Chapter 333: Power Shift

[Chapter 333: Power Shift]

In the fifth week after the release of The Butterfly Effect, the film earned $14.37 million, bringing its total North American box office to $114 million, making it the third film this year to surpass the $100 million mark.

By this time, Guess Pictures entered the promotional phase for its seventh film of the year, The Shawshank Redemption. Traditionally, North American theaters had a tacit agreement to only release one major blockbuster each week to avoid competition. However, this understanding existed only among the major studios and did not include Guess Pictures.

As Guess Pictures ramped up its promotions for The Shawshank Redemption, Universal Pictures also began promoting Waterworld. Starring Kevin Costner and Jeanne Tripplehorn, the production cost reached $175 million and took three years to complete. The media had predicted it as the film most likely to win the annual box office championship.

With such a major film being released at the same time, The Shawshank Redemption faced considerable pressure.

Link instructed Jon Gordon and Mark Amin to promote the film on a modest scale, in line with a B-movie approach. This decision stemmed from prior commitments to keep the hype in check and the understanding that the film leaned towards more artistic sensibilities -- overextending their advertising budget could lead to financial losses.

Jon Gordon agreed to the scaled-back promotional efforts. Unexpectedly, after Guess Pictures reduced its promotional ambitions, Universal Pictures also decided to tone down its marketing for Waterworld.

...

"Ron, what are you doing?" Michael Ovitz immediately called Ron Meyer, the president of Universal Pictures, voicing his displeasure. "Why is the promotion for Waterworld less than that of The Shawshank Redemption? Waterworld is a huge film, and you should take advantage of Guess Pictures' misstep to maximize your marketing efforts and crush The Shawshank -- I don't understand why you're backing down!"

Ron Meyer, hearing Michael's tone, felt a surge of annoyance. "Mike, how we promote is an internal matter; it's best you don't pry," he replied.

"Ron, we're allies here. I have a duty to guide you on this matter," Ovitz insisted.

"Thanks for your advice, but it's not needed. The promotional strategy has been a carefully considered decision by our marketing department and won't be changed lightly. If you want to assist with Waterworld's promotion, you can coordinate with CAA artists after the film releases to help, and rally your media resources for support. That would be appreciated," Ron Meyer stated dryly.

Michael Ovitz felt his anger rising. He had exhausted his efforts to maneuver Link into a false sense of security, but now Ron Meyer displayed such an ungracious attitude.

If Ron were still at CAA, Ovitz thought he would have slapped him across the face.

Recognizing the larger picture and not wanting to make a scene, Ovitz suppressed his rage. "Ron, The Shawshank Redemption is gaining momentum. If you don't promote it vigorously, the North American box office will soon be dominated by Guess Pictures' films."

"It won't happen. The Shawshank is an art film; it won't gross too high to affect Waterworld's box office. Even if Shawshank performs decently, that doesn't matter. Universal has released several major box office hits this year, including Apollo 13 and Casper, along with the upcoming Waterworld. Our performance exceeds that of Guess Pictures. We don't need to waste resources on this," Ron Meyer replied confidently.

Realizing Ron's strategy, Michael's teeth clenched in frustration. The major studios had gained an upper hand against Guess Pictures, and now Universal was ready to bow out.

"Ron, don't forget our alliance's goal is to crush Guess Pictures until they're bankrupt, restoring the dominance of the major studios in Hollywood. You can't give up halfway!" he retorted.

"Mike, haven't you realized yet? I'm just the president of Universal Pictures, not the owner. My job is to find ways to enhance the company's profitability, strive for a higher position on the annual box office charts, and satisfy the shareholders. When the company profits, I benefit as well and can keep my job. I'm sure the other six presidents feel the same way. Bringing down Guess Pictures at any cost -- only you have the appetite for that. I've got a meeting to attend, we can talk later," Ron said before hanging up.

...

Hearing the dial tone, Michael Ovitz's face turned a shade of red to a dark shade of anger. He felt the blood vessels on his forehead bulging as his vision blurred.

In his haze, he recalled Link's earlier remark: in the film industry, the studios always ruled; agencies merely served the industry's needs. In the power struggles among top studios, agencies had no right to intervene.

Ron Meyer's own experience proved this point. Back at CAA, Ron was just a pawn, lacking real power. Now at Universal, he dared to end their call without a second thought. It was outrageous.

Taking deep breaths, Ovitz contemplated calling Michael Eisner, ready to accept his invitation to serve as co-president at Disney. Yet, as he picked up the phone, a surge of defiance rose within him. The summer box office showdown was his ongoing battle to undermine Guess Pictures alongside the major studios.

Given the current conditions, his alliance stood a strong chance of success.

He decided to wait.

Once the major studios triumphed, he intended to enter Disney as a victor. There, he would aspire to wield significant influence and realize the status of being Hollywood's true king.

He looked forward to making all who had underestimated him regret it.

"All of you!!" Michael Ovitz growled, his eyes wide and filled with fury as he slammed his fist down on the office desk.

...

Bang!

"Ron, Michael must be furious right now," David Geffen, the head of DreamWorks, chuckled from his office at Universal.

Geffen, in his fifties, dressed in a gray suit, with a slender frame and a pale complexion, carried a unique gentleness typical of successful men. A titan of the entertainment industry, he was worth over $2 billion and ranked 186th on Forbes' billionaire list.

He began his career as an agent at WMA in the sixties, where he worked alongside Michael Ovitz and Ron Meyer. By the seventies, he founded Geffen Records, representing renowned artists such as Elton John, Guns N' Roses, Nirvana, and The Smiths. In the nineties, Geffen Records merged with Universal's parent company MCA, resulting in a multi-billion dollar empire.

