Saturday, November 30, 2013

George Clooney Says, "Hollywood, Ignore Hedge Fund Investors"

[It took me almost 3 hours after posting to add some additional material. Apologies to everyone who checked it out early on, but I had made some updates and they didn't save properly] On Friday, August 2nd, I noticed an article about writer/director/actor/heartthrob George Clooney. The guy appears in news articles often enough, but in this case, he was speaking out against a certain person who is exerting influence on Sony film-making studios.

Now, as has happened so often in the past, this article shows us an individual who is smart and opinionated - and, most importantly, deeply-committed to the film industry.

In essence, the article is about an activist investor named Daniel Loeb. In case you don't know much about activist investors, here's the link to the Wikipedia page on the topic. For those of you who don't want to read it (and shame on you for being lazy), I can summarize the idea thusly: they're people with money who buy a lot of shares in a company and then tell all the other shareholders that the business they invested in isn't being managed properly. They then suggest various ideas for making the business more profitable.

The article is a little unfairly-narrow. For example, Loeb had a whole range of suggestions for Sony, particularly for spinning off part of their business. While that move does seem to be about isolating losses from Sony's computer hardware, it makes sense that Loeb would have plans for the film division as well. Then again, he ousted the board of Yahoo!, then sold off his stake a year later.

It's a shame that it took me 4 months to write this entry. Then again, I don't follow up on a lot of my news entries, so maybe it actually is better to have the benefit of later developments. I was far too busy while these events were playing out this Summer. Loeb's public comments against the company serving as a catalyst for Clooney's impressively-lengthy and thorough critique. Among other things, DL said
“We were surprised that after Entertainment’s highly touted big budget summer releases — After Earth and White House Down — bombed spectacularly at the box office, CEO [Kazuo] Hirai... brushed off these failures saying: ‘I don’t worry about the Entertainment business, it’s doing just fine’,” And the television business "relies on old Merv Griffin Production workhorses like Jeopardy!"... but “has no hit network television shows, only one major syndicated network show, the Dr. Oz Show, and has missed the market for unscripted television.”
So, yes, Mr. Loeb speaks in the third person, and that's the real tragedy in this news...

Let's keep in mind that Sony's CEO responded 2 months before George did:

And since so much time has passed, we can look at the news that came 3 days after Clooney's public statement - in which Loeb basically pussied out and back off and was completely politic about all of it. Now, it's more than 3 months after the fact, and the hedge fund CEO has said that he and GC share the same hopes, dreams, desires and fantasies - wait, sorry, that they want the same things... for the Japanese company.

Hell, Ashton Kutcher has chimed in on this. And he called both men naïve. (watch the video in that link)

However, for a long time, it's been clear that Hollywood is a conflicted business. It's engaged in creating "art" - but that art has to be embraced by a large enough percentage of filmgoers around the world to make that art profitable. For another thing, the failure of any particular film may be blamed on the quality of the film-making - a valid complaint if ever there was one. However, at other times, a fine film just doesn't find an audience when it's released - and, in those cases, executives lay the blame on a genre not being popular anymore, or the film not being based on existing "franchises," so the whole venture was a bad idea because it was rated R, when PG and PG-13 films tend to do much better box office.

The worst part of all this is that the standards are unoriginal market-chasing, and reductivist, and... stupid. For many execs and/or investors, it doesn't matter whether the movie sucked. If a picture doesn't earn its budget back, the fault is that it wasn't made for kids, or about a topic that's not really "popular" right now, or because it didn't have any "stars" in it. but because there wasn't the built-in audience that would exist if, say, I made a film based on Winnie-the-Pooh or Dr. Seuss story.

If you look at some of my past posts - notably the ones on sequel-itis and remake-itis, as well as the one for the Liberace biopic - you see that, more and more with time, a lot of non-artistic factors are influencing the movie-making biz. I despise this quite a bit, and I therefore laud Mr. Clooney, both for speaking out on this subject, and for encouraging long-standing industry professionals to listen to their instincts and experience instead of people with deep pockets, loud voices, and no knowledge of the business itself...

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