COVER STORY : So Happy...

<i> Nina J. Easton and Alan Citron are Times staff writers. </i>

Peter Guber and Jon Peters were determined to acquire a fleet of corporate jets for Columbia Pictures Entertainment that would rival that of Warner Bros., where they had last made their home.

Fine, the word came back from Sony headquarters in Tokyo, but the planes were to be used for internal corporate purposes, not jetting stars around the country like their idol, Warners chief Steve Ross, was fond of doing. Impossible, said Columbia’s co-chairmen in Culver City. Who was going to tell director Ivan Reitman to find another way to get his family to Canada? How was Barbra Streisand to scout locations for “Prince of Tides”? How was Columbia going to treat its stars and directors to vacations in exotic locales?

“It was a huge point of contention,” recalls one highly placed source.

But Sony gave in.


So much for the heavy hand of Tokyo management that Hollywood had feared.

It’s been 16 months since the Japanese electronics giant installed this pair of hot-shot producers to run the studio it bought for $3.4 billion and took over on Nov. 16, 1989. But in many ways, last spring’s debate over the corporate jets remains the defining moment in the relationship with Sony: Insecure in the alien waters of Hollywood, the company has been willing--so far, at least--to go along with the grand ambitions of its American managers.

Guber and Peters see themselves as more than studio chiefs--they’re media moguls assembling a communications conglomerate. “The railroad industry made a big mistake in the 1930s,” Guber says, “when it saw itself as being in the train business instead of the transportation business. It would be the same mistake to view us as being in the motion picture business, rather than the communications business.”

Columbia, with its movie and TV production and chain of Loew’s theaters, isn’t in the same league as the gigantic Time-Warner Communications, where Ross is now co-chief executive. But that hasn’t stopped Guber and Peters from spending mind-boggling sums of money to build the infrastructure for their budding empire. Having a plane or two on the lot for business meetings may be fine for most studios, but not for two aspiring media barons.

So that Columbia’s stars would have some place to go on the corporate jets, Peters spent two of his 16 months on the job renovating his 22-acre Aspen ranch, using crews 24 hours a day to build guest houses and a main lodge (at his own expense, he says). He filled the grounds with reindeer and llamas, the house with Ralph Lauren and lace. Cher and Michael Douglas and Sylvester Stallone and Streisand all came and raved. There was even talk of a Columbia resort, modeled on Warner’s famed Acapulco retreat, in Hawaii--a sort of halfway meeting point between Los Angeles and Tokyo.

Inside the troubled and gutted company they inherited, Guber and Peters hired staff. And hired more. Orion co-founder Mike Medavoy came in with a fully appointed staff to run Tri-Star. Former Columbia chief Frank Price brought in his people to run the Columbia side of the company. Guber and Peters hired one of their crack former lawyers, Alan Levine, as chief operating officer, and their other lawyer, Paul Schaeffer, as executive vice president for corporate affairs.

They hired financial whiz Jonathan Dolgen from Fox, gave him the title of Columbia president under Price, but put him to work upstairs as yet another executive plotting overall corporate strategy. When Paramount chief Sidney Ganis resigned, they squeezed him in, too. Now there are rumors that they want to hire Warner production chief Mark Canton, but with the executive offices already brimming, no one knows where he would go.

Guber and Peters paid their new executives salaries that set competitors’ teeth on edge--from the $400,000 reportedly given to a 33-year-old vice president all the way up to their own $2.75 million plus a percentage of profits. They redecorated their historic Thalberg Building offices in elegant art-moderne. They planned the renovation of the tattered Culver City lot, which will cost $100 million in the next three years and hundreds of millions more over the next 15.


They paid top dollar for scripts and made deals with talent that were unprecedented in their size and cost: Top TV producer James L. Brooks, director Steven Spielberg, actors Dustin Hoffman and Robin Williams. They set out making big-budget movies--like Tri-Star’s $50-million “Hook” and its $40-million “Bugsy.” They hired Michael Jackson to star in another lavish production, this one an action-musical, and in a few days they will announce that they are giving him his own record label. There were even whispers that Guber and Peters eventually hoped to take over Sony’s record company.

To pay for all these projects, they set about consolidating--and expanding--Columbia’s revenue sources. The studio’s nine-year-old video partnership with RCA was declared obsolete: Guber and Peters are convinced that when five-inch laser discs become a reality it will change the face of the video business and they want Columbia’s share all to themselves.

