The Keys to the Kingdom (12 page)

“It was very hard because Ted was truly one of the most fun people that I've ever been around in my life,” Katzenberg says. “He was the kind of person who could take the most depressed and down-on-his-luck person and
fill them with a sense of going for it…. This is a man who had a joy for life. I loved Teddy.”

 

THE MEETING TOOK
place in a hotel room somewhere in Wisconsin early in John Lindsay's 1972 campaign for the presidency. A wealthy New York businessman, David Buntzman, had flown in to meet with the candidate. He brought an envelope stuffed with cash. It wasn't illegal, in those pre-Watergate days, to make such undisclosed contributions. And it wasn't necessary for Lindsay even to brush his fingertips across the envelope. Instead, the money went straight into the hands of the only campaign aide who was present—Jeffrey Katzenberg.

Katzenberg was an advance man at a time when various suppliers of services to a presidential campaign—car rental agencies and hotels—demanded to be paid in cash up front. “The companies stopped giving credit because the losers never paid,” Katzenberg remembers. “Somebody [from the campaign] needed to have cash all the time. Tens of thousands of dollars. Everybody knew me, trusted me. I came from a well-to-do family…. Cash would come from New York to me and I would dole it out. I paid rent, I paid bills. I was the cash machine and there were times that I had almost $100,000 in that briefcase.”

But Lindsay's presidential campaign went nowhere and his time in political office ended in 1973. That year Governor Nelson Rockefeller appointed a special prosecutor, Maurice Nadjari, to investigate possible wrongdoing in city government. “He investigated everybody—me, Jeff, quite a lot of people,” Aurelio says. “This was a typical prosecutor who went awry.”

That hotel room in Wisconsin was of particular interest to Nadjari. The Lindsay administration had given the Buntzman family a lease to operate the Bronx Terminal Market near Yankee Stadium. Davidoff says the Buntzmans got the land because “no one else wanted it…. It was at the time an armpit of New York City and they were willing to put in the money, take it over, and do it.”

But then the Yankees insisted that the city make improvements to Yankee Stadium—including the addition of a parking structure. “Buntzman had the land and now the city needed it,” Katzenberg says. “They're buying the land and he kills them on the deal. He gets an incredible windfall relative to what he paid.”

And of course, Buntzman was the contributor who had flown to Wisconsin to hand over an undisclosed sum of cash to Lindsay. It appeared to be a sweetheart deal and Katzenberg was in the middle of it. “The only person in the room who's a witness to this is little Jeffrey and he went after me with both barrels,” Katzenberg says. “This guy was having people show up at my house at three or four o'clock in the morning with subpoenas. I was harassed beyond belief.”

It lasted for three years, and before it was over, Katzenberg had moved on to a job at Paramount. Even though Nadjari ultimately came up empty, the episode led to a lasting perception that Katzenberg, in his youth, was a “bagman” for the Lindsay administration.

 

IF JOHN LINDSAY
had been presidential material, one can only imagine what might have come next for Katzenberg, who had acted as treasurer in the 1972 campaign. But when the bid failed, the administration disbanded. The lease was up on the brownstone, so Davidoff and Katzenberg moved into an apartment at East Seventy-third Street and Second Avenue. Davidoff and Aurelio opened Jimmy's, a restaurant on the original site of the legendary Toots Shor's sports bar and next to the famous restaurant ‘21.'

Jimmy's was a hit. There was a round bar on the main floor and an Off-Off Broadway show upstairs featuring stars like Betty Buckley. A nightclub downstairs featured Nixon mimic David Frye (Davidoff had been on the notorious Nixon enemies list) and future shock jock Don Imus, who held forth about the restaurant's operators being former Lindsay “bagmen.” Several jazz legends—Maynard Ferguson, Stan Getz, and Buddy Rich among them—recorded live albums in the same space. “It was quite the place to be seen and to find out what was going on,” Davidoff remembers. “I used to say there were more judges made in my bathroom than in any other place than city hall.”

Katzenberg worked at everything, functioning as a savvy maître d' or washing glasses behind the bar. The older men worried about his education and pushed him to go to college at night. Katzenberg tried it but quickly quit. “No question, I didn't get a classic education, but it's not as though I was uninterested,” he says. “Many of the things one would learn in college, I went and learned in the streets of New York. I'm not trained in classical literature, but I think I've acquired a pretty good command of English. I got it but in an unconventional way.”

When it became clear that college was out of the picture, Katzenberg's friends nagged him to get a real job. They enlisted the help of Davidoff's friends the Margolies brothers. Abe and Robbie were suppliers to Zales Jewelry and avid gamblers; Robbie was “one of the great card counters in blackjack,” as Davidoff recalls. They ran a casino in St. Martin in the Caribbean where Katzenberg was sent to study their business from the ground up.

