← Good Bad Billionaire
Good Bad Billionaire
Steven Spielberg: Directing dreams and deals
00:42:51
How Steven Spielberg became the most commercially successful movie director ever
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This BBC podcast is supported by ads outside the uk.
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A 26 year old man crouches on a small fishing boat in the middle of the ocean. It's 1974. 4. He's wearing denim cutoffs, long hair and aviator shades.
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He's peering through a camera, but the swell is bobbing them up and down so it won't stay still for a moment. Cue Bruce.
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He shouts from beneath the water. A ginormous shark's mouth appears with hundreds of sharp teeth. But just as the shark is launching out of the water, it stops crashing down awkwardly.
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It's broken again. The blood drains from our young director's face. That's another day's shoot ruined. He whispers under his breath. I'm never going to work again.
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But he needn't have worried. When it's released, his film will be the highest grossing film ever and no one will want to go in the water again.
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Welcome to Good Bad Billionaire from the BBC World Service. Each episode we pick a billionaire and we find out how they made their money.
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We take them from zero to their first million and then from a million onto A billion.
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My name is Zing Seng and I'm a journalist, author and podcaster.
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And I'm Simon Jack. I'm the BBC's business editor.
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And you'll probably live under a rock if you haven't seen one of these guys films.
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Yeah, the early years of this are very much my era, so I feel very comfortable with this and very excited about it because we're talking about Steven Spielberg, the most commercially successful movie director in history.
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That's right. He is currently worth a cool $7 billion and he turns 80 this year. Congratulations, Stephen. And over a 50 year career, he's made some of the world's most beloved movies. Movies, E.T. indiana Jones, Jurassic park, that's just to name a few.
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I've got to say, my parents took me to see Jaws when I was six years old.
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That strikes me as too early, too young.
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I think basically they couldn't get a babysitter so they just hoped that I'd fall asleep. But I watched the whole thing. Terrified. The bit where the head comes out of the hole in the bottom of the boat, the whole place freaked out. It was quite a moment.
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Were you scared to go into the water after that?
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I think we all were. I mean, tell me somebody who doesn't go, mm.
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It really did give Sharp's a bad
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rep. And before that this idea of a summer blockbuster didn't really exist. I mean, he kind of redefined now to some people, they'll say he ruined cinema with this kind of blockbuster idea.
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And he's actually got a new film coming out this year called Disclosure Day. Have you heard anything about that?
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I have heard nothing about it.
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It's going to be about aliens, but this is a business podcast and we have to talk about business. And actually I was really surprised to learn Steven Spielberg, despite the fact he pleases so many people in the cinemas, is not a people pleaser. He's actually one of the tough negotiators in Hollywood.
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And so we're going to find out who is the man behind some of our favorite films. So let's start. Roll the opening credits.
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Steven Allen Spielberg was born in 1946 in Cincinnati, Ohio, USA, the eldest child with three younger sisters. His mother, Leia, was a former concert pianist, a free spirit who never said no to Stephen. But his father, Arnold, was a very different kind of man. He was one of the first computer engineers. He was sto, he was a workaholic. And his job meant that the family moved around quite a lot. So by 3 he was in New Jersey. By age 10, he was in the newly built suburb of Phoenix, Arizona.
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And Steven Spielberg described himself as a fearful kid. And the first film he ever saw was the Greatest show on Earth. He was terrified by the movie's train crash. So age 12, he recreated it repeatedly with his own model trains. Then he got the idea to film it with his dad's little 8 millimeter movie camera so he could watch the film over and over again. He said, I was able to, I think intuitively wrest back control of my fear. It would calm me down. That's super interesting.
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That's a really interesting insight into a director's psychology because I think you do have to be a bit of a control freak to be a movie director. Well, around the same time he became a Boy Scout. He made it to Eagle Scout. That's the highest rank attainable. Only about 4% of scouts ever make it there. And his first film was a movie he made at the age of 12 to fulfill the photography merit badge. It was a three minute Western called the Last Gunfight. And his fellow Scouts went absolutely bananas for the movie. The applause, the laughter, it made him feel like he really wanted to do that again, to please again.
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And at 13, he made a 40 minute war film called Escape to Nowhere with his classmates as actors. His father had been a radio operator on a bomber plane during World War II and was responsible for Stephen's lifelong interest in war. You know, we all know Saving Private Ryan, right? And he had a lot of stories from his dad, even watched his father's friends break down in tears. So that thing about drama and emotion and that film won first prize in a statewide competition. And actually you can watch that on YouTube.
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As a teenager, Stephen made over a dozen short films using his dad's camera. He paid for film with the money he made through small manual jobs like painting citrus trees. And by 17, he'd written, directed and edited his first feature length film called Firelight, a sci fi that was kind of a dry run for what would later become Close Encounters of the Third Kind. And that's the iconic, what is it? A tone that the aliens make.
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We sent it into space for the aliens to see whether we could actually communicate with them.
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Well, Stephen composed a score for Firelight himself on the clarinet, and his mum then created sheet music which was then performed by the high school marching band. And the film even had its own premiere. He got it into its local cinema in Phoenix. His dad hired it for the evening and he sold 500 tickets at a dollar each. But the profit only just about covered his costs.
