Tough as Steel : Columbia Pictures' President Runs Her Studio With the Style of Hollywood's Old-Time Moguls

Flashback to 1973: Dawn Steel, who began by answering telephones and now dreams up merchandise tie-ins for Penthouse magazine, notices that amaryllis plants take on a phallic look just before blooming. She hires an artist to exaggerate the effect and writes her own copy for the ad: "Grow your own . . . All it takes is $6.98 and a lot of love." The plant is so popular that Penthouse can't keep it in stock.

Fast forward to 1979. Steel has moved to Hollywood to develop product tie-ins for Paramount Pictures' films. Her first assignment is "Star Trek," the movie. But production is a mess, and there's no film to show McDonalds or Coca-Cola or anyone else that might put the starship Enterprise on their cups and commercials. So Steel stages her own show on the Paramount lot: She is "beamed down" on stage and "Star Trek's" stars materialize at her side. The retailers get the point: Soon Klingons are everywhere on TV, eating Big Macs and drinking Coke.

Fast forward again, to 1982. Steel has moved into film production. She's at the bottom of the totem pole, but she makes sure that everyone upstairs knows exactly who she is; one former colleague recalls this as Steel's "in-yo-face" strategy. Steel also has a script she wants produced, and she makes sure everyone knows that, too. Eventually the blue-collar musical epic called "Flashdance" grosses $95 million at the box office.

One year ago, at age 41, Dawn Steel got a chance to run her own studio when she was tapped as president of Columbia Pictures. The anomalies of that appointment remain the talk of Hollywood--the fact that Steel was the second woman in history to run a studio (Sherry Lansing was the first), that she wasn't a lawyer or an MBA or a film aficionado and yet she followed in the footsteps of David Puttnam, the British film maker with a lofty reputation.

Steel wasn't even one of those Hollywood producers who had majored in literature at Radcliffe. She never finished college. She was known as the one who sold toilet paper stamped with the Gucci label. In that sense, though, Steel is throwback to Hollywood's roots. Her track record at Columbia remains to be seen. But in taste, temperament and background, Steel is reminiscent of the old studio moguls who packed mainstream America into their theaters. Before they made movies, Samuel Goldwyn hawked gloves and Louis B. Mayer sold junk.

Today, authors write admiringly of how tough, aggressive and rude the old moguls were. Steel draws some of the same adjectives, though not always in admiring tones. "Steelie Dawn," her detractors call her. There aren't many shades of gray in Steel's operating style. Probably her two most common responses to film proposals are "no" (said often and abruptly enough to generate some enemies in town) and "it's a no-brainer" (an enthusiasm that, translated, means a film idea has the makings of a commercial hit).

Unlike other Hollywood players, "it doesn't even occur to Dawn to be afraid to say no," says producer and longtime friend Lynda Obst. "That's critical for a studio head." Obst points out that male executives in Hollywood aren't criticized for being too tough.

It's too early in her tenure to predict whether Steel will turn around Columbia. The studio has been in turmoil for years, and last summer's Hollywood writers strike seriously set back Steel's efforts. "No one should blink over Ms. Steel's performance for three years, and then they should only look at the projects she has in development," says Fox Inc. Chairman Barry Diller.

Moreover, with reports circulating that Coca-Cola is anxious to sell off its 49% share in Columbia, there's some question as to whether Steel will get a chance to rebuild Columbia. (See related article on Columbia Pictures in Business section.) And rumors persist that her future there may be short-lived anyway. Columbia's current dearth of films was highlighted when its only major Christmas release, "Old Gringo" (starring Jane Fonda, Gregory Peck and Jimmy Smitts), was pushed back until next year. Studio officials say the $24 million epic is not yet complete. Steel is enthusiastic about the film, even though it caused the studio some embarrassment early in production when Burt Lancaster sued Columbia after the studio dropped him from the film. Columbia had been unable to secure cast insurance for the aging actor.

But Steel says she is secure in her position. She points to the the whole-hearted support of her boss, Victor Kaufman, chief executive of Columbia Pictures Entertainment, and Herbert A. Allen, an influential Coca-Cola board member. "That relationship is going to remain very stable," Steel says, "I feel very comfortable about that."

Just as important, early in her tenure Steel wisely forged ties with Ray Stark, godfather to many of Columbia's most prominent films. The powerful producer was instrumental in Puttnam's fall from power. Now Steel's regime is producing his film, "Revenge."