“I suggested he'd make a good croupier,” Aurelio says. “We encouraged him to go down [to St. Martin] and study it and to do it as a career…. We knew he was interested in more than being a maître d' or a restaurant manager.” Meanwhile, Davidoff was trying to get gambling legalized in New York so he could start a club. He figured that Katzenberg, having learned his trade in St. Martin, could run it.

Despite its popularity, Jimmy's always lost money. “I overestimated my ability to run a business,” Davidoff laments. “A lot of people who worked for me opened their own restaurants afterward. You wonder how they could.” After hours, Katzenberg and Davidoff spent hours in their apartment practicing counting cards at blackjack. A Margolies brothers' associate (whose métier allegedly had been fixing college basketball games) provided Katzenberg with a training kit, which he has kept for all these years. “Jeff was really good at it,” Davidoff marvels. “He's got a computer mind.”

It was a perfect Katzenberg arrangement: high-stakes gambling with an element of control. With $10,000 from the Margolies brothers in his pocket, Katzenberg set out for Freeport. The brothers agreed to split Katzenberg's winnings with him. “For wise guys, what was quite wonderful about them is they said they would stake me for six months or $250,000, whichever came first,” Katzenberg says. “They allowed me the fantasy and dream of doing this insanely bizarre thing. As much as they were wise guys, I liked them. I'm sure they were into a thousand things that were completely horrible, but they have codes…. Their handshake was six months. They did not want me to make a career as a professional gambler.”

Katzenberg strolled into a casino in midafternoon and promptly won $25,000. That was enough for one day and he decided it was time to go home. But that was not a popular decision with the casino management. Katzenberg pretended to have an attack of stomach flu to justify his exit. He traveled to Las Vegas, Puerto Rico, Paradise Island. He couldn't stay anywhere long. As soon as the house figured out what he was up to, he was no longer welcome. On one such excursion, Davidoff accompanied Katz
enberg to Paradise Island. As they played blackjack, a couple of casino employees approached and asked them to move on. They sat down at the roulette table. “I had come up with a system on roulette,” Davidoff explains. But management suggested that what they really needed to do was leave on the next plane. They obliged.

Naturally, Katzenberg was obsessed with making his $250,000 goal. He went to Vegas with about $200,000. He was closing in. But the house was wise to him, roped off his table, and started cutting the deck higher to make it more difficult to count the cards. Katzenberg started losing until finally his money was gone.

Even though he was cleaned out, the casino planned to put Katzenberg's picture in a book of card counters and other unwelcome types. The Margolies brothers intervened on his behalf. They contacted Benny Binion, owner of Horseshoe, and Ash Resnick, the manager of Caesars Palace, then the two premier clubs in the town. Katzenberg agreed to quit gambling to keep his photo out of the book.

It was time for a change. The lease on the apartment was running out. Davidoff was getting married and moving to Queens. Katzenberg had suddenly paired up with Marilyn Siegel, a young woman—a few years older than Katzenberg—who had been a popular undergraduate at the University of Bridgeport in Connecticut and was now a schoolteacher in the Bronx.

She had met Katzenberg through her boyfriend, Donny Evans, who was an assistant to the mayor and hosted a regular Sunday-night poker game. Evans hadn't noticed any sparks between the two when he was dating Siegel, though Katzenberg often tagged along with them to dinners or the movies. In fact, Katzenberg seemed like “a young kid”—hardly a rival at all.

But sometime after Evans and Siegel split, Katzenberg stepped in. Marilyn was so used to hearing him called “Squirt” that she wasn't sure who Jeffrey Katzenberg was when he called her one night. She went to dinner with him “to see how the kid turned out.” She apparently concluded that he had turned out well enough. The two quickly became engaged, to the surprise of Evans and others who thought of Siegel as an older woman and Katzenberg as a workaholic kid devoid of romantic interests. But the two forged a lasting partnership that would endure even though Katzenberg continued to devote almost every waking hour to work.

“Jeff decided that Marilyn was going to be whatever she was going to be to him,” Davidoff remembers. “Knowing Jeff, he probably said, ‘This is
the girl I want to marry,' and that was it.” This type of intimate information, he adds, was not fodder for discussion despite the closeness between the two.

 

KATZENBERG'S ANXIOUS GODFATHERS
had another idea—they introduced him to some Hollywood types. One was independent film producer David Picker—not yet an executive at Paramount—whose wife had worked in the Lindsay administration. After Picker's wife called to make a reservation for dinner at Jimmy's, Davidoff and Aurelio made sure Katzenberg was there. He also met Marvin Josephson, then head of International Famous Agency. In the wake of his gambling career, Katzenberg decided to become a Hollywood agent. He went to work for Josephson.

