On the office of Robert Evans on the Paramount that smelled of cigarette smoke.
The walls were lined with framed photographs of Evans with beautiful women, Evans with difficult directors, Evans looking pensive near a swimming pool and even one with Duke when they were on the premiere of Love Story.
On this particular Tuesday in late April 1970, the vibe was filled with anxiety.
Evans paced the length of the Persian rug, a telephone cord trailing behind him.
He was wearing tinted glasses indoors, a choice that he was trying to pull off without looking ridiculous.
"The donuts were bad," Evans muttered, slamming the receiver down. "The goddamn protesters are not to be encouraged, Duke."
Duke sat on the plush sofa, his long legs stretched out, looking entirely unbothered. He held a glass of mineral water, watching Evans pace around.
"The donuts were a gesture of goodwill, Bob," Duke said calmly. "We fed the hungry students. It's biblical."
"Biblical?" Evans scoffed, running a hand through his immaculately coiffed dark hair. "It's a disaster!"
The door to the office swung open. Gary Kurtz stood there. He didn't look panicked.
"It's escalating," Kurtz said, closing the door behind him.
"Tell me," Duke said.
"The donuts worked," Kurtz explained, walking over to the sidebar to pour himself a drink. "The students loved them. They were laughing. The tension was diffusing. But then the cameras showed up. And about twenty minutes ago... she showed up."
Evans froze. "She?"
"Jane," Kurtz said.
"Fonda?" Evans whispered the name like he didn't believe it.
"Fonda," Kurtz confirmed. "She brought a megaphone. She's calling Hacksaw Ridge an army fantasy. She's calling for a boycott of the movie."
Evans collapsed into his leather chair, putting his head in his hands. "I knew it. I knew the Klute thing would come back to bite. You snubbed her, Duke. Now she's making it personal."
"She's making it political," Duke corrected. "Maybe this could be even better."
"Better?" Evans looked up, his eyes wide behind the tinted lenses.
"Duke, she's one of the face of the Anti-war movement! If she turns the youth against this movie, we lose the under-thirty demographic!"
"We're not going to lose them," Duke said. "But we need to manage or get a way to control the narrative."
"Manage?" Evans laughed, a high, nervous sound. "She's calling for a boycott! Do you know what Charles Bluhdorn is going to do when he hears the word 'boycott'? He's going to have an aneurysm."
"Call Jaffe," Duke said.
"What?"
"Call Stanley Jaffe," Duke repeated. "He's the President. He's in New York. Ask him what's his solution."
Evans looked at the phone. He looked at Duke. Then, with a trembling hand, he dialed the number for the Gulf + Western building in New York.
He spoke in hushed, frantic tones for a moment, then listened. And listened.
Slowly, the tension began to drain from Evans's shoulders. He sat back. He took off his glasses and rubbed the bridge of his nose.
"Yeah... yeah, okay, Stanley. I get it. No,no, no I won't... right. Okay. Thank you."
Evans hung up. He looked at Duke, a strange expression on his face.
"Jaffe says to calm down," Evans murmured.
"Let me guess," Duke said. "The networks aren't biting?"
"CBS ran a ten-second clip," Evans said. "But they cut away before Jane started her speech. Jaffe says the networks are tired of her, she's overexposed. Unless she burns a flag or gets arrested, it's a local story. It's not national news."
"Exactly," Duke said. "It's a tantrum, Bob. Let's keep calm."
Evans let out a long breath, reaching for a silver cigarette case. "Jaffe says to ignore her. If we respond, we give her attention. We just need to let the advertising do the work."
"Smart man, that Jaffe guy," Duke said. "But we still need to adjust the rollout."
He stood up and walked to the large corkboard where the marketing timeline for the July 20th release was pinned up.
"We have two movies, Bob," Duke said, tapping the board. "We have the movie Jane Fonda thinks we made, and we have the movie we actually made. We need to sell both."
"Branching," Kurtz said, catching on.
"Precisely," Duke nodded. "In the heartland, like Ohio, Texas, the South we keep the current campaign. 'One man on a ridge.' 'The price of freedom.' We sell the action. We sell the heroism and we lean heavily into the patriotism."
"And on the coasts?" Evans asked, lighting his cigarette.