If Steel succeeds at Columbia, it will be with the same kind of mass appeal fare and big name talent on which the old studio system was built. One of Steel's first actions as Columbia president was to resurrect "Ghostbusters II"; the film fell off the studio's schedule after Puttnam accused its star, Bill Murray, of excessive greed. Steel also put "Karate Kid 3" at the top of her schedule. Already, she's hot on the trail of the next "Flashdance." "Overall, Dawn's instinct is a commercial instinct," says James Wiatt, president of the talent agency ICM.

That doesn't mean Steel won't make difficult films. The first movie she produced at Columbia (though developed as a script when she was still at Paramount) was "Casualties of War," a dramatic Vietnam story scheduled for release next year. But in typical Steel style, she made sure the project was attached to big name talent, with Michael J. Fox and Sean Penn starring.

In contrast to the team at Disney, which rebuilt that studio by bargain-hunting for talent whose careers were on the skids, Steel surrounds herself with names that are currently "in"--Michael Douglas, Cher, Glenn Close, Sally Field, Sean Penn and Madonna; directors Adrian Lyne and David Seltzer; producers Scott Rudin, Gale Anne Hurd and Frank Yablans, Obst. Certainly Steel's contracts with these names, ranging in annual cost from $200,000 to $1 million for fees and overhead, enhance the studio's image. Some in the industry, however, speculate that they may not yield many film projects.

But Steel says she is counting on her alliances to generate product. "Columbia was one big dead motor that we had to get started," she says. "I felt that the way for us to do that was to enlist the help of a lot of producers. I chose very carefully."

Those contracts will be fruitful in another way: They have helped rebuild Columbia's ties with the talent agencies, particularly the powerful Creative Artists Agency, which had locked horns with Puttnam. Steel has shrewdly ensured that when an interesting film project surfaces, she's one of the first to hear about it.

At ease in her elegant Westside home one Sunday afternoon, Steel is vivacious, exuberant--and brimming with New York wit. Wearing khaki shorts, her hair in a pony tail and her 18-month-old daughter Rebecca on her hip, Steel gives a brief tour of what was once Jane Withers' pool house. Her home, where she lives with her husband of three years, arbitrageur-turned-producer Chuck Roven, is filled with the bright pastels of the early 20th-Century American pottery she collects.

It is also full of evidence of her close ties to Hollywood talent: photos of Barbra Streisand at her wedding shower; Tom Cruise at her side; a very pregnant Debra Winger next to an equally pregnant Steel; James Woods as best man at her wedding, where she broke Jewish tradition by insisting that she, as well as Roven, should smash the wine glass. "The rabbi thought I was an alien!" she says, laughing. In years past, the men she dated included Richard Gere, Richard Dreyfuss and Martin Scorsese.

Steel's life wasn't always so glamorous--or comfortable. She was born in New York City, daughter of a zipper salesman and his wife. The family name was originally Spielberg but her father changed it to Steel--reflecting his prowess as a semi-professional weightlifter--because of the obstacles facing Jews wanting to sell their wares to the U.S. military.

The zipper business was a rocky one, and Steel spent her childhood moving from the working-class side of the tracks on Long Island to a more fashionable neighborhood in upper Manhattan. The constant moving back and forth by her family, says Steel, left her with a vulnerable core, "which is what my toughness, if you want to call it that, hides. . . . But it also made me not afraid of ever losing my job. Having money is better than not having it, but I've been poor and I've survived."

She ran out of money after a year at Boston University and two at New York University, and landed a job as a receptionist at a small publisher of sports digests. The editor gave her a shot at writing, which is why she landed outside the press box at Yankee Stadium one afternoon listening to an old-timer tell her she couldn't come in because she was "a girl."

When Penthouse opened its doors in 1969, Steel was one of its first employees. She started as a secretary and did some editing before Penthouse founder Bob Guccione tapped her as director of merchandising to devise X-rated product ideas for the Penthouse label. "She has an uncanny ability to know what is commercial," says Kathy Keeton, chairman of General Media, Penthouse's corporate parent.

Guccione recalls Steel as "a very bright and enthusiastic girl with a good sense of what the public wanted . . . ." Her rise to merchandising director was made possible, in part, because the staff was so tiny. "I can't say it would have happened like that today," said Guccione.

In 1975, while traveling through Europe looking for gimmicky gift ideas, she came up with the idea of poking fun at the omnipresent Gucci label by stamping it on toilet paper. "I believed I had the pet rock," Steel says now.

She solicited orders from boutiques and bath shops and then formed her own company, Oh Dawn! Inc.--"because when I said I was in the toilet paper business, people would say, 'Oh, Dawn!' "

But within months the Gucci family sued her for copyright infringement. Attorney Sid Davidoff, a former top aide to Mayor John Linsday, agreed to take the high profile case even though Steel, he recalls, "didn't have a dime. She was living by her wits." Davidoff built a First Amendment defense, and made sure the press got wind of the case. The "toilet paper caper" became the stuff of headlines in New York's tabloids, and spawned an editorial cartoon portraying the Gucci family as Goliath battling poor little Dawn Steel as David. The case was settled out of court.