It was 1973 and the Arab-Israeli War broke out. Josephson decided to sponsor an ambitious rally for Israel, hooking up the twenty-five biggest arenas in the country by satellite and having stars like Barbra Streisand perform. The whole thing needed to be mobilized fast and Katzenberg was assigned the job. He was in his element—organizing at breakneck speed—when the war ended. The benefit never happened, but Josephson and Katzenberg were rewarded with a VIP trip to Israel. Katzenberg was escorted to some of the scenes where fighting had taken place. He was overwhelmed by the experience. When he returned, life at the agency seemed dull.

Picker, the producer, invited him and Marilyn to Miami for the Christmas holidays. They stayed at the Fontainebleau hotel and amused themselves playing tennis with Dustin Hoffman and Paul Anka. One afternoon, Katzenberg was sitting courtside with Anka when the singer suggested that Katzenberg could be his agent.

“You know, I don't think I should be your agent,” Katzenberg said. “I don't know anything about how to book or manage your career. I could devote twenty hours a day, seven days a week to you with a lot of enthusiasm but your agent can do in ten minutes what it'll take me twenty hours to get done. I shouldn't be your agent and I shouldn't be anybody's agent.”

As he had talked, Katzenberg realized that being a great agent wouldn't be much fun. When he rejoined Picker, he said, “I'm quitting.” He went back to New York and did precisely that.

K
ATZENBERG STARTED WORKING
as David Picker's $125-per-week gofer. He was dispatched to Africa to help scout locations for a film called
Dangerfield Safari
(the picture was never made). Then he found himself traveling to Miami with Dustin Hoffman during the making of
Lenny,
director Bob Fosse's film about ill-fated comedian Lenny Bruce. He had entered a world of jets, limousines, and yachts. “My mouth never closed,” Katzenberg remembers.

Katzenberg was enjoying himself immensely when one day Picker called and asked, “Do you know who Barry Diller is?…He's a great guy, very smart and looking for an assistant. I think it would be a fantastic opportunity for you.”

“I'm having a great time here!” Katzenberg protested. But in what Katzenberg later described as “the most selfless act that anybody professionally has done for me,” Picker insisted that he make the trip to Los Angeles to meet this prospective employer.

Diller had taken the helm at Paramount and was commuting between the New York and Beverly Hills offices, where he met with Katzenberg. Katzenberg wasn't that interested in the job, so he had decided on the plane to be aggressive in the interview—a frightening prospect considering Katzenberg's usual level of intensity. Unless this was the greatest job in the world, he didn't want it.

As Katzenberg recalls the meeting, Diller asked a few pro forma questions and dismissed him with a thank-you. At this point, Katzenberg says, he interjected, “Excuse me. I have a few questions. What exactly is this job? If it involves your laundry and your dry cleaning, I'm really not interested.” He still remembers Diller flushing in response.

Diller, however, doesn't remember the encounter that way at all. “We had a brief interview and I was impressed with him,” he says. “He certainly
wasn't arrogant…but smart and alert and willing and full of beans—the good ones, not the confrontational ones.” Katzenberg was convinced that he'd never get the job, but the next day, Picker called to say he was in. “I think he saw a lot of himself in you,” Picker said.

On his first day, Katzenberg sat down at his desk at the Gulf + Western offices in New York when suddenly he heard the harsh buzzing of Diller's intercom. Katzenberg nearly jumped out of his chair; later he would say that buzzer felt like an electrode wired to his ass. When he went to the boss's office, Diller pushed a thick stack of papers across the desk and said, “Tell me what you think.”

This was the manuscript of the Judith Rossner novel
Looking for Mr. Goodbar
. Katzenberg labored through it and returned to Diller. “I have no idea how you make this into a movie,” Katzenberg said. “It was all told from inside her mind.”

“That's not your job,” Diller responded. “That's what a filmmaker will do. Do you think it's a good story to make into a movie?”

Katzenberg tried again. “I imagine women will be really interested,” he said.

“How would you know?” Diller snapped. “You're not a woman, are you?”

Katzenberg looked down at his crotch, then back at Diller. “Not that I know of.”

“Your job is to go out and find ideas that interest you, that you love—not like—that you love sufficiently to put your career on the line, to have a level of passion to want to make something and to have the courage of your convictions. There is no way you will ever know what a housewife in Kansas or a businessman in Chicago wants to see. Your job is to find things that interest you. Then what you do is you say, ‘Yes.' You close your eyes, cross your fingers, and pray that there are millions of other people who feel the same way you do. Anytime you presume what someone else will like, you will lose.”

