Seventy-five years ago, an ensemble of Hollywood's best-known talent, including Charlie Chaplin, Mary Pickford and D.W. Griffith, created United Artists to take on the big movie studios. Last week came the sequel. In an alliance that could alter the landscape of the entertainment industry, three of the biggest names in the business -- Director Steven Spielberg, record mogul David Geffen and former Walt Disney executive Jeffrey Katzenberg -- said they planned to start a major new movie, animation, TV and entertainment company.
But the notion that the "Dream Team," as Katzenberg dubbed the trio, could soon rival one of Hollywood's Big Six studios required almost as much suspension of disbelief as a typical Spielberg movie. After all, the new studio has no name, no staff and no physical lot -- at least not yet.
Culture clash. Nonetheless, the track records and deep pockets of the three close friends had the movie world awed by the possibilities. Speculation was rife about a tie-up between the unnamed studio and MCA, the entertainment colossus that Japan's Matsushita purchased for $6.1 billion in 1990. Analysts reckoned that the new studio could align itself with MCA for distribution, which is the most complex part of the business. Some even thought that Spielberg, Geffen and Katzenberg might make a run for MCA with Sidney Sheinberg, MCA's president, who gave Spielberg his first break in the movie business. It's common knowledge that the MCA-Matsushita marriage is rocky, with reports of frequent culture clashes between the staid Osaka-based consumer electronics giant and the creative Hollywood executives who run it.
One key to success in the movie business is attracting top directors and actors -- and it's hard to imagine a more powerful magnet for talent than Spielberg, Geffen and Katzenberg. Spielberg made the most-popular and acclaimed movies of 1993: Jurassic Park and Schindler's List; Katzenberg, who just left Disney after a dispute with Chairman Michael Eisner, rejuvenated the studio's animation business, and, as a recording impresario, Geffen has no peer.
Even so, creating a major studio from scratch is a daunting challenge. For starters, the new company's financial needs remain unclear. It's true that the three founders aren't exactly hurting for cash -- Geffen's net worth is estimated to be around $1 billion and Spielberg adds at least $600 million. But insiders estimate that starting a full-fledged studio could cost at least $2 billion. Katzenberg boasted last week that "billions of dollars are now accessible to this entity on some basis," but he didn't divulge details.
If Spielberg, Geffen and Katzenberg can pull it off, theirs will be the first successful studio launch in more than a decade. But Hollywood's history is littered with failed studios started by movie industry luminaries. Twenty-five years ago, Barbra Streisand, Sidney Poitier and Paul Newman formed First Artists Production with similar fanfare, only to watch it fold later. And then there's the story of United Artists. Although the studio survived in one form or another for decades, Chaplin made just a handful of UA films, leading actress Pickford soon retired and celebrated director Griffith left the studio in the mid-1920s. Geffen said last week that he hadn't been as anxious about anything in two decades -- and no one thought he was kidding.
Power players and partners Jeffrey Katzenberg, Steven Spielberg and David Geffen have a script to shake up Hollywood.
JEFFREY KATZENBERG. The former head of Walt Disney Studios was responsible for hits like Aladdin and The Lion King. He is expected to be heavily involved in animation at the new company.
STEVEN SPIELBERG. The filmmaker has delivered a string of huge box-office blockbusters over the years, including E.T., Raiders of the Lost Ark, Schindler's List and Jurassic Park.
DAVID GEFFEN. The billionaire record impresario, investor and producer founded Asylum and Geffen records. He is expected to launch a new record label for the new company.
