Queen of the movie bosses
by Dominic Rushe
Sunday Times (London)
May 9, 2004, Sunday
How Amy Pascal became the most powerful woman in Hollywood.
The office in which Hollywood legend Louis B Mayer once “auditioned”
starlets has been taken over by Amy Pascal. But apart from a shelf
of snow shakers made to commemorate movies she helped to pro- duce,
she has yet to stamp her personality on it.
White-walled and sparsely furnished, the room could be the lobby of
an upmarket hotel. It seems too antiseptic for Pascal, who is chic
in a bohemian way dressed in black, with a long string of pearls,
and hair that is a mass of red curls.
Pascal proudly showed off the tiny anteroom where Mayer, the final
M in Metro Goldwyn Mayer, had his casting couch.
It leads on to a huge balcony with views of the Hollywood hills.
“I’m thinking of having meetings out here, maybe some plants,”
she said.
If Pascal has yet to leave her imprint on Mayer’s office in the Art
Deco Thalberg building in Culver City, she has certainly made her mark
on the industry. She has just released a record five profitable films
in a row (Gothika, Hellboy, 13 Going on 30, Secret Window and 50 First
Dates) and has been elevated to chairman of Sony’s motion-pictures
group, owner of Columbia Tristar.
Pascal -Hollywood’s most powerful woman, according to Forbes magazine
-is preparing to release what could be her biggest gamble to date:
the $ 200m (£110m) summer blockbuster, Spiderman 2.
Sony is also, ironically, in talks to take over the now troubled MGM.
Mayer’s old studio still makes the James Bond movies, but its glory
days are long gone. MGM’s back catalogue is now more valuable than
its film-making unit.
Just down the corridor from Pascal is another office that is also
beginning to bear the signature of a new owner. Less flash, the room
is home to London-born Michael Lynton, the former chief executive of
AOL Time Warner Europe and now Pascal’s boss.
Despite a brief stint at Disney’s ill-fated Hollywood Pictures,
Lynton is an outsider. A self-portrait by Stanley Spencer hangs on his
wall. “People think it’s Harry Potter,” he said. Lynton’s literary
tastes appear to be more highbrow. The office has a bookcase of
well-thumbed Penguin classics -he once ran the company.
Both books and movies are businesses that people get into because
they are “completely in love” with the product, said Lynton.
“If somebody comes in from left-field, people understandably ask
why he is entitled to that position,” he said. “I don’t presume
to be the movie picker. I am an outsider. It is useful to have an
outside perspective as long as the person can take his ego out of
the equation.”
Pascal’s unit is a shining star in a troubled company. Sony is carrying
$ 12.8billion in debt and is in the middle of a huge restructuring. The
company’s consumer-electronics division is still underperforming and
its music business – along with those of its rivals -is struggling
to fight off the threat of piracy and consumer apathy.
Lynton’s appointment was not a total surprise. Sir Howard Stringer,
Sony Corporation’s chairman, pulled a similar move last year, putting
in another outsider, NBC television executive Andrew Lack, to run
the group’s music division.
But with Sony Pictures doing so well, this time rival studio executives
were expecting fireworks between Pascal and Lynton. “They’ll fall
out. They always do,” said one. But so far the two seem to get along
in classic Hollywood odd-couple style.
“It was a shotgun marriage but we found true love,” said Pascal. She
will concentrate on movies while Lynton will ensure that Sony is
making as much money as possible out of its films. He will also keep
an eye on the broader picture.
The industry has probably never undergone a time of greater change,
said Lynton.
“Studios are very complicated enterprises; there are a lot of moving
parts. Amy has done, and continues to do, a brilliant job putting
together this great slate of movies.
“That said, there is a broader agenda that the studio has to contend
with on distribution, television programming and issues of piracy.
It’s helpful to have two heads.”
While Pascal prepares Spiderman to face his next opponent, Dr Octopus,
Lynton is up against an equally tricky opponent.
Kirk Kerkorian was six years old when MGM released its first picture.
Born in Fresno, California, in 1917, Kerkorian grew up the son of poor
raisin farmers in a small colony of Armenian immigrants. He was given
his first break, and a passion for flying, by the aviator Florence
“Pancho” Barnes, Hollywood’s first woman stunt pilot. During the second
world war, he enlisted with the RAF, ferrying planes from Canada to
England. After the war he started an airline with the purchase of a
single plane.
