A ‘Virtually Empty’ Vault : Entertainment: The new guard at Columbia Pictures talks about what it found upon taking charge--and where the film company is headed.

Sony Corp. hasn’t quit making waves since it bought Columbia Pictures Entertainment from Coca-Cola Co. and other shareholders for $3.4 billion last fall.

First came a nasty scrap with Time Warner Inc. over the services of Columbia’s prospective co-chairmen, “Batman” producers Peter Guber and Jon Peters, who happened to be under contract to the American media giant. The fight was settled in a deal some analysts have said could be worth $600 million to Time Warner, though Sony executives dispute that figure.

Guber and Peters then grabbed attention by spending big money on movie scripts and quickly hiring some of the best-known executives in the film business.

Mike Medavoy, who had long been New York-based Orion Pictures’ chief West Coast executive, signed on as chairman of Columbia’s Tri-Star Pictures unit.

Shortly afterward, Frank Price, who had previously headed both Columbia Pictures and Universal Pictures, became chairman of the Columbia film unit.

Medavoy, Price and Alan Levine--president of Columbia’s film group and an entertainment attorney who previously represented Guber and Peters--agreed last week to talk about their new positions as Sony’s top film executives. (Columbia’s extensive television operation is headed separately by Gary Lieberthal.)

The discussion took place in the commissary of the Culver City movie lot to which Columbia is now moving from its old quarters at the Burbank Studio. Guber and Peters declined to be interviewed and did not attend.

A key point proved to be what the executives say was their surprise at the poor condition of Columbia’s movie operation when Sony bought it.

THE TIMES: Were you surprised at what you found when you first got inside Columbia’s movie operation?

LEVINE: We were surprised.

TIMES: In what way?

LEVINE: We were surprised that there weren’t a great deal of pictures in the pipeline. That the development (of movie scripts) was rather extensive, (but) projects had not moved along to a stage where they would then be made. We opened the door in the vault, and it was virtually empty.

PRICE: Which, by the way, creates a real morale problem.

LEVINE: When we got here, I guess there were very few pictures that were made. Columbia made very few pictures.

TIMES: During what period, the prior six months?

LEVINE: Prior to the time we got here. Jon, Peter and I started Dec. 1, and Frank started two weeks ago, Mike about four weeks ago. There were very few pictures in the pipeline.

TIMES: Because of the transition process?

LEVINE: Oh, no, no, no. This goes way back. I think this is not just transition. When the company was preparing itself to be sold, rather than take additional risks with pictures they may have otherwise made under different circumstances, they didn’t want to take that risk.

TIMES: You seem to be saying that’s a reflection less on the movie management that was here at the time (Tri-Star’s Jeffrey Sagansky, now a CBS executive, and Columbia’s Dawn Steel, now a Disney film producer) than on a corporate decision to stand pat until the sale was complete.

LEVINE: We’re speculating that was the case, because that’s logical. I don’t know for sure whether that was the case, or whether the management on the creative side simply didn’t want to make those pictures. You would think by the amount of development that was occurring that they wanted to make pictures, so I have no reason to believe that they didn’t. One can only then suppose that their reason had to do with their intention to sell the company.

(Victor Kaufman--Columbia’s former chairman, now with Cody Productions in New York--declined to comment.)

TIMES: Did the Blackstone Group (which advised Sony in the Columbia purchase) do its job? Did they do ‘due diligence’ and give a full and accurate report of what Sony was buying?

LEVINE: I assume so, but I was not involved, nor were any of us involved in the due diligence process. We were involved in the process of selling our company, the Guber-Peters company, to Sony as well. So that we weren’t involved in the Sony-Columbia transaction at all.

TIMES: Was the level of surprise at the product coming through so great that you feel Sony overpaid for Columbia?

LEVINE: Oh, no.

TIMES: Are we going to see writeoffs?

LEVINE: I don’t think that you’re going to see a lot. This may be premature . . . to give you the answer in any detail because we have all been given a directive, basically, of doing this carefully, with patience, on a well-thought-out plan. We have the luxury of being able to take our time.

TIMES: Given what looks like a dearth of readily available films, what is your mission now?