"In New York, Los Angeles, San Francisco... we pivot," Duke said. "We sell the Conscientious Objector. We sell the story of a man who refused to kill. We take out full-page ads in The New York Times and The Washington Post. No guns in the artwork. Basically we make it look like a pacifist manifesto."
"The Times would eat that up," Evans admitted.
"I'll write an op-ed," Duke added. "As C.H. Blackwell. I can write a piece for The Atlantic about 'The Burden of Non-Violence.'"
"We intellectualize it for the elites, and we emotionalize it for the masses."
Evans stared at the smoke curling from his cigarette. "You're a smart bastard, Duke."
"I'm a realist," Duke said. "And I want this movie to be a hit."
Evans chuckled, his confidence slowly returning. But as the laughter faded, his face darkened again. He looked out the window toward the Paramount water tower.
"God, I hope it opens big," Evans whispered. "I need a win, Duke. Corporate is breathing down my neck so hard I can feel the heat."
"Bluhdorn?" Duke asked.
"Bluhdorn," Evans spat the name. "And the rest of the board at Gulf + Western. You know what they asked me yesterday? They asked me why our return on investment isn't as good as their auto parts division."
Evans stood up, pacing again, but this time with anger rather than fear.
"Auto parts, Duke! Bumpers! mufflers! Zinc plating! That's what they love. They look at a spreadsheet and they see that a muffler factory produces X units at Y cost and makes Z profit. Every quarter. Like a clock."
He gestured wildly at the movie posters on the wall.
"They don't understand that the film business is fickle! You can't predict a hit! But Bluhdorn... he looks at me like I'm a gambler playing with his money. They're pushing this CIC deal, I don't know if you have heard of it."
"Cinema International Corporation," Duke said. "The joint venture with Universal."
"It's a backstep," Evans hissed. "Combining our international distribution with Universal to 'save on overhead.' They want to cut costs because they don't believe in the product anymore."
Duke watched Evans unravel. He saw the frustration of a creative man shackled to a conglomerate that viewed art as just another commodity to be traded.
"Sounds like they're losing faith, Bob," Duke said softly.
"Losing faith? They're ready to jump ship," Evans said, pouring himself a drink. "Bluhdorn told me last week that the volatility of the film slate is ruining his quarterly projections."
Evans downed the drink.
"Honestly, Duke? Since you decided to move your future distribution to Ithaca... the board is terrified. They look at Paramount and they see a liability now."
Duke nodded slowly. He simply filed the information away in his mind.
"It's a tough business, Bob," Duke said, standing up. "Maybe Bluhdorn is right. Maybe movies aren't for conglomerates."
"Tell me about it," Evans sighed. "Well, let's just get Hacksaw open. If it hits, maybe they'll let me keep my office for another year."
"It'll hit," Duke promised.
Two hours later, the atmosphere shifted from the manic of Hollywood to the hushed, air-conditioned of high finance.
Duke sat at the head of a long, polished table in a private conference room in Century City.
To his right sat Marcus, his wealth manager.
Across from them sat Preston Whitmore, a senior representative from Lehman Brothers.
"We've reviewed the portfolio, Mr. Hauser," Whitmore said, opening a leather dossier.
"Your liquidity is... impressive. The gold futures strategy was aggressive, but given the current instability in the currency markets, it appears to have been prescient. And the real estate holdings in the Sun Belt provide a solid collateral base."
"I like land," Duke said simply. "They aren't making any more of it." He said remembering the real state obssesed Lex Luthor from Superman the movie.
"Indeed," Whitmore smiled politely. "However, Marcus here tells me you are interested in a rather... significant acquisition. One that would require a substantial leverage facility."
Duke nodded to Marcus. This was the moment. Duke was the vision and Marcus was the mechanics.
"We want Paramount," Marcus said.
He didn't bury the lead. He dropped the name onto the table directly.
Whitmore blinked. He adjusted his glasses. "Paramount Pictures? The studio?"
"The studio, the library, the lot, and the distribution infrastructure," Marcus clarified. "We are aware that Gulf + Western is the current parent company."
"Gulf + Western is a conglomerate," Whitmore noted. "Mr. Bluhdorn is not known for selling assets. He is well, more known for acquiring them."
"Bluhdorn is a portfolio manager," Marcus countered smoothly. "And right now, Paramount is the worst-performing asset in his portfolio. We've done the analysis, Preston."
