The Dream Team: The Rise and Fall of DreamWorks and the Lessons of Hollywood

Almost 13 years ago, three of the most talented and most powerful people in Hollywood who also happened to be close personal friends -- Steven Spielberg, Jeffrey Katzenberg, and David Geffen -- announced at a press conference that they were forming a new company that was later named DreamWorks. At that time, Katzenberg referred to the three founders as the "Dream Team," the business equivalent of the U.S. basketball team that won the gold medal at the 1992 Olympics in Barcelona. That was arguably the greatest basketball team ever assembled, beating its eight opponents by an average of 44 points. Its 12 members included Michael Jordan, Magic Johnson and Larry Bird. Eleven years after the initial press conference, despite DreamWorks' successes (e.g. American Beauty, Gladiator, Saving Private Ryan, and Shrek), most of it was sold off or shut down and the three founders went their separate ways, pursuing new opportunities. What happened and, perhaps more to the point, what didn't happen? Why didn't DreamWorks continue with two or at least one of the founders still involved? Finally, what lessons can be learned from what is frequently referred to as the "New Hollywood"? Daniel M. Kimmel offers his answers to these and several other questions. I found Katzenberg to be the most interesting of the three founders, in part because he had the most at stake and thus the most to lose. Because the litigation with the Disney organization had not as yet been resolved in his favor, he mortgaged his home to raise the investment funds his partnership with Spielberg and Geffen required. By then, Geffen had founded and sold at least two companies and was a billionaire. Spielberg was already wealthy (perhaps almost as wealthy as Geffen) and could always concentrate entirely on directing films. The relationships between and among the three were both complicated and fragile. The same can be said of DreamWorks' relationships with what is generally referred to as the "Hollywood Establishment." Kimmel examines all of these relationships with rigor and precision. Among the many lessons to be learned from the rise and fall DreamWorks, one of special interest to be was what Kimmel has to say about entrepreneurs such as John Kluge and Rupert Murdoch "who were willing to take a chance on various deals where they might lose vast sums because the potential returns made the risk worth it...No one at DreamWorks was willing to play for those stakes." It is probable, for example, that the Playa Vista studio project (1,087 acres of commercial and residential development) was doomed from the beginning but it eventually fell apart because Spielberg and Geffen were told they had to start risking some of their own money on the project. However worthy the project, the company couldn't afford it. The lesson: If you want to "play with the Big Boys" (i.e., General Electric, NewsCorp., Sony, Time-Warner, Viacom, and Walt Disney), you better have deep pockets or at least the highly develope

Despite not having access to the principal players, Daniel M. Kimmel has written the definitive book on the rise and fall of DreamWorks. He goes into great detail on the company's successes and failures, and presents an insightful analysis explaining what this means about Hollywood in general.