Film Studies: Once a movie-maker, always a money-grubber

The greatest failing in how we think about the movies has always been in under-estimating the money. Not just the amounts, but the gravitational pull of the dollar, and the way it alters even a great artist's sense of himself and reality - and the balance between the two. It is hard to make a good movie; but it is harder still to get oneself in a position of being able to try. That is because, to most of the important collaborators on a project, they are making a product, with merchandising spin-off. And it is likely to cost $50m. But there's a jewel of comfort in that absurdity: you are getting $2m. So keep a straight face.

Do not neglect that $2m. You may be intent on being Orson Welles, Martin Scorsese, or Terrence Malick. In other words, you may be artistically high-minded. You may be able to sustain the hope, much of the time, that the transaction in any movie is you thinking and working and then The New Yorker, Sight & Sound and the Independent on Sunday mulling over your work. Instead of the sponge that soaked up $2m.

Two million dollars can do so much: it can get you a decent home and car; it may get you a new spouse (with pumped-up alimony for the old one). It can quickly get you into habits where $2m really isn't so much. Or not enough. So as you finish your movie you're desperate to get another one for $3 or $4m - to keep up payments and standards. That's when someone says they might go to $5m if you'd do Scream 13. By then you're not what those print organs think of as "an artist" any more.

If there's one thing living in the US and being in Los Angeles has taught this critic, it's follow the money. This month that game paid off in terms any serious film-goer needs to absorb.

Michael Eisner and Jeffrey Katzenberg were friends. Eisner was eight years older, and plainly the senior partner. No doubt there were conclaves in which Michael felt it necessary to explain to Jeffrey who had the power. And Michael may not have been as endearing then as he was with Jeffrey in public. They came together in 1976 at Paramount. Jeffrey had been there for a year as assistant to Barry Diller, chairman and CEO. Eisner was hired as president and COO. He and Jeffrey ran the studio, effectively, until 1984 and they were good years, thanks to pictures such as Grease, Saturday Night Fever, An Officer and a Gentleman, Heaven Can Wait, Ordinary People, Raiders of the Lost Ark, Flashdance and Beverly Hills Cop. Money pictures.

Then there were changes at Paramount, and Michael and Jeffrey quit as a team and went to Disney. In the early 1980s, that studio was moribund. In 10 years, they made a transformation. Eisner was CEO of all of Disney - theme parks, merchandising - while Katzenberg had direct responsibility for movies.

They reinvigorated the animated feature. They turned Disney towards adult material. They made the studio hot again, and built up the stock rating, with Pretty Woman, Dead Poets Society, The Lion King and Beauty and the Beast. Eisner became associated with annual bonuses in three figures at the million-dollar level. Katzenberg, I'd guess, was paid in the region of $5m a year.

In 1994, a crisis hit Disney. Eisner had just had heart surgery, while another executive at the studio, Frank Wells, technically his No 2, was killed in a plane crash. Katzenberg was the obvious new No 2, and heir apparent to Eisner. Whereupon Michael snubbed him - as if so much sense of equality was anathema. Within the year, Jeffrey quit to join Steven Spielberg and David Geffen as founders of DreamWorks.

But Jeffrey also sued. He claimed his contract owed him 2 per cent of the profits generated by his projects at Disney. Eisner said, cry baby, you left the company and forfeited that. But the suit remained, and in November 1997 Disney conceded that Jeffrey was owed something.

This spring and early summer, in a law office in Century City, the proceeding took place to ascertain the amount owed. By now, Katzenberg was of the opinion that $250m was a ball-park figure. Day after day, the case went on, with top lawyers involved. It turned ugly as Michael and Jeffrey took the stand. "I think I hate the little midget," Michael had written once about Jeffrey. Settle, said all the good advice in town, before it gets worse. For Disney was in the position of claiming Jeffrey's films had lost money - which was nuts - and which could only be proved by bringing out the records. And Hollywood studios do not like their records going public. So there were other profit participants eager to see the numbers.

The top executives wasted weeks, because Jeffrey had a case, and Michael hated to lose. Earlier this month, before the most incriminating dirt could be dished, they settled. We don't know the hard amount yet. But $250m is a ball-park figure. Michael has been humiliated. The midget has grown. And the $250m, or whatever, will become part of the overhead as movies become yet more expensive, harder to endure, and more of a gamble.

For if you follow the money, then, in the end, you come to this question: how is it that geniuses make garbage? Answer: they learn later than most of us that they were in the garbage business.