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Now, years later, Tom Han would later describe Stephen's personality as the AV audio visual guy in school. You know, the guy who brings the movie projectors round, knows how to thread the film onto them. Not normally the most popular kid in class. And Stephen has said himself, I was so sort of ostracized in that last year of high school. The camera became my defensive weapon. And his outsider status ran deeper. His family was Jewish, although not strict in their practice. And in suburban Phoenix. This made Stephen the target of some anti Semitic bullying. And because of this, he had quite a complicated relationship with his Judaism. He said, I wanted to be like everyone else. I wanted to be a gentile, like non Jewish with the same intensity that I wanted to be a filmmaker.
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And this would make Stephen feel like an outsider for the rest of his life. However, his sister Anne has said that despite being a nerd, he had more friends than he remembers. I don't think he realized the crushes that some girls had on him. He really had an incredible personality. He could make people do things. He made everything he was going to do sound like you wished you were part of it.
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That's such an brilliant quality to have, isn't it? Because doing a movie you'll have to lead a huge team of multidisciplinary people. But Stephen's parents divorced in 1965. That was the year he was graduating from high school. He wasn't a high achieving student. He was rejected twice from the University of Southern California's film school, the most prestigious film program in Hollywood. Instead, he studied film production at California State College, Long Beach.
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There's a story that Stephen has told many times and every time he tells it it's slightly different. As a university student, Stephen snuck off during a Universal Studios tour by hiding in a bathroom, then spent the day wandering around the lot watching productions be made. After impressing a guy called Chuck Silvers, he was given a three day pass. On the fourth day, he says he dressed in a suit and the security guard waved him in. And that summer he hung out every day and became an unofficial apprentice at Universal Studios, which he described as a film school inside a studio. But in reality, when he was 16, his dad had pulled some strings and he knew someone at Universal and he arranged that first visit with Chuck. Stephen and Chuck stayed in touch. And Stephen came back during summers in college.
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Yeah.
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So boy, he knows how to spin a yarn, doesn't he?
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Yeah, even about himself. Meanwhile, he was getting poor grades at university. He dropped out after two years. Now I've lost count of the number of our billionaires who dropped out of college.
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But crucially, he didn't drop out of Stanford.
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No, he didn't. Instead, in 1968, he made a short film called Amblin, a 24 minute love story. Amblin is a word you might recognize. That's Steven Spielberg's own brand.
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Exactly.
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He got financing from a friend, the aspiring producer Dennis Hoffman, for $25,000 and 5% of the profits.
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And that film was screened at the Atlanta Film Festival where it impressed executives at Universal, a massive film studio. Sid Sheinberg, then the head of Universal's television department, signed Stephen to a seven year contract as a TV director. Now bear in mind, Stephen at this point is just 21 years old, making the youngest director ever to be signed to a long term contract by a major Hollywood studio. And you know, it's worth noting that this was at a time when being a young director was not really necessarily considered a good thing.
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Yeah, but he's doing a job of work. Over the next few years he directed episodes of TV shows. He was paid $275 a week, including, interesting fact, pub quiz fact. This one he directed the pilot episode of Columbo. I can see that definitely being a pub quiz fact.
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That's a good one.
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Then in 1971, he made a TV movie, a thriller called J. Jewel. And it did so well that Universal decided to give it a theatrical release like put it in cinemas. And it was so good, I agree with that, that at a party thrown by Francis Ford Coppola, a young George Lucas hid in a bedroom to watch it. At the first commercial break, he ran downstairs saying, Francis, you got to come and see this movie. This guy is really good.
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What I wouldn't give to be at that party. Imagine you're just wandering around trying to find the bathroom and then you come across George Lucas.
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Well worth a watch though. It's brilliant.
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What is it about?
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It's about a truck which develops a monstrous personality. So this guy's driving along in his car and he just overtakes this truck and they kind of honk at each other and he doesn't think any more of it. And this truck then becomes to hunt him down, trying to kill him basically. And it's gripping. And here's an interesting fact at the end, the truck goes off the edge of a cliff and it makes this horrible noise. And you kind of see this kind of spirit coming out of the truck, like it's been possessed by something. They used exactly the same noise When Jaws, the shark is killed at the end of Jaws.
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And now that is another great pub quiz fact. I'm going to remember that one. Well, the success of Duo convinced two producers, Richard Zanuck and David Brown, to let Stephen direct his first theatrical feature film at the age of just 24, the Sugarland Express, starring Goldie Hawn. Now, the film didn't do that well, but more importantly, he impressed its producers. And Richard said, the first shot, it was the most elaborate thing I've ever seen in my life. I knew right then and there that this guy probably knew more at that age about the mechanics of working out a shot than anybody alive at the time. High praise. So Richard and David immediately hired Stephen to direct another film, this time about a shark.
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Ah. This film, of course, was Jaws. It was incredibly difficult to make. Stephen was 26 at this time. He described it as a living nightmare. Two of the lead actors in it, Robert Shaw and Richard Dreyfus, had a massive feud. And of course, the biggest issue was the ocean, which was nearly impossible to film on. They had three mechanical sharks. They cost quarter of a million dollars to build and they were nicknamed Bruce, but they hadn't been tested in salt water. So in the sea they broke down constantly. This caused huge delays. The production ran way behind schedule, went massively over the original $4 million budget and cost $12 million during filming.
