The Keys to the Kingdom (19 page)

That weekend, when Eisner found out what had happened, he thought Gordon had used Paramount's offer as a prod in his negotiation at Universal. He and Gordon had an explosive argument and Eisner vowed to throw him off the lot. As far as Eisner was concerned, Gordon had betrayed him. On Monday morning, a studio employee showed up and asked Gordon's staff to leave. “I'm going to have a truck pick up all your stuff and I'll take it wherever you want,” the employee said.

Gordon asked the man, “Are you telling me if I refuse you're going to come in and take my furniture from underneath me?” He vowed to defend his turf with a baseball bat if anyone touched his belongings.

Incredulous that his longtime friend—a man he had helped and counseled in numerous ways over the years—would treat him so coldly, Gordon called his lawyer. The lawyer phoned business-affairs executive Dick Zim
bert and demanded a ninety-day notice period. Zimbert said he could not override Eisner. With extraordinary boldness, Gordon had his lawyer obtain a court order preventing Paramount from evicting him. The studio retaliated by banning Gordon from the commissary. The next day, Gordon made a point of having lunch there and tipped the maître d' to seat him near Eisner.

Neither
Streets of Fire
nor
Brewster's Millions
(which Gordon ultimately decided not to direct) performed well. But that didn't mollify Eisner. “They didn't speak for years,” Don Simpson remembered later. “Their wives were in business together. Their kids were on the same baseball team.” Eisner hid when Gordon came to pick up his children at Eisner's house and even passed Gordon at school meetings without so much as a nod. Later, Eisner had a script written about the episode, though it was never made. Gordon used to joke that Eisner would cast Robert Redford to play himself and Jack Palance or some other bad-guy character actor to play Gordon.

“Michael would have close relationships with very few men,” Wedemeyer says. “They often ended badly.” It would be years before Gordon and Eisner would reconcile.

Wedemeyer's relationship with Eisner ended badly, too. Wedemeyer eventually was promoted to talent relations but was hurt when Eisner informed her that as part of an effort to reduce the number of people reporting to him, she would have to answer to a new boss—obviously lower on the totem pole than Eisner. She promptly resigned. Eisner refused to accept her resignation, but she insisted. When the head of marketing, Gordon Weaver, offered her a job in his department, Eisner wouldn't allow it. If she didn't work where he wanted her, she wasn't going to work for the company at all. Eisner always seemed to be anticipating a betrayal. When it came—or when he thought it did—the rupture was always painful and dramatic.

 

EISNER DIDN'T SINGLE
out Gordon when it came to grinding down budgets. He was constantly on the lookout for ways to save and no one was immune. James L. Brooks was a television genius who had created
The Mary Tyler Moore Show
with his partner, Allan Burns, and followed with
Taxi,
an exceptional series about misfits in a garage that launched the careers of Danny DeVito, Christopher Lloyd, Andy Kaufman, Marilu Henner, and Tony Danza. He had also written
Starting Over,
a modestly suc
cessful film starring Burt Reynolds and Jill Clayburgh. Now Brooks wanted to try his hand at directing for the big screen. His choice was a Larry McMurtry novel called
Terms of Endearment,
the story of a mother's relationship with her doomed daughter.

Given the daughter's fate,
Terms of Endearment
wasn't the sort of project that warms a studio chief's heart. “They always thought, ‘No, no…cancer—she dies of cancer,'” explains producer Lawrence Mark, then an executive at the studio. Diller and Eisner figured the picture could never outperform one of their earlier grim but well-received efforts,
Ordinary People,
which meant that it couldn't possibly gross more than $50 million. So even though they were willing to give Brooks a shot, they weren't happy about giving him the $11 million budget he wanted, though that was roughly the average cost of a film at the time.

Jeff Berg, Brooks's agent at International Creative Management, thought Eisner owed Brooks some benefit of the doubt. After all, Paramount had lured Brooks to the studio with a promise that he could make feature films. Brooks had kept up his end of the deal by creating
Taxi,
a series that was going to make the studio a lot of money. Paramount could afford to let Brooks make a picture that wasn't exceptionally expensive. But the studio refused to finance the project and Berg tried to set it up elsewhere without success. Finally MTM, the production company founded by Mary Tyler Moore and her then husband, Grant Tinker, offered to invest a million dollars in the film. Paramount agreed to ante up $8.5 million, although Eisner made it clear that he still wasn't overjoyed at the prospect of making this movie. To keep to the budget—$1.5 million less than originally forecast—a very tight shooting schedule was set.