They huddled in meetings plotting ways to gain control of the ailing Orion Pictures, where Columbia stands to lose $125 million in distribution rights if the mini-studio goes under. They moved Columbia into cable TV, an investment that is likely to be announced in the coming weeks. They even looked over a proposal to buy the Hollywood Park racetrack, but passed.

They dreamed up Sonyland, a theme park that may or may not ever happen.


There are two ways to look at all this extravagant activity:

Either Guber and Peters are visionary empire builders, moving Sony’s company into new realms of opportunity, making the impossible possible, going where no moguls have gone before.

Or, the Japanese are being taken for a very expensive ride.

Sony swaggered into Hollywood with its wallet bulging nearly two years ago and fell right into a patch of quicksand. It cost the company hundreds of millions of dollars to dig itself out.


The misstep was Sony’s decision in September, 1989, to hire Guber and Peters to run its newly acquired Columbia Pictures while they were still under a production contract at Warners. Warners sued, Sony countersued, and after months of acrimonious litigation, the two companies finally agreed on a settlement that analysts said contained roughly $500 million in concessions from Sony--a figure that Sony executives dispute.

That was on top of the $200 million Sony had already paid for the Guber-Peters Entertainment Company, putting $80 million directly into the pockets of the two partners. Sony had also agreed to a one-time bonus pool of $50 million, to be split among Columbia’s top executives, plus an 8% share in any appreciation of Columbia’s value. The industry trade paper Variety has estimated that the value of these fringe benefits could balloon to $150 million to $200 million.

By and large, Japanese companies have not been successful at creative enterprises on foreign soil. But almost alone among its compatriots, Sony gives its American managers wide berth--as well as paying them truckloads of money. When it bought CBS Records in 1988, Sony left in place the company’s mercurial but successful chief executive, Walter Yetnikoff, and by most accounts let him run his own show.

But even under Sony’s soft touch, Yetnikoff could not survive. His erratic temper and troubles that landed him in a rehabilitation clinic in 1989, as well as public signs that he was loosing his hold on top recording artists Michael Jackson and Bruce Springsteen weakened his standing at Sony, said sources close to the company. But, these same sources say, the debacle over recruiting Guber and Peters also hurt him. Yetnikoff stepped down in October, 1990 after Sony agreed to pay off his contract for a reported $25 million. He has declined comment on his departure.


It was Yetnikoff who led Sony to Guber and Peters after Creative Artists Agency Chairman Michael Ovitz decided he didn’t want the job. It was Yetnikoff who backed Guber’s assurances that the Warner contract wouldn’t be a problem. And, according to sources close to Sony, it was Yetnikoff who stood up at a late-night meeting in the fall of 1989 and dramatically argued that Sony should go forward and hire the two producers--even after Warner had threatened to sue. Later, Guber and Peters would refuse to report to Yetnikoff.

Officially, top Sony officials have nothing but kind words to say about their new managers at Columbia Pictures. “I have enormous respect for both Peter and Jon,” said Michael P. Schulhof, vice chairman of Sony Corp. of America and president of Sony Software, the corporate division that oversees Columbia. “Sony is very pleased with their management.” Columbia executives also deny there was ever a dispute with Sony over the corporate jets.

But Yetnikoff’s fate suggests that Sony’s generous leash only extends as far as the bottom line. Even before Guber and Peters release their first batch of movies, there are signs that their leash may be getting shorter: Some sources close to the company say a shift in the management structure early this year that required the pair to report directly to Schulhof, rather than a management committee headed by Sony president Norio Ohga, was a sign that the Japanese are exerting tighter control over Columbia. Sony says the management committee was always considered transitional.

Moreover, rumors persist that Peters can’t survive press reports about his eccentricities. There were published reports, for example, that last year he used a corporate jet to send flowers to his girlfriend. Peters emphatically denies that story and others about his love life, but it’s clear the company has undertaken extensive damage control. For this story, Columbia executives suggested reporters talk to Peters’ lawyer, feminist activist Gloria Allred, about a $50,000 contribution he made to a woman’s shelter. And Peters has made a point of publicizing his new-found political activism. On Monday, he is hosting a fund-raiser for Connecticut Sen. Christopher Dodd.


Guber, always quick to defend Peters the way an older child backs his mischievous kid brother, says there’s no truth to the published reports speculating Peters may leave. “We enjoy a very tight relationship,” he says. “Not withstanding the noise you hear from time to time, we are together. . . . I adore him.”

