Introduction: Movies Are Everybody's Second Business

In fall 1999, entertainment attorney Peter Dekom embarrassed the hell out of me at an American Cinematheque tribute to Jodie Foster. After giving his welcoming remarks, he introduced me as his co-chairman by saying, "Mike is writing a book. For ten thousand dollars he'll keep your name out of it." Everyone laughed, but I cringed.

I've never thought much of tell-all Hollywood memoirs designed to generate gossip-column items, nor have I particularly admired the kind of self-aggrandizing books that aim to heighten the profile of the author. I love what Mark Twain said about writing autobiographies: "An autobiography is the truest of all books; for while it inevitably consists mainly of extinctions of the truth, shrinkings of the truth, partial revealments of the truth, with hardly an instant of plain straight truth, the remorseless truth is $391;emphasis my own$#93; there, between the lines." That is why I have gone back and talked to some of the people who were there at different junctures of my career to find out the part of the truth that I might have missed along the way.

I've always felt that one of the danger signs of age is when one dwells on the past, so I don't do that; rather, I try to learn from it, which is not an easy task in the film business, because everything is constantly changing. Nevertheless, I've been counseled for years by colleagues to maintain a higher profile, to go out and tell everybody what I've done, so I will be "more valuable" -- I haven't got a clue what that value is and to whom I would be more valuable.

But spurred on by a post-open-heart-surgery new outlook on life -- which included giving up my passion for cigars -- and the little part of me that wanted to become a history teacher, I decided to write this book to document some of the amazing changes in the movie business that I've seen firsthand over the last four decades, to debunk a few myths about how some movies got made, to give credit to some people who should have gotten it the first time around, and, selfishly, to make some sense of the journey. But rather than a compendium of my career, this is a look at the rocky road the movie business has traveled over the past four decades and how I absorbed the bumps. If anything, it was inspired by how different the process of getting a movie made and selling it to the public is today than it was thirty-six years ago.

Most filmmakers nowadays make twelve to fifteen movies in their lifetime. The most prolific actors might go before the camera in thirty films. As a studio executive, I've had a hand in more than ten times that many films. Some I had almost nothing to do with; they were acquired by executives who worked under me or over me and then released. On others I was the catalyst in bringing the idea to the studio, and I remained intimately involved in the process of translating the idea to the screen. Of the three-hundred-plus movies I've been associated with, I would say there are probably around one hundred or so really good ones, including eight Academy Award winners for Best Picture and seventeen nominations in the same category. There are another hundred or so I'd watch myself on a rainy Sunday afternoon. And then there are about a hundred for which my colleagues and I should be shot for thinking it was a good idea.

In Hollywood terms, that's a pretty good record. And there is more to come.

Fade in: Shanghai, 1940. I, Morris Mike Medavoy, am born to Michael and Dora Medavoy.

We lived in China until I was seven. My father fled Communism as a child, escaped Russia, and found refuge in Shanghai. But in 1947 he knew it was time to find refuge again. My mother was born in Manchuria, China, the youngest of fifteen brothers and sisters. As the Communists prepared to invade China, my father sold all our furniture and his prized 1940 Plymouth and loaded the family onto a Dutch steamer.

I knew we were in danger, too. The first movie I saw in my life was a wartime Russian propaganda film about the Nazis. The image etched in my mind was that of a woman holding two hand grenades at the battle of Stalingrad, jumping under a tank to blow it up.

Heroism is a big emotional kick, but even at six I knew I didn't want my own mother doing that.

I have watched the movie business change many times over, in ways that I didn't fully realize until I sat down to reflect on how the thirty-six years have gone by. As a young agent, I carved out a niche for myself representing almost all the hot young directors of the early seventies, at a time when these guys were staging a creative revolution: Steven Spielberg, John Milius, Terry Malick, Philip Kaufman, Monte Hellman, George Lucas, Hal Ashby, and Francis Coppola. These roguish American auteurs created a cinematic style and legacy that continues to shape Hollywood to this day.

Then I moved to United Artists, where I was able to make movies with this new generation of filmmakers. UA was a company that pioneered the notion that filmmakers should have freedom from interference and an honest accounting of profits. In the four years I spent at UA, the studio won back-to-back-to-back Best Picture Oscars for Rocky, One Flew Over the Cuckoo's Nest, and Annie Hall, and finished number one among all studios at the box office for two of those four years. We also made Francis Coppola's controversial Vietnam film Apocalypse Now and put into motion Marty Scorsese's Raging Bull, a film that was later voted the film of the decade by a nationwide group of movie critics.

All of this happened at a time when conglomerates were buying studios to prop up their balance sheets. In the case of UA, the buyer was the insurance giant Transamerica, and the results of this purchase were so disastrous that four of my colleagues and I resigned en masse to escape corporate oppression.

