At Sony Pictures, Dolgen-omics Rules : Hollywood: The studio’s president slashes costs and builds a reputation for being a caustic, brilliant manager.

At Sony Pictures Entertainment, which once spent money like there was no tomorrow, executives first sensed that tomorrow had come when the personal fruit baskets and freshly cut flowers stopped arriving at their offices each Monday morning.

More distressing, Sony’s corporate jets were no longer available to ferry around coddled stars and their entourages. There would be no more Sony-sponsored premiere parties.

Then the legal department was told that it could not have an in-house lawyer to hammer out music contracts. And when Sony’s two studios, Columbia Pictures and TriStar Pictures, ran out of development funds only four months into the fiscal year, the spigot remained shut.

It was a swift and stunning reversal for the spend-happy company, which initially resisted Hollywood’s new wave of cost-cutting. And it was mostly the work of one man: Jonathan Dolgen.

Few people relish the role of bad cop, even in the hot house corporate environment of Hollywood. But the 47-year-old Dolgen, president of Sony’s Motion Picture Group, seems to wear his burden like a crown. For Dolgen, who is known as a brilliant but caustic manager, acting as the heavy is almost a matter of type-casting.

He played a similar part at 20th Century Fox and Columbia Pictures before Sony brought him back in 1991, and he is the first to admit that he’s a controversial figure. Even the ire of his fellow executives, which Dolgen seems to regularly ignite, doesn’t seem to faze him.

“If you’re in the ‘yes’ business, it’s an easy business. People like yes,” Dolgen says. “But if you’re in the ‘no’ business, it’s a tougher business.”

As if to clarify his role, Dolgen keeps a 5-foot-tall wooden Louisville Slugger baseball bat in the conference room of his fourth-floor suite in Sony’s Thalberg Building headquarters--a pointed gift from a couple of movie producers.

“To a big hitter, just don’t hit us,” pleads the note that came with it.

So far, most of Dolgen’s whacks have been against costs. He’s set limits on everything from movie budgets to the number of plants allotted to any office with one window (one). Sony executives differ on whether Dolgen calls his own shots or merely carries out the marching orders of Sony Pictures Chairman Peter Guber and filmed entertainment Chief Operating Officer Alan Levine, but no one questions his authority.

“A guy like Jon is necessary because he get things done,” says Bones Howe, who used to negotiate soundtrack rights for Columbia and is now an executive with Windswept Entertainment. “A lot of money at movie studios gets spent on projects that never get made. Somebody has to put a lid on all that excitement and temper it.”

One area where Dolgen has made substantive progress is in marketing. He slashed the budget by 30% over the last year--saving Sony about $50 million. Two years ago, the average marketing cost for a Sony release was $15 million; today, it’s $10 million. Production expenses are still high on an industrywide basis, but Dolgen is making headway there as well.

Studios usually forgive cost over-runs on projects by major directors. But James L. Brooks, whose credits include “Terms of Endearment,” “The War of the Roses” and the hit TV series “The Simpsons,” was forced to pick up the tab, to the tune of several million dollars, earlier this year when he went over budget on his $40-million-plus musical “I’ll Do Anything.”

Richard Dreyfuss, who got $5 million for his role in Disney’s “What about Bob?” took home $1.5 million for his upcoming TriStar release, “Lost in Yonkers.” Another upcoming TriStar film, “So I Married an Axe Murderer,” almost got made a couple years ago for $32 million. Today, it’s being done for $17 million, with “Wayne’s World” star Mike Myers.

Similarly, “Remains of the Day,” the new Columbia release from acclaimed producers Ishmail Merchant and James Ivory, originally looked as though it might cost $25 million to $30 million. That’s because the movie carried some hefty talent--Mike Nichols was set to direct, and Meryl Streep read for a lead role. Now the film is coming in at $15 million, helped in part by Nichols’ making way for the Merchant-Ivory team, and Emma Thompson taking Streep’s part.

Sony’s executive staff has also discovered Dolgen-omics. Raises at Sony Pictures, a unit of Japan’s Sony Corp., were strictly held to 4% for non-contract employees last fiscal year. Movie trailers are now produced in-house rather than being farmed out. And whereas in the past as many as 15 to 20 different TV spots would be cut to advertise a new movie, today only six to seven are made.