In 1992, he established Geffen Films, with Interview with the Vampire being a notable release. Earlier this year, Geffen partnered with Spielberg and Jeffrey Katzenberg to create DreamWorks Studio.

Today, he was at Universal to discuss potential collaboration opportunities.

Hearing about Ron Meyer's call with Michael Ovitz, David couldn't help but chuckle.

In the seventies, they were all just workers getting by, having good contacts. Eventually, Ovitz ascended to the presidency of CAA, quickly rising through the ranks of the entertainment world. This left him more distant from his peers and somewhat arrogant.

In the eighties, Ovitz took decisive actions to solidify his control at CAA, pushing out many who dared to challenge him, regardless of whether they were friends or allies. Geffen had openly criticized Ovitz's hunger for power and his lack of gratitude.

Ron Meyer shrugged. "I have to say, under Michael's suggestion earlier this year, we formed an alliance against Guess Pictures. Michael has since intervened in our operations far too often, and at times, it has been troublesome for us. I tried to gently remind him not to do this, but bossy habits die hard, so when he interfered in our promotional strategy today, I had to be straightforward with him, hoping he would see reason."

"I understand. Michael's desire for power has been unchanging over the decades. The rise of Link and Guess Pictures directly threatens his position in the industry, and now he is eager to take them down to regain his stature in Hollywood. Yet, as it stands, your campaign appears to be stagnating," Geffen noted, playing idly with a metal trinket on the table.

"Indeed. Guess Pictures has matched the major studios with production and distribution capabilities, complemented by a wealth of experienced executives and producers, not to mention Link, their talented and renowned founder. Such an adversary appears nearly flawless and is quite the challenge -- at least, in the short term, we cannot take them down. Michael seems unwilling to acknowledge or accept this truth, constantly pushing us to handle Guess Pictures' films as if it would restore his grip on power. But it's never that simple," Ron Meyer shook his head as he lit a cigarette.

"Michael's reliance on external forces to reclaim his power is misguided," Geffen remarked, gesturing at a newspaper on the table with his trinket. "However, he is right about one thing: recently, your promotional efforts for the new film have indeed appeared weak, not reflecting a blockbuster with a budget in the hundreds of millions."

Ron released a puff of smoke and replied slowly, "Waterworld's production cost reached $175 million, requiring over $300 million worldwide to break even. During the internal screenings, the feedback was quite lukewarm, estimating its North American box office at around $200 million. While increased marketing could yield higher grossing, the risks of loss would also rise.

Moreover, with films like The Shawshank Redemption and The Bridges of Madison County released concurrently, if we enhance our promotional spend, Guess Pictures will undoubtedly follow suit, and given their financial strength, the risk of losses escalates. We must tread carefully."

"I see," David nodded, understanding and agreeing with Universal's approach. He then pulled out a folder, clarifying the purpose of his visit: collaboration of Universal Pictures in film production, with DreamWorks seeking technical and financial support. He envisioned a long-term partnership.

DreamWorks also planned to enter the film market.

"Now is not the best time to enter the fray, considering the intense competition following the successive successes of Guess Pictures. The film industry has become increasingly cutthroat, making survival challenging. Entering the fight now poses great risks and narrow profit margins for you," Ron Meyer remarked.

"Ron, don't be so pessimistic. The streetwise often say that the most lucrative opportunities arise in the fiercest competition. You should have confidence in Spielberg, Katzenberg, and my abilities," Geffen replied confidently.

Ron Meyer chuckled but didn't counter; DreamWorks' trio certainly wielded considerable strength. David Geffen held extensive resources, expertise in operating businesses and film distribution; Spielberg, notable as a leading director and producer; and Jeffrey Katzenberg, former chairman of Disney Studios, adept at animated filmmaking. The alliance formed by these three industry moguls would have a strong probability of success.

Still, DreamWorks' rise would heighten competition in the film industry, posing implications for Universal Pictures.

That was Ron's true concern.

Nonetheless, he had no intentions of rejecting collaboration with DreamWorks.

After all, David Geffen was a stakeholder in Universal's parent company, MCA. Spielberg maintained a close relationship with Universal since the seventies, launching numerous successful projects including Jaws, E.T., Jurassic Park, and Schindler's List.

The two companies enjoyed a solid foundation for collaboration.

Moreover, the trio at DreamWorks ensured any film they produced would be high quality. Partnering with DreamWorks would undoubtedly bring numerous benefits to Universal Pictures.

...

Knock, knock, knock!

As they chatted, Ron's assistant came in, handing him a report detailing the first-day box office numbers for Waterworld and The Shawshank Redemption.

Waterworld had grossed $8.13 million on its opening day, while The Shawshank Redemption followed at $4.55 million.

Ron smiled with satisfaction, presenting the figures to David Geffen.

"Congratulations! Waterworld is off to a great start. Universal stands a significant chance to surpass Guess Pictures and take the annual box office crown."

"Ha! There are still several months to go until the end of the year. It's too early to draw conclusions," Ron modestly waved his hand.

Yet, inside, he appreciated the compliment. Currently, Universal had one film exceeding $100 million at the box office, Apollo 13, and another nearing that milestone, Casper.

Based on the figures so far, it was all but guaranteed that Waterworld would surpass $100 million, possibly reaching over $200 million.

In just the first half of the year, Universal had three films exceeding the $100 million mark, outperforming Guess Pictures and holding a strong likelihood of claiming the industry lead.

With such accomplishments by year's end, Ron believed he would not face much scrutiny as president at the board meeting.

*****

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