AGING BULLS

The Studios

Baby-boomer studio executives are feeling their years as John Travolta, Kevin Costner, and even hallowed director Steven Spielberg get creamed at the box office by teen hits such as Scream 2. But maturity has its advantages: Hollywood’s blockbuster feuds—Geffen vs. Ovitz, Eisner vs. Katzenberg—are losing steam

KIM MASTERS

Jane Fonda recently celebrated her 60th birthday in Atlanta with a party for about 200 friends. The festivities included a screening of a 30-minute film which the former actress had made for the occasion, a “lessons-I’velearned-in-life type thing,” says a guest. Fonda offered a rendition of “Bye Bye Love” backed by her brother Peter and a ranch hand who plays guitar and is married to the honoree’s cook. Fonda’s husband, Ted Turner, vice-chairman of Time Warner, showed his devotion with a $10 million gift, which his wife is to use to start a foundation.

For many of Hollywood’s fiftysomething baby-boomers, 60 is starting to look like a too close encounter. Is this a good feeling? Not in Hollywood, where the guard appears to be changing. This is a climate where two teens-on-therampage movies, Scream 2 and I Know What You Did Last Summer, outperformed Kevin Costner’s The Postman and Mad City with John Travolta (and Dustin Hoffman thrown in). What’s more, the movies for the kids each outgrossed the other two combined. There is nostalgia in the air for the days when the boomers reigned: in Hollywood, Fonda may have been easier to accept as Hanoi Jane than as a Gray Panther.

While Planet Hollywood spins off its axis, Madonna and Nicole Kidman are keeping their eyes wide open at Les Deux Cafes.

Some recent films starring the, um, more established actors have tanked. Mad City— the $50 million Travolta-andHoffman vehicle—grossed $11 million in its entire domestic run. Costner’s disastrous Postman, which cost at least $80 million, squeaked out $20 million. Scream 2 opened at $33 million. Are you sensing change?

Even the Planet Hollywood restaurant chain, struggling to avoid its last supper, seems worried about the $20 million stars it used to call its partners. Because of the chain’s financial woes, Sylvester Stallone, Arnold Schwarzenegger, Bruce Willis and Demi Moore, and 30 or so other celebrities and professional athletes now hold sadly diminished stock or potentially worthless stock options. But the company’s less than sentimental president, Robert Earl, seems to imply that these celebrities, who received the stock or options in exchange for their marquee value at events, are no longer major constellations. As part of his strategy for revitalizing the faltering franchises, he announced he would look to “newer, up-and-coming stars,” and dispatched executive Brian Woods, who will settle in L.A., to seek them out.

Maybe Earl should ask himself why new young stars should sign on when their elders have so little to show for all those photo ops. If Woods wants talent, perhaps he should go where the stars really meet, which is not Planet Hollywood but Les Deux Cafes, which is housed in an unmarked building in the unchic and very earthy environs of real-life Hollywood, just south of Sunset Boulevard on Las Palmas Avenue. That’s where you’ll find the cool crowd. Nicole Kidman threw herself a welcome-home party there after being liberated from more than a year of hard labor in England on Stanley Kubrick’s kinky Eyes Wide Shut. (Tom Cruise, her husband, remained in custody.) And a few nights a week Madonna holds court into the wee hours. But I’m not sure that she and Mr. Woods would have much to say to each other.

Some executives were scared senseless by a new report which shows youthful audiences becoming ever more dominant. Disney’s Joe Roth says that at the height of the baby boom there were 31 million teenagers in the U.S. By 2005 that figure is expected to hit 50 million. (These are Roth’s figures.)

A producer sums up the boomer despair. “It’s the way of the world,” he says. “The people who thought there would never be another culture look around and find there is.” What do all these new kids want? The studios are scrambling to find out. But that may end badly. “Anytime we all start going one way ... we do damage,” says Laura Ziskin, who heads one of Fox’s film divisions.

Disney, like most studios, is unabashedly foraging for youth-oriented fare. (Maybe someone will pick up Adrian Lyne’s Lolita.) “Older people are less available, more driven by critics, more insistent on movie stars,” says Roth. Teens, on the other hand, shoot out of the house without the lure of $20 million names. And, Roth notes, they aren’t shy about boarding Titanic half a dozen times. Marketing-wise, teens are cheaper to reach. “You don’t have to buy spots on Seinfeld and ERf Roth observes.