Guber is equally concerned about his own public image. For this story, he and Peters appointed Ganis--a former publicist--to sit in on executive interviews, and afterward to engage in heavy spin-control with the reporters. Both executives refused to have their photos taken.

Most assessments of Peter Guber and Jon Peters dwell on their differences. The 49-year-old Guber is the one Hollywood insiders describe as brilliant, the guy who went to law school by day, business school by night, and ran production at Columbia when he was only 29. He’s been married to the same woman for nearly 30 years and, despite the ponytail he sported until Sony came along, he is at heart a conservative who cringes when he sees protesters burning the American flag.

At 44, Peters is still described as the one with the seventh-grade education and a history in juvenile hall, the guy who was married three times and has been romantically linked to women ranging from actress Kim Basinger to Swedish model Vendela. His real success, though, stems from his penchant for throwing out ideas, some ridiculous, some with promise, and then pursuing them with a vengeance.


Guber has the high-brow tastes, and an uncanny knack for fast-paced deal-making. He made “Gorillas in the Mist” after months of charming wildlife groups and the Rwandan government into cooperating. Peters’ taste run mass market, and he has an eye for design. He stuck with “Batman” for the better part of a decade before pushing it onto the world as Warners’ biggest hit ever. He designed the provocative Batman logo that appeared on billboards and bus stops everywhere.

Guber is nonconfrontational; Peters is deadly one moment, sweet and loyal the next. Peters once pointed an unloaded gun on workmen at his Aspen ranch, pulled the trigger, and then contritely confessed in a deposition that his troubled childhood had left him with a penchant for violence. At Columbia, insiders said his dressing down of former executive Roger Faxon last spring made his combative predecessor, Dawn Steel, look like the Good Witch of the East. He goes through secretaries so often he uses a temp agency.

Peters seems to derive his ego from being a powerful Hollywood player. Guber is more conflicted about his role. “My sense is that there is an aspiration in Peter to have more of a reflective life than he has now,” says Andrea Rich, vice chancellor of academic administration at UCLA, where Guber still teaches a film class once a week.

But this pair also has more in common than the sound of their names. They share an office and go to therapy together once a week. They both exude a charm gleaned from years of cultivating big-name stars and directors. They both have ranches in Aspen and houses in the Malibu Colony.


In a town where the top-floor corporate suites are dominated by buttoned-down financiers, Guber and Peters stand out as grown-up hippies. While Guber holds an M.B.A., he peppers his Boston-accented, free-form streams of consciousness with New Age-sounding maxims (“You can’t know where you’re going ‘til you know where you’ve been”). Peters displays a childlike exuberance over his own ideas.

They are equally hyperactive. Peters gets so worked-up when he’s making a point he grabs your knee; Guber goes for the foot. When you catch one of them alone, it’s hard enough to keep up with the verbiage that streams across the room like a falling star. When they’re together, it’s like witnessing a supernova.

“They’re an energy source,” says Columbia president Dolgen. “You can warm your hands against these guys on a cold winter day.” Between the two men, says actor Jack Nicholson, “there’s so much energy it’s scary.”

Most of the executives and producers who work for them profess to thrive under this exuberance. Says Columbia producer Laura Ziskind: “Are they cowboys? Yeah. But it feels good to me. There’s an energy that goes with that.”


Is all this energy and money is moving in the right direction--or in any direction at all? “It’s like lighting a six-booster rocket without having any direction,” insists one source close to Sony.

But Guber says he knows exactly where he’s going. “The idea was to design this mousetrap so that it was our own,” Guber says of Columbia Pictures. “They old management sold off many rights. They were constantly interested in a quick return on their investment.”

Neither Guber nor Peters is known for a long attention span, or an eye for detail. One former associate said Peters has “trouble focusing on anything for more than a millisecond.” And a friend of Guber’s notes that while he is “brilliant, this is not a man with a long attention span.”

When Guber first came in, for example, he wanted to launch a Sony film festival in Moscow. Nice idea, said sources familiar with the plan, but Guber wanted the festival to take off within a few months; he had no idea of the logistic complications involved. In another case, Guber and Peters signed a two-year contract with a vice president; when Price came in with his own people, they let the executive go, paying off his expensive contract.