Brooks had a spectacular cast—Shirley MacLaine and Debra Winger, with Jack Nicholson as the degenerate former astronaut living next door. (Originally, the Winger role was going to be played by Sissy Spacek. Burt Reynolds, who was going to make a run at serious acting by abandoning his lifts and his toupee, was going to play the astronaut. At the eleventh hour, he opted to do
The Man Who Loved Women
. After trying to interest Clint Eastwood, the studio turned to Nicholson.) Jeff Daniels, John Lithgow, and Danny DeVito also appeared in the film.

Despite the dream cast, the production quickly turned into a nightmare. As a first-time and nervous director, Brooks took the unusual step of shooting the movie in sequence and it wasn't the most efficient approach. He started
shooting in Houston, where he insisted on spending a lot of time in rehearsal on fully dressed sets. Even before shooting began, Brooks was falling behind on a schedule that was too tight in the first place.

To make matters worse, Debra Winger engaged in a lot of erratic behavior, possibly because she was ingesting too much cocaine. (When the production moved to Lincoln, Nebraska, where Winger met future beau, then-governor Bob Kerrey, the producers checked her into detox for several days.) She also had developed an abiding hostility toward her on-screen mother, Shirley MacLaine. One day, the two sat side by side looking at screen tests of Winger wearing various outfits. Winger appeared on the screen in a red dress which she was to wear early in the film. “Isn't that cute!” MacLaine said, and reached over to touch her costar's arm. Unfortunately, she missed. “You grabbed my tit!” Winger shrieked, and to the amazement of others in the room, she punched MacLaine. Alarmed crew members had to pull Winger off her costar.

Winger then set out to bait MacLaine in every way she could, simultaneously campaigning to have her fired. “I don't know how I can possibly act with her,” she told Brooks. “We have different styles.” She also complained to Brooks about her love life and other woes. “Debra would spend hours crying in Jim's office,” remembers one member of the crew. “I cannot tell you what a one-woman movie-stopper she became.” When MacLaine had to do a scene in bed with Nicholson, Winger crept under the sheets and licked her leg. At one point Winger let on that she had gotten to see some footage of the film before MacLaine. Infuriated by the endless taunting, MacLaine ran to her car and tried to make an escape. But time was short and Brooks couldn't afford to have MacLaine go AWOL. Coproducer Penny Finkelman Cox threw herself on the hood of the car to stop MacLaine from leaving.

It didn't take long for Paramount to panic over the pace of the production. Soon after filming started, Eisner flew to Houston to take a look at this disaster in the making. He was whisked into a screening room and viewed some footage, hastily cut together for his visit. He saw an opening sequence, in which Shirley MacLaine wakes her baby in a panic over whether the child is still breathing, as well as a sequence that had been shot that day (which discreetly showed Winger performing oral sex on her husband). Brooks and his associates waited anxiously for Eisner's reaction. “We were hoping for a miracle to get the studio off our backs,” says a
member of the crew. In this case, the miracle came. Eisner could see that Brooks just might be making an extraordinary film and gave him a bit more breathing room.

But not much. Katzenberg was given the job of enforcer, relentlessly hammering on Brooks to hurry up. “We would work from five or six in the morning until we lost the light and then Jim would get on the phone with Jeff in his trailer and sometimes we wouldn't get to dailies until eleven
P.M
.,” remembers a Brooks associate. “We would wait while there was yelling every night. Katzenberg was yelling so loud that I could hear his voice over the phone.” The debilitating arguments over time and money continued as the studio constantly threatened to shut down the movie if Brooks didn't speed things along, while he declared that he was going to quit anyway. “It was not a fair fight,” said one Brooks colleague. “Jeffrey does a fair fight and Jim's smarter than that. Jim was outboxing him.”

One of Brooks's goals was to get the money he needed to shoot scenes of Winger meeting her friend Patsy's circle of New York acquaintances on location in Manhattan. There was a key sequence when Winger asked why she wasn't supposed to talk about her illness, and Brooks was determined to get it exactly right. “I made the movie for that scene!” he told colleagues. Katzenberg told him that New York was out unless he could catch up on the shooting schedule.

Brooks finally got four days in New York—barely enough to get his scenes shot. And the studio made it clear that every day had to count. The Memorial Day weekend was coming up and the studio had no intention of paying for the cast and crew to work overtime on a holiday weekend. But when the cast got to New York, Winger wouldn't come out of her room at the Plaza Hotel. She had a large pimple and didn't want to be seen.