With that, the Hollywood education of Jeffrey Katzenberg began in earnest.

 

ABOUT THREE MONTHS
into his job, Katzenberg made a mistake that aroused Diller's ire to a level Katzenberg hadn't previously seen. Diller phoned him and unleashed a barrage of high-volume rage without
letting Katzenberg speak a word in his own defense. At the end, Diller slammed down the phone. Katzenberg says he stood up and marched into Diller's office, barging past the secretary, who protested that Diller was on the phone. He planted both hands on Diller's immaculate glass desk. Outraged at the intrusion, Diller glared at him with what seemed like unalloyed hatred.

“I just want to tell you one thing,” the diminutive Katzenberg declared with all the dignity he could muster. “This is the first time and the last time that you will ever talk to me that way while I work for you. If you do not want me here, I will leave. If you ever do this again, either start with ‘You're fired' or end with ‘You're fired.' Because if you ever do this again, that will be the last conversation we ever have. Let's file this under ‘getting to know each other.'”

And according to Katzenberg, Diller never spoke to him in that tone again. While he screamed at Eisner and everyone else on his staff, Katzenberg enjoyed immunity. As for Diller, he doesn't remember the conversation. “It's not my recollection but it's not against my recollection,” he says. “There's no question that I thought Jeffrey was more than worth it.”

Despite Katzenberg's tales of his youthful cockiness, he also craved the approval of his bosses and worked tirelessly to get it. To some, his zeal to get ahead seem reminiscent of Sammy Glick, the amoral subject of Budd Schulberg's novel
What Makes Sammy Run?
As Diller's assistant, he had special responsibility for decorating and overseeing Gulf + Western's guest house on the company's extensive property in the Dominican Republic. Bluhdorn was especially pleased with the results. “Jeffrey's job, when I met him, was to outfit that house with the powerboat and water skis and floats for the pool,” remembers one prominent producer. “He was into it.”

Meanwhile Gulf + Western, Paramount's parent company, was having its own problems with the law. The company's top management was under investigation by the Securities and Exchange Commission for allegedly misappropriating funds. If Katzenberg was worried that his legal problems from his days with the Lindsay administration would get him into trouble with Charlie Bluhdorn, he soon found that the effect was quite the opposite. “He completely related to me,” Katzenberg says. “In his mind, he was also being harassed and persecuted.”

When Diller invited Bluhdorn to Los Angeles, Katzenberg's job was to remain glued to his side, ensuring that he had nothing but fun. And when
Diller wanted to throw a last-minute surprise thirtieth birthday party for his lady friend, Diane von Furstenberg, Katzenberg put together a bash at a chic Chinese restaurant at Third Avenue and Sixty-fourth with two hundred guests, from Mick Jagger to Henry Kissinger. (Diller also marked the occasion by presenting von Furstenberg with thirty diamonds in a Band-Aid box. Katzenberg was responsible for getting the diamonds, which he did with the assistance of his old gambling friends, the Margolies brothers.)

From the start, Katzenberg never did his job by half measures. Martin Starger, who had been Diller's boss at Paramount, remembers that Diller invited him to use the Dominican Republic house for a vacation and promised to have his assistant make the arrangements. Minutes later, Katzenberg was on the phone from New York, asking about Starger's flight plans. When Starger arrived at LaGuardia Airport to make his connection, he was greeted by Katzenberg, wearing a dark suit even though it was a Sunday afternoon.

“He takes me from one plane to another,” Starger remembers. “I said, ‘You came all the way from Manhattan to make sure I get from one plane to another?' He asked what I like to drink, all that stuff. I get there, and walk into the house and the phone rings—I swear not two minutes after I walk into the house—and I hear, ‘Mr. Katzenberg on the line.'…It was unbelievable. I mean, the guy knew what room I was going into from three thousand miles away. ‘I understand you went skeet shooting. Did you enjoy it?' He was the most efficient young man I had ever seen—other than Barry.”

But perhaps because Katzenberg was such a clever assistant, it wasn't long before Diller concluded that the arrangement wasn't working. “He had alienated a lot of people in the first six months or so, which is what happens when you're an assistant and you're young,” Diller says. “I couldn't have him be my assistant anymore because it wasn't healthy. The assistant has no role of his own. He's using the authority of the person he works for, and the people who deal with him are not dealing with him in any way other than relative to the person he works for. I felt that it was a rotten luxury for an executive to have an assistant because it makes his life easier and everybody else's life miserable.”