When my associates and I left UA and formed Orion, we spent four years under the Warner Bros. umbrella, making us one of the first fully financed, autonomous satellite production companies to use a major studio for distribution. Today, every studio relies on two or three of these types of deals. Then we broke away from Warner and reconstituted Orion as a public company. For the next eight years, Orion championed films that the other studios rejected. Throughout the eighties, a time when movies needed to be sold on the basis of one line of high-concept advertising copy, we backed a string of thought-provoking films, including Platoon and Amadeus. We also formed a creative nucleus with talents such as Kevin Costner, Jodie Foster, Woody Allen, Gene Hackman, Sean Penn, Milos Forman, Jonathan Demme, and Susan Seidelman. We gave each member of this extended Orion family the chance to realize their unique, singular vision in films that couldn't be made at other studios.

I left Orion to become chairman of TriStar Pictures, which had just been bought by Sony, and I soon found myself at ground zero of a culture war: the Japanese were (supposedly) taking over Hollywood. A media maelstrom ensued over Sony's decision to hire the high-flying producers Peter Guber and Jon Peters to run the studio, but none of that affected me because I had TriStar to run. There I worked with whom the press commonly refer to as the biggest names in the business: Warren Beatty, Steven Spielberg, Sylvester Stallone, Tom Hanks, Dustin Hoffman, Robin Williams, Julia Roberts, Robert De Niro, Sharon Stone, Michael Douglas, Danny DeVito, Meg Ryan, and Denzel Washington. But I will always regard my greatest accomplishment at TriStar as pushing through the first mainstream film to deal with the then (and now) controversial topic of AIDS, Philadelphia.

After four years, a benign conflict between Peter Guber and me led to the end of my tenure at TriStar, and I set out to recapture the days of UA and Orion. I wanted once again to make thoughtful and provocative films in an orderly atmosphere, so I formed my own company, Phoenix Pictures, and raised enough financing to be the master of my own destiny. With the release of Phoenix's very first film, The People vs. Larry Flynt, I found myself at the center of a debate about whether this was a film about the First Amendment or the story of a pornographer. The debate jumped from the entertainment pages to the editorial pages. I also committed to back the first film that Terry Malick, my former client, had directed in two decades, a World War II story entitled The Thin Red Line. Even though the film was released in the same year as the hugely successful Steven Spielberg film Saving Private Ryan, The Thin Red Line proved that art can still be rewarded: it received seven Academy Award nominations, including one for Best Picture.

Most recently, I backed the first major film about human cloning, The 6th Day, a project that also reveals a new Arnold Schwarzenegger to the moviegoing public. It's the first film I've ever signed my name to as a producer -- I've always felt that if you were in a position to give credit, you didn't need to take it. But things are different now, and some of my most cherished and personal projects, like "Shanghai," are yet to come.

Hollywood is an egotistical world where everyone falls prey at one time or another. It's natural to want your fifteen minutes of fame in a business that produces more famous people than any other. Today, fame is like fast food: With so many outlets in today's world, more people than ever are looking to get their fifteen minutes of fame, but in most cases, it's over before they realize it. When I started in the 1960s, the media paid little attention to executives. The only thing the press cared about was movie stars. Everything changed in 1978 with the David Begelman check-forging scandal, which was Hollywood's Watergate and the subject of David McClintick's Indecent Exposure. Now there are at least three nightly TV shows dedicated to the business of entertainment, as well as dozens of weekly and monthly magazines. I wish I could say I was the lone executive whose ego never got the best of him, but I can't. I love what I do and I like to talk about it.

I've seen the movie business from three unique inside perspectives: I got my start in the agency business. I was a member of the team that ran United Artists and co-founded Orion Pictures, and I served as chairman of TriStar Pictures, all during a time of enormous creative turmoil in the movie business. Most recently, I've been running my own shop, which has brought me even closer to the movies I produce. As an agent, a producer, and a "greenlighter," I've worked with some of the most talented people who have ever passed through our business. The Academy Award winners and box-office champions like One Flew Over the Cuckoo's Nest, Platoon, and The Silence of the Lambs are the ones people ask me about. But some of the films that didn't win Oscars or gross $100 million have been even more rewarding, films such as Coming Home, Raging Bull, The Great Santini, Mississippi Burning, Arthur, Philadelphia, The People vs. Larry Flynt, and The Thin Red Line. These films set trends, started careers, broke barriers, and captured society.

Then there are some of those one hundred really stupid movies, made for the sole purpose of making money, films like Without a Clue, Another You, and Under the Rainbow. These movies were made by following some kind of trend -- always a sure kiss of death for a studio head -- rather than by trying to do something original, which is often tough but more rewarding.

In recent times, a handful of executives and filmmakers have succeeded by being able to grab the zeitgeist by the throat. That's great, and I've done it myself from time to time, but I'm always suspicious of the hot new thing. You can really get burned attempting to make films like the ones that worked last month or last year.

The best work often comes from the most original ideas: I had something to do with eight Best Picture Academy Award winners, starting with The Sting in 1973 and ending with The Silence of the Lambs in 1991. The success of these eight movies can be attributed only to William Goldman's often-quoted, partly accurate observation: "Nobody knows anything."