Brooks and Winger had barely been speaking since the production had moved to Lincoln. But her agent, Rick Nicita of CAA, could not get her to emerge. Finally Brooks went to the hotel, praying for the wit or inspiration that would persuade her to open the door. As he approached the room, he still had no idea what to say. Finally he knocked.

“What do you want?” Winger asked through the locked door.

“Let me in,” Brooks pleaded. The inspiration came. “I have to pee,” he said.

Still, she refused to leave her room. An entire scene showing Winger having lunch with the women at a restaurant was shot around her absence. Only the next day did she show up to perform her lines.

Even though early screenings of the film didn't go well, Brooks reworked the picture and transformed it into a major hit. Paramount's projections were shattered when the picture scored $108 million at the box office. The picture was nominated for eleven Academy Awards and won five, including Best Picture, Best Director, Best Actress (for MacLaine, who beat the also-nominated Winger), Best Supporting Actor (Nicholson), and Best Screenplay Based on Material from Another Medium. Critics loved it. Ironically,
Newsweek
's David Ansen noted that in her performance as Emma, Winger was “the mortar that holds all the parts together.” The movie business is indeed one of illusions.

C
HARLIE BLUHDORN COULDN'T
even die without stirring controversy. When the end came on February 19, 1983, the official story was that the fifty-six-year-old Bluhdorn had suffered a massive heart attack. There were subsequently various rumors about his physical whereabouts when he died. The official story was that he was stricken on his jet while returning from a trip to the Dominican Republic. In fact, he had died at Casa Grande.

The news came as a shock, but it shouldn't have. Bluhdorn was suffering from leukemia—a fact that a major public company clearly should have reported to the Securities and Exchange Commission. But if the federal government was right, this wasn't the first time Bluhdorn had violated federal securities laws.

His successor was Martin Davis, a fifty-six-year-old Gulf + Western veteran who leapfrogged over other high-level executives to take the helm. Davis's tenure at Paramount dated back to 1958. His first task at the studio, in his own unminced words, was to “reorganize or be the hatchet man” in the advertising and sales department. He was well suited for the role. In the mid-1960s, Davis was a key player in fending off a hostile takeover of the studio. He assembled a committee of friendly shareholders; as head of that committee, Davis picked a theater owner from Boston named Sumner Redstone.

By 1965, Davis was Paramount's chief operating officer and an assistant to the president. His next move was to broker a marriage with Bluhdorn's Gulf + Western—a conglomerate involved in auto parts and zinc. Bluhdorn was thrilled with the purchase of Paramount and show business quickly became his first love. “Charlie liked Hollywood and women,” Davis said in an interview before his death in 1999. “Nothing wrong with that.” Another
studio veteran put it more bluntly. “Paramount,” he said, “was the biggest purchase for pussy in the history of America to that time.”

Davis wasn't the type to fritter away time in Hollywood. Instead, he made himself useful to Bluhdorn in many ways. He managed the acquisition of Consolidated Cigar Corp. and eventually moved into the corporate side of the business. In October 1981, he helped Bluhdorn resolve a bruising five-year battle with the Securities and Exchange Commission, which had filed a suit charging the company and Bluhdorn personally with wide-ranging “fraudulent courses of conduct.”

In essence, the suit alleged that Bluhdorn had used Gulf + Western as a personal cookie jar. He was accused of improperly spending company funds on planes and limousines for purposes unrelated to business. He also allegedly had obtained personal loans from banks that hoped to do business with Gulf + Western. He was said to have used the company's pension fund to make inappropriate investments in businesses in which he had an interest. And Bluhdorn was accused of unilaterally investing $64 million of the company's money in sugar futures in the Dominican Republic without disclosing the transaction.

In the settlement, the government didn't require Bluhdorn to make any restitution of funds. Gulf + Western agreed to improve its corporate housekeeping but Bluhdorn neither admitted nor denied the charges. Davis, who said that Bluhdorn was devastated by the investigation, insisted that Bluhdorn did not deliberately break the law. “If he was short of anything, it was common sense but not integrity,” he said.

Davis said Bluhdorn's battles—with the SEC and his leukemia—changed him. He started to spend several days a week in the Dominican Republic, with direct lines to the company's Manhattan headquarters installed. He started “running things by phone.” But Davis said he was unaware that Bluhdorn had cancer. Others say Bluhdorn was apparently ill—after all, he had taken to wearing a wig in an attempt to conceal the hair loss caused by chemotherapy. But his sickness was never addressed.