Insiders also note that when Guber and Peters took over, they bought several high-priced scripts, including “Fire Down Below” for $750,000. Later, when Price was hired, he decided he didn’t like the script and put it into “turnaround,” studio jargon for putting the project back on the auction block.

They spent $1.2 million on another script, “Radio Flyer,” and committed to let the young writer David Mickey Evans direct. But after spending $5 million on the production, Peters fired Evans and started over with veteran director Richard Donner (“Lethal Weapon,” “Superman”). Donner made a $5 million salary, and his wife, Lauren Shuler-Donner (“Mr. Mom,” “Pretty in Pink”) received $1 million to produce. The budget on “Radio Flyer” has since swelled to over $30 million, even though there are no major stars in the cast.

“It’s possible they are restraining themselves now,” says Harold Vogel, Merrill-Lynch’s entertainment analyst. “But the first year was one of considerable upfront spending that distorted the economic balance of the entire industry.”

Critics contend that the most visible sign of disarray is the company’s seemingly top-heavy, and expensive, management structure. One highly placed source at Columbia said the company looks like a tulip--with a heavy bud and a thin stem. Some outsiders call Columbia “the elephants’ graveyard” because of all the big-name executives.


Levine, who as chief operating officer is heavily involved in the company’s day-to-day affairs, defends Columbia’s management structure. “There’s no question the people we have are collectively more experienced than other management teams,” he says. “But I don’t think we look expensive or out of line at all. We’ve built an infrastructure that we think we need. Maybe our goals are a lot larger than other studios.”

“Each of the people is a part of the whole puzzle,” Guber says. “It may be puzzling to somebody outside the company, but we know where we are going. We have our vision and our map of action, and we think we need these racehorses to get us there.”

But one source close to the company speculates that the pair is trying to remove themselves from the day-to-day operations of Columbia. (Guber has been known to describe their role as “inspiration versus perspiration.”) While the two maintain a joint office (Louis B. Mayer’s old suite) in Culver City, Peters primarily works out of his home and Guber spends most of his time at his office inside the Tri-Star building in Burbank.

Among the company’s 3,000 employees, there is also some resentment about the high-life these executives are enjoying at a time when most others at Columbia have to be content with 2-5% pay increases. The fleet of corporate jets, the private elevator set aside for top brass, the TV camera that monitors guests going in and out of the chairmen’s office, the VIP parking in front of the Thalberg building that eliminated much-needed spaces on the lot--all of this contributes to an atmosphere that one employee summed up like this: “There are the Pharaohs, and there are the citizens.”


The Medavoy Way

If Columbia’s movies hit pay dirt, such complaints will sound trivial. But those dice will be rolled by the two men--both very different in style--who run Columbia’s film divisions.

Mike Medavoy spent a dozen years counting pennies as the L.A.-based partner of Orion Pictures. But at Tri-Star, he appears to have inherited his new bosses’ passion for big ideas and big dollars. Around town, Medavoy is likened to a poor kid suddenly let loose in “Toys R Us.”

These days he probably feels more like Peter Pan. Inside sound-stages on the Columbia lot, Steven Spielberg is filming “Hook,” a modern-day version of Sir James M. Barrie’s Peter Pan legend. Medavoy found the script sitting among two dozen others when he came in, bumped its screenwriter out of the director slot, moved aside its producers, and convinced Spielberg to direct and Dustin Hoffman and Robin Williams to star. The budget immediately ballooned from $35 million to $50 million--not including the salaries for Spielberg, Williams or Hoffman. Instead, those three will split an estimated 40% of gross ticket sales, a deal that critics say will make it difficult for Tri-Star to come out even unless the movie is a blockbuster hit with more than $100 million in ticket sales.


“It’s got to be the most expensive deal in history,” said one source close to the project. However, this source added, it would have cost another $22 million to pay salaries upfront to these men, bringing the total price tag on “Hook” to $72 million--more than two-and-a-half times the cost of an average movie. Medavoy notes that by paying Spielberg and the stars a percentage of gross ticket sales, “it takes a little longer to break even but the risks aren’t as high.” It’s also a project, say insiders, that the Japanese are thrilled about.

Another expensive, high-profile Tri-Star movie is director Barry Levinson’s “Bugsy,” starring Warren Beatty, a period-piece gangster film that outsiders estimate will cost $40 million. “Hudson Hawk,” a project that Medavoy inherited when it was well under way, ran substantially over budget, pushing its cost above $50 million, insiders say. The producer on that film is the notoriously hard-to-control Joel Silver.

