Hit and Run tells the improbable and often hilarious story of how two Hollywood film packagers went on a campaign to reinvent themselves as studio executives at Sony's expense. Veteran reporters Nancy Griffin and Kim Masters chronicle the rise of Jon Peters, a former hairdresser, seventh-grade dropout, and juvenile delinquent, and his soulless soul mate, Peter Guber and all the sex, drugs, and fistfights along the way. It is the story of the ultimate Hollywood con job and the standard by which every subsequent business blunder has been measured. Hit and Run delivers rock-solid business reporting liberally laced with inside gossip and outrageous scandal plus a new afterword bringing us up to date on the latest fallout from the Guber-Peters legacy.
|Publisher:||Simon & Schuster Audio|
|Edition description:||Abridged, 2 Cassettes|
About the Author
Nancy Griffin is the West Coast Editor of Esquire magazine and the former Deputy Editor of Premiere. She lives in Los Angeles.
Read an Excerpt
"If God didn't want them sheared, He would not have made them sheep." The Magnificent Seven
Walter Yetnikoff freshly out of drug rehab, found himself at the epicenter of a multi-billion-dollar deal.
It was September 1989, and the head of the Sony Corporation's successful music division was playing a pivotal role in the Japanese electronics giant's acquisition of a major Hollywood studio. For Yetnikoff, who expected to run the combined entertainment empire, the purchase would represent the realization of a long-cherished dream. But there was a hangup. If the deal were to "make," in the industry parlance, Sony needed managers to put in charge of the new studio. Under pressure to fill the vacancy, Yetnikoff had an idea: He would call his old friends, film producers Peter Guber and Jon Peters.
A few days after Yetnikoff contacted Guber and Peters, Sony confirmed a swirl of rumors that it was buying Columbia Pictures Entertainment. The cost, $3.4 billion plus $1.6 billion in debt, was considered high for an entertainment company that had been faltering.
The news of the acquisition was not welcomed in the United States. There was an outcry over the sale of a venerated and uniquely American institution to a foreign acquirer. Sony, seen as something of a brash upstart at home, was viewed by many in the United States as part of a rich and invincible army of invaders snapping up American properties, from Rockefeller Center in the East to the rolling resorts of Hawaii. The fact that Sony was willing to meet a rich price only inflamed American anxiety.
Sony expressed its regret over American reaction to the deal. But it wasn't concerned about the criticism that it had paid too much. The company had been mocked for overspending when it bought CBS Records in 1987, and the music division had flourished under Yetnikoff's leadership despite his substance abuse problems. Having made one successful foray into the entertainment world, Sony had every reason to think it could win again in the movie business.
Sony was hardly the first to fall into the Hollywood trap. The movie business has long attracted an array of hopeful outsiders, from insurance companies to purveyors of soft drinks. Many have learned the hard way that Hollywood is a world apart a risky business where the uninitated are routinely shorn. It is a fantasy factory where the insiders are often more skilled at creating illusions about themselves than they are at spinning magic for the big screen.
On paper, Guber and Peters looked like genuine movie moguls. They were high-profile producers who had just made Batman, the largest-grossing film of all time, for Warner Bros. Their names were on such hits as Rain Man and The Color Purple. But the real players knew that Guber and Peters were hardly hands-on filmmakers. When Steven Spielberg made The Color Purple, he had a provision in his contract explicitly barring them from the set. Guber and Peters had visited the set of Rain Man only once, while the production chores were handled by director Barry Levinson's associate, Mark Johnson. When the picture won the Academy Award, Guber and Peters got to neither collect nor keep the Oscar. They happily took credit for the film and had themselves photographed jubilantly brandishing a statuette. But they had to borrow it from writer Barry Morrow, who had won for best screenplay.
Guber and Peters may have seemed an impressive pair, but their greatest gift was for promotion especially self-promotion. What was lacking was any credential or experience that would qualify them to run a major studio. Peters, perennially known as Barbra Streisand's former hairdresser, had never worked as a studio executive. He was a seventh-grade dropout and a reform-school ruffian. Many said he could barely read, and he certainly had never quite learned to control his violent temper. The ponytailed Guber at least had a law degree and he had done a stint as an executive at Columbia in the seventies until he was fired. He subsequently ran a fledgling production company financed by PolyGram. In short order, PolyGram lost $100 million and pulled out of the movie business.
The two men were hardly untalented; they had an eye for material and a genius for packaging and selling their projects. But in an industry where avarice is not uncommon, Guber and Peters distinguished themselves for greed. They were grabbers who snatched up material, credit, and money, leaving a swath of dazed victims in their wake. Their first loyalty was always to themselves. It was an ethic that Japanese executives coming from a tradition of teamwork and long-term commitments to their firms could hardly be expected to grasp.
Hollywood's surprise at Sony's hiring of Guber and Peters turned to stunned disbelief when the industry learned how much Sony had agreed to pay for their services. Warner boss Terry Semel said Guber confided that he wanted to "make more money than anyone in the history of the motion picture industry" and now he had come close. Aside from buying Guber and Peters's money-losing production company for $200 million about 40 percent more than its market value Sony gave the two a rich compensation package that included $2.75 million each in annual salary (excluding hefty annual bonuses), a $50 million bonus pool, and a stake in any increase in the studio's value over the ensuing five years.
As soon as the ink on the deal was dry, Warner slapped Sony with a billion-dollar lawsuit. Guber and Peters had just signed a generous contract with that studio, but Sony had failed to review the agreement when it negotiated with them. Forced into a settlement worth as much as $800 million, Sony found that the expense of hiring Guber and Peters had gone up dramatically. And many in the movie business suspected that Sony's nightmare was only beginning.
If Guber and Peters regretted that Sony had to cough up so much to hire them, they didn't show it by exercising restraint. They spent big from the start, setting off a round of inflation that is still taking a toll on the movie business today. Guber and Peters were about to take Sony on the wildest and most profligate ride that Hollywood had ever seen. For five years, Sony executives in Tokyo and New York would stand by while the studio lost billions and became a symbol for the worst kind of excess in an industry that is hardly known for moderation.
There were box-office bombs, lavish renovations, and extravagant parties against a backdrop of corporate intrigue, expensive firings, and even a call-girl scandal. The ill-advised pairing of a Japanese corporation with a couple of Hollywood's cleverest rogues would culminate, as one insider delicately put it, in "the most public screwing in the history of the business."
Copyright© 1996 by Nancy Griffin and Kim Masters