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A Rare Interview With Megaproducer Arnon Milchan: What He Spent on ‘The Revenant’ and Why “the Movie Business Stinks”

New Regency's elusive owner (No. 49 on the THR 100) answers everything about friend Rupert Murdoch, his alleged background as a spy and arms dealer, and the need to clean house on the job ("As time goes by, you start to lose touch").

Just a year and a half ago, things were looking pretty bleak for New Regency Pictures, the Fox-based production and financing company owned by Arnon Milchan. Rumors were swirling about the spiraling cost of The Revenant; insiders were speculating about whether another Regency investment, The Big Short, could ever make money; and whether Milchan, 71, a billionaire who started in the chemical business and has investments including Puma sportswear, was too focused on his other companies to pay attention to film.

But on Christmas Day 2015, Revenant opened to strong reviews on its way to 12 Oscar nominations and $533 million at the global box office. Two weeks previous, Paramount had released The Big Short, which went on to earn five nominations and gross $133 million worldwide. Coming on the heels of the Milchan-financed Birdman and 12 Years a Slave — best picture Oscar winners in 2015 and 2014, respectively, both joint ventures with Fox Searchlight — it was clear the Israel-born mogul was back on top.

In part, that was due to a major restructuring of his company that took place in 2011, when Milchan took over as chairman and replaced exiting execs Bob Harper and Hutch Parker, bringing in former Paramount executive Brad Weston as president and CEO. That restructuring was followed by an email Milchan sent to his staffers in December 2011, in which he put it bluntly: “I’d like to know [who are] the 3-5 best connections you have in the movie industry, that can move the needle and create added value beyond what Fox does. I’d like to be reassured that if I don’t sleep, you don’t sleep. I can afford not to — you cannot. I’m contemplating a major decision, and before I do that, I need your feedback.” Now, since Weston left Regency in May, Milchan’s son Yariv has been running the company with chief operating officer Jonathan Fischer and production president Pam Abdy.

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But, more than anything, Milchan’s success has been driven by his decision to gamble on his gut, an anomaly in an industry that increasingly uses greenlight committees and algorithms to determine its bets.

Above all, says Milchan — who has a major art collection including works by Picasso, Pissarro and Basquiat — he learned from his interest in art to believe in individual film artists, as obsessed with their work as the major artists he collects. “How many paintings did Francis Bacon destroy because they were not exactly what he wanted?” he asks. “This idea of a man alone in front of a canvas evolved into: Who’s today’s Picasso?”

Is the movie business still healthy?

The movie business stinks. If somebody asked me, “What’s a good way to make money?” I would say, “Stay away from the movie business, period.” Take Revenant: You take the cost, you add P&A [prints and advertising] and the distribution fee — you have $300 million behind one movie. This past year we had Alvin and the Chipmunks: The Road Chip and Big Short and Aloha [and Unfinished Business], too — we had five movies out on the same day, almost. That’s $1.5 billion. All you pray is to break even or make a little bit. If I took all that money and put it in the bank, I’d make five times more, without risk. But I’m a junkie.

When The Revenant‘s budget kept growing, were you worried?

Very. Alejandro [G. Inarritu] and Leo DiCaprio publicly said, “Arnon is so brave. He never flinched about the money.” I swear to you, I flinched a lot. Every single penny came from my personal bank account. I own the company almost 100 percent — well, technically 87 percent and 21st Century Fox owns the rest. It will be 100 percent by the end of [the Fox deal].

Milchan (seventh from right) with Brad Pitt (at the microphone) and the actors and filmmakers behind best picture Oscar winner 12 Years a Slave at the 2014 ceremony.

How much did the movie cost in the end?

I think it was $140 million.

Will you make money from Revenant?

Of course. And imagine what it’s going to be worth later.

Many years ago you said how much you admired Rupert Murdoch. Do you still?

Yes. The guy is what, 85? Look how he structured his business. Rupert had a plan. He implemented it slowly, and his kids are now controlling it up to a point, but he didn’t go away. What he said is, he is much more free to think of the next step. He failed sometimes, but he did what he loved.

Do you talk about personal things with him? You’re married to Amanda Coetzer, a former professional tennis player, and like him you have young kids.

Yes. Once, he said, “Arnon, you should have another child.” I said, “Don’t you think I’m a little too old to start having a child?” Now I have two little ones. The youngest, Olivia, just turned 5 and Shimon is 7. Then I have four older ones and nine grandchildren. When they all come together, I don’t know who’s who.

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How did having young kids change your life?

Something happens. It keeps you young. You have no choice. You can’t let them down, these little kids, so better stay safe and focused and give some importance to their world. I can tell you about Barbie and they’ll tell me about Elsa, so it’s really great.

Where do they live?

I have them in Israel with me, and we were in Geneva last week, and then they’re going to London and France and South Africa.

So you still travel all the time?

I love it. I follow the sun. Israelis and Jews like myself don’t like to be cold.

Besides Murdoch, who else do you admire?

I just talked to [former Israeli President] Shimon Peres, who’s 92. We were talking about some peace process, hopefully one day. I said, “It’s so depressing.” He said, “Don’t look down. If you never looked up to the sky, you’d have no chance to see the stars. Look at your shoes, you only see your shoes.”