In the seventies, there were four Oscar winners: The Sting, which I helped put together as an agent, was written by a young writer out of film school who wasn't on the studio's radar screen. One Flew Over the Cuckoo's Nest, the first of three consecutive Oscar winners we had during the four years I was head of production at United Artists, had been rejected time and again over a thirteen-year period. The next, Rocky, was a labor of love written by an unknown, Sylvester Stallone, and it was done partly because the producers agreed to make it on a shoestring budget of $1.3 million and cross its profits with New York, New York, which we thought would be a sure hit. Annie Hall was the creation of Woody Allen, a virtual one-man band of a filmmaker who did his movies the way he wanted, turned them in to the studio, and then went back to his apartment to write another one. All of them were unusual fare for Best Picture.

By the eighties, my senior colleagues from United Artists and I had formed Orion Pictures. Amadeus, the first of four equally unlikely Best Picture Oscar winners for Orion, was a costume drama about Mozart at a time when MTV was all the rage. Platoon was Oliver Stone's ultra-personal film about Vietnam, based on a script that had bounced from producer to producer until it was finally put together by a man named John Daly. At the time, everyone -- including me, I admit it -- was skeptical and believed that movies about Vietnam had run their course. Nevertheless, at United Artists, we had two of the most powerful of the bunch: Apocalypse Now and Coming Home. But it was Platoon that became the standard for Vietnam films.

The final two of these eight Oscar winners came in the nineties at a time when, ironically, Orion was headed for bankruptcy. Nevertheless, Dances With Wolves won. More amazingly, it was a three-hour Western that was regarded as an indulgence on the part of Hollywood's newest leading man, Kevin Costner. (During production, in a reference to the notorious cash-drain Heaven's Gate, cynics dubbed the film "Kevin's Gate.") The eighth Best Picture, The Silence of the Lambs, was about a guy who ate people. The film ran the risk of being gory, so much so that Gene Hackman, who had agreed to split the cost of development with us, became squeamish and dropped out before the script was turned in. When Jonathan Demme made the film with Anthony Hopkins and Jodie Foster, it became a commercial hit, a genre-breaker, and the third film ever to win the five major Academy Awards -- Best Picture, Best Director, Best Actor, Best Actress, and Best Screenplay -- and it eventually led to a successful sequel, Hannibal.

My parents' goal was for our family to settle in the United States, but they weren't able to get visas before our departure from Shanghai. Like so many other emigrants, my family and I saw America as a place where the streets were paved with opportunity and hard work. When we reached South Africa, my dad learned that our U.S. visas had been approved in Shanghai. However, there was no turning back, so my parents decided we would continue on to Chile, which accepted political refugees without much difficulty. We had to wait ten years for a second visa, during which time I grew up knowing America only through its movies.

The first time a film swept the five major Academy Awards, I wasn't even born yet. It was 1934 and the film was Frank Capra's It Happened One Night. But the second time, I was sitting in an orchestra seat, celebrating the fact that one of the first movies I had worked on as an executive was being recognized as a landmark achievement. It was 1975 and the film was One Flew Over the Cuckoo's Nest. The third and only other time a five-Oscar sweep occurred was in 1991, for The Silence of the Lambs. I was again seated in the orchestra, but on this occasion I was seated next to disappointed executives who had worked tirelessly to promote another film I had put into production, Bugsy. As The Silence of the Lambs Oscars began piling up, I remember sitting back in my seat, finally beginning to understand -- I mean really understand -- the serendipity and irony of life.

Bugsy was one of the first movies I put into production at TriStar. It won the Golden Globe for Best Drama -- often an Oscar bellwether -- beating out The Silence of the Lambs. It got ten Oscar nominations, five more than Silence. Warren Beatty had pushed us to the brink on the marketing of Bugsy, to the point that a rift developed between me and Peter Guber, who was the chairman of Sony Pictures, TriStar's parent company. A win for Bugsy would have been vindication for me from all the ugliness that ensued after its release, but the gods of irony apparently thought it was more interesting that little Silence take the prizes.

The gods of irony wield a lot of power in Hollywood.

I attended an English-language school in Chile, but I spent countless hours in darkened rooms watching movies. Every Saturday, I went to a small adobe theater on the town square and sat through two, sometimes three, matinees, which gave me glimpses of the American way of life and fueled my childlike fantasies. As a kid, I was Robin Hood, I was Bogart, I was whoever was up there on screen. Though I never thought of working in films, I often dreamed about riding across the prairie with John Wayne, jumping ship with Errol Flynn, and kissing Liz Taylor -- all within the span of a minute. At the movies I could daydream life as I wished it to be and see how I feared it could become. Now, everywhere I go in the world, I can turn on the television and see a film being broadcast that I had some hand in getting made.

The movie business is probably the most irrational business in the world.

