MBAs in Hollywood
As Hollywood becomes increasingly corporate, MBAs are finding unprecedented career opportunities in the industry.In an era when studio chiefs are spending just as much time dealing with stockholders, government lobbyists and multinational operations as deciding which projects to greenlight, is the MBA becoming an increasingly invaluable asset for the industry's power brokers? Some say the degree provides the kind of training that enables them to look at the business from, well, a business standpoint.
"The entertainment industry is very much a business today," says Alan Horn, president and chief operating officer of Warner Bros. Entertainment. "And in a world where all the (film) companies are owned by large conglomerates, it helps to speak their language."
With a keen understanding of management techniques, accounting, investment and financial practices, the MBAs in positions of prominence -- like Horn, Sony Pictures Entertainment chairman and CEO Michael Lynton is a Harvard Business School alumnus, while former MGM chairman Chris McGurk is an MBA grad from the University of Chicago and producer and former Sony Pictures chairman Peter Guber earned his MBA at New York University -- are, in many ways, far more prepared for the modern world of show business than legendary tycoons such as MGM's Louis B. Mayer or Columbia's Harry Cohn, who famously made decisions based on "the seat of my pants."
An MBA "helps you view what a lot of people see as a crazy, creative enterprise as a business," McGurk says. "It also helps you with dealmaking because a good MBA program will focus on value creation. And it helps you become a better problem solver. A real key to solving problems is sorting through the 95% of information that is useless and focusing on what's important -- an MBA teaches you how to do that."
Today, Horn, Lynton and their peers are involved in acquiring other businesses -- Sony's multibillion-dollar investment in MGM, for example -- or working with hedge fund managers on major deals -- as Horn did recently when his studio brokered a multihundred-million-dollar pact with Legendary Pictures.
While these men continue to oversee their studio's overall slate, these days, they typically leave the day-to-day operations to their production presidents.
Despite the increasingly corporate nature of Hollywood, however, executives with MBAs are just beginning to infiltrate studio ranks in large numbers, primarily because other industries pay them more. Considering that many MBA graduates come out of school with $100,000 or more in tuition-related debt, they often don't have the luxury of taking a $400-a-week job in an agency mailroom.
"The (financial) trappings of being an MBA (in other industries) are such that you have to really want to be in the entertainment industry," Lionsgate acquisitions chief Peter Block says. "You come out of an MBA program and see all the big dollars being dangled at you, and no matter how many times during your studies you said, 'I want to get into the (film) business,' the dollars dangled by accounting firms and others make it unattractive.
"When I was at business school, many people wanted to work in 'the business,' but when they realized the disparity between that and other businesses, they much preferred the paycheck in other areas," Block adds.
Principal Communications Group communications associate Hans-Dieter Kopal says he had to consider the salary gap when he was debating whether or not to pursue a career as a publicist. "If I wanted to be a stockbroker, I would make a grip-load more money," says Kopal, a graduate of Loyola Marymount University who worked at Universal Pictures before moving to his current job. "But in the long run, I will get there, and I will enjoy my ride more."
Other young executives seem to be adopting that same attitude.
"Now, because the industry is changing so much and it is such a dynamic world with new business models being created every day, this attracts many of the business school students," says
Jon Kaplowitz, who graduated from Harvard Business School in May and now serves as head of business development for World Poker Tour. "Also, because there are so many entrepreneurial activities within entertainment now, thanks to the new technology and the YouTubes and Googles, everybody is circling the wagons and trying to figure out how to capitalize on this. All these things offer not only an interesting opportunity (for graduates) but a way to explore entrepreneurial opportunities that weren't there a couple of years ago."
Harvard Business School already has begun to pursue these opportunities by creating an Entertainment and Media Club, which organizes a four-day "trek" to Hollywood each winter, when students meet top executives -- which is precisely how Kaplowitz found his current job.
Still, he says, the fact that many of the top business schools are on the East Coast and have long ties to Wall Street and consulting firms means that Hollywood needs to do a lot more to recruit the best and the brightest. "(They need to show) these are not the run-of-the-mill, traditional operational jobs; they're giving a real opportunity to figure out how to integrate new media businesses into the older entertainment world," Kaplowitz says.
Of all the business schools in the U.S., only USC offers an MBA program specifically tailored to entertainment, though the Entertainment and Media Management Institute at UCLA's Anderson School of Management does offer an MBA with an entertainment specialty.
Those programs are attracting up-and-coming executives who already have jobs in the business but are trying to make themselves more marketable or broaden their professional horizons. Amy Powell, senior vp interactive marketing for Paramount Pictures, decided to put herself through UCLA business school while holding down her studio job in order to enhance her understanding of all aspects of the industry.
"I was very much a creative mind, but I realized that I wanted to understand the business from a more holistic point of view," she says. "And that meant understanding the business behind the business. I loved my job, and so I decided to get my MBA while I was working."
Powell says that her education has proved beneficial, though she acknowledges that in her current post, its benefits are often tangential to the work she does day to day.
Lynton agrees that sometimes MBA training isn't always applicable in the most practical sense, but he does think that its emphasis on thinking critically is always useful.
"What (the degree) doesn't teach you is two very necessary things," Lynton says. "There are moments when you really have to trust your passions over cold analysis. Business school really favors the latter, and sometimes, you have to fight that instinct. And the second thing is, it doesn't encourage you to pull the trigger. It does ask you to perpetually look for more analysis, which is why a lot of MBAs make really good consultants or bankers."
If Lynton's and Horn's track records are any indication, MBAs seem to make pretty good studio chiefs as well.
"Any media executive in today's world has to have a facility with numbers," says Randy Falco, president and chief operating officer of NBC Universal Television Group and an MBA graduate from Iona College in New Rochelle, N.Y. "It may not be that they need to be MBAs, but certainly they need to understand the language being spoken."