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Stephen thought Jaws would be the end of his career. Universal, Sid Sheidenberg sat him down and said, look, this is a disaster. I don't know what to do, except we could pull the plug right now. We could take our losses. I'm gonna let you make the call, but. And this is a very crucial. But Stephen decided to continue.
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This feels like one of those sliding doors moments that really determined the entire future of our billionaires and also the
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movie industry in a way.
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Yeah. I mean, necessity, often the mother of invention. Because the mechanical sharks really worked, he was forced to turn the shark into something like an unseen presence. Like a bit like, you know, the alien in Aliens. Instead, he used clever camera angles. And there's a legendary editor called Verna Fields, who basically was tasked with kind of keeping the rather unconvincing mechanical shark out of the shot. And it was that and John Williams amazing score that made it this kind of really menacing, unseen presence. Jaws is not just a sort of shark film. I think Jaws is one of the top five films of any kind ever made.
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Of all time.
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Of all time.
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What makes it so good, in your opinion?
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Because it's so taut. The film Finished film was not the monster movie he'd intended. Instead it became a suspense driven thriller, more like a kind of Hitchcock type film. And it became an unimaginable success. It was released in 1975, became the highest grossing film of all time up to that point ever. It brought in $480 million at the box office. Stephen's earnings, though a little more modest. His fee for directing would probably have only been in the tens of thousands of dollars.
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But more importantly, Stephen's agent renegotiated his deal just before the film opened and got Stephen 5 the profits, known in the business as points. Now points are usually shares of net profit rather than gross revenue. And often they're paid only after investors get back their costs. Remember this because it will become important later. So Stephen was only able to collect about $3 million. But this is what made him a millionaire. And for a 28 year old in 1975, this made him Hollywood rich.
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Yeah, we're going to come back to that. Gross and net on movies, massively important for this industry a little bit later. But let us go from million to a billion, Basically. Jaws changed Hollywood. It was the first ever summer blockbuster. From then on, studios wanted these big budget films every summer so they could spend a ton of money marketing them wide distribution rather than tens of millions at the box office. They now were hoping to take hundreds of millions. And, and importantly for Stephen, Jaws success established him as Hollywood's most valuable young director. Universal Studios offered him Jaws too, but he turned it down. A wise move in my view.
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Instead, he made his next movie with Columbia Pictures. And I have to confess, I haven't actually watched Stephen's second film, which was Close Encounters of a Third Kind.
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What, you haven't seen it? No, and it's absolutely amazing.
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And it's funny because I love all the films and TV shows that came after it. X Files, you know, things like that that were clearly inspired by this Alien film.
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Funny story, because Richard Dreyfus kind of knew that Steven Spielberg was going to be a big deal. He kind of felt it. And so during the filming of Jaws, he basically spent the entire time trying to persuade Steven Spielberg to cast him in the next movie, which he duly did.
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Dreyfus clearly had a good intuition about him. Again, he made a massive hit on a 20 million budget. The film grossed over the $300 million worldwide. That is huge. He'd negotiated 17.5% of the net profit, but this only worked out at around 5 million after the studio recouped their costs. And it actually Saved Columbia, who had been deep in debt and were facing bankruptcy.
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This is a fascinating story. George Lucas, director of Star wars, by the way we've covered him on Good Bad Billionaire actually took some of his profits from that film. George had visited Stephen while he was filming Close Encounters. And as I say, George was making a little called Star wars at the time. He was nervous it wasn't going to be a hit. And on the Close Encounter set, comparing the movies, George felt even more concerned. I don't like the look of what this guy's doing. He's too good. So George asked to trade points with Stephen. George would give him 2 1/2% of Star wars if Steven gave him 2 1/2% of Close Encounters. And Steven said, sure, I'll gamble with that. Great. And even though Close Encounters were hit, it was nothing like the monster that was Star wars, which grossed $775 million. So Stephen did pretty well off that little bet.
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I can't imagine the conversation that Stephen, George and their lawyers and agents must have had when these two guys call their teams up to be like, hey, we made a little gamble. We made a bet. It's pretty fun. Exactly. Lots of hand wringing, I think.
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Well, I guess no one cared until it became a monster hit. Right.
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So this is very true. And if you listen to the episode about George Lucas, you'll know that the idea of a space opera was not exactly one that went down particularly well in Hollywood when it was first mooted. Well, we're back to Stephen, and after a brief dud, the film 1941, he has two more ginormous creative and commercial hits. First of all, Raiders of the Lost Ark, Indiana Jones, of course, this is the collaboration he did with George Lucas, which grossed $354 million. And that film was made with Paramount, where Steven's directing fee was a million dollars. But crucially, the deal guaranteed him gross points. Now, another little explainer. Net points means you're paid from the money left after all the costs are deducted. So studios can deduct production costs, it can deduct marketing, distribution, internal costs, et cetera, et cetera. The list goes on. So getting net points often produces very little income for a director.