In 1977, Diller decided to reassign his protégé. “I thought enough of him to get him a real day job,” he continues. “I threw him into the marketing department to get his bearings and he didn't disappoint me…. That was the end of assistants for me.”

 

KATZENBERG DIDN'T DALLY
in the marketing department for long. While there, he met Michael Eisner—the new head of the studio—and was charmed by his self-deprecating humor and boyish enthusiasm. He also befriended a rising young production executive in Los Angeles named Don Simpson—a particular favorite of Eisner's. Though the straitlaced Katzenberg seemed to have little in common with the hard-partying, profane Simpson, this would hardly be the first time that Katzenberg had enjoyed a friendship with someone who may have operated outside the law (and between hookers and drugs, Simpson broke his share). From Teddy Gross to the Margolies brothers to Simpson, Katzenberg showed no objection to associating with rather colorful characters. He and Simpson started swapping information about goings-on at the studio. In the annals of networking, the Simpson-Katzenberg combination must have been truly formidable. Both men were tireless in their information gathering and both could focus their considerable energies with laserlike intensity.

Katzenberg and his wife were about to buy an apartment in New York when the studio asked him to move to Los Angeles. He was recruited to work on a bold project that Diller was attempting to launch. It was to be called the Paramount Television Service—a fourth network. The notion of taking on the Big Three seemed as hopeless then as it did a decade later, when Diller would try again at Fox. A producer who worked on the lot remembers: “Everybody in the world said Barry was crazy, there can never be a fourth network, it will never happen.”

Diller's plan was to attack the programming problem with his strong suit—made-for-television movies—and a new
Star Trek
series. By then, Paramount had been working on the low-budget
Star Trek
movie for a couple of years. Diller had passed on Roddenberry's concept—a dark and controversial riff on the nature of God. The studio had recruited a number of science-fiction writers, including Harlan Ellison, but couldn't come up with a story. A clutch of directors—Spielberg, Lucas, and Coppola—had passed on the project. Paramount was ready to give up on the feature-film idea.

In June 1977, Diller and Eisner announced the fourth network and the new
Star Trek
series to the press. The series would be launched with a two-hour
Star Trek
made-for-television film. With a budget of $3.2 million, this was going to be the most expensive television movie ever made. At twenty
six, Katzenberg was named head of programming for the new web. He didn't have a clue what he was doing but Eisner seemed to have confidence in him. “He would believe in somebody,” Katzenberg says. “If you were a talented carpenter, he would think you could be a brain surgeon.”

Early on, Don Simpson warned Katzenberg to steer clear of the project. “
Star Trek
is a nighttime freight train,” he said. “It's bearing down on you at two hundred miles per hour. Get off the fucking track!” But Katzenberg was a terrier and the prospect of pleasing his bosses by tackling an impossible project was irresistible. Perversely, he would test himself by quitting smoking as the project was going into production. “The single most stressful moment of my life,” he explained later. “I knew if I could stop smoking then, I could stop forever.” He also bought a Porsche—the same car that Simpson drove. But Katzenberg's was automatic, and to Simpson and his wild bachelor friends, Katzenberg was missing the point.

Paramount had become leery of Roddenberry, who was combative in sticking to a vision that Diller had rejected. The studio hired two producers to work with and discipline him. Soon Roddenberry was waging war over the script. Clearly, the producers would never be able to start the film and then get episodes for the regular series under way in time to launch the fourth network. As it turned out, they didn't have to. Bluhdorn lost confidence in the project and the fourth network died before it made its debut.

That left Jeffrey Katzenberg with nothing but a partially developed script for a two-hour
Star Trek
pilot. He was transferred to film production and told to make the pilot into a feature film.
Star Wars
and
Close Encounters
had gobbled up a fortune at the box office while Paramount, which should have had the edge on the final frontier, wrestled with a fractious group of producers without success. “Jesus Christ, this could have been us!” Eisner had reportedly exclaimed as
Close Encounters
opened to critical raves and massive grosses. Katzenberg was given a relatively modest $8 million budget and told to get this problem solved.

But in the wake of
Star Wars
and
Close Encounters
—which he screened repeatedly—Roddenberry was convinced he needed a lot more than $8 million for special effects or he'd be laughed out of the theaters. Katzenberg went to Eisner and came back with an extra $10 million. With the budget growing, Eisner and Katzenberg courted director Robert Wise, whose credits included
West Side Story
and
The Sound of Music,
as well as
The Day the Earth Stood Still
and
The Andromeda Strain
. Promising that they wanted
to make a “top-notch picture,” Eisner and Katzenberg told Wise that they thought he would probably be able to bring in the film for less than $18 million.