In the classic New Yorker cartoon of a few years ago, a billionaire sat behind his desk, boasting, “I own one plane, two yachts, three houses and four politicians.” Today’s version would add, “and I’m also producing five movies.”
The list of billionaires globally has now soared past 1,000, according to the Wall Street Journal, and their impact on both politics and pop culture is fast expanding. At this year’s Cannes Film Festival, there seemed to be more partying plutocrats than there were hungry sales agents.
“The new class of billionaires will change the landscape of Hollywood,” one billionaire-producer told me last week, typically asking not to be quoted. “I think that’s a good thing because, like the moguls of old, they truly care, and want to be involved.”
But do they know what they’re doing? some filmmakers would ask. The billionaire class in show business lately has been bolstered by the likes of Megan Ellison, Gigi Pritzker, Teddy Schwarzman and Jeff Skoll, whose slates are as expansive as their fortunes.
The acquisitiveness of the billionaire class extends to politics as well, with the Koch brothers and Sheldon Adelson allocating billions to their right wing slates and the candidates they support. Indeed a 2014 book titled “Billionaires” warns about the dire impact of the big-spending 1%. Written by Darrell M. West of the Brookings Institution, the book points out that plutocrats worldwide not only “own” candidates but “buy” political office — witness Bidzina Ivanishvili in Georgia, Serge Dassault in France or, most famously, Silvio Berlusconi in Italy. Then there’s Rupert Murdoch, who yearns to own, not the office, but the news.
The resources of the super rich are expanding exponentially. Hedge-fund managers last year took home record paychecks — $1.3 billion for Kenneth C. Griffin, $1.2 billion for James H. Simons and $1.1 billion for Raymond Dalio. Compensation levels for such moguls continue to soar, despite the fact that 2014 marked the sixth consecutive year in which hedge funds fell short of stock market performance — a batting average seemingly fit for the vagueries of movie production.
The new billionaire class clearly enjoys spending its riches. A record $179 million was bid earlier this month for a Picasso — an amount that embarrassed even art dealers. “The ‘hedgies’ are throwing money around as never before, in business as well as the arts,” noted one corporate CEO, pointing to Bill Ackman’s $3.3 billion move on Valeant Phamarceuticals. Daniel Loeb, meanwhile, was more bearish about a media investment, recently selling off his $l billion stake in China’s Alibaba.
Not that long ago, rich investors from outside the industry were treated with disdain by Hollywood. When Ted Field, heir to the Marshall Field fortune, arrived in town in 1982, he was surrounded by vultures peddling bogus deals. (Field hung on — he’s made more than 50 films as well as building a major music business.) Today’s new arrivals quickly surround themselves with top attorneys and agents to insulate themselves from con artists.
Will the billionaire class have a positive impact on the film business? A one-percenter I talked to said he was confident they would smartly fill the gap in midbudget films left open by the major studios’ obsession with tentpoles. “We’re going to end up owning two or three studios,” he predicted.
In disputing this view, an industry veteran pointed out that distribution is still the key to box office power, and that the irrevocable trend in the field is toward consolidation, not democratization. “A billion bucks is still a drop in the bucket in the worldwide entertainment business,” he maintained. “The billionaires may flaunt their money, but they’ll remain the outsiders looking in.”