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Yeah, it's very interesting, this, because often, for lots of reasons, including tax, lots of films don't end up making much of a net profit. Whereas gross points means you're paid from the gross revenue, I. E. The total money earned before most deductions. It's very hard to manipulate. You earn money as soon as the film starts making money. Gross points are incredibly valuable and they're not given away easily by the studios. Stephen was one of the first directors to get gross points. According to George, all the other studios got very upset with Paramount for making that deal.
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If you want a good insight into how Hollywood studios work, there's a very fun television show called the Studio, starring Seth Rogen as a sort of hapless movie executive. That is actually quite a good insight into the way that studios try and exert control and power over filmmakers to lesser and greater degrees. Yeah, well, Stephen in real life is actually an infamously hard negotiator. The editor in chief of Variety has said it's as tough to make a deal with him as anyone in history. The New Yorkers described him as an unusually tough businessman, a ferocious, canny, obsessively secret negotiator, and not a terribly generous one. If you remember his own sister Ann, she's a filmmaker, too. She said, he's a very tough bargainer. He's a hard man to deal with on those things. There are times I'd be tempted to take things other places where I know I would get a better deal. So he doesn't even go easy on his own sister.
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And it's quite interesting that, because sometimes you think, oh, the creative, whatever. They don't care about the money side of it. He clearly does. And for his next film, ET Gross Points, which we just discussed, became incredibly lucrative because it became the highest grossing film ever again, at the time taking nearly $800 million, beating Star Wars. And for ET he was back with Universal. But this time he negotiated a new clause in his contract to control the release of the VHS version of the movie. Remember VHS's? And split the profit. When E.T. went to video in 1988, the sales added an extra $70 million to his earnings. Now, E.T. i'm sure you've seen the film was actually influenced by his parents divorce. And the character was actually based on an imaginary friend he created. He said, this is a friend who could be the brother I never had and a father I didn't feel I had anymore.
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Come on, I think you can do the ET Voice. I bet you can do the ET Voice.
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Can I do it? Hang on.
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Cast your mind Back to the E.T.
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phone him. I can't know.
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That is good. Although you've given ET A British accent.
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Have I?
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Which I'm not sure is strictly.
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Okay, well, listen, I'm not that. You know, I know that I'm going to be made fun of here, but you know, I'm up for it. It's fine. I don't mind being.
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Well, I think it's quite rare. I think it's quite sweet that he based ET on his parents divorce. He's clearly quite a sensitive guy too.
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Yeah, he's sensitive. There's a slight. I mean, if there's one criticism of him, something a little saccharine some people would say about it, and that's something
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that his films have also been criticized for by film critics, that they veer on sentimentality. They're very sweet, aren't they? So at this point, Stephen was also becoming more than just a director. Maybe he was inspired by his good friend George Lucas, but he also set up his own production company named Amblin. After that short film we discussed. Stephen was now the boss with about 50 staff. And through Amblin, he added the revenue stream of executive producer for major films, including Gremlins, Back to the Future and who Framed Roger Rabbit, which came out in 1988. An underrated classic in my eyes.
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Ah, yes. Jessica Rabbit was big heartthrob to me in my youth.
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Exactly. And also, you just don't get real people acting alongside animated cartoons that much anymore.
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It was Bob Hoskins, wasn't it, who played alongside all the different characters?
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Yes, Bob Hoskins plays the private detective.
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That's right.
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Well, Amblin also got Stephen into TV, which included cartoons and the incredibly successful drama ER, which ran for 331 episodes. Another pub trivia question, I think.
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Yeah.
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Well, by the mid-1980s, Stephen increasingly refused a traditional director's fee. Instead, he was betting on the success of his films by negotiating gross points. He said, I'm a gambler. I love gambling to see what's going to make it and what is not. According to Forbes, his typical movie deals worked something like this. The studio absorbs all costs. Once the movie starts to bring in revenue, he generally gets a 5% cut if he produced the film and 15% if he directed it. He makes money even if the film loses. Overall, his gross points often rise, say to 30% until the film breaks even. At that point, he and the studio split the profits. 50. 50.
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That's a hell of a deal.
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Deeply unconventional for Hollywood.
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Now we're going to skip over the next few films, although we should pause briefly maybe on the second Indiana Jones movie, because it got him his second wife. His first wife, Amy Irving, was an actress he met in 1976 during an audition for Close Encounters. Their relationship has been described as tempestuous and troubled. Over the next decade, they broke up, got back together, eventually married in 1985 and had a son together.
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But in 1989, the couple divorced, and their settlement is one of the most expensive in history, estimated at $100 million. His second wife, Kate Capshall, was the actress in Indiana Jones and the Temple of Doom. If you ever wondered what happened to her. They married in 1991 after she converted to Judaism for him, and they'd go on to have five children together, two of whom are African American and adopted. In an interview, she said, we were watching Indiana Jones and the Temple of Doom the other night on television. I turned to Stephen and I said, what happened to my career after that movie? He said, you weren't supposed to have a career. You were supposed to be with me. And it's true, my focus was on Stephen and a large family. I'm not sure I would personally react that well, if that's what my husband told me about my own career. But, you know, clearly they're very happy together.