Eighty years later Kerkorian is the 33rd richest man in America, with
a $ 6billion fortune based on buying low and selling high. Since 1969
he has ownedMGM three times and sold it twice. Now it appears he is
trying to even the scores.
Sony and MGM will not comment, but MGM has delayed its annual meeting
to review “strategic options”.
MGM is the last independent studio in Hollywood. All its rivals are
owned by giant media combines. Warner Brothers, for example, is owned
by Time Warner, 20th Century Fox by News Corporation, ultimate owner
of The Sunday Times.
Sony and two private-equity firms, Texas Pacific Group and Providence
Equity Partners, are thought to be offering $ 5billion for MGM.
Kerkorian, who controls 75% of MGM, has held talks with Sony about
a deal before, but they came to nothing after a disagreement over
price. This time MGM watchers believe a deal may work. “At this price
it is more likely than before,” said Mike Savner, an analyst at Banc
of America.
Without the financial muscle of a parent group such as News Corp
or Time Warner, Savner said MGM will struggle and its fortunes will
continue to decline.
Of MGM’s $ 1.9billion revenues last year, $ 1billion came from its
home-entertainment division. MGM has a back catalogue of 4,000 films.
Among others it owns West Side Story, the Rocky movies, Terminator,
19 Woody Allens, and a handful of Ingmar Bergmans. It also owns the
rights to the James Bond, Pink Panther and Addams Family movies.
Old films have rarely been so valuable. The proliferation of cable
channels, services like video-on-demand, and DVD sales have made old
movies hot commodities.
DVD sales rose 43% last year, with American firms netting $ 14.9billion
in worldwide sales. More than two-thirds of those sales now come from
old movies.
Lynton compares the film industry today with the book business after
the second world war. The arrival of cheap paperbacks made classics
like Dickens or Dostoevsky available to a whole new audience and
fuelled a huge sales boom. “There are so many analogies between the
book business, which is now a mature business, and the film business
today,” he said.
In a notoriously high-risk business, DVD holds out the promise of
greater stability. Perhaps like the music industry and its CD-fuelled
growth years, DVD sales will prove a temporary phenomenon. But for now,
Hollywood thinks it has struck gold.
DVD sales may be low risk, but the blockbuster is getting ever more
expensive and frightening. To a large degree, it has always been this
way. As Hollywood chronicler John Gregory Dunne wrote in The Studio:
“Hollywood is a technological crapshoot. Table stakes open at a
million dollars.” But Dunne’s insider book on 20th Century Fox was
written in 1968. Since then the stakes have become even bigger.
With so many big films coming out over the summer, and movies being
released so quickly on DVD and pay-per-view TV, the business has
changed, said Pascal. “The old equation in Hollywood was that a movie
would rake in eight times its opening weekend. These days the opening
weekends have got bigger but the ratio has fallen to four times,”
she said.
Whereas a few years ago the studios would stagger their “event” movies,
these days cinema goers are being bombarded with blockbusters week
after week during the summer.
Some films, for example Tom Cruise’s The Last Samurai, are now so
expensive they hardly make money. Their cinematic run is almost an
extended advertisement for DVD and other post-cinema sales.
Two dozen movies that cost more than $ 100m to make are due for
release this summer in what is sure to be a cut-throat battle. Last
summer was littered with hyped movies that proved to be duds. They
included The Hulk and Matrix Reloaded.
The rewards for hitting it big are immense and, as MGM learnt to its
cost, it doesn’t matter how good your back catalogue is if you are
not producing new movies and franchises.
The first Spiderman film raked in $ 800m and made stars of Tobey
Maguire and Kirsten Dunst, proving there is a worldwide appetite for
the webslinger. Pascal and Sony have a lot riding on Spiderman 2, which
opens in Britain on July 15, not to mention Spiderman 3 due for 2007.
Sequels are increasingly popular in Hollywood but as The Matrix series
showed, they do not always live up to expectations. With Spiderman,
Pascal seems confident she has a three-part winner. “It’s very hard
to make sequels,” she said. “The ones that work best are the ones
that were meant to be serialised in the first place.”
Pascal said she saw a clear three-part narrative for Spiderman from the
start. The first is about childhood and discovery, the second about
the confusion of adolescence, and the third about the challenges of
becoming an adult.
But most of all, she said, it is about getting the greatest number
of people to come and see a great story. “My job is most of all about
the story. Without that you have nothing at all.”
Louis B Mayer would no doubt have agreed.