"Dumb money” used to be a big joke in Hollywood. Rich folks who
wanted to rub shoulders with glamorous stars would throw money at
Hollywood and for some reason, their films never made any profit. Blame
“creative accounting.” Eventually, they would slink back to the safer
waters of Wall Street.
Today’s billionaires are much smarter about their Hollywood
investments. They’re not just in it for the glamour, they’re in the game
to make money and create quality films.
Exhibit A: James Packer.
Worth $6.5 billion, the Australian casino mogul decided last year to
invest in Hollywood. (You can read more about Packer’s Tinseltown gamble
here.)
He partnered with director Brett Ratner to form RatPac, a production
company that Packer plans will eventually encompass movies, TV and
publishing. One of RatPac’s first deal was to land a massive financing
deal with Warner Bros. RatPac is now covering 25% of the production
budget of all Warner Bros. films.
The first movie in the RatPac deal was Gravity, which last night won seven Oscars including
for Best Director. Although the film was completed by the time RatPac
signed with Warner Bros., it hadn’t yet been distributed so Packer got
to take his 25% stake in the film. Not only did Gravity win the
most Oscars this year, but it’s also the highest-grossing of the Oscar
films. The movie earned $704 million on a budget of $100 million meaning
Packer and Ratner stand to make millions from the deal.
Another Forbes billionaire who played a role in last night’s Oscars was Arnon Milchan (Packer
considers Milchan his best friend and mentor when it come to financing
films.) Worth $4.7 billion, Milchan ranks 319 on this year’s Forbes
Billionaires list. His New Regency Pictures partnered with Brad Pitt’s Plan B Entertainment to produce 12 Years a Slave,
the brutal film about slavery from British director Steve McQueen. Last
night the movie walked away with the biggest award of the night: Best
Picture. Milchan recently admitted
that he had been a spy for Israel (something that was always rumored
in Hollywood). It’s unlikely the admission will affect his standing in
the film industry. In addition to its Oscars, 12 Years a Slave earned $140 million at the global box office on a budget of $20 million. The film should continue to earn on home video.
Billionaire producer Arnon Milchan (center)
joins the cast and crew of ’12 Years A Slave’ to accept the award for
Best Picture at the 86th Annual Academy Awards (Photo: John
Shearer/Invision/AP) Although she’s not on our Billionaire’s list yet, Megan Ellison has
become a big presence in Hollywood and she had two films up for multiple
Oscars last night: Her and American Hustle. Although American Hustle got shut out, Her won for Best Original Screenplay. Ellison’s father, Larry Ellison, ranks fifth on our list with $48 billion.
Both of his children have gravitated to the movie industry. Ellison’s
son David is helping finance big budget movies at Paramount like Star Trek and the hit zombie film World War Z.
Megan Ellison has focused more more on the indie world. She’s backing
the kind of tricky films that don’t always attract studio financing.
Ellison doesn’t have anything lined up for 2014 but she’s stepping into
franchise territory with the Terminator films which she now owns the rights to.
,
Another Forbes Billionaire who has successfully made the leap to Hollywood is Jeffrey Skoll. Ranking 396 on our Billionaires list with $3.8 billion, Skoll’s Participant Media has earned Oscars for movies like Lincoln and The Help. The company’s big 2013 movie was The Fifth Estate which turned out to be a critical, and financial, bomb.
What do billionaires have in common? What is it that they do
better than anyone else? Why do we admire them, or their companies’
products and services, so much?
I’ve spent some time trying to identify common traits in the Forbes list of billionaires
and other similar lists of the world’s wealthiest. I’m particularly
interested in finding patterns in the types of people whom I respect.
It’s less about all that dough they’ve accumulated than about better
understanding how and why they made their fortunes.
It turns out there are many ways to make a billion dollars: real
estate, investing, gaming and entertainment, retail, technology, and
good old-fashioned inheritance. But the most interesting (and most
respected) businesses and personalities are also the ones with the
strongest and most authentic purposes behind them. My business partner, Mats Lederhausen,
was one of the first advocates I knew of purpose-driven business and
entrepreneurship. I credit Mats with helping me understand that purpose
is neither something soft nor something overly lofty. Instead, purpose
is the bigger why of a business. All of us understand the what of any successful business, but what about the why?