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Yeah. Well, Stephen credits Kate's conversion to Judaism as bringing himself back to Judaism. And soon after, he connected creatively with his faith by directing the Holocaust film 1993's Schindler's List. While filming Schindler's List, Stephen said that he cried all the time. It was, in his words, the most personal film I've ever made because it was something I was so ashamed of. It's a three hour black and white movie about the Holocaust. It's a hard watch. Stephen was convinced it would lose money. Even the budget was just $22 million. But needn't have worried. The film grossed over $320 million worldwide.
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However, he actually gave away his profits for the movie, saying, I was unwilling to keep it because it was blood money. In fact, Schindler's List was the film that got him into philanthropy. After the film, he set up two foundations. One gives grants to Holocaust and Jewish continuity projects, and the other records testimonies from Holocaust survivors. However, he said he mostly gives anonymously because of his faith. He said, a rabbi sat me down and told me, you know, if you put your name on everything, it goes unrecognized by God. I said, really? So 80% of what I give is anonymous, and the other 20% is only where my name can help attract other monies, which is a really interesting approach to philanthropy.
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Yeah, no, obviously, he can be a mustering point for other donors, can't he? If he discloses that he's one. Well, Shinder's List Won Stephen his first Oscar awards for Best Director and Best Picture. And that brought him a new kind of credibility. He was a hit make, but hadn't been really recognized creatively. But of course, he wasn't done with blockbusters quite yet. The same year that Schindler's List came out, something quite different. Jurassic Park. Now, Jurassic park became the highest grossing film ever at the time. Seem to be saying that quite a lot as we go through this.
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It's a common refrain in the film.
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Basically, he keeps breaking his own records. And it grossed over $914 million worldwide. Stephen and Universal were essentially 50, 50 partners on this film. So he was getting money as both a director and as a producer through AMB. Altogether, he made about $250 million from the film, by far the most an individual had ever made from a movie or any other unit of entertainment that we can find at that time.
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Well, Jurassic park also made him money. Long after the popcorn had been swept off the cinema floors and people had been ushered out. Before the film, Universal had been worried about Stephen being poached by Time Warner, another studio. So to keep Steven sweet, his old mentor, Sid Sheinberg, devised one of the most unusual deals in Hollywood. Stephen has a habit of racking these up. He would become, and this is so fun, creative consultant for Universal Studios theme parks. And his job was helping to design elements of the parks as well as the rides. I mean, I'm sorry, this sounds like a dream job. In exchange, he would get 2% of all park ticket revenue, plus a portion of park concession receipts. And now this. This really is a phenomenal deal. Stephen takes home about $30 million every single year. And he signed that deal in perpetuity, so he gets it forever.
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I wish someone would offer me a deal where I get $30 million a year for the rest of my life.
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Imagine, every single ticket you buy to Universal Studios, a tiny bit of that goes into Steven Spielberg's pockets.
- [28:09]
A
Gosh. So, you know, given all of that, it's really not surprising that in 1994, Forbes declared Stephen a billionaire, age 46. This made him the first officially listed entertainment billionaire. And what's incredible about this, compared to many of our billionaires, is how much cash he had. Many of our billionaires get that status based on the value of their companies, what they own in stock, and what is valued on the stock market. But it was estimated that Stephen had more than $600 million in sort of hard assets, cash, basically. The remainder was the value of his wholly owned Amblin Entertainment.
- [28:43]
D
It's a good thing. Stephen had a lot of cash floating around because he's about to get into one of the most expensive businesses in the industry. Owning his own stud.
- [29:06]
B
Ever invest in something that seemed incredible at first but didn't live up to the hype? Like those five dollar roses at a gas station? Or a secondhand piece of technology that breaks in the first 10 minutes? Marketers know that feeling. We optimize for the numbers that look great, impressions reach and reacts. But when they don't show revenue, well, that's a not so great conversation with the CFO. LinkedIn has a word for bullspend. Now you can invest in what looks good to your CFO. LinkedIn Ads generates the highest roas of all major ad networks. You'll reach the right buyers because you can target by company, industry, job title and more. So cut the bull. Spend advertise on LinkedIn, the network that works for you. Spend $250 on your first campaign on LinkedIn ads and get a 250 credit for the next one. Just go to LinkedIn.com Broadcast that's LinkedIn.com Broadcast Terms and Conditions apply.
- [30:10]
C
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- [31:39]
A
Decisions made in Washington can affect your portfolio every day. But what policy changes should investors be watching? Washington Wise is an original podcast from Charles Schwab that unpacks the stories making news in Washington right now and how they may affect your finances and portfolio. Listen@schwab.com washingtonwise that's schwab.com.
- [32:14]
D
So let's take Steven Spielberg beyond a billion. After Schindler's List came out, he took a three year break from directing to found a company called DreamWorks SKG. The S stands for Spielberg, the K for ex Disney chair Jeffrey Katzenberg, and the G for music mogul David Geffen. And we've already covered some of this story, by the way, in our David geffen episode, the three men put in their own money that he $3.3 million each, plus 2 billion of other people's money, including half a billion from Microsoft co founder Paul Allen.
- [32:42]
A
I remember this being founded at the time. It was like a big huge deal. It was kind of like money and the creative industries coming together. And of course they had that really cool bit of imagery of the boy in the moon with the little fishing rod which I thought summed up quite a lot of felt very Spielbergy, didn't it?