LEVINE: The mission is to evaluate what is there, and bring in the best management we could possibly find to run these companies. We’ve succeeded at that. And to create an atmosphere that’s quite different from the atmosphere we found when we got here. That atmosphere has to do with long-range planning and hopes. The strength of Sony from a financial point of view and also from a morale point of view is really in building a company that has an environment within which creative people can flourish. Bringing the best management, the best artists, the best everything.

MEDAVOY: You need a sense of stability. You can’t run these companies with management changes every other year.

TIMES: The lore has been that you went out very quickly, before Mike and Frank were here, and spent a lot of money on scripts and books to make an impression. True?

LEVINE: I’ve heard this, I’ve also read it. That we’re trying to make a statement, or that we actually overpaid for things. Look at the track record of Jon and Peter. These guys know value in the marketplace. They have not been precipitous in any of their purchases of literary material in the past. If you look at the lineup over the last couple of years, just last year alone, doing “Tango and Cash,” “Rain Man,” “Batman,” “Gorillas in the Mist.” These pictures were all based on material that was purchased or developed by them over a long period of time. They know value, and so I’m amused by the implication or even the direct statement that we overpaid for stuff.

TIMES: So there really was no spending spree?

LEVINE: Given the fact that (Columbia’s prior management) hadn’t really drawn a hell of a lot of attention to themselves at the studio in the six to 12 months prior to our arrival, anything would look like a spree, I suppose. This is natural in any transition. But the answer to your question, directly, is no.

TIMES: Alan, you have a couple of big guys to your left and right. Where are you going to fit?

LEVINE: Right here! (Between them.) Each of these fellows has the ability to run his own shop, and I’ve managed a lot of people in the creative community in the 18 years I’ve practiced law. I’ve managed them on the basis of giving them help and assistance, whatever they’ve needed to flourish. That’s what I did with Jon and Peter, and that’s what I’m going to do with these guys.

TIMES: Where are all three of you going to fit vis-a-vis Jon and Peter? Is there an agreement about how the process will work?

LEVINE: As far as day-to-day management of the company is concerned, that’s my job. Jon and Peter are running the entire company. What I believe Jon and Peter really are looking to do is help set the map, or help set the plan for the future.

(Price and Medavoy) have autonomy when it comes to developing, producing, marketing and distributing their pictures.

TIMES: Mike and Frank, what will happen when you decide you’re going to make a film? Do you expect to make that decision jointly with either Peter or Jon or Alan?

MEDAVOY: Both Frank and I have the autonomy to go and make whatever film we decide we want to make.

TIMES: Any budgetary limits to that? Has anyone said it’s all yours if you’re talking about $25 million, but come talk to me if it costs $40 million?

MEDAVOY: We’ve never had that discussion because I don’t think we’ve ever contemplated not having a discussion (about movie projects), and I don’t mean asking for approval. We both feel there’s a resource in Peter and Jon and Alan, and we want to counsel with them. The advantage is we’re all in the same location. It’s not like I’ve got to find somebody in New York or wherever. So it’s not going to be a major problem.

TIMES: What happens if, hypothetically, Jon and Peter want to make a “Private Lives” (based on a Warren Adler novel, for which Columbia recently paid a reported $1.2 million to acquire the rights) and Frank Price doesn’t? You have the ability to say, ‘No, that’s not on the Columbia slate’?

PRICE: Right.

TIMES: These are not contractual, but gentlemen’s agreements as to how you’ll operate?

LEVINE: Those are the clear understandings that we have. I don’t think its necessary to characterize them as gentlemen’s agreements or documents. They could be both.

TIMES: Mike, what brought you around, after so many years, to leaving Orion?

MEDAVOY: It was the right time for me to make the move. I had a long relationship with Peter Guber. We talked about working together for years, and I thought it was a good opportunity for me. . . . I had a long history with Art (Krim), Eric (Pleskow) and Bill (Bernstein). It was not an easy decision to make.

TIMES: At Orion, you had an explosion of success with “Platoon,” “Amadeus” and some other films. Then you had a couple of years when things sagged. Why?

