Peter Guber has nestled into the plump upholstery of the King Edward Hotel, in downtown Toronto, on a drizzly, grey day. Perhaps the weather explains why the Bel Air movie mogul is sporting what appear to be white tube socks inside his thin black suede loafers, a Gucci-goes-hunting effect.
Aside from this, Guber seems sleek and prosperous, his hair looks lightly hennaed, the button-down collar on his shirt fashionably unbuttoned. His eyes are as warm and brown as a spaniel’s, and who could think anything negative as he reminds of the making of Midnight Express, Batman and Rain Man, of the fact that he has produced “some of the greatest films that have ever been made—and I don’t mean that from an ego sense”?
This is the same Peter Guber once dubbed the BillionDollar Man, a testament to the amount of money he was said to have cost Sony Corp. when he was head of Sony Pictures Entertainment. Jets, chefs, big-budget movies that bombed and a wretchedly expensive remake of the MGM studio lot—the story line as scripted by the entertainment press was deliciously compelling. Guber does not say his critics were unfair. He cites envy, meanness and “toxicity” as possible motivations. In the fall of 1994, Sony let Guber loose, but he didn’t go hungry. Before taking a $4.4-billion writedown on its disastrous Hollywood experience, Sony made a $275-million investment in Guber’s new company, Mandalay Entertainment.
With this, Guber went about producing such big-screen fare as the soonto-be-released Seven Years in Tibet, starring Brad Pitt, and such television fare as the recently aired Intensity mini-series based on the Dean Koontz novel. Mandalay Television was, he says, “an inch away from getting The Rosie O’Donnell Show.” Now, Guber has taken Mandalay TV and struck a deal with an unlikely partner, Frank Giustra, the Vancou-
ver-based ex-head of Yorkton Securities Inc. Giustra made millions underwriting mining stocks before his climacteric departure from Yorkton last year at 39, choosing instead to fly jet planes over the California desert and declaring his love for moviemaking. The latter passion has emerged in the form of Lion’s Gate Entertainment Corp., in-
to which has gone Mandalay Television as well as Cinepix Film Properties, Inc. of Montreal and Vancouver’s North Shore Studios. Cinepix finances and distributes movies— watch for Johnny Skidmarks, a feature film starring Frances McDormand now in postproduction. North Shore is the largest production facility in Canada, with six sound stages. Throw Mandalay into the pot and
you’ve got, says Giustra, the beginnings of a fat, vertically integrated entertainment colossus. Says Nelson Smith, head of corporate finance for Yorkton’s entertainment and leisure group: “This is the first day of the rest of the Canadian film industry’s life.”
It would be easier to dismiss such hyperbole if Yorkton hadn’t just completed a $60-million private placement for Lion’s Gate, leading a syndicate of First Marathon, Wood Gundy and others that won the support of such diehard Giustra investors as BPI Capital Management Corp. An earlier $56 million was raised last spring. There will be more acquisitions, and Giustra promises a “put” deal with a major Hollywood studio in which the studio will distribute all Lion’s Gate product for five years. That mitigation of risk, says Yorkton’s Smith, was key to the deal.
Still, it does seem a stretch that a biggie like Guber would be interested in marrying a guy like Giustra. “A lot of peopie that come from the meat business or the shopping centre business and go into the movie business do not succeed. And therein a lot of stories are written,” says Guber. So why should Giustra be any different?
Eleven years ago, Giustra went into the film business with Peter Strauss, creating The Movie Group, whose mainstay was acquiring the foreign sales rights to U.S. independent flicks. So he has some experience.
Strauss introduced Giustra to Guber. All three have equity stakes in Lion’s Gate, with Giustra’s by far the largest at 13 per cent. ‘We’d like to be in on the business of having capital gains,” says Guber, getting to the heart of the matter. He believes this partnership—and he concedes he has had many, some good, some bad— will have the fearlessness to make a success of it. “This,” he says, “is a hit-driven business. It isn’t like a gold mine. You can pretty much predict what’s in a gold mine.”
The ex-head of Yorkton Securities goes mining for Hollywood gold
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