These days, all the major studios and most of the minor ones are owned by multibillion-dollar multimedia conglomerates such as Viacom, News Corporation, Sony, Walt Disney, and AOL Time Warner. When Hollywood was formed at the turn of the last century, the showmen were in charge. The studios were owner operated by the likes of Jack Warner, Adolph Zukor, Louis B. Mayer, and Darryl Zanuck, creative people with the mentalities of riverboat gamblers. It's startling, but without Jack Warner, there would be no AOL Time Warner. Today, the lawyers, bankers, and businessmen are in charge because the CEOs of the conglomerates that own the studios feel more comfortable with them, and to some extent, this is a good thing. Given the economics of movies these days, the studios could never survive as the small principalities they were under the stewardship of the founding moguls. But for the most part, the businessmen have done away with much of the creativity that Hollywood was built on.

Studios are no longer incubators for movies. Their primary function now is to provide a distribution and co-financing system for films, leaving the making of the movies up to others. Movies aren't seen as eleven thousand feet of celluloid with sprocket holes on both sides and certainly not as the art form of the twentieth century; they are seen as "content." (And with the advent of digital, they won't be seen as celluloid at all.) "Content" isn't something that makes us feel but rather something that fits into the business plan of the company that owns the studio. This is true even at the company Walt Disney created: in the Walt Disney Company's annual report, movies are listed under "Creative Content."

Darryl Zanuck used to say that he put together an entire picture in ten minutes; now it can take years. As his son, Dick Zanuck, explains it, Darryl had a chart underneath a glass top on his desk. On it were the names of all the talent under contract to Fox. He would look and see which actors were available, pair them up with a director and a writer, and send everyone off to make the picture. That was the casting session. To land a major star today, first you have to beg the star to the read the script, then you have to offer to pay him or her $:20 million, and then you have to plead some more and offer a Gulfstream V, a fully furnished house with worldwide satellite TV, a twenty-four-hour masseuse and -- don't forget! -- a cook. The fact that the stars are taking so much up front and on the back end has increased budgets and cut into the studios' profits. This has made the movie business unattractive to new investors.

Why do studios put up with solipsistic actors and their erratic behavior? Billy Wilder tells a story about working with Marilyn Monroe on Some Like It Hot that goes something like this: "There was an actress named Marilyn Monroe. She was always late. She never remembered her lines. She was a pain in the ass. My aunt Millie is a nice lady. If she were in pictures, she would always be on time. She would know her lines. She would be nice. Why does everyone in Hollywood want to work with Marilyn Monroe and no one wants to work with my aunt Millie? Because no one will go to the movies to watch my aunt Millie and everyone will come out to watch Marilyn Monroe."

Movies require months of preparation, filming, and post-production work, and until the process is finished you have absolutely no idea if it's going to work. Given how much films cost, this can be terrifying to the faint of heart -- one of the most recent films I backed was $85 million plus another $25 million for marketing. The only formula for success in today's expensive, competitive marketplace lies somewhere between independent and interdependent. Movies need the leg up of a conglomerate, but they also need the freedom to be made by creative people.

Present-day studio owners think that the movie business doesn't make any sense, and they are probably right. They come from a much more orderly universe, whereas making movies is a recipe for chaos from start to finish. The new owners often nod in agreement and say they get it, but they don't really. They think they are dealing with people who are crazy, and they are partially right. People who make movies are passionate, often to the point of being crazy, which can be both good and bad. Some of the best movies of our time have been created by sending a madman genius to the jungle with a script, a group of actors, and a fixed amount of money, and then seeing what he comes back with. (So have some of the worst.) The entire movie business is governed by a set of rules that are absolutely irrational.

To survive as long as I have, you must learn somehow to play by those irrational rules.

So what makes a film work?

The truth is, you can never be certain because no two films are alike, which is part of the magic of moviemaking. A good film is like a symphony: it has independent movements working interdependently. Usually, it starts with the script. My rules for a good script are simple:

Do I want to turn the page to see what happens? Do I care about the characters? Does it strike an emotional chord? Is it thematically interesting? Is it unique?

The second film I worked on as a studio executive was One Flew Over the Cuckoo's Nest. What I liked about that brilliant script's ending was that it wasn't a compromise. Other studios had turned it down because the ending was too dark, but I liked that darkness. The scripts for On Golden Pond and Driving Miss Daisy were precisely these kinds of page-turners, but I let other factors get in the way of my criteria, and I missed out on being a part of two great films.

Often a good film idea is not the same thing as a good film. It takes a director with a vision to convert a good film idea into a good film. Choosing the right director often requires studio executives to refrain from their natural instinct, which is to pigeonhole creative people and ask them to repeat themselves. Early in my career I had lunch with the great writer Paddy Chayefsky and his producer Howard Gottfried, in the old MGM executive dining room where you could still get Louis B. Mayer's chicken soup. We were talking about directors for Paddy's script Network, and Howard asked me what I thought of Sidney Lumet. "Sidney Lumet to do Network?" I gasped. "What was the last funny movie he made?" In response, Paddy turned his bowl of chicken soup over on the table. "You're right, Paddy," I replied, "he'd be great." But I learned my lesson, and proved to myself that I had, when I fought to put Jonathan Demme on The Silence of the Lambs.