After Bluhdorn died, his widow, Yvette, backed Davis as his successor. Barry Diller allied himself with Davis, who had promised not to make changes at the studio. With Davis taking the top job,
Variety
declared, “there no longer can be any question about possible dilution of Diller's authority, either by political ploy within Paramount or on the upper reaches of G + W.” The report was diametrically wrong.

“It was a terrible mistake of mine,” Diller says now about his role in supporting Davis. After the board resolved that no one should take Bluhdorn's title or his office, Davis did both. Davis also turned on Yvette Bluhdorn, taking away the company limousine, yanking support for a Bluhdorn-founded arts center in the Dominican Republic, and canceling other benefits.

Such measures, according to Davis, were necessary to salvage Gulf + Western, which had become a debt-laden and irrational collection of assets. He said he waited a respectful six months before taking Bluhdorn's title and his office, but then it was time to get on with business. “We were letting go of a lot of people,” he said. “We were trying to cut down and then build ourselves up. To do that, you do not win a popularity contest. We cut out the airplanes and we cut out a lot of the limousines—not just for [Yvette Bluhdorn].”

Davis acknowledged that his relationship with Diller quickly soured. “When I restructured the company, he could not have the same relationship with me that he had with Bluhdorn,” Davis said. “That was emotion-driven and with me, as well as I knew him, it was all business. I had thirteen other division chiefs. He was only one.”

At first, however, Diller seemed to be on the rise. Soon after Bluhdorn's death, in March 1983, Davis promoted him to chief of a newly formed Entertainment and Communications Group, giving him responsibility for Simon & Schuster, the New York Knicks, Madison Square Garden, and the Sega video-game division. The effect on Diller's relationship with Eisner was not salutary. Eisner hoped this would give him more control of the studio, but he was disappointed. “Michael thought I was moving away from Paramount,” Diller says. “I had no intention of moving away from Paramount…. That pissed him off.” Eisner said later that at this time “a chill set in” between him and Diller.

But Diller's added responsibility did not bring with it the autonomy that he thought he had been promised. Martin Davis could be stubborn to the point of irrationality—a trait that became more apparent as he assumed the helm at Gulf + Western. “I became a control freak, which I clearly admit,” he later acknowledged. And in the case of Paramount Pictures, he was bent on instituting a new management style. About two months after Bluhdorn's death, Davis told Diller that he had always disliked Eisner and suggested that Diller fire him. Diller declined. “I didn't know Marty Davis—I didn't know his methodology,” he says. “That was the way he weakened people—
to go after their number-two man. For at least six months, I fought against Marty Davis trying to get him not to do this. And I was unshakable. I never told this to Michael Eisner because I thought it was my job to deal with this. I didn't want to drive him out of the company.” Davis, he says, “used Michael Eisner to break me—not that I understood what he was doing, because I didn't.”

Davis denied that he was out to “break” Diller; instead, he blamed Diller for allowing his attack on Eisner to continue. “Any feuds and alleged feuds that Michael and I have had should never have happened,” Davis said. “I didn't know him and he didn't know me…. Barry was very protective. You never saw any of the others in the organization unless he deemed it necessary.”

Despite Diller's insistence that he came to Eisner's defense, Eisner became convinced that Diller was not his advocate. He even suspected that Diller might be undermining him with Davis. Diller says Eisner simply “was not in possession of the facts.” But his relationship with Eisner started to fray. “I so resented being in this position that in addition to blaming Marty Davis, I blamed Michael Eisner,” he says.

In March 1984,
Terms of Endearment
picked up its five Oscars. And Diller, as Davis resentfully remembered it, was “building up a great image.” Several stories in the press heaped praise on Diller and his management team. Davis's jealousy was not the only problem: the studio's very success was undermining it from within. The long-simmering tension between Diller and Eisner was now at full boil, arousing Eisner's natural tendency to anticipate betrayal. “When you're failing, all the brothers were brave and the sisters were virtuous,” says one executive who was there at the time. “When we all got rich and successful, there was a lot more fucking each other over.”

Davis had another bone to pick with Diller and Eisner. Both received hefty bonuses every year—and they were splitting more than half of the bonus pool for the entire studio. (Eisner had tapped into the bonus pool in 1982, when he had renewed his contract at Paramount. At the time he was being courted by Bill Paley to run CBS, and holding the advantage, he convinced Bluhdorn to loan him enough money to buy his dream house in Bel Air as well as a share in the bonus pool.) In fiscal 1984, Diller's take was 31 percent while Eisner got 26 percent. And Diller and Eisner were each pulling down seven-figure salaries (Davis made far less). “I wanted that changed,” Davis said. “People say I was jealous that they were making more
than me. Nonsense. Whatever Barry wanted, he generally got from Bluhdorn. Not from me. At some point you have to decide. Do you want to be held hostage?…Barry is not going to work for anybody. You either give him his candy or you throw him out.”