“During a (corporate) retreat a year ago, Dolgen said if they kept doing business the way they had been then pretty soon there would be no business,” confides one Sony executive.

Dolgen’s medicine doesn’t always go down so well on Sony’s Culver City lot, where he’s been called everything from a “bully” to a “cancer on the company.” Many executives complain that his personality undercuts whatever he might be trying to accomplish.

“He’s whip smart and singularly the most difficult, bullying and insanely obsessive person I’ve ever worked with,” says one. “His area of expertise is the destroying of self-worth.”

Not surprisingly, Dolgen’s in-your-face operating style has also rankled many of Hollywood’s powerbrokers, who now find it much tougher to get the accustomed rich deals for their clients. They complain that Dolgen can torpedo what has already been agreed upon by Columbia Chairman Mark Canton and TriStar Chairman Mike Medavoy.

Producers are fighting back. Fearful that Dolgen can doom a film he doesn’t like, they have requested that his name be struck from invitation lists for research screenings. Several remember that he originally opposed the comparatively cheap purchase of “A River Runs Through It” for $7.5 million, which has grossed more than $32 million at the box office so far.

By most accounts, however, Dolgen is a canny corporate strategist and deal maker.

His business acumen is credited with helping to rescue Fox from financial disaster in the 1980s. One associate estimates that Dolgen has engineered 10 deals worth over $100 million in the last decade, from film financing to foreign pay TV rights and home-video joint ventures.

Industry executives still talk about a 1984 pay-TV deal that Dolgen cut with HBO during his first stint at Columbia. Dolgen negotiated the contract so that there were no “caps” on how much HBO would pay Columbia. Customarily, license fees in pay-TV depend on how well the movies do at the box office--up to a point. But since there were no caps in the contract, HBO had to pay Columbia $35 million for the box office smash “Ghostbusters.” The deal turned out to be an embarrassment for HBO. Subsequently, several top HBO managers lost their jobs.

“He basically tries to wear you down,” says former HBO President Frank Biondi, who is now president of the entertainment conglomerate Viacom International. “During negotiations we had to put four to five people on him.”

Besides being known for his deal-making prowess, however, Dolgen is saddled with a reputation for sometimes brutalizing behavior toward subordinates. There is even a verb for it: “Dolgenized.” Translated, it means to have a run-in with Dolgen and come up the loser.

Says one top Sony executive: “There’s not one person in this company who doesn’t get a pit in their stomach when he calls.”

The consequences can be devastating. Dolgen, for instance, is not a morning person. When one staff attorney allegedly had the poor judgment to schedule a meeting for Dolgen at 9 a.m. without his permission, the attorney was banished and told to look for work elsewhere.

Typically, Dolgen does not start a staff meeting until 7 p.m. because he believes that it isn’t fair to hold them during “billing hours.” Dolgen’s secretary at Fox would buzz his staff when he would finally leave at 9 p.m. or later. “Elvis has left the premises,” she’d announce.

Dolgen’s office, kept at refrigerated temperature, would be a haze of cigarette smoke and littered with junk food wrappers. One staffer recalls running into a ghost-white Dolgen in the hallway one day after he was struck down by a kidney stone attack. “What are you doing here ?” the staffer asked incredulously. “Ah, I passed the stone,” Dolgen murmured.

Indeed, in a business infamous for its unenlightened, Dickensian management style, Dolgen could be nominated for the Jacob Marley Award among studio executives. He even looks intimidating, with his deep-set, often bloodshot eyes and linebacker build.

Nobody is better aware of his reputation than Dolgen himself. He half-joked to associates at Fox: “In Barry Diller, I finally got the boss I deserved.” The meaning was not lost on subordinates. Diller, a former chairman of Fox, is one of Hollywood’s most feared bosses.

At Fox, Dolgen terrorized staffers with sudden flashes of anger. He earned the nickname “The Beast,” and colleagues called his office “The House of Pain and Suffering.”

Arriving at his Fox office every morning, Dolgen would often mutter, “It’s gonna be a bad day” as he whizzed past the desks of his two secretaries, barking from inside his office, “Run the calls! Run the calls!” in response to the phone messages piling up.