Guber defends Tri-Star’s expensive movies, noting that “motion pictures are often locomotives for other parts of the company. . . . Something like ‘Hook’ will boost our merchandising, soundtracks, international sales, etc. " In contrast to Medavoy, Price seems distinctly out of sync with the go-go atmosphere that pervades Columbia. He eschews big-name stars and directors, emphasizing story development. “Frank’s theory has always been story, story, story,” says producer Steve Roth, who is making the boxing film “Gladiator” for Price.

Price is often tagged as the studio chief who passed on “E.T.” But he also released such Oscar-winning films as “Kramer vs. Kramer,” “Tootsie” and “Gandhi” during his last stint as Columbia chief in the early 1980s. In keeping with his past, Price says he is emphasizing comedy and romance.


One of the few studio executives who started as a writer, Price gets involved in minute details on scripts--leading to some complaints that his style is too cautious, even plodding. The slate of films he recently announced appear to have modest budgets--and, some of his critics contend, modest ambitions.

This summer he is releasing a sequel to “The Blue Lagoon,” a film that made enormous profits for Columbia when he last ran the studio. He put into production a $6-million movie by a young black filmmaker, John Singleton, about coming-of-age in South-Central Los Angeles. Insiders say he expects “The Inner Circle,” the story of a Stalin aide by director Andrei Konchalovsky, to achieve the critical and commercial success of “Gandhi.”

But even Price isn’t immune to the lures of Sony’s fat checkbook: For a supporting role in the upcoming comedy “My Girl,” he paid “Home Alone” star Macaulay Culkin $1 million.

Courting Brooks


Much is made by executives inside the company about the autonomy that Price and Medavoy enjoy. But that doesn’t mean Guber and Peters are keeping their hands out of movie production, or Gary Lieberthal’s Columbia Pictures Television division, which produces such hit shows as “Who’s the Boss” and “Married . . . With Children.”

One of Guber’s first lunches after he took over Columbia was with TV and film producer James L. Brooks, whose contract at Fox was up. Brooks was impressed. “Every quirk of mine he knew,” he recalls about Guber. “He talked for some minutes about me more intelligently than I could talk about myself. “

Several months later, Brooks agreed to a film and TV deal that sent shock waves through Hollywood because of its cost. Sources familiar with the deal claim that Columbia won’t make money unless all three of the shows he is producing are hits. Brooks declines comment on the details of the deal, except to dispute that assessment. One insider says simply, “It will take significant success to meet expectations. But he’s clearly been one of the most successful TV producers. This is not a deal you do every day of the week. But for a studio starting up, you need this.”

Guber conducts most of his movie-making through GPEC, the Guber-Peters Entertainment Company, which Sony bought and merged into Columbia. The company line about GPEC is that Guber and Peters kept it intact because “the name in our community signalled a certain kind of product, what we think of as quality films,” as Stacey Snider, executive vice president of GPEC, put it.


But many friends and associates of Guber think GPEC is his annuity, a place to go if things don’t work out at Columbia. For now, it is clearly his personal playground, a place that will produce such literary-driven films as “Single White Female,” directed by Barbet Schroeder from the John Lutz novel; “Remains of the Day,” directed by Mike Nichols from the Kazuo Ishiguro novel; and “Mary Reilly,” based on the Valerie Martin novel about Dr. Jekyll and Mr. Hyde’s maid.

Guber even found time to attend a meeting in New York with children’s writer Chris Van Allsberg, during which he and Interscope executives convinced the reclusive author to sell the film rights to his book “Jumanji"--the first time Van Allsberg has ever sold a book to Hollywood.

If Guber is “completely story and literary driven,” as Snider describes him, then Peters is the original “high-concept” producer, summing up his ideas in “TV Guide talk.” “ ‘Tootsie’ meets ’48 Hours’ ” is how he describes “Girls Club,” a movie he recently dreamed up to pair Sylvester Stallone with Arnold Schwarzenneger. “ ‘Star Wars’ on Earth” were his instructions to the writers of the new Michael Jackson movie. “I have 50 movies in my head,” Peters says.

While Guber is heavily involved with both Tri-Star and GPEC, Peters works through Columbia--where his ex-wife, Christine Peters, has a production deal. She is currently developing “Girls Club” for Peters. Her Columbia deal prompted Peters’ critics to cry nepotism. Peters responds, “Christine is one of the best producers in Hollywood.”