 

IT IS COMMON
in Hollywood for a significant realignment in the power structure to be preceded by a single piece of journalism that serves as a catalyst. This had been the case when Bluhdorn unceremoniously ejected Frank Yablans from his perch at Paramount. It happened again in July 1984 when
New York
magazine published a story by Tony Schwartz called “Hollywood's Hottest Stars.” Diller and Eisner were pictured on the cover of the magazine, both looking exceptionally genial.

The article chronicled Paramount's success and described the executive team's bare-knuckle management style as the “chemistry of confrontation.” By now, Paramount's management team had been in place for eight years, far longer than any other studio's top team. In Hollywood terms, Paramount was a dynasty. It had been among the three most profitable studios for each of the preceding six years. “By nearly any standard other than popularity,” Schwartz wrote, “Paramount is the leading studio in Hollywood.”

Though Schwartz got Diller to acknowledge that argument was a daily staple at Paramount, he did not write about a conflict that arose, according to Don Simpson, over Diller's desire to cut Eisner out of the
New York
article altogether. Jeffrey Katzenberg concurs. “This is when Barry and Michael started to go at each other,” he said. “Barry started the article and Michael found out about it halfway through. He had a shit fit.”

Simpson said Eisner simply disregarded Diller's orders to stay away from Schwartz. “He said, ‘Fuck Barry Diller,'” Simpson said. “He talked to the press and you know what Barry did? Nothing. Michael Eisner played poker with Barry Diller and won.” Diller denies ever having instructed Eisner to stay away from Schwartz, and Eisner says he doesn't recall the incident. (Some years later, Eisner would call on Schwartz to coauthor Eisner's autobiography.)

After a dinner, Diller took the reporter to a theater to see how audiences were responding to
Indiana Jones and the Temple of Doom,
which was Eisner's project. Eisner wasn't about to let Diller grandstand over it, so he and his wife had gotten there first. The next day, Schwartz got a call from an unnamed source who told him that Diller's excursion was a ploy. “He
never goes to check audiences,” the caller said. But Eisner often did. “He's a maniac,” the caller exclaimed. “He went to two more theaters after he left you. Eisner's your man.”

When Schwartz's article hit the newsstands, it was obvious even to a casual reader that a spin competition had taken place. The article provided a memorable snapshot of the executives who made up Paramount's storied management team. Diller and Eisner were wealthy and successful men. The article said Diller was pulling down $2.5 million a year, Eisner a bit less. (The figure eclipsed Davis's earnings of $584,699.) Diller was single, as always, and moved in chic circles. Calvin Klein and Diane von Furstenberg were among his best friends. Eisner had been married for seventeen years and didn't socialize with celebrities.

The competition between Diller and Eisner remained keen. “Having each other's approval means a lot to both of them, and I'm not sure either one is happy about that,” the astute director James L. Brooks told Schwartz.

Katzenberg was described in an unattributed quote as “a golden retriever [who knows] what's going on with every producer, agent, lawyer, director and star in town.” To his chagrin, this nickname would stick to Katzenberg forever. The article also raised what was becoming a persistent question about Katzenberg's taste: was he all organization but no instinct?

Perhaps the most ironic statement in the entire article was a quote from an unnamed producer. “Paramount's great strength,” he said, “is that their executives know they'll be there tomorrow.”

 

MARTIN DAVIS WAS
possibly one of the most unpleasant bosses in the annals of business; a former employee once described him as a man with “a tiny, cruel heart.” He was a no-nonsense corporation man who had once, according to legend, told an unhappy executive to come to his office early one morning to discuss his grievances and then left the hapless employee waiting hour after hour for an appointment that never happened. The story holds that Davis finally breezed by at the end of the day with the parting words “That's to remind you who's boss.”

Davis maintained that such tales were fictitious.

If Diller and Eisner had hoped that the
New York
magazine article would impress or intimidate Davis, they were wrong. “That was a stupid story,” he remembered. At the time he reportedly started complaining to associates that Diller and Eisner were “overrated and overpaid.” Davis de
nied that he made that remark, but said the
New York
article was a slap at the rest of the company because it failed to acknowledge the contributions of others—especially Frank Mancuso, the marketing and distribution chief who still operated, despite Eisner's best efforts, from his base in New York.