One former Fox vice president recalls how Dolgen kicked a chair and threw a thick binder notebook at him during a routine budget meeting when he was unable to answer a question in sufficient detail. The executive quit the next day. Another former top Fox executive says he sought psychological counseling “because I wanted to know how to deal with the guy.”

One business school intern remembers watching in astonishment as a harried Dolgen crashed into Columbia’s New York office and ordered a flummoxed secretary to make his plane reservations back to Los Angeles. Within seconds, Dolgen could be heard on the office intercom demanding to know if the reservations had been made.

When he believed that a subordinate was invariably doing something wrong, Dolgen would warn: “You’re playing in traffic.” Or he would bluntly say: “With deference . . . you have no idea what you’re talking about.” He saved some of his sharpest barbs for fellow lawyers and business affairs types. He used to call Fox’s staff accountants “the cattle” because “they all shook their head the same way and didn’t get it,” recalls a former colleague.

Despite numerous incidents of this sort, Dolgen nonetheless has left behind him a highly loyal cadre of followers, nearly all of whom have gone on to top jobs in Hollywood. He invariably recruited smart MBAs out of the best business schools and then subjected them to the Hollywood equivalent of Marine boot camp. Dolgen calls them “The Guys.”

They include Chase Carey, now chief operating officer of Fox Inc.; Richard Rosen, an agent with ICM; Tony Lynn, president of Playboy Entertainment; Bob Kreek, president of cable TV channel Comedy Central; film producer Rob Fried, and MGM executive Gary Marenzi.

“If there was a problem and you didn’t tell him, you’d see God,” recalls Bud O’Shea, senior vice president at CEMA Distribution who once worked for Dolgen at Fox. “He didn’t like surprises. Yet for all the sleepless nights, I walked out of there learning an enormous amount.”

Producer Fried says Dolgen taught him “work habits and discipline that is invaluable . . . this concept of doing ‘homework’ before a deal was critical to him, so that you would be prepared on every level before going into a meeting with HBO or Shearson.”

Woe to the person who didn’t do their homework, however.

O’Shea recalls once witnessing Dolgen dress down a staffer for not handling an assignment properly. “You just ruined that guy’s day,” O’Shea told Dolgen. “Yeah, isn’t that great!” Dolgen responded. “But next time he’ll be better prepared.”

But colleagues also say that Dolgen can show touching concern when co-workers or friends are having family problems or experience a tragedy.

When the son of a Fox TV executive from South America was seriously injured in an automobile accident, Dolgen had the boy flown to Boston at company expense to see a specialist. And when Rob Blattner, the head of MCA Home Video and former Dolgen staffer, was killed last month in a Colorado plane crash, Dolgen got promises from The Guys that there would be Hollywood jobs waiting for Blattner’s two children when they got out of school in 15 years. Another says Dolgen used his weight as a board member to help get Blattner’s children into the tony Oakwood School.

“He really cared about his people,” ICM’s Rosen says. “There was no problem I couldn’t go to him with.”

Lately, Dolgen has been trying to broaden his dealings beyond business affairs.

Studio colleagues credit him with bringing over Damon Wayans from Fox, where Dolgen frequently visited him on the set of “In Living Color.” He helped put together Sony’s deal with the Zukor Bros. (“Airplane” and “Naked Gun”), and he wrapped up in one weekend Sony’s acquisition of “Dracula,” which brought with it producer Francis Ford Coppola.

One of the actors he is close to is action hero Jean Claude Van Damme, whose “Universal Soldier” was distributed by TriStar. Dolgen was the only Sony executive to show up at Van Damme’s house one afternoon not long ago to attend his son’s christening party.

Dolgen’s reaching out to forge relations with talent has led to speculation that he ultimately wants to play a bigger role at Sony. Several executives and producers there believe that Dolgen would like to become chairman of the studio when Guber moves back into production, as many expect him to do one day.

But others believe that as smart as Dolgen is, he is handicapped by his volatile temper and confrontational nature. “Dolgen is clearly the enforcer,” says a source close to the company. “Eighty percent of what he does is valid, but 20% is counter-productive . . . if he could just find a way to reduce that 20%, it would be a gold mine.”