Rebels on the Backlot (8 page)

The moviegoing audience was perceived, increasingly, to be
made up of young men, aged twelve to twenty-four, and as the 1980s wore on Hollywood made a great many movies to serve that audience, with loud music, fast-paced editing, and sexy women: the cultural equivalent of junk food. Every once in a while Hollywood reached deep into its artistic soul to make an unusual film, or a controversial one, like
Platoon
, by Oliver Stone, or
The Last Temptation of Christ
, by Martin Scorsese. But these were rare. Risky, difficult, or unfamiliar ideas in moviemaking were increasingly not to Hollywood’s taste.

As the merger mania of the 1980s took hold among the young masters of the universe on Wall Street, Hollywood also began to catch the fancy of the broader corporate world. Buying a studio was a way to diversify a large company’s holdings into the evergrowing sector of media and entertainment, and as diversification went, this one gave Wall Street types a legitimate business reason to hang out with movie stars. There was nothing like it.

Before Wall Street took notice, Hollywood was one of numerous industries in the United States that had been able to operate in its own discrete world, which had been true since the creation of the movie studios by immigrant Jews from Eastern Europe earlier in the twentieth century. But the world was changing. Mergers and conglomeration of industry became a revolutionary way of combining corporate strengths horizontally. One business would feed another; ideas would be cross-fertilized; efficiencies would be gained; investment banking fees would be earned. The revolution had a hightech, space-age name: synergy. It was thus that a soda pop company called Coca-Cola came to acquire the Columbia-TriStar studio in 1982. This was why in 1986 the Australian media magnate Rupert Murdoch and his company, NewsCorp, bought Twentieth Century Fox, with its Century City backlot. In 1990 Italian financier (and, it later emerged, felon, convicted of perjury, evidence tampering, and fraud) Giancarlo Parretti bought MGM, backed by a French state bank. There were many more such mergers to come. In 1991 the Japanese corporation Matsushita bought Hollywood godfather Lew Wasserman’s MCA-Universal while the 1990 merger of entertainment and publishing giants Time Inc. and Warner Brothers created the largest media entity in the world up to that time.

But the magical synergy did not necessarily follow. Like so many revolutions, it appeared rather less appealing in the light of day, once the carcasses of previously profitable companies littered Wall Street. And what synergies could be found or created between soda manufacturers and movie studios were not significant. The cash-rich Japanese seduced in the 1980s by Hollywood’s siren call felt, for the most part, buyer’s remorse. But there always seemed to be a supply of new recruits to the philosophy of synergy. When Coca-Cola decided to bail on Hollywood, Sony Corporation stepped in to take over Columbia-TriStar in 1989. Starting in the eighties and all the way until the millennium, Wall Street continually found new corporate marks to bring to the Hollywood party. And there always seemed to be a hangover.

These acquisitions ushered in a period of significant change in the corporate culture of Hollywood. Gone were the moguls of old, those self-made, self-styled tyrants and visionaries who made films that suited their image of themselves, the audience, and the country as a whole. The studios were their personal fiefdoms and the movie stars who worked there, along with the rest of the staff, their children. By the mid-to late 1980s the studios were becoming more like other corporations, run by men in suits with master’s degrees in business from Harvard and other fancy universities. They tended to regard movies as products; they scrutinized the balance sheets for profit margins. What those bosses sought most of all were reliable profits and growth. To achieve that the young studio managers in turn sought reliability in their movie slate (never guaranteed in the best of circumstances), to reduce investment in risky movie production as much as possible. This meant sticking with tried-and-true plot formulas, using market research companies to “predict” profits and weekend box office, hiring movie stars with proven track records, and, as much as possible, appealing to the mass audience by avoiding controversial topics.

For a guy like Quentin Tarantino in the early 1990s, Hollywood’s major studios were not the place to expect a warm welcome.

Harvey Weinstein, by contrast, was much more like the moguls of old. Loud, bullying, tyrannical, a chain-smoker and a passionate advocate of the films and filmmakers he loves, he was a self-made
success. Significantly, Weinstein was based in New York, operating independently of the Hollywood studios. He realized that by the 1980s American moviegoers—those who loved the great American auteur films of the 1970s and the great European art films of the 1950s, 1960s, and 1970s—were hungry for more substantial fare than Hollywood provided them. In the 1980s independent distributors such as Orion and Cinecom offered alternatives, but none did so as energetically as Miramax.

