Jon Peters Leaves Columbia Chair for Independent Post
Jon Peters, the mercurial movie producer hired as co-chairman of Columbia Pictures Entertainment two years ago in one of the richest and messiest deals in Hollywood history, relinquished his post Wednesday to establish an independent production company.
Peters is expected to develop film, television and music projects under an exclusive deal with Columbia’s parent company, Sony Corp. The 44-year-old executive said he asked to be released from his management contract in order to devote himself fully to creative matters.
“I am enthused by this opportunity to productively channel my creative interests,” Peters said in a statement. “I’m excited about committing all of my energy to this new venture.”
Peters’ exit came as little surprise to Hollywood. He and Peter Guber, his longtime business partner and company co-chairman, spent vast sums to revitalize Columbia after Sony purchased it for $3.4 billion. But Guber handled most administrative matters and spent more time on the studio lot.
Peters’ pet project, a proposed amusement park called Sonyland, received scant encouragement from Sony executives, who were said to be put off by Peters’ flamboyant style. At the same time, however, Peters was credited with facilitating a lucrative, long-term agreement between Sony and its biggest recording act, Michael Jackson. Peters also has strong ties to such stars as Jack Nicholson and Barbra Streisand.
One close associate said Peters, a former hairdresser who broke into the movie business while dating Streisand, realized early on that he was not well suited for management. “He wasn’t happy attending financial meetings and looking at balance sheets,” the associate explained. “Without sounding pejorative, it’s a little like the Peter Principle, where you reach a level where you’re not as confident--or as happy--as you were before.”
The terms of Peters’ new deal were not disclosed, but they are thought to be generous. One studio source even insisted that Peters’ salary and benefits would be unchanged. He was paid a reported $2.75 million a year plus a percentage of profits as the studio’s co-chairman. Sony also spent hundreds of million of dollars to acquire the Guber-Peters team in a deal that involved purchasing their company and freeing them from their Warner Bros. deal.
Warner production chief Mark Canton, a longtime friend and colleague, said Peters “is doing exactly what is best for him.” Canton, whose Warner contract expires next year, has been rumored for several months to be headed to Columbia under Guber and Peters.
Guber, who assumes the post of chairman and chief executive, reportedly discussed Peters’ departure with Columbia’s top managers for the first time Wednesday morning. He said Peters’ company will be housed on the Culver City lot and have autonomy to develop, produce and market its projects. Sources close to the studio said the move had been in the works for several weeks but was kept carefully under wraps.
In a formal statement, Sony said it looked forward to its new relationship with Peters. Michael P. Schulhof, president of Sony Software Corp., the division that oversees Columbia Pictures as well as Sony Music, said the company expects Peters to make “an even greater contribution to Columbia” and “the Sony family” in his new position. Schulhof declined to respond to reports that Sony had encouraged Peters to step down.
In financial circles, where Sony was broadly criticized for overspending on the Guber-Peters team, analysts said Columbia should be unaffected by Peters’ exit. “Everyone on the street is yawning,” said Ray Katz of Shearson Lehman Bros.
Harold Vogel of Merrill Lynch said it was impossible for Sony to “look sillier” than it did when it made the Guber-Peters deal.
“They paid a high price at the time, and this won’t make it look any better,” Vogel said.
Guber and Peters were riding high on the success of “Batman,” one of the most popular films in Hollywood’s history, when Sony tapped them for the top jobs at Columbia in 1989. The two had enjoyed a fairly successful decade-long partnership, producing “Rain Man” and “Missing” in addition to “Batman.” But it was Guber, a lawyer who came up through the executive corridors in Hollywood, who was seen as the management whiz. Peters was known as the one with the sharper creative instincts and the “golden gut” for commercial tastes.
In hiring Guber and Peters, Sony reportedly believed that Warner Bros. would release the producers from their contract. Instead, the job offer set off a series of legal skirmishes that eventually resulted in the Japanese electronics giant paying out as much as $500 million in concessions to Warner, according to widely circulated reports. In addition, Sony paid $200 million for Guber Peters Entertainment Co. and established a $50-million executive bonus pool at Columbia.
Guber and Peters spent millions of dollars on scripts, hired such top executives as Mike Medavoy and Frank Price, and approved a series of costly movies such as “Hook” and “Hudson Hawk.”
But few expected Peters to remain in management. His flamboyance, volatility and general loathing of bureaucracy reportedly rankled Sony executives.
Jeffrey Logsdon, an entertainment industry analyst with Seidler Amdec Securities in Los Angeles, said it is too soon to judge Guber’s and Peters’ performance as studio chiefs, since the bulk of the movies approved by them will not begin to appear until this summer.
But a Sony spokesman on Wednesday said the company had no regrets about hiring Peters. “Obviously, we feel it was not a mistake,” Robert Zito said.