As for reports that he has put former paramours, and his son’s girlfriend, on the Columbia payroll, Peters states, “I have never mixed my business and personal life, absolutely not.”

In the months before Price came on board, Peters basically ran Columbia, buying up scripts at steep prices, often from first time screenwriters. “Radio Flyer” was his project, a film that he said touched a personal chord because of his own past history of being an abused child.

Michael Douglas, the film’s producer, defends Peters’ willingness to go along with the expensive change of directors on the project, saying that Peters displayed “a courage and belief in the material.” Too often, he adds, when a film gets off on the wrong foot, studio executives are unwilling to step in and change course.

Peters has been instrumental in other projects at Columbia, including setting up Streisand’s next directorial effort, “Prince of Tides” and putting into development the 1920s adventure book “Strongest Man.” When he first came in, he tried to put together a movie featuring the kiddie-rock group, New Kids on the Block, but the deal fell apart when the band decided to tour instead.


Peters’ current obsession is the Michael Jackson movie, set to start filming this summer. The musical-adventure film is now being written by Caroline Thompson (“Edward Scissorhands”) and Larry Wilson (co-author, “Beetlejuice”), with sets designed by “Batman’s” Anton Furst. Peters sees it as Columbia’s “Batman” but many outsiders are dubious, noting Jackson’s minimal acting experience.

The film is part of an overall relationship Jackson is developing with Sony. Sometime soon, Columbia will announce the formation of the Michael Jackson Entertainment Company--Jackson’s own record label and TV/movie production house, to be financed by Sony. “I said to Michael, close your eyes,” Peters recalls. “Now picture yourself getting out of a limo, you open your eyes and it’s an Art Deco building that says Michael Jackson Entertainment Company on top. You walk in the lobby and there are guys with epaulets and hats standing there. It’s your family, your home and you’re the boss.”

Jackson already had a film production deal under former Columbia chief Steel, and Jackson’s then-attorney John Branca had been in negotiations with Yetnikoff about starting a record label before Peters showed up. Moreover, rumors that Jackson was on the brink of leaving Sony Records (formerly CBS Records) last summer appear to be overstated: The artist owed the company four more albums and probably would have faced an expensive lawsuit if he broke his contract.

But Jackson’s associates say Peters was instrumental in persuading the artist to make Sony-Columbia his creative home. “Jon saved the day for Columbia,” insists Jackson’s manager, Sandy Gallin.


Peters has clearly developed a close friendship with the artist. The two are regularly seen together, and a Michael Jackson video game--a present “with love” from Jackson--stands in the corner of Peters’ Culver City office.

Through his manager Gallin, Jackson says this: “Jon Peters is brilliant, original, sensitive and dynamic. His work bears the mark of a true visionary. He is the rare combination of effortless spontaneity, ferocity, and intensity. When he unleashes his creative potential, what comes out is breathtaking, beautiful and magnificent.

“He gets so enthusiastic: One day at lunch while talking about a movie idea, his glasses fell into his soup. I love him.”

Next Big Project


It’s so quiet in Jon Peters’ backyard you can hear a diamond drop. A hawk circles silently in the sky. Down below, beyond the pool and the tennis court, beyond the koi pond and the sculptured rocks, is the foundation of Peters’ next grand project--a guest complex consisting of a theater, bungalows and a food hall.

On most days, this is where Peters can be found--behind a stone guard’s gate in the hills high above Los Angeles, where mansion after mansion rises up out of lush shrubbery like some fairy-tale neighborhood. Friends say Peters is fond of showing his guests around his elegantly appointed home, announcing the prices of his art and antiques.

Peters displays the kind of thrill with money that one might expect from someone who is new to the stuff. But with Peters, it’s more than that: Even in Hollywood--where nepotism runs rampant, where studios were founded by junk dealers and fur traders--Peters can’t live down his roots. No matter how many movies he makes or studios he runs, no matter how many $100,000 Tiffany lamps he buys, in Hollywood’s mind Peters is still the ex-hairdresser who hustled his way into the business through a love affair with Barbra Streisand.

As a young child living in the San Fernando Valley, Peters came home one day to find that his dad, a Native American who worked as a cook, had died of a heart attack. His mother remarried, but her next husband was alcoholic and abusive. When he was 11, Peters decided he’d had enough of watching his stepfather beat his mother, so he slugged him back. The stepfather threw him in juvenile hall.


