An invitation to climb into the cockpit and watch the flight crew land the Asiana Airlines jet he was on was Jeffrey Katzenberg’s first clue that the invisible hands of Miky Lee were hard at work.
And by the end of his four-day trip to South Korea in November--a visit that featured a banquet complete with individual ice sculptures and a chat with President Kim Young Sam at the Blue House, the presidential mansion--the Hollywood studio chief had no doubts that his new partner could deliver on her promises to make DreamWorks SKG a household word in Asia.
“Miky Lee was the ‘Godfather,’ ” he said. “She was pulling these strings everywhere, everything you could see. There wasn’t a detail that she had not thought about personally herself.”
Jaws dropped on both sides of the Pacific last year when the 38-year-old Lee and her brother, Jay H. Lee, 36, emerged from relative obscurity to pony up $300 million to make Cheil Jedang--South Korea’s largest food company--the No. 2 investor in DreamWorks, the entertainment company formed by ex-Disney Chairman Katzenberg, director Steven Spielberg and music mogul David Geffen.
The Lees represent a fresh South Korean elite--the result of a transfer of power within many family corporations from a generation of Japanese-educated, self-made tycoons in their 60s and 70s to a younger crop of Western-educated, internationally oriented leaders.
And the Lees are the colorful leading edge of what is becoming a South Korean mini-invasion of Hollywood. In the last two years, giant conglomerates, or chaebol--backed by a government that sees major economic growth in the nurturing of creative industries such as film, video and television--have entered partnerships with some of entertainment’s biggest corporate names.
This campaign moved into high gear in early 1994, after an advisor to President Kim explained that the profit from a single film, “Jurassic Park,” was equivalent to that from the export of 60,000 Hyundai automobiles.
And what would be more satisfying to Koreans than succeeding where the Japanese had failed in such spectacular fashion?
Skeptics wonder whether the Lees--whose youth and global outlook are rarities in South Korea’s conservative business climate--have the smarts and the stamina to survive a Hollywood environment that ate Sony and Matsushita alive, sending the Japanese electronics giants back home billions of dollars poorer after their studio investments turned sour.
“I’m not doubting the prospects of DreamWorks,” said Bill Sohn, an analyst in the Seoul office of W.I. Carr, a brokerage house. “But are they [Cheil Jedang] spending the money wisely? Should they have spent the money in a business they know better?”
But those who doubt Cheil’s ability to survive in the entertainment world haven’t seen Miky Lee--a director of Cheil and the president of Lee Entertainment, the company’s multimedia arm--in action, according to Katzenberg and others.
“I think that all three of us, Steven, David and I, are genuinely taken with Miky and her energy, enthusiasm, excitement and . . . flat-out raw ambition,” Katzenberg said. “She’s awesome.”
In exchange for its investment in DreamWorks--second in size only to the $492 million from Microsoft co-founder Paul Allen--Cheil received distribution rights for DreamWorks’ products in Asia (with the exception of Japan, Australia and New Zealand) and seats on the board of directors and executive committee.
Lee’s ability to engineer a red-carpet visit for her DreamWorks partner came as little surprise here, given her illustrious bloodline. As the granddaughter of Lee Byung Chull, founder of the Samsung Group--the nation’s most influential chaebol--she grew up among South Korea’s richest and most powerful.
Early on, Lee learned that she would either have to assert herself or get lost in the boisterous gatherings at her grandfather’s home, where the extended family met for holidays and special occasions. Those were happier times for the family, whose feuds and disappointments have since become rich fodder for gossip in the nation’s executive boardrooms.
The corporate rumor mill went into overdrive when Samsung’s founder, who died in 1987, bypassed his eldest son, Lee Maeng Hee, and handed over control of the family empire to his younger son, present Chairman Lee Kun Hee.
Instead, the eldest son--Miky Lee’s father--was given the job of running Cheil Food & Chemicals Co., a solid but stodgy food products company that reported a skimpy pretax profit of $12.6 million last year on sales of $2.1 billion.
Although the family maintains a facade of harmony, rumors of a rift gained credence when Cheil began severing its ties to its parent company in 1994--including with the ongoing sale of its estimated $1 billion worth of shares in several Samsung affiliates.
More than just family angst is at work here. Corporate Korea is facing tough international competition. And South Korea’s move toward democracy has placed new pressures on the giant chaebol by shining a harsh light on their dominance of the economy and their close ties with the political elite. The result has been the indictment of numerous top corporate executives on corruption charges, including the current CEO of Samsung, Miky Lee’s uncle.
Such forces have accelerated the transfer of power to the next generation of corporate leaders, who usually are the beneficiaries of South Korea’s top private schools and a college education in Europe or America.
Lee’s early years fit that mold. After graduating from Seoul National University, she and her then-husband, a college classmate, went to Harvard, where she enrolled in an Asian regional studies program.
But while other affluent Korean students at Harvard indulged in designer clothing, expensive cars and parties with A-list guests, Lee shopped at the Gap and became an ex officio den mother to a group of Korean Americans whom she taught in a Korean-language class.
