Davis also resented the attention that Katzenberg had garnered in the magazine. On a visit to New York, Katzenberg stopped in to meet Davis for the first time since he’d become chairman of Gulf+Western. Instead of the praise Katzenberg expected, Davis ventilated his hostility toward his Hollywood executives. “You’re all overpaid and spoiled,” he said. He told Katzenberg he was “a little Sammy Glick.” After Katzenberg reported the bizarre encounter to Eisner, Eisner confronted Diller and demanded to know what was going on. Weary of the subterfuge he’d been maintaining, Diller told Eisner that Davis wanted him to fire Eisner. It was hard to believe, given Paramount’s success. “Marty’s an idiot, but it’s true,” Diller said.
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