A year later, Peters took off to New York, where he cut hair in a low-rent beauty shop. He returned at age 14, with a 15 year-old-bride at his side, started cutting hair in a relative’s shop, and eventually took over an uncle’s Rodeo Drive shop. He made a splash with the Hollywood set when he stopped teasing hair in favor of a soft, blow-dried look--a style he had picked up during a trip to France.

He divorced his first wife and married actress Lesley Ann Warren in 1967. Seven years later, that marriage crumbled when he met Streisand on the set of “For Pete’s Sake,” where the actress had called him in to design her wig. “He saw me as this young, hip chick,” Streisand recalls. “At the time I used to wear Dior. I appeared older than I was. He made me feel young and beautiful. He said the public should see the sexy side of you--your legs, your tush.”

Peters produced Streisand’s next album, designed its cover (the idea to plop a housefly on a stick of butter and name the album “Butterfly” was Peters’), and packed the inside spread with photos of himself. When Streisand’s agent tried to persuade her to do “A Star Is Born,” Peters had no idea it was a remake of two classic films. But he persuaded her to take the role--and then announced that he would produce, direct and co-star. The latter two roles, Streisand insists, he suggested as a joke.

The production was a troubled one, and many on the set considered Peters a buffoon for the ideas he proposed, such as charging extras $5 apiece to sit in on a Streisand concert. (It worked: They paid up.) But the film was a hit, and Peters got his entree to Hollywood.


Peters hooked up with Guber at Polygram Pictures in 1980, after the former hairdresser had produced two bombs, “Eyes of Laura Mars” and “The Main Event,” and a commercial hit, “Caddyshack.”

The son of a junk dealer from Massachusetts, Guber got his start in the business as an executive assistant at Columbia. He walked in the door with an M.B.A., a law degree, and a university stint in Florence, Italy. Guber took the job because he had a wife and young baby to support; it could have been Fruit of the Loom for all the ambitions he had about the movie business.

The times were turbulent at Columbia when Guber joined. But he hung in, becoming one of the few islands of stability in a financially troubled company where executives moved in and out with the seasons. By 1973, he had risen to production president.

Guber had an eye for material, but he was also a savvy promoter. His first movie after leaving Columbia’s executive offices to become a producer on the lot was “The Deep.” Guber’s longtime friend and former studio executive Ned Tanen recalls that Guber promoted the film as if it was a sequel to the Universal’s blockbuster movie “Jaws"--much to the consternation of that rival studio. “The Deep"--whose claim to fame was the movie ad’s photograph of Jacqueline Bisset in a wet T-shirt--wasn’t a great movie, but with Guber’s promotion became a much-needed hit for Columbia.


Guber also was able to turn a movie as dark as “Midnight Express” into a commercial success. The Alan Parker-directed film about an American man’s experience in a Turkish prison cell earned an Oscar for screenwriter Oliver Stone.

The first teaming of Guber and Peters was not a successful one. At Polygram, they enjoyed some success with “Missing,” but also released a string of duds that left the company in the red. Guber blames the troubles on the fact that Polygram’s owners--reeling from a downturn in the record business--didn’t want to be in the capital-intensive movie business, even if it meant financing such potential hits as “Flashdance” and “Batman.”

The track record since then has been mixed: Warner chief Steve Ross complained bitterly in his company’s lawsuit against Sony that while the pair had some hits, Warner stuck with them through many lean years. Their bombs included “Who’s That Girl,” “The Clan of the Cave Bear,” “Caddyshack II,” and “The Legend of Billie Jean.”

Guber and Peters had a hand (a minor one, others on the project argue) in the blue-collar musical hit “Flashdance.” They bought the rights to “Color Purple” but had virtually nothing to do with the production once Spielberg came on board to direct. Ditto for the smash hit “Rain Man”: Detractors of Guber and Peters say the success of the film is the doing of their development executive Roger Birnbaum and director Barry Levinson, while allies of the pair point out that they found the project and kept it alive through a series of writers and directors.


Peters did serve as on-set producer for “The Witches of Eastwick,” which grossed nearly $65 million, but his battles with the producers and director George Miller were ugly--and expensive. Peters came up with the idea for “Tango & Cash,” a box-office disappointment here but a success overseas. Guber and Peters also were executive producers on last year’s groaner, “Bonfires of the Vanities.”

