Hit and Run: How Jon Peters and Peter Guber Took Sony for a Ride in Hollywood
By Nancy Griffin and Kim Masters
(Simon & Schuster; 479 pages; $25)
Soon after taking over Columbia Pictures in 1989, Peter Guber and Jon Peters got down to the business of establishing their importance in Hollywood: They redecorated. The producers particularly wanted to impress the studio's new owner, the Sony Corp. in Tokyo, so they redid their suite in a Japanese motif, importing Japanese workers to put up cedar paneling over a special kind of mud used in Japanese wall construction. Unfortunately, Hollywood humidity melted the mud, and the floors buckled. Guber and Peters fled to new offices shortly thereafter.
The marriage of Japan and Hollywood worked out about the same way. Sony, the electronics giant famous for inventing and marketing products that consumers never knew they wanted, shelled out what Variety reported to be $6 billion for Columbia, a figure that included the cost of severing Guber and Peters' existing contract with Warner. Everyone else in Hollywood was flabbergasted and jealous, while the media dwelled on fears that a cultural treasure was being gobbled up. In the end, though, it was the Japanese who were swallowed whole. Five years after the purchase, Sony had to write off $3.2 billion on its investment, one of the biggest losses in industry history.
I n their book, Hit and Run: How Jon Peters and Peter Guber Took Sony for a Ride in Hollywood, Nancy Griffin and Kim Masters outline the colossal arrogance, excess, and self-delusion that led to the debacle. Their steady stream of malicious, if clumsily written, anecdotes is nothing if not entertaining. Jon Peters, everyone knows, began as Barbra Streisand's hairdresser. Here we learn that he also played a critical role in her sexual awakening--that their marathon fights, followed by sex, freed the diva to experience a new "assertiveness" in bed. At Columbia, however, he was a hot-tempered bully, threatening at one point to break a colleague's jaw. On another occasion, after Streisand confessed that she had never seen an uncircumcised penis, Peters ordered the couple's driver to come over and drop his pants. Peters also sent the corporate jet, laden with flowers, to a model he was courting, and ordered his driver to call ahead to the studio so someone could be poised to open his car door when he arrived.
Guber--a ponytailed lawyer and technology buff who rose through the ranks at Columbia--refused to be interviewed for the book. Perhaps as a result, he comes across even worse than Peters. Most damaging for his future job prospects is the implicit suggestion that he cynically exploited Sony to advance his own movies and sybaritic lifestyle, never caring much about the parent company's long-term interests. With a habit of disappearing during moments of crisis at the studio, Guber came across to friends as ambivalent, at best, about working for the Japanese. "They haven't bought me," he told a fellow studio executive. "They're only renting me for five years." The reader may be most amused by lesser players like Mark Canton, the credit-hungry head of production at Columbia, who pathetically asked the producers of A Few Good Men to thank him publicly at the premiere (they did) and implored Nick Nolte to thank him if he got a Golden Globe award for Prince of Tides (Nolte won, but didn't).
There are plenty of problems with the way Hit and Run is told. It relies too heavily on anonymous sources, and the trade press has begun complaining that some of its stories are bogus. The editor of Variety, for instance, has indignantly denied the authors' assertion that he suppressed publication of financial documents embarrassing to Columbia Pictures. The book's tone also is relentlessly caustic. Can there ever have been a more loathsome collection of charlatans, sycophants, and back-stabbers? Come to think of it, maybe not.
But the book's value lies less in the anecdotes than in what it has to tell us about how one of the biggest entertainment deals went awry at a time when the industry was consolidating everywhere, heading toward domination by a mere six or eight multinational companies--all of which face the headache of competing fiefdoms. The Sony-Columbia deal is a cautionary tale, even though larger lessons are not Griffin and Masters' forte.
One does wish that they had more to say about Sony and Columbia Pictures' misplaced faith in "synergy," since the search for that elusive ideal has run so spectacularly aground in other media deals. It was especially disastrous in the acquisition of MCA Inc. by Sony's electronics rival, Matsushita, which took place about the same time. (Matsushita later sold the majority interest of MCA to Seagram for $5.7 billion.) The MCA sale did not involve the same level of plunder. In both takeovers, though, the Hollywood side thought that by selling, it could tap into a bottomless well of capital with which to buy television networks, record companies, and the like. The Japanese, on the other hand, were hoping for a new source of "software" (i.e., movies and television shows) for their digital televisions, compact discs, and other new products. They counted on the studios to produce it in a reliable way.
L ike Guber, Sony refused to cooperate with the authors of Hit and Run, so we don't get much insight into the thought processes of the Japanese. Did they have a "mole" in the studio or not? How much did they know about what they were getting into? We never find out. But we do get snapshots of the mindset that allowed them to get sucked into the vortex of financial losses. At one point, Norio Ohga, the president of Sony, joined a group of executives from Tokyo to tour the set of Who's the Boss? one of the studio's more successful television shows. All they did was look at the cameras and ask who made the video tape and what kind of lead density it had.
The Japanese may have been confused, but the Americans who supposedly represented their interests seem frankly guilty of misleading them. If anything, Griffin and Masters let these characters off too easily. Both Peter G. Peterson, the prominent New York investment banker, and Michael Ovitz, then-head of Creative Artists Agency, would seem to have been more interested in making money out of the Columbia deal than in warning their client, Sony, about the risks, but the authors are too polite to come right out and say so. Also treated kindly is Michael Schulhof, the miscast head of Sony's American operations (he had no background in the movie business). After backing Guber through a series of disasters, Schulhof eventually admitted that he was unable to get the producer to change his management style. But the authors do not hold Schulhof accountable. They do not ask what changes he had in mind, other than getting Guber to try harder to make better movies at lower cost.
Hit and Run is further undercut by parochialism, especially evident in its constant use of Hollywood jargon. This is a book in which executives never approve a movie; they "greenlight" it. Even beyond the klunky language, the authors fail to transcend their narrow context and explore what management success in the movie business might have entailed. The only clear measure of Guber and Peters' misjudgment is their overspending for antique furniture, yachts, slumber parties at Aspen, and the like, and a numbing succession of box-office bombs. (Actually, some of the bombs were pretty good movies, like Wolf and Remains of the Day, while others, like the much-maligned Last Action Hero with Arnold Schwarzenegger, were failures in an interesting way.)
With their backgrounds--Griffin is deputy editor of Premiere and Masters, a contributing editor for Time and Vanity Fair--the authors should have been able to tell us a little more about why Hollywood movies are so bad. Instead, they have written the story of a failure, albeit one with important consequences for the industry today. Hopefully, people who read the story of Sony's less-than-excellent adventure in Hollywood will look a little more skeptically at the vaporous claims surrounding other megamergers in the communications business. They will have less patience for optimistic talk about synergy and the marriage of content with distribution. As William Goldman put it, when it comes to what works or doesn't in Hollywood, "nobody knows anything."