In the old days—say, last year—studios opted for safety. You went with the star no matter what the cost. Now, it seems, there aren’t many names who can absolutely open a picture. Leonardo DiCaprio. Maybe Brad Pitt and Will Smith.

“I look at DiCaprio, Matt Damon— they’re baby Cruises,” says a studio chief. “There’s this angelic, sexless thing going on. There’s the image people are looking for.”

At this writing, the older performers are still considered stars and are still big internationally. Warner’s cochairman Terry Semel points out that more senior stars definitely delivered some big recent hits, including Air Force One, which featured Harrison Ford. But, Semel says, “when they get paid those big bucks, they should do what they’re famous for.”

No one has relied on established stars more than Warner, which finished 1997 on an especially low note. But it’s not hard to defend the studio’s decisions. Take Mad City. When Warner approached John Travolta, it wanted him to play the opportunistic reporter who covers a distraught security guard desperate to get his job back.

The studio saw the journalist as the money role; the guard could have been played by a far less important (i.e., less expensive) actor. But Travolta wanted to play the guard. That changed the complexion of the film; Warner needed a strong presence in the reporter’s role, which meant writing a check to Dustin Hoffman. The picture’s budget climbed to about $50 million. But how many executives would really turn down a chance to cast Travolta? Probably none.

Costner and The Postman! Well, Costner’s only other directing effort was Dances with Wolves—which logged a $424 million gross. Now Semel is consoling himself with memories of how much money Warner made on Costner outings such as Robin Hood and The Bodyguard.

Semel wasn’t seated at Ted and Jane’s table at the Fonda birthday party, and, given reports that Turner is unhappy with the Warner co-chairman (all emphatically denied by Semel), that’s no surprise. It’s easy to understand Turner’s frustration, what with the bad news at the box office. (On a happier note, Warner’s television business is good; the studio will pick up $330 million in ER money from NBC over the next three years.)

Almost every industry pundit agrees that something has to give on the movie side. Some are beginning to speculate that Semel won’t stick around indefinitely, though he says he will. Warner without Semel is hard to imagine, but the executive’s friends say it could happen. “He must be sick of Ted’s shit,” says one. “He must be embarrassed. I think he’s rich enough.” (He certainly doesn’t need Turner to give him the money to start his foundation.)

For nearly 18 years, the Bob DalyTerry Semel relationship has been one of Hollywood’s more opaque pairings. But it has worked. Daly, now the industry’s elder statesman, is generally respected as a savvy businessman whose television expertise has kept Warner on top. Semel is much harder to pin down. He’s notorious for not returning calls—a trait that even friends don’t try to defend. “It’s a horrible way to function,” says one. “It’s rude. I can’t explain him to anybody.”

But many make the point that Semel is the industry expert on distribution and is also a shrewd marketeer. And he has always been a successful schmoozer of stars. (“He spends money freely and that makes him good with talent,” says one high-level executive.)

Turner isn’t likely to be appeased anytime soon. Sphere, the Michael Crichtoninspired undersea adventure, which starred Dustin Hoffman, Sharon Stone, and Samuel Jackson, was nothing but trouble. Warner began construction of a multimillion-dollar set, then demolished it after discovering that the specifications were wrong. Eventually the budget topped $100 million. Then the film’s opening was delayed from December to February. In January, director Barry Levinson had to go back for eleventh-hour reshoots, which, unfortunately, didn’t help.

Warner’s big hope for the summer is now Lethal Weapon 4, which could work but won’t come cheap, what with Mel Gibson, Danny Glover, Joe Pesci, and Rene Russo all back. The studio agreed to “young up” the production a bit by adding Chris Rock to the cast (despite the skepticism of Daly and Semel). But industry expectations aren’t great; as a high-level executive at a competing studio puts it, “Anything with a numeral that large after it has got to feel like: Is this a good idea?”

Warner is holding out more hope for the end of the year, when Meg Ryan and Tom Hanks reteam in You Have Mail, directed by Nora Ephron, and Costner returns as a romantic lead in Message in a Bottle. But, meanwhile, Warner appears to have missed opportunities in its own Burbank backyard. Buffy the Vampire Slayer is on the WB network, but its star, Sarah Michelle Gellar, is making movies elsewhere. Jewel croons on a Warner Music label, but she’s making a bigscreen debut for another studio. The problem, says a Warner veteran, is that Daly and Semel find it hard to listen to new ideas. If you’re not as young as you used to be, he says, “you should be smart enough to let the people you’ve hired do their work.” The studio may have gotten the message; Warner is courting Scream’s Neve Campbell for Three to Tango.