MEDAVOY: There’s a cyclical nature to film production. You can have a terrific year or even a terrific couple of years, then you can have a year that things don’t work. Orion didn’t have the benefit of those franchises that Paramount had, where you can go back and do a “Star Trek” over again. Or it never really got into what I call the Disney comedy business. It also doesn’t have as deep pockets as a lot of these companies have. The interesting thing is, I feel (Orion) will probably have another banner year this year. There’s “Robocop,” which is a franchise. A Robin Williams picture is coming up, and quite a few rather promising pictures for this year.

TIMES: You hear that Mike Medavoy is a great executive whose hands were tied at Orion--that he couldn’t spend money readily on a script or project without getting approval from New York. Is that correct?

MEDAVOY: I would say it’s partially correct.

TIMES: The rest of the rap on Mike Medavoy is that he’s a “hustler,” a “townie,” a guy who’s out there on the circuit a lot, but also somewhat package-oriented--that you like to buy combinations (of scripts with directors or actors attached) rather than to develop. Do you buy that?

MEDAVOY: That was more true at Orion than it is now. At Orion, because it was less of a deep pocket, I had to wait around for packages. That doesn’t mean that I won’t continue to (buy) packages. . . . You know, I hate the word “hustler.” I’d rather be known as someone with taste, straight-shooting, honest, creative. You ought to change the word, and if you don’t, I’ll change it.

TIMES: Frank, didn’t you talk with Sony executives about the top jobs at Columbia before Guber and Peters took them?

PRICE: We had some preliminary conversations. They didn’t go anywhere.

TIMES: With whom?

PRICE: With (Sony USA chairman) Mickey Schulhof. He wanted to get acquainted and we did get acquainted. I presume I was one that they were thinking about.

TIMES: People say you’ve moved slowly at your production company over the past couple of years. Do you buy that?

PRICE: No. No, I was moving very rapidly.

TIMES: Doing what?

PRICE: Developing scripts. That process is very hard to do extremely rapidly. There are probably over 40 projects that we have in development there.

TIMES: What’s going to become of those projects?

PRICE: They merge into Columbia development.

TIMES: You must have had some ownership of those properties, and now you’re the executive who will administer them. Have you sold these to the company? What becomes of your rights?

LEVINE: The company owns the projects, and the economic arrangements we have with Frank are not subject to this interview, or any others, or any comment.

TIMES: At Price Entertainment, were you close to producing any film?

PRICE: We already have going “Return to the Blue Lagoon.” It’s in production late May, early June. It’s a continuation of the story. “Blue Lagoon” was one of the hits I had at Columbia. It deals with the child that was born at the end of the picture, and it continues the story of that child.

TIMES: You’ve mentioned morale. How was it when you got here and how is it shaping up now?

LEVINE: The issue of morale is a natural focus in any company that goes through either a transition of management or a change of ownership, and we just went through both. I think we’re all sensitive to the fact that we have very talented people that we want to be in a much better atmosphere, a loving atmosphere. We’ve clearly changed the environment, we’ve changed the atmosphere. Morale is changing right along with it.

TIMES: Can you avoid cutting people?

ALL: Absolutely.

TIMES: What about the producers, the writers, the projects that are being developed? Is a lot of the material going to have to be “turned around” (released for possible production elsewhere)?

MEDAVOY: Probably. I think fairly quickly. People don’t like to be hung up in never-never land. People like to get an answer, even if the answer is no.

TIMES: People are going to be watching for a long time to see whether working for the Japanese makes any difference at all. Do you think it will?

LEVINE: The major difference is their attitude about long-range planning and patience. That’s a very large difference in a very positive way. We don’t anticipate, and have not experienced, any impact on our management and on our day-to-day running of the company. The patience and hands-off attitude can’t be stressed enough, and that’s what’s going to make us very different.

TIMES: Is Sony going to be a stronger and more successful owner than Coke was?

PRICE: The record of Columbia during the years Coke owned it was not very good. Clearly, I would anticipate being much more successful.

TIMES: Where did Coke go wrong?

PRICE: I don’t want to comment on Coke. I’d just as soon duck it.