Casting is often the hardest part of putting a movie together. At Orion, when I suggested that Arnold Schwarzenegger be considered for a role in The Terminator, it was because of his force of personality. At the time, he had had a speaking part in only one feature movie, Stay Hungry, which we had done at UA. But I'll be the first to admit that I had no concrete evidence that he would be any good, let alone that he would create such an indelible character. To be honest, I also floated the name of O. J. Simpson for the same role. Casting is far from a science. In one situation two actors might be magic, while in a different situation they might have no chemistry at all. After Tom Hanks and Meg Ryan co-starred in the not-so-successful Joe Versus the Volcano, I supported putting them together again in Sleepless in Seattle. Even Nora Ephron, who is a first-rate writer-director, was skeptical. Not only was Sleepless in Seattle a huge hit, the two got back together a third time in You've Got Mail, also for Nora Ephron.

Putting together the elements of a film is a succession of best guesses. You have to trust your instincts. Not long ago, I had a conversation with the chairman of a major studio who said to me: "Okay, no more chick flicks -- they aren't working. I don't care about dramas either -- let somebody else make dramas. I'm just going to make event movies and genre pictures for teenagers." That mentality is not unique; it pervades the movie business today because teenagers go to the movies over opening weekend more often than the over-25 crowd.

Studio owners have been known to tell production people: "Make popcorn movies -- that's what people want." The only definition I know of a successful movie is one that succeeds at the box office. Steven Spielberg, whose Hook I greenlit at TriStar, has directed and/or produced more successful popcorn movies than any filmmaker in history. He makes wide-audience movies because he connects to that inner feeling of amazement he had as a child and translates it to the screen. Trying to make popcorn movies is a recipe for failure because you spend all your time looking in the rearview mirror, pointing at what worked last time and the time before that. Today, with marketing people making or significantly influencing which films get made, this has become the norm, and it has resulted in the sameness of what we see on the big screen. The truth is that nobody knows for certain what will make a hit movie. Most of the times I've declared my intention to make a hit, I've ended up with egg on my face. I have a dictum that I try to follow if at all possible about getting people for a movie: Go directly to the talented people. If I could say that I had a talent for anything, it was a talent for knowing who was talented.

Everyone is a critic, and the movie business is everybody's second business.

I'll be using the men's room at the AMC Century 14 and someone will hand me a script. "You should make this script," the man will say -- there hasn't been a woman in the men's room yet, but there will be -- "It's a lot better than the last film you made."

How many times have you gone to a movie and said, "Geez, why did they ever make that movie?"

There are many reasons why one script gets put into production and another of equal quality sits on the shelf for years and collects dust. For starters, we're always very concerned -- usually too concerned -- with having a big opening weekend at the box office, usually so that we can justify our decision for greenlighting the film. The pressure for profits is enormous. I pushed for films like Desperately Seeking Susan and House of Games because I believed in the creative vision of the artists. But there is also a long list of films I'm sorry to say I put into production at both Orion and TriStar just to fill out the studio's annual release slate. Those kinds of films are often flops: UHF and Heart of Dixie. These are the kinds of films that have made the process tiring and caused me to become fed up. But invariably, I would return for another round because the good ones are magically rewarding.

People sometimes criticize my taste in movies for being too highbrow, by which they mean that I don't do the kind of movies that Jerry Bruckheimer and Joel Silver do.

Now, those guys are really good producers, and I like their films as much as the next guy. I'd love to be paid millions of dollars by the studio to make action films. The Rock was a wild ride and The Matrix was a superb film, but I'm much more drawn to films that are rooted in truth or history, like Gladiator. I don't look down on broad-audience films or even mindless comedies. I like them though I prefer wit to toilet humor. I've made several in both categories because I realize that I can't make films for myself; I have to make them for an audience. But as for my taste veering toward art-house fare, I hardly walk around in tweed jackets with elbow patches contemplating Fassbinder. I've been involved with many mainstream commercial hits -- Rocky, Arthur, The Addams Family, and Sleepless in Seattle. I just look for stories that make me laugh or cry or feel. I look for stories that feel real to me, or at least plausible.

What I don't like about mainstream filmmaking, however, is when we are forced to make changes just to give the audience what it wants so we get what we want at the box office. Most recently this happened to me on Urban Legends: Final Cut. At a test screening the audience told us there wasn't enough gore in the movie. Though I'm very uneasy about this type of prefabricated violence that isn't part of a movie's story, we went back and shot another urban legend about a guy's head being chopped off. When we retested the movie, that scene was almost unanimously the audience's favorite. I'm not sure if we would have been number one at the box office on opening weekend without that additional violence. Do I understand it? Yes. Do I like it? No.

The two things most missing today in both movies and in the business of making them are subtlety and intelligence. For the most part, studios produce movies for the lowest common denominator. I try to avoid this herd mentality, but it's very hard. The margins in the movie business today are very small, and the tendency to chase the audience is always strong.

The audience may not know what it wants, but it certainly recognizes a second-rate product when it sees it. It ought to: it grew up watching second-rate stuff on television. However, these days what you get on cable television is sometimes better than what you get at the theater.