Wamer’s bad news did drown out the drumbeats about DreamWorks (industry joke: “Stop dreamin’ and start workin’!”). There are reports that Steven Spielberg, one of the company’s three founders, went into quite a funk after Amistad failed to win more critical acclaim, box-office bang, and Oscar nominations. Apparently he believes—as do other executives and agents—that the film was hurt by the negative publicity surrounding author Barbara Chase-Riboud’s now resolved suit alleging that the script was cribbed from her novel Echo of Lions. And Spielberg, who has braved these sorts of charges before, is said to be laying some blame on his partner Jeffrey Katzenberg, who, the director believes, should have made the litigation go away.

Strangely enough, court papers filed by Chase-Riboud’s lawyer Pierce O’Donnell (who won a partial victory for Art Buchwald when he sued Paramount for lifting some of his work) suggest that Katzenberg tried to do just that—at least initially. O’Donnell told the court that back in February 1997, before the suit was filed, Katzenberg phoned to say that he wanted to avoid a public-relations battle. According to O’Donnell, Katzenberg used the word “amicable” repeatedly and said, “I have an olive branch in my hand.” Katzenberg also said that Spielberg was sensitive to these types of claims, so it was important “not to back Steven into a corner ... if Steven feels his integrity is being questioned, he will turn the claim over to his lawyers and tell them to fight to the death.”

“If Steven Spielberg feels his integrity is being questioned,” Katzenberg said, “he will turn the claim over to his lawyers and tell them to fight to the death.”

After that, things went downhill. O’Donnell demanded money, screen credit, and help publishing a paperback of Echo of Lions to be pegged to the movie. O’Donnell filed the suit in October, eliciting a very hostile response from DreamWorks lawyer Bert Fields, who said that in an effort to “grab money for herself” Chase-Riboud was essentially betraying her people by attacking Spielberg’s project.

“What in the world were they thinking, making Bert Fields their heavy-handed, ironfisted spokesman?” asks a prominent producer with amazement. “The whole thing was bizarre to watch, like a slowmotion car crash.” But Fields expresses no regrets and says he was following orders. “I was the truth squad,” he says.

While DreamWorks was insisting that no one associated with Amistad had ever even heard of Chase-Riboud’s book, O’Donnell got what seemed to be quite a break. A writer named Benjamin Pettis called Chase-Riboud’s lawyers to impart some choice information: starting in 1993, Echo of Lions was under option at Dustin Hoffman’s Punch Productions. The writer attached was David Franzoni —the very same David Franzoni who subsequently wrote the Amistad script. Franzoni admitted that he had been given a copy of the novel and that he had pitched the project at Warner. But he denied having read the book. (O’Donnell argued to the court that it was “highly suspect” that Franzoni would pitch a project based on a book he hadn’t read—which shows how much O’Donnell knows about Hollywood.)

When the case was finally settled—an option that DreamWorks maintains it would have pursued in the first place except for Chase-Riboud’s insistence on a movie credit—the publicity had taken its toll. Terms were not disclosed, though the novelist acknowledged Spielberg’s innocence. The settlement was made public the day before the Oscar nominations were announced. (Amistad got three nominations—including Best Supporting Actor—but none in the big categories.)

Some in Hollywood argue that this flap hurt the picture; others claim that Amistad simply wasn’t going to work no matter what. Both are probably right.

Spielberg, according to a colleague, “booked out in a big way” over the Christmas holiday, to Easthampton—far from the madding show-business crowd in Hawaii. “He was very upset,” says his associate. “It’s just human nature.” So it wasn’t only that Spielberg wouldn’t take Katzenberg’s calls, this insider insists; he didn’t want to talk to anyone. “When things don’t work for Steven, he is irrational,” says an executive who has worked with him. “These aren’t long-lasting things. He’ll blame Jeffrey, himself, the marketing people, critics, and Barbara Chase-Riboud.”

"DiCaprio, Matt Damon—they're baby Cruises," says a studio chife. "There's the image people are looking for."