- [33:00]
D
Exactly.
- [33:01]
A
But starting a studio is a much bigger gamble than a production company. This is the first new big studio in a gener generation. The other ones were all established for World War II during that golden age of Hollywood. MGM, all those kind of people. Those studios had vast back catalogs and the revenue from that keeps them afloat when they make inevitable multi million dollar flops. All studios make flops. It's one of those weird businesses. You make 10 films and you hope that the blockbuster that does really well kind of helps you pay for all the duds that you make. But if you've got this kind of revenue coming in from, you know, your back catalog, that can cushion all of that. So Stephen up this point had been relatively flop free, had a few duds, but he'd never really made a film that had lost money. Steven said, I threw myself over the barbed wire with Geoffrey and David so we could have what we wanted.
- [33:50]
D
The three founders took on different roles at DreamWorks. As an exec at another studio put it, Stephen is still the idea man. Although no one ever says it. Jeffrey's doing all the grunt work while Geffen sort of lurks in the wings and lobs a ball in OR two when he's inspired to do so. Quite scathing of David Geffen there, but with so much skin in the game. You'd assume that Steven would make films exclusively for DreamWorks. But no. The first film he directed after setting up DreamWorks was the Jurassic park sequel, the Lost World, which was for Universal. It was another box office smash, although less well received by critics.
- [34:24]
A
I mean, the first Jurassic park, there were some sort of jaw dropping moments when you first saw the dinosaurs. It was kind of, wow, these days it's kind of meh. More dinosaurs.
- [34:32]
D
Yeah, I know. What else are they gonna throw at us? Aliens.
- [34:35]
A
Yeah. Well, two years after initially forming, DreamWorks still had no live action films in production, which was a serious concern for the people who backed them. So DreamWorks pushed a film called the Peacemaker to be released in 1997. It wasn't directed by Stephen, wasn't well received by critics. So Stephen, I think, in a way of remedial action, immediately shot two films for DreamWorks, meaning he shot three films in just 12 months, including Jurassic park, remember? So they released Stephen's historical drama Amistad. The critics didn't mind. It did okay with them, but it lost money. And Stephen explains, I kind of dried it out. It became too much of a history lesson. Not enough of his sugary sentimentality, maybe his Hollywood gloss. Yeah.
- [35:16]
D
But by the next year, 1998, they really got into the swing of things. His DreamWorks film, Saving Private Ryan was a commercial and critical hit. He said he made it for his dad, whom he'd reconnected with in the years before. But even Saving Private Ryan was a co production with Paramount. And as Jeffrey Katzenberg put it, having half of something Steven's excited about is better than having none.
- [35:37]
A
That's a great quote. It's difficult to know how much time Spielberg could have dedicated to running a studio. In nine years, for example, he directed nine films. Dreamwork released a number of hits from other directors, but for every hit, there was at least one flop. And in fact, DreamWorks was on the verge of bankruptcy several times, and the studio began to sort of fall apart. Its animation division became a separate public company run by Jeffrey Katzenberg, for example.
- [36:02]
D
And in 2006, Steven and his partners sold DreamWorks to Viacom, this parent company of Paramount, for $1.6 billion, which included about 400 million of DreamWorks debt. Steven stayed on as a key creative partner, but it wasn't a happy marriage Reporting at the time noted simmering tensions, backbiting and internal power plays between the co founders and the new owner. In other words, just another day in Hollywood. Yeah, but two years after the deal, Paramount was released Stephen from his contract with financing from the Indian conglomerate Reliance, owned by the Embamis, another one of our billionaires. He relaunched DreamWorks as an independent production company.
- [36:40]
A
So he continued directing high profile films including Lincoln Bridge of Spies and the Fablemans, which was semi autobiographical and not much of a film if you ask me. I'm allowed to be a critic here. I thought it was terrible. Anyway, to this day, Stephen remains the highest grossing director of all time. His films have grossed over 10, $10 billion at the box office. But the industry has changed a lot in the 50 years since he started out. There is no longer a sure thing at the box office and even Steven is forced to play by the new rules.
- [37:10]
D
But don't worry about him too much because his bank balance is more than okay. For serving as executive producer on 2015's reboot Jurassic World, he said to have made more money than Universal itself. The film grossed a billion dollars and there's been three sequels since. Since. And in 2017, he had the opportunity to be bought out of his theme park deal for the huge lump sum of between half a billion and a billion dollars. But Stephen chose to keep that deal, leaving him with one of the most lucrative ongoing revenue streams in Hollywood. And maybe the only one that involves roller coasters.
- [37:43]
A
Yeah, I'm just trying to do the numbers on that. So it's $30 million a year in perpetuity, probably inflation links, it goes up with inflation. So half a billion is 500 million. So basically he thinks he's going to live at least 15 years on from. From then because otherwise the numbers wouldn't work out. You should have taken them the money anyway. God, if you, if Steven Spielberg, if you're listening, was that what went through your mind?
- [38:06]
D
Or maybe he's got himself a nice little cryogenic chamber and he's planning to live forever.