There was a book written about your past working as a spy for the Israeli government and as an arms dealer — Meir Doron and Joseph Gelman’s Confidential: The Life of Secret Agent Turned Hollywood Tycoon Arnon Milchan. Did those actions help or hurt you?

In the beginning it was like, “Oh, James Bond is coming!” You’re James Bond coming to town, so it’s more fun. Then when you start to be too successful, you go from James Bond to being “an arms dealer,” which I never was. That happened 35 or 40 years ago. But I definitely helped Israel, and I still will. Listen, I’m an 11th generation [Israeli] — 400 years, mother, father, all the way to King David.

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Was the book true or false?

Let me say the following: Two guys knock on my door one day and introduce themselves and give me in galleys a book about myself. I said, “Did I authorize it?” They said, “No, but we’re going to publish it.” So I said, “Let me look at this.” So I look at it and say, “You got so many facts wrong. I’ll correct some. I met [Prime Minister] Benjamin Netanyahu not in 1977 but 1997, and he never worked for me.” I said, “Listen, you’ve got to understand something. When you’re a kid and your father comes home from the war shivering from malaria, just before the independence, and this little country called Israel becomes a test ground for the Anglo-Saxon countries to try their missiles and planes against the Russians during the Cold War, of course you help.” I was in agriculture and pharmaceuticals. That’s not spying — that’s helping Israel to survive. I don’t know what a spy is, but that’s not what I was. If I was a spy, I wouldn’t have time to talk to you.

Your film company’s had a major revival. What made that possible?

I never, ever plan. But when I start to see mediocrity, I have an allergy to it. It’s the same work to do a good film as a just-OK one, seriously. The [change] was me saying, “Let me get a director I believe in. I don’t want to get stuck in development hell. I don’t mind paying whatever it is for a book or a screenplay, as long as I have a director supervising and committing to do it.” Otherwise, you do like some people: They go to the Polo Lounge and buy the book and hire the best screenwriter and wait two years and finally they approach the director, who says, “What is this piece of shit?”

Peres (left) joined Milchan in Jerusalem in March as the producer announced a $100 million donation to establish a new university in Israel.

You took charge yourself, then brought in new executives. Why?

You’ve got to get younger help because as time goes by, you start to lose touch with the consumer. I didn’t want to know every Amazon and every Netflix [executive]. But I still believe that you start any business with a product, with a story, not with technology.

How hands-on are you with your film company?

Unfortunately, too much, because [film is a relatively small part of of the media pie. News Corp. executive] Chase Carey would explain to me that Fox’s [film division] is making a few hundred million dollars a year, but Fox Sports makes $1.5 billion and Fox News makes $1.7 billion. If you’re in the movie business, [it’s because] you’re a junkie.

Do you have an annual budget or annual number of films you want to make?

No. I never in my life had a budget. I never had any business plan. I remember one time we had to increase our credit line at JP Morgan — from $300 million to $500 million at the time — and I had to shake hands at a cocktail party to sign the deal. I see all these guys with suits and ties, and I come in wearing jeans and a T-shirt. They said, “The whole thing is subject to them hearing your vision.” I panicked. I made up some vision, “Blah, blah, blah.” I went up onstage. I got so nervous, I reached into my pocket and tried to read what I wrote and I couldn’t understand a single word of my own handwriting. I had about five seconds to decide what to say, so I said, “Let me tell you the truth: I have no vision.”

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What made you decide to retain ownership of your films?

I swear to you: not knowing the rules. I ended up paying for everything, so I own everything. The whole library of 450 movies is ours — all the way from Pretty Woman to JFK to L.A. Confidential to Free Willy to Fight Club to all the Academy Awards movies. With Amazon and Netflix and all the other companies that need products, we are in a really interesting war that gives so much value to libraries.

You’ve kept a distance from the TV business.

I had the greatest run on television with Malcolm in the Middle and then Bernie Mac and now we’re starting a joint venture with Lionsgate. For a while, everything I touched made money and worked; and then I met with rejection or made mistakes of judgment — like Mr. and Mrs. Smith. I thought, “No-brainer, television series.” It is true, but I took an actor and actress who look almost like Brad Pitt and Angie [Jolie]. You have to change; you have to be fresh. But we have such great IP: You can take Man on Fire or Heat or Gone Girl and stuff like that [and turn it into television].

What’s Hollywood getting wrong at the moment?

They’re relying too much on sequels, they’re relying too much on movie stars, and they forget the script.

Are you getting into the superhero business?

I’d get bored with it. By the way, I don’t judge. It’s a great business, but I’m not doing it.

Which studio leadership do you admire the most?

Fox, because we’ve been there for 17 years and we have another eight years to go. Their international marketing is second to none. Domestic, they’re very good, but so is everybody. It’s easier for domestic: You have a sea of circuits, you have HBO or Showtime or Epix, and you are a few phone calls away from covering America. In the international [field], it’s a whole different story. In France, you have to know which theater. You have to know if upstairs is better than downstairs. It’s an endless amount of knowledge. You can’t just unload it from L.A.

They had a shake-up when Tom Rothman left. Did that impact you?

No. I don’t care about the politics of a studio because the decision to make a movie or go with Alejandro — that’s [mine].

A version of this story first appeared in the July 15 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.