One has to have some sympathy for all the parties here. Spielberg has been on an unlucky roll. He missed the premiere of DreamWorks’ first movie, The Peacemaker, when he and his wife, Kate Capshaw, were involved in a car accident. Meanwhile, he was allegedly stalked by a man with some very unsavory fantasies about raping and killing him. Then he got sued over Amistad while genuinely believing, according to his own account, that he was doing perhaps the most important work of his career.

In the midst of all this, Spielberg prevailed in another lawsuit, filed by writer Stephen Kessler, who charged that Spielberg and Michael Crichton had swiped the idea for Twister. Spielberg’s lawyers tried to get that case tossed out of court, but the judge found substantial similarities between the Twister script and Kessler’s screenplay. So the famous director had to go to St. Louis in January to testify. On the stand, he argued, mysteriously, that the script accounted for only 5 percent of Twister’s success. By his math, the action and special effects accounted for 60 percent, Helen Hunt for 20 percent, and sound effects for 10 percent. This is pretty precise for a guy who testified that he didn’t know exactly how much money he made from the film.

Why didn’t anyone talk Spielberg out of this strange statement? Sources say the director lives in a privileged world. Nobody wants to deliver bad news. Katzenberg says the Chase-Riboud suit was “a genuine annoyance” but nothing more; he’s also willing to accept the blame for the failure to defuse the litigation. “I took it upon myself... to be the focal point of whatever second-guessing might go on,” he says. “It’s my job.”

“Steven was very upset,” says a Spielberg associate, ofAmistad’s failure. “When things don’t work for Steven, he is irrational,” says another executive.

But not everything is a bummer for Spielberg. There’s good buzz on Saving Private Ryan, his summer movie with Tom Hanks and young potential megastar Matt Damon (actually, DreamWorks will get only half of the film’s take; it had to split the project with Paramount, which owned the property). And Spielberg can always console himself with the new deal for ER, co-produced by his company, Amblin Entertainment, which will earn about $110 million. For everyone but NBC, ER was like a big threeyear relief package. DreamWorks should have it so good.

Spielberg’s pique with Katzenberg was, according to the claims of one member of Jeffrey’s camp, no more than “a mosquito bite.” And some other feuds may be losing their sting. David Geffen, the third DreamWorks partner, recently broke bread with Barry Diller and old foe Michael Ovitz at Locanda Veneta. Geffen, however, dismisses the meal as an impromptu non-event. He says that Diller was dining with Ovitz, and he tagged along at the last minute. When Variety reported the meeting, Geffen was quick to take offense, thinking that Ovitz was the leak. (He was mollified when he found out otherwise.)

Both Ovitz and his other nemesis, Disney chieftain Michael Eisner (who fired the former CAA titan from the Magic Kingdom), were in Aspen over the holidays. Ovitz entertained Disney board member Gary Wilson, chairman of Northwest Airlines, with whom he also happens to own a yacht named Illusion. But certain chasms are not ready to be bridged. Although the Eisners and Ovitzes used to take turns entertaining on Christmas and New Year’s, attempts were made this year to prevent the two Michaels from crossing paths. One informant says Eisner tried to approach Ovitz through a friendly third party but was rebuffed; Eisner’s response, as we hear it, was bafflement. “It was just business,” he reportedly said of Ovitz’s departure from Disney. “It didn’t work out. He got $100 million. What’s the big deal?”

Eisner has made some sort of peace with DreamWorks, having agreed to pay Katzenberg an undetermined sum to settie the former Disney executive’s suit over his share of profits earned during his years at the studio. Eisner made the trek to visit sometime adversary David Geffen at his beach house—not exactly neutral territory—to smooth things over. Now Katzenberg and Eisner are even talking about teaming up on future projects. (Some of this goodwill may dissipate now that Disney has moved its big summer movie Mighty Joe Young, with Bill Paxton, to next Christmas, right up against Prince of Egypt, the source of DreamWorks’ most animated hopes.) Geffen, as noted, has had a peaceable meal with Ovitz, but stay tuned. Ovitz has a way to go before he’s in the good graces of the rest of the town. He’s been out and about a bit more, making a rare appearance recently at the premiere of Wag the Dog. Not everyone was excited to see him. “It was like a blast of ice-cold air,” says one prominent producer. “Nothing has changed.”