- [38:10]
A
Oh, yes, of course. Well, maybe it becomes part of his estate and therefore his family can keep owning it in perpetuity. Right, so it's in perpetuity.
- [38:19]
D
I'm sure there are a lot of lawyers having very serious arguments about this as we speak.
- [38:23]
A
Anyway, enough of that back of the fag packet financial calculations on Steven Spielberg's behalf. It's now time to score him on our billionaire categories, which are wealth, controversy, power and legacy. So we'll start with wealth.
- [38:39]
D
Well, he's currently worth 7 billion. And that is a lot of money. But that only puts him at 540th in the billionaire stakes at out of almost 4,000 billionaires in the world.
- [38:50]
A
And David Geffen said, like most very successful, very creative human beings, he likes the idea of getting paid a lot of money, But I wouldn't say it's the focus of his interests.
- [38:59]
D
I agree with David Geffen. Obviously he's a hard negotiator, but he probably works very hard as a director. I mean, he made those three films in a year. So I wonder if money's not the main interest that he has. He just loves movies.
- [39:13]
A
I think it's a bit more like Warren Buffett. Money was a way of keeping score of how right he is. And we heard from Spielberg earlier. I like to gamble. I like to see whether things pay off. You know, how his schoolmates loved his film. Back in, you know, back in class, they applauded him. So the money is a kind of proxy for approval, love, approbation, validation.
- [39:35]
D
Some movie directors get it from film critics and reviews. I think Spielberg genuinely gets it from how well his films do at the box office.
- [39:43]
A
Certainly one of the richest people in entertainment of all time. So wealth. I'm gonna give him a. I'm gonna give him a six.
- [39:51]
D
Yeah, I think I would give him a six. Or seven out of ten, maybe. Seven out of ten.
- [39:55]
A
Yeah.
- [39:55]
D
Just because being a showbiz billionaire, I mean, there's something so glamorous about that. Right? You're not making your billions laying bricks. Apologies to bricklayers. But making movies, that is real glitz and glamour.
- [40:07]
A
Controversy, all pretty minor.
- [40:09]
D
Yeah. I mean, he's been described as a tough businessman and a ferocious, canny negotiator. Not terribly generous when it comes to the boardroom. I mean, his own sister found him really hard to do deals.
- [40:21]
A
There's a very interesting book called Easy Riders, Raging Bulls. And in that it's about the history of Hollywood around this time, before and after the big blockbusters. And kind of posits the idea that some critics have, which is that this creation of Hollywood's franchise driven blockbuster culture left little room for sort of creativity, the depth of cinema of the 1970s, before jaws came along. If you remember, people talk about sort of Dog Day Afternoon and Serpico and Taxi Driver, French Connection, Taxi Driver and all those kind of really gritt, creative films. And then it's like, wham, you got the blockbuster. And we've never kind of recovered from that. That's the criticism of him.
- [40:58]
D
Sue me. But I love a good blockbuster. I know I should say that. You know, yes, I wish all cinema was art house cinema and everything should be more like Dog Day Afternoon. But, God, when you go into a cinema and you watch something like, say, Jurassic park or ET for the first time, I mean, I remember watching Jurassic park on television off of vhs. And even then I found it terrifying and it completely changed me. Very few films get to do that. I'm not a blockbuster hater, I have to say.
- [41:27]
A
No, Fair enough. But he has got some criticism for. When you bring that kind of Hollywood treatment, the happy ending, you bring that approach to really tough issues. For example, Schindler's List, he received criticism because the hero was a redeemed Nazi. And also Amistad, David Geffen, even one of his business partners said it was less about slavery than about white people saving black people. Sort of white, you know, white savior complex.
- [41:52]
D
Right.
- [41:52]
A
And in Indiana Jones, the baddies are. They are pretty cartoon characteristics.
- [41:56]
D
They are pretty bad. Yeah. I mean, even when I was a kid and I remember watching Indiana Jones and I saw those baddies, I was like, something doesn't feel right here. But, you know, Steven Spielberg has also said, I've never made a movie that I consider immoral. I've never made a film that I could say, you know, I wish I hadn't made that picture because it led people astray. And I'm real proud of that. You know, he could have done much worse, I think.
- [42:18]
A
I think, you know, we've had ruthless business people on here. He doesn't seem to fit that category. For me, if he puts a bit of sugar coating on some tough issues just to make a movie successful, yes. I think culturally that can be actually much more in these days than it would have been 1970s, that can be a problem. But I think he scores low in controversy. For me, I'm going to give him a two.
- [42:37]
B
Two?
- [42:38]
A
Even a one.
- [42:40]
D
I think I would give him a two out of ten.
- [42:42]
A
Okay, two for you, one for me. So power, what kind of power do they wield both in their industry and in the world?
- [42:50]
D
Well, interestingly, Spielberg is close friends with President Bill Clinton, so he was even the co producer of the big extravaganza to celebrate the millennium at the White House. But, you know, it's been a long time since Clinton was president.
- [43:03]
A
Yeah, I mean, he's still probably in terms of movies, he's still the number one name in directing, I would say, in the world. If you were to call up the current president of The White House and say, I'm thinking of making a little film. I wonder if you'd like a part in it. I think the answer would be yes.