"The return on equity for the studio division has been erratic for four years. Duke here was the one who really drove their success, and Duke is leaving."
Marcus slid a single sheet of paper across the table.
"Bluhdorn is obsessed with stability," Marcus continued. "He's heavy into manufacturing, auto parts, raw materials. Industries with predictable cash flows."
"The film business is giving him problems. It drags down his Price/Earnings ratio because analysts can't model the earnings."
Whitmore looked at the paper. It was a deal structure.
"Thirty million cash," Whitmore read aloud. "And one hundred and twenty million in debt notes, structured over three years."
"It's a Leveraged Buyout," Marcus said. "We use the studio's own assets, such as the real estate on Melrose, the film library as collateral for the loan."
"We put down thirty million of Duke's own liquid capital as the equity slice. That's our skin in the game."
Whitmore tapped his pen on the table. "One hundred and fifty million total valuation. That's... aggressive. But the debt load? Interest rates are hovering around eight percent. Servicing that debt will be heavy."
"Eight percent is acceptable," Duke interrupted.
Whitmore looked at him. "Beg your pardon?"
"Right now, money is cheap, Preston," Duke said, leaning forward.
He saw Marcus give him a subtle nod only to procced to ignore him.
Duke knew the history of the 1970s, the stagflation, the oil shocks. And most importantly inflation was coming to eat the dollar.
Debt incurred in 1970 could be paid back with more debt in 1973, and just pay with devalued currency in 1975.
It was the perfect time to borrow if somebody knew the interest rates, luckily Duke remembered that the US was about to enter a bad economic situation.
"And," Marcus added, stepping back in, "we have intel that Bluhdorn is keen on listening offers. He's frustrated. The proposed joint venture with Universal, CIC is a signal. If we offer him a clean exit, cash upfront and a removal of the liability from his books, he'll take the meeting."
Whitmore studied the numbers. He looked at Duke, the man who had turned a few million into a hundred million in two years.
"Gulf + Western has been complaining about the volatility," Whitmore admitted slowly. "We handle some of their bond issuances. The film division is... noisy. Bluhdorn hates it."
"I love it," Duke said. "I know how to run this Industry."
"You really think you can run a major studio?" Whitmore asked. "It's not just picking scripts, Mr. Hauser. It's unions, overhead and a thousand employees."
"I have the team, I have the product and Paramount is a sleeping giant." Duke said.
Marcus leaned in for the close.
"Lehman syndicates the debt," Marcus said. "You get the fees. You get the relationship with one of the new major player in Hollywood. And you get to be the bank that brokered the deal."
Whitmore sat back. He looked at the fog outside, then back at the calm confident young man across from him.
"Thirty million cash," Whitmore muttered. "That gets Bluhdorn's attention."
"It gets him to the table," Duke said. "The rest is just details."
Whitmore closed the folder. "I'll run it up. But frankly? I think you might be right. Bluhdorn is an Austrian industrialist, I dont know why he's trying to play in Hollywood. If the checks clear... he might just hand you the keys."
"The check will clear," Duke said.
After Whitmore left, Duke and Marcus stood by the window of the conference room.
"You realize," Marcus said quietly, "that if we do this, you are leveraged to the hilt. If Hacksaw Ridge bombs... if the economy tanks... you could lose everything. The land, the gold, Atari. The bank takes it all."
Duke looked out at the city.
He thought about the future. He thought about The Godfather (which he already owned). He thought about Indiana Jones. He thought about Star Wars.
He thought about the endless stream of blockbusters that were about to define the next fifty six years.
He wasn't gambling.
"Bluhdorn is not a good owner, and we need to take advantage to pounce, if i have Paramount, i'll be able to exponentially grow way faster than if i just did it on my own." Duke said.
"Evans probably won't like it," Marcus noted. "If you buy it, he works for you."
"Evans is a brilliant producer," Duke said. "But he needs a boss who understands the business. I'll give him that."
Duke turned away from the window.
"Structure the debt, Marcus. Lock in the rates. Get the paperwork ready."
"And the offer?"
"We wait until Monday," Duke said. "Better if we can do it before Hacksaw Ridge is released."
___
I was reading a little about the economy in 1970 and how Paramount almost sold for 120 million in 1972 before the Godfather saved them and i realized debt in 1970 is not high interest.
Decide on this:
DC(I personally think this one is more interesting)
Marvel