Meanwhile, the Ovitz-Gefifen-Diller detente has fueled already-ferocious talk over the future of Universal. Recall that Edgar Bronfman Jr. has sold Diller the better part of the studio’s television operations; some have speculated that Diller will soon take over the entire entertainment company. But those in the know say Diller could have had the whole thing but doesn’t want to mess with the lousy margins in the movie business. Bronfman himself says he would have drafted Diller to run Universal long ago except that he knew Diller’s agenda, “and what he wanted to accomplish had nothing to do with working for me.”

So now Diller presides over the new USA Networks, Inc. (Home Shopping Network, most of Ticketmaster, 12 TV stations, USA Network, and Sci-Fi Channel, as well as Universal’s television production operations). Universal owns 45 percent of the company. Diller calls the shots (but needs Bronfman’s approval for major moves) and stands to make a fortune on stock options.

Some in the industry are curious what Bronfman will do with what’s left of Universal—including Sid Sheinberg, who used to be president of the company when it was called MCA. Like other observers, he concludes that the Diller deal “emasculated” chief executive Frank Biondi by getting rid of television and cable—Biondi’s supposed strong suits— and left the company with movies, “a shitty business.” Sheinberg figures the only thing left to do is give the company to Diller. “It’s got to be the end of the road,” he says. “It’s just a question of when.” But Bronfman says the company has more than just the movie business— specifically, music, a big library, and plans to be Disney’s biggest rival in the destination-resort business.

Another popular scenario has Bronfman splitting Universal into a company separate from its parent, the Seagram Company Ltd. As one Wall Street analyst observes, many believe that Seagram stock would be as high as $80 per share if the company had just kept its hefty stake in Dupont (which it sold just as it bought Universal). Meanwhile, the stock hangs around $35, about where it was three years ago. Analysts, however, acknowledge that the company may be undervalued because entertainment analysts don’t get the liquor business.

But Bronfman says he doesn’t want to split Universal from Seagram. “My job isn’t to make life easier for analysts,” he says. “My job is to deliver the results they expect.” He points out that the transaction with Diller has already made Seagram about $800 million richer on paper thanks to the value of its share in Diller’s company (“I don’t consider that chopped liver,” says Bronfman). He also notes that Universal—which had all but written off television as a business when he bought it—can acquire a majority stake in USA Networks when Diller leaves or dies. “Barry’s views notwithstanding, one of those two things will happen eventually,” Bronfman says cheerfully. And, he adds, he can wait.

Another notion conjured up over paranoid lunches these days is that the Ovitz-Geffen rapprochement was part of a Diller scheme to insert Ovitz into the top job at Universal, which would have been Ovitz’s in 1995 if he hadn’t gotten greedy in his contract negotiations. The view is that Diller would then have a close ally running Universal, which is now closely associated with his own company. Getting Ovitz into the job would be an amazing feat, considering the depth of Edgar junior’s disgust with Ovitz after the failed negotiation three years ago. In fact, Bronfman says the chances are “somewhere between zero and nil.”

“The people who thought there would never be another culture find thereis.”

Diller also scoffs at the rumors. “We have a company with a market capitalization of about $8 billion which is the fourth-largest cable programmer and the sixth-largest broadcast group. Why can’t people say there is no next step other than the development of our assets?”

Some stories end happily. Titanic could gross about $1 billion worldwide, making it the biggest hit ever. “Relief has turned to joy,” says Tom Rothman, president of Fox Film production.

The going joke was that Peter Chemin (who green-lighted the film before he was promoted and left it to Bill Mechanic, his successor as head of production) would emerge from his new post at News Corp—Fox’s parent company—if the film scored. Sure enough, there was a skirmish at the Golden Globes. Chemin tried to take Mechanic’s place at the Titanic table. The matter was resolved when the men left the table to director James Cameron and the film’s stars.

So Fox has won, and Paramount, with its $65 million investment in the picture, has won, too. (Fox says it gets 60 percent after both sides recoup costs, but don’t be surprised if the partners end up fighting over the cash.) But the rest of the industry could ultimately lose. A very A-list director has stated that nothing he demands should be considered unreasonable in light of Cameron’s budget. And one entertainment-company chairman notes with dread that the picture’s three-hourand-fourteen-minute length will set a new diabolical standard. Now, “no matter what it costs, no matter how long it is,” he says, directors will insist that size is good.

Cameron should perhaps also get credit for anticipating the youth wave. “Jim was always determined that the lovers be young,” Rothman says. But did anyone expect him to cast Jane Fonda?