TIMES: Wasn’t Sony President Norio Ohga here a couple of weeks ago?

LEVINE: We had some meetings. Actually, we were on this lot. We opened a Sony store on the lot. Norio came to cut the ribbon.

TIMES: Presumably, he had other business?

LEVINE: I think he wanted to look at the lot and see what was going on here. But I think it was much more of a ceremonial visit than anything else.

TIMES: How will you relate to the Japanese management? Do you expect that only Jon and Peter, or only Peter, will talk to these people? They’ll talk once a month? Every day? Never?

LEVINE: I don’t think there’s any formality to it. I also believe that the communication will be like any other company that is interested in what their subsidiaries are doing. It’s an educational process, too. We’re learning how to deal with them. They’re learning how to deal with us.

TIMES: Mike, when you were hired, did you talk to Norio Ohga first? Was he part of that process?

MEDAVOY: Nope, never.

TIMES: Was anyone in Japan part of that process?

MEDAVOY: Nope.

TIMES: Was (Sony entertainment committee chairman) Walter Yetnikoff part of the process?

MEDAVOY: Nope.

TIMES: Who was?

MEDAVOY: The conversations were with Jon, Peter and Alan.

TIMES: Alan, on your side, did someone get approval from a Japanese executive to make these hiring decisions?

LEVINE: No, no approval. We had our mandate when we came into this company to build it and to run it.

TIMES: Were Sony executives alarmed by the attention Jon and Peter got during their first couple of months?

LEVINE: They didn’t display any emotion about that at all.

TIMES: The notion that Jon and Peter have been asked to cool it, to become less visible and let the publicity burn off--that’s probably not correct, then?

LEVINE: Probably not correct.

TIMES: Has Sony set any mission for the next two years?

LEVINE: No. As a matter of fact, they told us to get our arms around the company and assemble the best management team at all levels that we possibly can and then come and tell them what we want to do with the company.

TIMES: Do you expect any rapid-fire programs to promote new media or integrate Sony hardware with what you do?

LEVINE: One thing that will be a factor is probably Sony’s presence here on the lot in high-definition television. But the extent to which they are a factor in our operations is yet to be seen. We fully expect they will assist us in preparing this lot as a state-of-the-art facility, which will really be a showcase for the world as it relates to equipment and hardware developed for the motion picture and television business.

TIMES: Do you know when?

LEVINE: No, I don’t. . . . I’m not even sure I’m being accurate in describing the extent of the involvement when I describe high-definition television because that may only be one of the technologies that may come into play.

TEAM SONY

Alan Levine

Levine, 42, joined Columbia as president of its filmed entertainment group last December. As a partner in the entertainment law firm of Armstrong, Hirsch & Levine, he represented Columbia co-chairmen Jon Peters and Peter Guber, among others. Born in Los Angeles, with business and law degrees from USC, Levine grew up with Hollywood. His grandfather was an agent, his grandmother worked in MGM’s costume department, and his mother appeared in some of Hal Roach’s “Our Gang” comedies.

Mike Medavoy

Medavoy, 49, became Tri-Star Pictures’ chairman last February, after spending 16 years with an executive team that ran United Artists and went on to found Orion Pictures in 1982. He has worked on some 245 pictures, including Oscar-winners “Platoon,” “One Flew Over the Cuckoo’s Nest,” “Rocky,” and “Annie Hall.” He was born in Shanghai to Russian parents. After graduating from UCLA, Medavoy worked his way up from a post in the Universal mail room, “delivering mail to Frank Price,” to become an agent for Steven Spielberg, George Lucas and Francis Ford Coppola.

Frank Price

Price, 59, began his second tour as Columbia Pictures’ film chief last month. During his earlier tenure, from 1978 to 1984, Columbia released “Kramer vs. Kramer,” “Tootsie,” and “Gandhi,” among others. Born in Decatur, Ill., Price worked in Columbia’s story department and as a TV writer in the 1950s before moving to Universal’s TV unit. He eventually came back to Universal, where he headed the movie operation from 1984 to 1986. He then formed Price Entertainment, a film company with ties to Tri-Star, through which it released “The Bear” last year.