So what makes a good head of production?

Being a good head of production requires the blending of two separate instincts: art and business. A degree in office politics is also helpful. There is always a fragile choreography between the creative and the business sides of the equation. One minute you must be able to talk calmly to actors, who can sense fear better than any group of people in the world, while the next minute you have to translate what you are doing to a group of M.B.A.'s. It all comes down to combining experience and intuition, learning how to know which star will match with which filmmaker. Instinct in choosing movies relies on antecedent information, like demographics, cost analysis, and even who is owed a movie. It is the ability to take hundreds of very small considerations and unconsciously roll them into one. Instinct can't be taught, but years of experience can help you develop a feel for it. You also need to maintain a perspective on what is going on in the outside world to keep your bearings on what you think audiences will respond to on the big screen. Los Angeles and New York are only a small part of the world.

As a studio executive, you have to have confidence in your abilities, but you must also keep your natural arrogance in check. Young studio executives often have an amount of power disproportionate to their experience. I've always loved the story about the snot-nosed executive who was having a meeting with the late Fred Zinnemann, who had directed such films as High Noon, From Here to Eternity, and A Man for All Seasons. The young man asked Fred what films he had made, to which Fred replied, "You first."

It is the responsibility of a studio head to make films that earn money, but it is also true that most people in the movie business are paid too much in relation to their contribution to society, including myself. Does any entertainment CEO deserve to earn more than $100 million in a single year? Does any actor truly deserve $20 million to star in a motion picture? Does any writer deserve $250,000 to punch up some dialogue? This is not unique to the movie business; it's the American system of business. Just because someone is earning millions making movies doesn't make him better than a schoolteacher, someone who changes people's lives, though it often makes him or her more arrogant. Understanding this is essential to dealing with the egos involved in the movie business, including your own.

You also have to be prepared to have your heart broken, your mind broken, and your body broken -- and then get up and fight a new day. If you have a string of movies that fail, it's easy to get thrown off your stride. This happened to me in varying degrees and at various times at United Artists, Orion, TriStar, and Phoenix. When this happens, you begin stumbling on hurdle after hurdle, and it becomes harder and harder to regain your balance. When you're not doing well, everyone thinks they know more than you do. The thing to remember is that even the best studio executive only has five good weekends at the box office a year -- if he's lucky. Not the easiest way to spend three decades, but I wouldn't trade places with anyone.

Part of the battle comes from the business side. While there has always been a struggle between the bankers and the artists, this conflict has become more unhealthy today than at any period in the past. The business side often blames the creative side for being too close to agents and talent and agreeing to pay exorbitant prices, and in part, they are right. The creatives can take those relationships with them to the next job and leave the old studio stuck with the tab. But the concern for the creatives is that banker types have essentially taken control of the studios, and the only thing they have confidence in is empirical data. The danger with bottom-line thinking is that decisions based solely on business reasoning or by committees don't work. You can't shoot the deal. As the profit margins from movies have shrunk, the lines between art and commerce have become nonexistent.

But movies are art and there is no formula for art.

What drives me crazy is that people in the movie business are always looking for a formula, and that formula is usually based on what worked last week.

History has always been forgotten in Hollywood. For young people in Hollywood, history begins the day they are born.

I took the cast of Whatever It Takes to dinner at Mr. Chow's, a favorite film-industry restaurant, in spring 1999. The movie was Cyrano-set-in-high-school, so the principal cast members were all in their late teens and early twenties. We sat upstairs in a private room where a David Hockney pencil drawing of Billy Wilder stared down at us. "Do you know who that is?" I asked one of the film's twentysomething stars. She didn't. "That's Billy Wilder, the great director," I said. "He's made some of the best movies ever." I ticked off a very brief Wilder filmography: The Apartment, Some Like It Hot, and Sunset Boulevard. But the actress just smiled at me. "That was before I was born," she explained.

To some degree, the fault for this myopia belongs to my peers and me. I grew up revering the history of the business, but that isn't the case of young people in the business today. We're responsible for much of the sameness of movies today. The movie business has always run on a here-and-now mentality: Who's hot and who's not is all that has ever mattered.

But increasingly, in daily negotiations, fewer and fewer people care about even the recent past.

It's no longer "What have you done for me lately?"; it's "What can you do for me right now?"

I am the child of survivors. My father had eight brothers and sisters and only three of them survived the famine in Russia at the turn of the century; my mother had fifteen siblings and only three survived. Later in life, I discovered that there was in me a survival instinct that I have called upon time and again throughout my career.

If they could beat those odds, I've always felt I could beat the odds in the movie business.

My Hollywood career started when a family friend wrangled a meeting for me with a man named Al Dorskind at Universal, who sent me to see the department head of the international sales division. I arrived for the interview wearing a suit and tie, ready to jump on a plane for my first overseas trip if need be. I figured I was the model candidate. After all, I spoke Spanish, English, and traces of Russian, Italian, and French. I was something of a citizen of the world with my overseas upbringing, and I had been schooled in world history and political science at UCLA.