- [43:16]
D
Very true. I think most people in the White House would still say yes to Steven Spielberg on the line.
- [43:22]
A
If this or any administration. I'm gonna give him eight for power.
- [43:26]
D
I think it'll be really interesting to see what his new blockbuster, Disclosure Day, does and whether it's a success at the box office, because I think that will be a real test of his power. Will the Spielberg name still bring people out into cinemas?
- [43:37]
A
Has he still got the magic? Does he still muster that kind of excitement? Excitement. So I'm gonna give him eight for power.
- [43:43]
D
I think I'm gonna give him a seven. But he could add an eight depending on the box office. For Disclosure Day.
- [43:47]
A
It's an extra point. Gross point for us.
- [43:50]
D
Exactly.
- [43:51]
A
Okay. And then Legacy. I mean, he's a legend, isn't he? I mean, for example, if you were to say to someone who's got their camera phone out and they said, no, you stand over there, you would probably say, who do you think you are, Steven Spielberg? Do you mean it's, you know, it's got that kind of name recognition.
- [44:06]
D
Whereas I don't think you would say, who do you think you are, George? Lucy?
- [44:09]
A
I don't think you would. Would you? Or you wouldn't say, who do you think you are, Paul Thomas Anderson, great as he is, Spielberg is the name, isn't it?
- [44:16]
D
I think it also helps that he's made such a huge variety of films. George Lucas will always be synonymous with Star Wars.
- [44:22]
A
He only made six movies.
- [44:23]
D
Whereas Spielberg's filmography is massive. And it does everything from historical epic to science fiction to essentially. I mean, ET Is basically a kind of children's film, really. It's about a child and his imaginary friend.
- [44:38]
A
Yeah. And arguably he shaped Hollywood for better or worse. You know, some people would say more than any other director, and this is important. I think you can argue that he shaped the West's popular imagination. I mean, he basically. His movies are seen around the world, and that is most of the world's version of America.
- [44:56]
D
That's so true. And it's the reason why television shows like Stranger Things have this almost nostalgic appeal, because they. They hark back to the Spielberg era.
- [45:06]
A
Yeah, they do. Yeah. Legacy. I'm 10 out of 10.
- [45:10]
D
There's a really interesting fact here. Close Encounters of the Third Kind was so successful that the number of alien sightings actually jumped after the film yeah. So people went and watched the film and then they genuinely started thinking they saw UFOs in the sky.
- [45:23]
A
People started wanting to see UFOs in the sky. That's the thing. I mean, I remember I must have been nine years old. I think when Close Encounters came, I would go and sit in the garden and look out and say, pick me, pick me. You know that's a modern phenomenon, right? Pick me, pick me. That's what I wanted the aliens to do.
- [45:41]
D
Well, as the X Files put it, another series inspired by Spielberg. I want to believe. Yeah, it's gotta be 10 out of 10 for Spielberg.
- [45:48]
A
100%. 10 out of 10.
- [45:50]
D
Well, is Steven Spielberg good, bad or just another billionaire? What do you think?
- [45:55]
A
Yes. Email good, bad, billionaire. That's all one word. Bc.com or drop us a text or WhatsApp to 001-917-686-1176 and tell us what you think.
- [46:08]
D
And don't forget to include your name as we may read out your message on a future episode.
- [46:12]
A
And we'd like to thank Keaton and Anya for recommending Steven Spielberg. They asked us to cover him. In their email it says Dear Simon, Zing and the whole team. I wanted to thank you for your excellent podcast. Thank you. I listened to it with my 16 year old daughter and we love it. And each episode is so interesting and sometimes inspiring depending on the billionaire.
- [46:32]
D
As well as Steven Spielberg, they also recommended Alan Sugar. Well, you're in luck because we will be covering him later in the series, so keep listening, will we?
- [46:40]
A
Is he a billionaire? Really? So what have we got next episode?
- [46:48]
D
Well, we've got the first active footballer in history to make it to the billionaires club, which is interesting.
- [46:55]
A
Probably the most populous, well, without doubt the most popular sport on earth and yet it has produced very few billionaires. But this one is well known for wearing number seven. He is none other than Cristiano Ronaldo. Our Next Billionaire Good Bad Billionaire is a BBC World Service podcast produced by Hannah Hufford. The editor is Paul Smith and it's a BBC Studios production for the BBC World Service. The senior commission commissioning producer is Sarah Green and the commissioning editor is John Manell.
- [47:37]
B
Ever invest in something that seemed incredible at first but didn't live up to the hype? Like those five dollar roses at a gas station or a second hand piece of technology that breaks in the first ten minutes Minutes. Marketers know that feeling. We optimize for the numbers that look great, impressions reach and reacts. But when they don't show revenue, well, that's a not so great conversation with the CFO. LinkedIn has a word for that. Bullspend. Now you can invest in what looks good to your CFO. LinkedIn Ads generates the highest roas of all major ad networks. You'll reach the right buyers because you can target by company, industry, job title, and more. So cut the bullspend. Advertise on LinkedIn, the network that works for you. Spend $250 on your first campaign on LinkedIn ads and get a 250 credit for the next one. Just go to LinkedIn.com broadcast that's LinkedIn.com broadcast. Terms and conditions apply.