Captains of Industry: David Geffen with Stephen B. Shepard
Founding Dean of CUNY Graduate School of Journalism Stephen B. Shepard sat down with DreamWorks SKG founder David Geffen on February 17 2005, part of 92Y’s Captains of Industry series in partnership with BusinessWeek.
As BusinessWeek wrote at the time:
“David Geffen, CEO of DreamWorks SKG, will admit to something that few among Hollywood’s glitterati might: When he started out he “really didn’t have any big plans.” As a boy in Brooklyn, he never dreamed he would someday own an independent music label, help start a movie studio (with Steven Spielberg and Jeffrey Katzenberg), and become one of America’s top philanthropists. No, that wasn’t in the cards. “
If he were just starting out:
I wouldn’t go into the entertainment business. It’s too expensive to make the product. The chances of hitting a home run are smaller and smaller and smaller. I would go into computers, the Internet business. I would like to be one of the guys who invented Google (GOOG). That sounds like a good job.
Dealing with piracy:
The film business has been smarter about pricing [to discourage piracy]. The record industry, when the cost of manufacturing went down, raised prices. That was a big mistake. The soundtrack of Jaws costs more than the DVD. The movie business priced DVDs correctly. Every six months, it lowers prices.
Early troubles at DreamWorks:
A couple of times we were on the verge of bankruptcy. When we made Sinbad we lost $125 million. We just didn’t understand how challenging it was to start a company — where you have to put your entire infrastructure in place with no product going through it. Also, the cost of making [and marketing] movies escalated beyond anything we imagined.
Animation vs. live-action films:
The animation company has a market cap of over $4 billion and the whole company has a market cap well over $5 billion. The animation business is infinitely more profitable.
Walt Disney’s problems:
Over the past 10 years, Disney (DIS) has been a sieve in which incredibly talented people have either been fired or left because of the atmosphere there — beginning with Jeffrey Katzenberg.
How he invests:
I met Eddie Lampert [whose fund now controls Kmart (KMRT)] when he was 25. In 1991 I gave him $200 million to invest. He has compounded annually since then at 30% a year. So you can figure that out for yourself.
Hillary Clinton for President in 2008:
I hope not. She can’t win, and she’s an incredibly polarizing figure. I think ambition is not a good enough reason.