Unfortunately, there were no jobs available in the international department.

In fact, the only job open to someone with my qualifications was in the mail room. Short of going to Schwab's and sitting at the counter drinking root beer floats until Mervyn LeRoy offered me a job as a production assistant, it looked as if the only way Morris Medavoy was going to break into the movie business was delivering mail, bicycling around the Universal back lot in 100-plus-degree heat or the pouring rain. When I started the mail room job, I did so with the indefatigable confidence that a promotion was imminent. My line of reasoning was quite simple: Once they see how smart I am, I'll be out of here in no time.

My rude awakening came when I realized that everyone working in the Universal mail room was just as smart as I was, if not smarter.

The $67-a-week job might have become a clich$#233; -- everyone from Michael Ovitz to Barry Diller to David Geffen got started in a Hollywood mail room -- but my colleagues certainly weren't clich$#233;s: John Badham, who would direct Saturday Night Fever; Marc Norman, who would become the Oscar-winning screenwriter of Shakespeare in Love; Walter Hill, who would direct 48 Hours; Steve Wolf, who would promote the first Beatles concert at the Hollywood Bowl and be killed shortly afterward for the ticket money it was thought he had; and Ken Handler, who was the model for the Ken doll, partly because of his looks and partly because of the fact that he was the son of one of the owners of Mattel. The one thing we all had in common was that none of us wanted to be delivering mail, so it shouldn't be terribly surprising that we weren't very good at the job.

We all had the same basic goal: to get the hell out of the mail room and into the movie business. Our agenda resulted in a great deal of incompetence, perhaps the most egregious being the accidental placement of a pack of important party invitations in the studio's international pouch to London rather than to the local post office. The party, it turned out, was being hosted by Lew Wasserman for Joan Crawford. Though the invitations were eventually located in London, it was too late, and the party had to be arranged by a flurry of phone calls and telegrams to the invitees from Wasserman's secretaries.

Precocious and ambitious, my mail room colleagues and I were the source of many uncredited innovations at Universal. One day we all sat down and drafted a memo to the studio management proposing paid public tours of the back lot. A few months later the Universal Studios Tour was inaugurated -- not that we were ever given any credit. Our particular group was so unique that it later inspired Iris Rainer Dart, who was married to Steve Wolf, to write a book entitled The Boys in the Mail Room. But, as anyone who started in any Hollywood mail room will tell you, the only good thing about the mail room is being able to reminisce about it once you have moved on.

I learned early on from a series of mentors four of the most important things in life: maintain your character, maintain your dignity, be loyal, and never stop learning. And I have never forgotten the apocryphal words of my grandfather on his deathbed: "You spend your whole life learning and then you die."

In this business, it's easy to confuse character with reputation. The great UCLA basketball coach John Wooden once defined character as what you really are, whereas reputation is what you are perceived to be. My first mentor was a man I met while we lived in Chile. Donald Decker ran a camp for eight- to twelve-year-old boys, modeled on the American YMCA camps. Being selfish wasn't tolerated, and Don's motto was "The other guy first." Through games and storytelling, Don taught us how to get along and work with other people.

Ralph Winters, a well-known casting director at Universal, hired me out of the mail room to help him cast the pilot of Dragnet. Jack Webb, the show's wily star, often took me out to dinner and, while downing double scotches, lectured me about the business. At the time, I knew virtually nothing about the inner workings of the industry and less about scotch. When I mentioned to Jack that I wanted to leave Universal, Jack set up a meeting with Lew Wasserman, the legendary Hollywood powerbroker and head of MCA/Universal. Lew asked me, "So what job do you want?" "Yours," I told him. Since Wasserman wasn't going to step down for a redheaded twentysomething who had been out of the mail room for only eighteen months, I went to work as an agent for Bill Robinson, who gave me my first real break in the movie business.

Years later I was hired to be head of West Coast production at United Artists by Eric Pleskow, the company's president. Eric became more than a mentor; he became a great friend. United Artists was run by Arthur Krim and Bob Benjamin, the two men who instilled in me the importance of character and dignity. Lawyers by trade, Arthur and Bob bought the ailing United Artists in 1951 from two of its founders, Mary Pickford and Charlie Chaplin, and turned the company into one of the preeminent places to work in the movie industry. Eric, Arthur, and Bob were gentlemen filmmakers who set the standard for film executives. They started out as my mentors, and I became their partner. Together, the four of us and Bill Bernstein left UA and formed Orion Pictures.

Our group (reduced to four when Bob Benjamin died in 1981) worked together from 1974 to 1990 in one of the most unique executive partnerships in Hollywood history. Arthur was a silent giant in the film business with interests reaching into politics, arts and letters, and charitable causes. As a close adviser to President Lyndon B. Johnson, he actually lived in the White House two days a week. LBJ aide Jack Valenti, who is now head of the Motion Picture Association of America, told me that every major decision Johnson made was in consultation with Arthur Krim. Bob Benjamin was a quiet and contemplative father figure whose wit and wisdom were unmatched. Eric Pleskow, who continues to put films together as an independent producer, is a brassy and somewhat stoic Viennese immigrant whose practicality rubbed off on me. Bill Bernstein, who is now executive vice president of Paramount Pictures, has a brain like a hard drive, and he could come up with facts and figures, date and deal points at a moment's notice. We all learned from one another.