Steel continued her business with other products, this time securing licenses for the use of copyrighted material. She put horoscopes and crossword puzzles on toilet paper, James Beard cookbook recipes on paper towels, and turned soap bars into Life Savers.

But by 1978, Steel was exhausted by the lawsuit, and a 10-month long marriage that had ended in divorce. She sold her interest in her business to her ex-husband, and asked Davidoff to place a call to Hollywood. Davidoff did--asking Richard Weston, who ran Paramount Pictures' merchandising unit, to meet her.

Davidoff recalls that in those days, Steel appeared tough, "but she really wasn't." But her new career at Paramount would thicken her skin--particularly after her success with the "Star Trek" campaign landed her a job on the production side. Steel didn't know it then, but she had been plopped into the midst of the most rough-and-tumble territory in Hollywood. "You had to get it quickly or they'd blow you out of the water," says Craig Baumgarten, then a Paramount executive.

The Paramount team included names like Barry Diller, who went on to run Fox; Michael Eisner, who together with his top lieutenant, Jeff Katzenberg, went on to run Disney; Frank Mancuso, who was later handed the reins at Paramount; and Don Simpson, who went on to produce mega-hits like "Top Gun."

Those who knew Steel then recall that it was a particularly difficult time for her. She was a woman in a traditionally man's world, and she lacked formal training in film. "There was a presumption then that she couldn't survive," Obst adds.

"Women tended to be judged more harshly," says Weston. That probably pushed her to accomplish more sooner." Baumgarten recalls seeing Steel late at night in Paramount screening rooms, catching up on old films, "educating herself with single-minded intensity."

Steel also quickly learned Hollywood's golden rule: Relationships are key. "Dawn used to look around for hot talent the way some guys look for dates," recalls one former colleague.

Steel took another lesson with her. "Paramount worked under a system of advocacy," she says, "which is how I run Columbia. It's about passion, and if somebody is passionate about a development deal, they're going to get it made."

Her first passion at Paramount was "Flashdance," the story of a teen-age girl, welder by day and nightclub dancer by night, who dreams of become a classical ballerina. By now, the disputes about who actually deserves credit for that hit are legendary. And at least one person involved in the film notes that Steel began by championing a script that required nearly a complete rewrite.

But there is general consensus that Steel sensed its commercial potential and kept the fires lit. Steel's star continued to rise when "Footloose," a second dance flick she championed within Paramount, was a box-office success.

Paramount's commando team scattered in 1984. Steel stayed behind and was given the president of production job. Films developed or produced under her tenure included "Fatal Attraction," "The Untouchables," and "The Accused." But her relationship with her boss, Ned Tanen, soured and in 1987, after giving birth to her daughter, she decided to become an independent producer in partnership with actor Michael J. Fox. (Through a Paramount spokeswoman Tanen declined to comment.)

"I now had time for my husband and daughter," Steel says, "and I was going to make films for Michael Fox, so what could be bad?" Nothing, except that one day Victor Kaufman called and wanted to know if she'd be interested in running Columbia. They met every day for a week, and by Friday she had accepted the job.

When Steel's friends and allies are asked about her shortcomings, the most candid of them point to her sometimes abrasive tone and quick dismissal of people she doesn't like or ideas she doesn't deem commercial. "When I get anxious and scared I probably lose my temper more than I should," Steel acknowledges. "I think when I got the head of production job (at Paramount) I was much more abrasive. I'm getting better."

Complaints continue to emanate from film makers whose movies aren't mass-appeal fare. Most recently, the makers of "The Beast," produced by the Puttnam team and set against the backdrop of the Soviet-Afghan war, say she treated the project with disdain, committing only limited resources to marketing it. Steel responds that the film received a mixed critical reception and was too violent to secure a spot at the Cannes Film Festival. "The film is not about something that has broad-based American appeal," she adds.

But Steel's supporters in Hollywood are many. Eisner sends pep letters and says now that he wishes she had followed the Paramount team that moved to Disney. Katzenberg credits her with bringing to Columbia "a plan and a philosophical approach about how to put a program of movies together."

Steel is counting on that program to restore Columbia's financial health. At the same time, she hopes to make a statement: "We are trying to get Columbia back to the days when it made great films that the public wanted to see," Steel says. "Columbia is back. The lady is back."

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