During off hours, they hung out at Lee’s apartment, eating home-cooked Korean food and learning about the culture of their ancestors. In return, they dragged her to movies and fed her tidbits about popular American culture.
Jay Kim, now a 36-year-old physician at a Harvard teaching hospital, recalls that even then, Lee had a voracious appetite for Hollywood trivia and displayed an encyclopedic knowledge of People magazine’s latest offerings.
“I remember many evenings sitting around talking about different movies,” said Kim, whose mother was a classmate of Lee’s mother in Seoul. “The fact that she had so many Korean American friends really helped her to understand the jokes and subtleties.”
After getting her master’s degree from Harvard, Lee spent five years in Hong Kong and Shanghai--working on a Ph.D in linguistics--before returning to the United States as a director of Samsung Electronics America. Her marriage over, she bought a condominium in Manhattan and commuted to the company’s New Jersey office. While her home base is now Seoul, where she lives with her parents, Lee still commutes at least once a month to the United States.
Around the time Lee became a director of Samsung Electronics America, Chairman Lee, who had gained a reputation for bucking tradition, was looking at ways to move the Samsung empire beyond its role as a highly efficient manufacturer of televisions and semiconductors. But he thought his firm lacked the creative talent needed to make the leap into fields such as multimedia and entertainment.
The South Korean government also was targeting entertainment and multimedia as a key industry, using tax breaks and lucrative licensing opportunities to steer companies in that direction.
Ock Ju Noh, president of Los Angeles-based Compass Consultants, said South Korea’s political and business elite view these new technology areas as a potent weapon in their competitive assault on the Japanese, particularly after the high-profile failures of Sony and Matsushita.
“To get an even playing field, they have to get into a new business where Japan has no lead time,” said Noh, who has investigated several entertainment deals for the chaebol.
In spite of the reputed family tension, Lee picked niece Miky to tackle the job of fostering creativity among Samsung’s 26,000 employees. Through partnerships with Parsons School of Design in New York and the Art Center College of Design in Pasadena, she established two design programs in Seoul--one open to the public and one for Samsung employees.
David Brown, president of the Art Center, said Lee’s international exposure helped her understand that Samsung needed to promote creativity in design and marketing to set its products apart and build a global brand image.
“She recognized that Korea would eventually have to come out to play with the big boys in the world market,” he said. “I think she recognizes that design and the perception of quality that design can communicate are the difference between winners and losers in the world market.”
But turning techno-nerds into free thinkers is not easy. One of the legacies of Confucianism and 35 years of Japanese colonial rule is an educational system that rewards conformity while discouraging independent thought.
“As Americans, one of the ways of being creative is to defy authority,” Brown said. “Whereas the entire cultural overlay in Korea is to obey authority and obey your elders.”
The senior Lee would later discover the pitfalls of unleashing those creative forces.
Late in 1994, a Los Angeles attorney friend wrote Miky Lee that the DreamWorks trio was looking for investors. An initial meeting was arranged at Spielberg’s Amblin Entertainment headquarters, on MCA’s back lot, and she came away convinced that an investment in DreamWorks would be not only smart business but fun.
Lee first persuaded her uncle to propose a $900-million stake in the fledgling Hollywood company, which at that time had no building, no studio and no films.
But when the Samsung CEO arrived at Spielberg’s home to cement the deal, accompanied by a phalanx of dark-suited officials and an interpreter, things quickly began to unravel.
In its retelling, this meeting has taken on a hall-of-mirrors quality. Spielberg has said he was spooked by the elder Lee’s seeming obsession with semiconductors, claiming the word must have come up at least 20 times during the dinner conversation.
Katzenberg agreed that the lack of chemistry across the table was a key reason for DreamWorks’ decision to walk away.
“They kept talking about semiconductors, and Steven kept talking about the emotional stuff, the core of storytelling,” Katzenberg recalled. “We were talking apples and submarines.”
In the end, Hyun Soo Park, general manager of Samsung’s newly created Entertainment Group, said Samsung could not justify spending nearly $1 billion on “three talented gentlemen” with a few good ideas.
Whatever the reason, it cleared the way for Miky Lee and brother Jay, who had assumed management control of Cheil Jedang in 1993. They made their successful bid for a piece of DreamWorks, a move that launched them into the world of multimedia--and placed them in direct competition with their uncle.
Some describe Cheil’s DreamWorks move as surprisingly opportunistic, and a humiliating affront to Chairman Lee. But his niece said her decision to leave Samsung and mastermind Cheil’s move into the entertainment world was simply smart business.
“They’re very good at what they’re doing,” she said of the DreamWorks threesome. “I had no doubt about what they hoped to do. And we’re very good at what we’re doing. We’re very similar.”
Her partners in DreamWorks couldn’t agree more.
“I don’t think there has been anybody who’s been more of a believer, more enthusiastic, more supportive of us than Miky Lee, personally, and that was the connection,” Katzenberg said. “There never was a connection with this $65-billion company called Samsung. It was never about a company called Cheil. It was about a person called Miky Lee.”
Chi Jung Nam of The Times’ Seoul Bureau contributed to this report.