Arthur, Bob, and Eric taught me how to trust filmmakers. United Artists used a system of five basic approvals to greenlight movies: script, director, producer, budget, and principal cast. Because material was submitted through various channels, there was no particular order to the approvals. For example, if a producer brought the script in with a director on board, we would then turn our attention to cost and casting. Once the five approvals were in place, the filmmakers would go off and make the movie. As long as those elements remained, we didn't second-guess our filmmakers, but if any of those elements changed without our approval, then we reserved the right to shake down the producer and director. Never once did things become so out of hand that we fired a director. We also gave a fair accounting of profits to talent and didn't charge overhead on film budgets. In a business known for its shifty reputation, this kind of honesty and decency was unparalleled. Over the years, we stuck together through Oscar wins and box-office losses. We were always underfinanced, yet we almost pulled it off, and we left behind a long and distinguished list of movies.

I've always thought of a mentor as someone who can teach me something vital. Even after my career was well established, I found a new mentor in Gerry Schwartz, whom I met while forming Phoenix Pictures in 1994. Gerry knew very little about the movie business, but he agreed to be the primary backer of Phoenix because he wanted to expand his horizons. Because of that I, too, have expanded mine. We talk several times a week about business, culture, or family, and we often spend vacations together.

But the challenge for me remains: How do you make interesting films that will support themselves in the marketplace?

The daily lives of the people at the upper ends of the movie business are centered on what happens inside of a large diamond-shaped section of greater Los Angeles that stretches from Culver City to Burbank and from Beverly Hills to Hollywood.

Nevertheless, particularly as I grew older, I wanted my life to be more than just the film business. I have a library full of books about history, politics, and culture, and I've read them. Movies are high profile all over the world, and as a result of my work, I've had "access," made close friends with political leaders both foreign and domestic, and sat courtside at countless sporting and musical events. Two of the highlights of my political involvement were my work as a finance co-chairman on Gary Hart's 1984 presidential campaign and my association with Bill Clinton, who invited me to spend the night in the White House a couple of times -- which I did without ever having to become a soft-money donor.

In the four decades that my career has touched, my colleagues and I have been in the eye of several well-documented Hollywood storms. My indoctrination as a studio executive came when I flew to the Philippines to visit the set of Apocalypse Now and arrived to find Francis Coppola on the verge of madness, Martin Sheen recovering from a heart attack, and a film that had no end in sight. A different kind of storm occurred on another project I worked on with Francis: The Cotton Club, which became the subject of a murder trial. Then there were films that saw political battles accompany the release: Coretta Scott King took Mississippi Burning to task without seeing the film; the Guardian Angels had toilet seats covered in a bloodlike substance delivered to our offices when the gang-themed Colors was released; gay and lesbian rights groups picketed Basic Instinct; and Gloria Steinem went on a vendetta against The People vs. Larry Flynt.

The most personal of all the controversies came in 1992 with the tabloid scandal surrounding Woody Allen. I had brought Woody to TriStar. Months before Husbands and Wives, his first film with us, was going to be released, Woody became embroiled in an epic scandal. First, he revealed that he was having an affair with his longtime companion Mia Farrow's adopted adult daughter, Soon Yi Previn. Next, Mia filed charges accusing Woody of sexually molesting their young daughter Dylan. When the scandal reached its peak, I found myself sitting in Woody's screening room, listening to his side of the story, trying to get enough information to decide when and how to release the film. It was a moment I never want to repeat.

Years ago, I said to myself, "Don't peak too early. Life is, at best, a marathon."

I didn't understand then what a long career meant, but I knew I wanted to have one. Along the way I learned a couple of things:

I learned that you can rediscover yourself and make your life fuller.

I learned that the business of film is a business of manufacturing dreams. Movies are part of the world's cultural framework, and they are our nation's largest export, having recently passed plastic. We can't live without plastic, and I don't think we can live without movies either.

And I learned that a good film gives people from all walks of life that chance to sit in the same theater and share a dream. What I love most about films is that they are a telling of a story in photographic images that opens up new worlds both consciously and subconsciously. Films have left indelible images in my mind that have become part of who I am.

Even when I worked in the world of corporate competition and quarterly dividends, I always kept those dreams in the back of my mind. I've had to make compromises, I've been at the center of bad publicity, and I've been less than charitable on occasions. It's considered chic in Hollywood to be destructive and to gloat over the failures of others, and I'm a creature of Hollywood. But we all fail someday. It's easy to be cynical about Hollywood and about life imitating fantasy, but each movie brings new hope.

Good films can really change people's lives for the better, and good films can still be made.

This is the story of how we try to do just that, despite impossible odds.

Copyright © 2002 by Mike Medavoy and Josh Young