In the last 10 years, there are two other successes that Guber and Peters can claim extensive credit for. Guber was intimately involved in “Gorillas in the Mist,” a film that was a disappointment at the box office but earned lots of attention at Oscar time. The smash hit “Batman” was Peters’ baby. He nursed it through the years of development, and was a fixture on the film’s set in London.

Deal That Failed

On a Sunday afternoon in 1988, Guber and Peters sat contemplatively on the front steps of Thalberg building on the old MGM lot, knowing that their dream of running a studio had just slipped through their fingers. They had announced plans to take over MGM with their financial partner, Burt Sugarman. But at the 11th hour the deal fell apart.


So when Sony came along a year later, it wasn’t hard to lure the two producers to Columbia. Still, the ambitious partners managed to secure a generous compensation package, and an agreement that Sony would take back the MGM lot that they dreamed about owning just one year before. By then, Warners owned the property. So, as part of the settlement on the Sony-Warner lawsuit, Columbia swapped its 35% stake in Warner’s Burbank Studios for the 45-acre Culver City lot.

A three-year face-lift of the aging lot will cost $100 million--and that doesn’t even include two 13-story buildings and several other office complexes to come later as part of a 1-million square-foot expansion. Models sitting in the executive conference room show a complex that in 15 years will include underground parking, a grand circular driveway, an ornate gate for movie premieres, several new office buildings done in the cream-colored art deco style of the original MGM lot, upscale retail shops, fountains and park squares.

Peters already has plans for a new health spa, and intends to bring in his analyst to speak to employees each week about her 12-step program to inner happiness. He’s also been heavily involved in the look of the architectural plan, flying his design team--which includes “Batman’s” Anton Furst--out to his Aspen ranch for planning meetings.

While this will all bring plenty of new glamour to the featureless Culver City lot, municipal officials who must approve Columbia’s request for waivers to the city’s four-story height limitation are skeptical. “It’s very controversial,” says Mayor Steven Gourley. “Some say it’s the best idea since sliced bread. Others say we’d be ruining the city. We like their business. It brings a great deal of prestige to the city. But we’re not about to sell the farm.”


City officials have been wooed with tours of the lot, meals at the studio commissary and screenings. Columbia has also set aside staff to churn out a bi-monthly newsletter to city residents.

An Urgent Summons

It’s 8 p.m. on Jan. 24, and Tri-Star chief Mike Medavoy has cut short his 50th-birthday dinner with his wife, Patricia, and is racing back to Stage 7 on the Culver City lot. His boss Guber has called: He just got off the phone with Sony president Ohga, who is fuming over the cost of “Hook.” Time to powwow, quietly, where no one can see.

Medavoy shows up at the door of Stage 7, and 300 people scream “Surprise!” The Ohga call was a trick. In front of a backdrop of the glittering L.A. skyline, a full orchestra in dinner jackets is playing, Art Deco chandeliers hang from the ceiling, and stars like Barbra Streisand, Warren Beatty, Sylvester Stallone, Richard Gere, Gene Hackman and Sally Field roam the room. Even Sen. Dodd, Medavoy’s close friend, has flown in from Washington.


The idea for the party may have been Patricia’s. But the scale of the production was pure Jon Peters. He got so caught up with it that the event went 60% over budget.

“How do you think Frank feels?” muttered one guest in a reference to Price. “Can you believe the Japanese spent all this money on a party when they’re not even contributing much to the Persian Gulf War?” carped another guest the next day. The party cost $80,000, but unfriendly Hollywood insiders quickly spread rumors that it cost 10 times that amount.

Critics of Guber and Peters claim the Medavoy party was an example of the extravagance Guber and Peters have displayed since taking over Columbia. These detractors predict that the free-spending at Columbia will be their downfall--providing a lesson to the Japanese about what happens when an absentee landlord takes over a company run by Hollywood talent.

Guber and Peters say they aren’t disturbed by the talk: It’s nothing they haven’t heard before.


“Here’s the story,” Peters insists as the “story” comes to a close, “We have this dream. Now the question is this: Can they do it? Can they turn this empty shell into a jewel box?”

But, for now, time’s-a-wasting. Peters has to get back to his designs for the studio lot and his dreams for Sonyland. Oh, and there’s the Michael Jackson announcement party to plan.