As an antidote to covering the Disney-Time Warner wars, I spent some time last week talking with a man who’s doing something remarkably retro. He’s starting a new company — no, not a dot-com company, but rather one that will focus its attention on that splendid anachronism, movies. Last week, Joe Roth was busy sewing up his multibillion-dollar financing, finalizing details of his distribution deal with Sony and, equally important, buying properties to produce.
Roth, of course, is a recent emigre from Disney. Had he stayed, he could have been privy to the headline-grabbing conflagration with Time Warner. Some would even argue that Roth is shirking his duty, that every seasoned media executive should be manning the battle lines.
Who would have predicted, after all, that the turf wars would already be reaching this level of homicidal intensity, with Time Warner summarily dropping Disney’s networks from its cable systems even as Disney takes full page ads offering rebates to viewers who buy satellite dishes.
And this is just Act One: wait till the battles over broadband heat up.
At a time when everyone’s attention is focused on closing the pipelines to entertainment, how can a serious executive concern himself with supplying it? Yet Roth is doing just that and, unlike his angst-ridden ex-colleagues, he seems to be enjoying himself.
What’s more, he’s getting a lot of help. A wide range of cash-rich entities from around the world have combined to fill the coffers of his new company beyond Roth’s wildest expectations.
This, too, seems paradoxical. The media monoliths keep whining about the dwindling profit margins in traditional entertainment. Why gamble on a mere 12% return from movies when you can count on a guaranteed loss of hundreds of millions by investing in dot-coms?
Oddly, while the multinationals are bailing on the movie business, there’s a big list of companies around the world eager to get in on the party. If Hollywood wants to spread around the profits from hits like “Sixth Sense” and “The Matrix,” they’ll be glad to get in line.
And Roth surely is one of the beneficiaries. Given his superb track record at Twentieth Century-Fox and Disney, he clearly is seen as a sound investment when it comes to picking winners. And while the studios and other independents carry big overheads, Roth isn’t even going to take fees or salaries, counting instead on an ultimate payoff.
According to one insider, Rupert Murdoch, for whom Roth once worked, is among Roth’s investors. Michael Eisner is not, another reminder that once executives leave Disney, they really leave Disney.
Indeed, though Roth declines comment, the finalists among potential distribution partners were DreamWorks and Sony. DreamWorks clearly could have benefited from Roth’s output, since the company needs to augment its product flow and its talks with Imagine have cooled.
While those privy to the negotiations aren’t talking, it would seem the deal got too rich for DreamWorks. At the same time, it apparently made sense for Howard Stringer, the astute chairman and CEO of Sony in America, not only to add a self-financing entity to his stable but also to stockpile high-profile executive talent against that moment when John Calley’s management finally steps down.
For all these reasons, the dealmaking trek of Roth and his nimble attorney, Skip Brittenham, has been fueling gossip and speculation among the top “suits” in town. Not since the formation of DreamWorks has a multibillion-dollar company come into existence. The very notion of investing in a start-up that’s not a dot-com carries with it an element of daring.
To be sure, Roth’s company will have a dot-com component. John Hegeman, who made his name at Artisan spearheading the “Blair Witch” exercise, is linked with Roth on two projects. Genre pictures in the horror and suspense category will be tested on the Web and those that click will become grist for features.
To this end, Roth sits in his new offices in Santa Monica, reading scripts and buying properties. Last week he closed a deal to buy a new novel by Lorenzo Carcaterra as the basis for a TV miniseries. He’s also starting his first feature, “Tomcats.”
Does all this represent a suitable preoccupation for a skilled media veteran who could be doing more productive things like shutting down people’s cable access or subverting the Time Warner-AOL merger? Wouldn’t his time be better spent cajoling and threatening consumers and politicians and talking darkly about ultimate control of those fabled “broadband pipes?”
Probably so, but Joe Roth is an old-fashioned guy. He still prefers to create things rather than to tear them down — clearly an anachronistic attitude in this moment of media strife.