Created in 1979 by Harvey Weinstein and his younger brother Bob, Miramax started as a savvy distributor of European art films. The company was named for the Weinsteins’ parents: Max, who’d been a diamond cutter in a booth on Forty-seventh Street in Manhattan’s diamond district; and Miriam, a housewife and sometime secretary. The brothers credited their parents with giving them a love of movies—that, and the chance event of stumbling into a screening of the François Truffaut movie
The 400 Blows.
Both brothers attended the State University of New York in Buffalo, where Harvey started promoting concerts. Soon enough both dropped out to work in concert promotion. After the company acquired a rundown, two-thousand-seat theater, it was Bob Weinstein who came up with the idea of showing movies there.

From there they started Miramax, with Miriam Weinstein as the company’s first receptionist. The company struggled mightily to survive in the 1980s, buying the rights to foreign-language films, releasing some low-grade erotica. In 1988 a British venture capital firm seeking to get into the movie business bought a small stake in the company for $2.5 million, guaranteeing a line of credit. That allowed the Weinsteins to coproduce some films and acquire others. Over time the company won a reputation for having the uncanny ability to choose films of artistic quality and cultural significance, and the even more uncanny ability to sell those films to the media, critics and discerning audiences, using clever marketing and dogged persistence. But Harvey Weinstein was a walking contradiction, a gifted self-promoter capable of vastly self-destructive behavior. He eventually grew to become a legend in contemporary Hollywood, a mogul who could as easily bury a film he’d produced
as promote it all the way to Best Picture at the Oscars. He was a champion of visionary directors, but he also earned the nickname “Harvey Scissorhands” because of his willingness to trim a director’s cut at will. He rode his employees hard, and he raged over the smallest infractions. It wasn’t uncommon to see overworked, underpaid drones at Miramax burst into tears, and Weinstein actually boasted he was once voted by a leading magazine as one of the worst bosses in the country. He threw things. He got his way. But he also dominated the Academy Awards from the early 1990s onward. In the latter part of the decade—after Miramax was acquired by the Walt Disney Company—Weinstein lost his taste for challenging and controversial fare, turning to costume dramas and lightweight genre films. By 2004, his future, and that of Miramax, was uncertain because of feuding with his corporate parent, Disney. But in the early years he was an advocate of the quirky, the risky, and the new.

E
ARLY ON ONE OF THE MOST IMPORTANT FILMS
M
IRAMAX
acquired turned out also to be the first veritable sign of commercial life in the independent film world.
Sex, lies, and videotape
is a cerebral comedy about sex, marriage, love, and intimacy, a multicharacter work written and directed in a loose, documentary style by a newcomer, Steven Soderbergh. Soderbergh had just turned twenty-six years old when the film came out, a precocious talent who had turned up at the 1989 Sundance Film Festival and became an immediate media sensation. The movie’s distinctive tone presaged the rebel sensibility of the new generation of filmmakers. It was unpolished, sexy, and funny, with an unmistakable sense of vérité, of reality. The movie starred James Spader as Graham, the odd, repressed observer of several people in various stages of romantic and sexual crisis; Andie MacDowell played Ann, a quiet type married to John (Peter Gallagher), who is having an affair with her sister, Cynthia (a feisty Laura San Giacomo, in a role she has never equaled). Graham’s peculiarity is that his greatest sexual satisfaction comes from interviewing women about their fantasies and needs.
The movie was fresh and new, like nothing ever seen before in Hollywood, certainly, and it became the sensation of the 1989 Sundance Film Festival (then called U.S. Film Festival), where it nonetheless failed to win a single prize. Even so, the movie was sought after by most of the independent distributors at the festival. Bob Weinstein pushed Harvey to buy the film, and they did, for a million dollars—not the first time Miramax would outbid its competitors by a lot.

A coproducer on
sex, lies
, Nancy Tenenbaum, recalled the negotiations, which took place at an office on the Columbia-TriStar lot. (Columbia-TriStar had helped finance the film.) “One by one each distributor came in to earnestly tell us why they deserved to distribute the movie,” she said. The film’s half dozen producers and Soderbergh were all there when the Weinstein brothers strode in along with Eve Chilton, Harvey’s personal assistant and future wife—introduced as the head of development—in tow.