While billionaires and their companies are bucket companies by
industry (i.e. the what of the company), I believe that there are three
categories of purpose that are interesting to observe, and consider
which one dominates your company’s mission. Here they are:
1. Making the world more beautiful.
2. Making the world more fun.
3. Making the world more efficient and smart.
1. Making the world more beautiful. These are the
people who make us look, eat, and live more beautifully. It is a broad
definition of outer and inner beauty. The best are able to make us look
and feel good. The beauty category of billionaires includes the
larger-than-life fashion figures of Ralph Lauren, Bernard Arnault (of
LVMH), and recently minted billionaire Tory Burch.
It is actually quite amazing to see how many of the world’s richest
come from the fashion, retail, and design worlds. And then there are
those who aren’t explicitly in the design, style, or beauty business but
nonetheless identify strongly with these themes. Apple, of course, is
the poster child for this ethos, as it puts design first for everything
from its software to the industrial engineering of products. For Apple,
it is not just design that matters — what’s paramount is using design to
connect to the user.
Beyond beauty sensed with our sight and touch, there are the founders
in this category who have focused on our inner beauty and health.
Indeed, there are people like Hamdi Ulukaya (the Turkish founder of
Chobani Greek Yogurt) or the founders of a variety of biotech and
pharmaceutical firms who have achieved this through focusing on the
purpose of healthier ways for us to eat and live.
2. Making the world more fun. One name that springs
immediately to mind is Richard Branson. His mission and purpose center
around fun and play. Disney is another icon that has redefined the
entertainment experience. But perhaps my personal favorite of a
billionaire founder who has spread his creative fun around the world is
Cirque du Soleil founder Guy Laliberté. Making the world more fun is
noble and creates greater happiness for us all. The billionaire founders
who get this and who have succeeded in doing so help to put more
smiles, more laughter and yes, more fun into a world that is too often
dull and mundane. Fun is a good business model — and it does not need to
be a billion-dollar enterprise. It is perhaps because it is relatively
easy to think of small ways to create fun that it is even more
impressive when people such as these are able to scale fun on a massive
level.
3. Making the world smarter, more efficient, and more relevant.
There are more “knowledge workers” today than ever before. In this
world, we have all become familiar with the technology and Internet
moguls (e.g. Larry Ellison, Bill Gates, Sergey Brin, and Larry Page) who
have helped to make us smarter, faster and more efficient in our daily
lives. Doing work via shared Google Docs versus a word processor versus a
typewriter — yes, we’ve come a long way. The connected social economy
and its companies like Facebook and LinkedIn are all about how we can
try to do more, faster. That is, these companies allow us to have more
communication moments in ever-shorter time segments. And there are also
information and media moguls, like Mike Bloomberg or the Thomson family
behind Thomson Reuters, who dominate financial and legal information,
respectively, and are viewed as being mission critical to professionals
in those fields.
As these firms enable more, faster, and smarter
throughput of information, a challenge will be to maintain relevancy. As
more and more information is thrown at us, we are now ironically often
seeking less and less of it. And this is perhaps what the next great
wave of tech and info billionaires will address — as curators whose
purpose will be to find greater meaning, context, and relevancy in this
mass information world.
So, while there are many ways to make money, there tend to be some
common patterns of higher purpose. The three purposes illustrated here
help explain why and how some of the world’s wealthiest have have gotten
so rich, and made our lives richer as well. These three purpose
categories likely blur at times, and certainly co-exist in terms of the
culture and value propositions of the truly great companies. But the
take-home lesson is to ask yourself which of these purposes you are
willing to strive to become the absolute best at. Companies and founders
that make a singular and unwavering commitment to excel along any of
these three purpose dimensions not only have the chance to make our
lives better, but also to leave an imprint on our culture, on how we
view and experience this world. That, and they might just end up as
billionaires.