At the time Miramax’s reputation was less than stellar. The Weinsteins were showmen, great at making the sale, at closing the deal, but less than reliable when it came to their finances, which were considered shaky at best. Harvey Weinstein dazzled the young Soderbergh with his passion for the film, spinning him a vision for promoting it; he would introduce it to the marketplace gradually, he said, getting it in front of key journalists first.

Columbia-TriStar executives, who had ensured the loan to make the film and wanted their money back, were not as dazzled and worried about doing business with the Weinsteins. “No one trusted them,” said Tenenbaum. “People would say ‘Harvey and Bob are great, but they need a new accountant.’” Despite the rich sum Miramax was offering for domestic distribution—without even home video rights—the Weinsteins had to agree to put their million dollars in an escrow account before the deal could be concluded.

In the end, Miramax made a very good deal on sex,
lies, and videotape.
The movie not only won the Palme d’Or at the prestigious Cannes Film Festival in 1989, which made an overnight sensation of Steven Soderbergh, but it also took in $25 million at the U.S. box office.

By 1992 that windfall was not enough to keep Miramax going. The independent studio had had numerous succès d’estimes, small movies loved by critics and discerning audiences, all of them acquired rather than financed by the studio. There was the charming Italian tale
Cinema Paradiso
and the powerful
My Left Foot
, starring Daniel Day-Lewis, who won Best Actor at the Oscars for playing palsied artist Christy Brown. The company’s biggest hit thus far had been
The Crying Game
, a British noir drama with an anatomical surprise at the end. Miramax paid $4 million for the film and, supported by the critics, successfully teased out $63 million at the box office.

But even so the company had serious cash flow problems. Miramax had made $28 million by selling the video rights to a handful of its movies to Paramount, but the studio was slow to pay out, and Miramax did not have the cash reserves to wait. Weinstein claims that the studio was making $4 million a year in profit between 1989 and 1993 and that the only problem was a temporary one of liquidity. “The cash flow problem was irritating us, and the competition was spreading it around more,” Weinstein claimed in later years. The rumors about Miramax’s financial insolvency were intense indeed, and Weinstein—ever vigilant when it came to his public image—went so far as to show
Variety
editor in chief Peter Bart the company’s Ernst & Young accounting statements one year to keep
Variety
from publishing a story that said the company was in trouble. But according to former Miramax executives, the company was in fact on the verge of financial insolvency when
Reservoir Dogs
came along.

Harvard Business School graduate John Schmidt was brought in in 1989 to make some sense of the financials. “Miramax was maybe three to six months away from chaos,” he said of the spring of 1989. Schmidt pushed the brothers to consider a public offering to bring in new capital, while Harvey and Bob began talking to studios about buying the company. Unfortunately, Miramax promptly went into a two-year slump in 1990 and 1991, where everything they touched seemed to fail
—The Tall Guy, American Dream
, and Hal Hartley’s
Unbelievable Truth
—three movies that together took in less than $1.5
million. The lone exception was Madonna’s
Truth or Dare
, which took in $15 million. Said Schmidt, “We proceeded to try to continue to grow the company through 1990 and 1991, but it just got tougher and tougher, because the hits weren’t there anymore. We were just limping along.” With their backs to the wall, the Weinstein brothers pursued an independent public offering on Wall Street, but backed out at the last minute, unwilling or unable to conform to the demands of a more transparent corporate culture.

The financial brinkmanship continued through 1992. Then came the Cannes Film Festival, and that changed everything. From then on, Harvey Weinstein hitched his wagon to the wild ride that was Quentin Tarantino.

I
T WAS THE YEAR OF THE
L.A.
RIOTS, AND MOST
H
OLLYWOOD
bigwigs were afraid to drive near the poor neighborhoods beside LAX airport to take a plane to the south of France. But Lawrence Bender did, and he and Tarantino stayed at the Hotel Martinez, one of the big luxury spots on the boardwalk, for three days, basking in the sun while L.A. was burning. They felt guilty, but only a little.