"Alan, that's like Jack Kennedy canceling his subscription to the
Herald Tribune.
Those guys don't care. It doesn't make any difference. You'll do more damage by going after Murdoch than by just letting it lie. They'll be writing long after we've been complaining. They can write anything they feel like writing about this movie, and so can anyone else."
Despite Herbert's nonchalance, the stock continued to fall and a number of stockbrokers and securities analysts telephoned their concern to Hirschfield, whose rage was shared by Director Steven Spielberg, Producer Michael Phillips, and all of the studio marketing and advertising executives.
Suddenly, on Monday afternoon, the new issue of
Time
magazine appeared with a lengthy review of
Close Encounters
by Frank Rich,
Time's
chief film critic. Rich's opinion of the movie was precisely the opposite of William Flanagan's. It turned out that Rich, too, had sneaked into one of the Dallas screenings, and his article, accompanied by color photographs and cover billing, pronounced
Close Encounters
a dazzling movie. Rich pointed out that one reason for the intense interest in
Close Encounters
was that it was the first movie directed by Steven Spielberg after
Jaws,
one of the most successful motion pictures ever.
"Close Encounters,"
Rich said, is "richer and more ambitious than
Jaws
and it reaches the viewer at a far more profound level than
Star Wars. . . .
Although the movie isn't a sure blockbuster
...
it will certainly be a big enough hit to keep Columbia's stockholders happy."
Though Columbia was relieved at the appearance of the
Time
article, the company knew that relatively few people saw
Time
magazine on Monday, and feared that since the stock market was skittish anyway the damage caused by the
New York
article might be difficult to repair. The stock cl
osed Monday at $17, down $1,375,
on a volume of nearly 170,000 shares, and the New York Stock Exchange refused to permi
t trading to open on Tuesday morn
ing because the influx of sell orders was too heavy to handle in an orderly fashion. It was a typical display of the mob psychology that afflicts the stock market—particularly the market in stocks of corporations that make products whose value is as difficult to anticipate as the value of movies. Stocks of movie companies frequently rise sharply in anticipation of a hit film—anticipation based on little more than intuition. The steeper the stock's rise the more vulnerable it is to a sharp drop on receipt of information that is just as flimsy as that which caused it to rise. Investors in Columbia Pictures, having se
en their stock soar from $7 to $
I8 in just a few months, grew anxious as the opening of
Close Encounters
approached, and many of them panicked when the
New York
magazine article appeared.
Columbia shares resumed trading at noon Tuesday, opening at $15.50
, off $1.50 from Monday, and $2.
875 from Friday. But the stock rose slowly through the afternoon and closed at $16 on a volume of nearly 185,000 shares.
Alan Hirschfield met Herbert Allen for
lunch Tuesday at the same La Co
te Basque table where he had given Herbert the news about
Begelman
precisely six weeks earlier. As they had several times since then, the two men discussed the
Begelman
issue without total candor:
Hirschfield
recited the arguments against reinstating
Begelman
—it will look as if we're condoning thievery; the SEC will object; and the press will crucify us. But he stopped short of asserting unequivocal opposition. Allen recited the arguments for reinstatement—Begelman is responding well to psychotherapy; he is owed another chance because of his contributions to the company; and replacing him with someone as talented will be very difficult. But he stopped short of unequivocal support for reinstatement. Herbert stressed, in fact, that Hirschfield, as the chief executive officer, would be expected to make the final decision and that the board of directors would support whatever he decided.
Hirschfield
outlined his conversation with Richard Smith of the General Cinema Corporation in Boston the previous week. Again, however, Alan miscalculated Herbert's reaction to a crucial development—this time the prospect of losing General Cinema's proposed investment in Columbia if
Begelman
were reinstated in his job.
"Baloney," Herbert Allen said. "He's just bluffing. He'll be with us with or without
Begelman
. He needs us more than we
need him. Arid even if he isn't, there are other General Cinemas in the world. That's no problem."
"Herbert, you don't understand this guy. You're dealing with a real straight shooter who is very sensitive to public image. You mark my words, there will be no General Cinema. In addition to which, there will be no IBM. I've met
with them. too. They think this
Begelman thing's been put to bed. Potentially, these are two of the most important deals this company will ever do. General Cinema is a bird in the hand—twenty-six million bucks and more than that every year for the rest of our lives if we're smart."
"I know Dick Smith. I've met him. It's just baloney. But we shouldn't be deciding this issue based on what some other company thinks. It's none of their business."
"We're living in the world, Herbert, not in a vacuum. We've got to think about how this looks."
At Hirschfield's insistence, Herbert Allen arranged a meeting with Rupert Murdoch, the owner of
New York
magazine, so that Hirschfield could vent his rage over the article on
Close Encounters.
Hirschfield, Murdoch, and Allen had breakfast at the Carlyle Wednesday morning.
Hirschfield
assailed the magazine's failure to observe a generally accepted rule of movie reviewing: films shall not be reviewed before they open to the public. He claimed that the article had severely damaged Columbia Pictures and its shareholders. The company was considering legal action and the withdrawal of its advertising from all of Murdoch's publications,
Hirschfield
said. Murdoch, a droll, disarming man, listened patiently and then expressed sorrow about any damage that Columbia may have suffered. But he pointed out that he had to give his writers the freedom to write what they felt; otherwise, no writers would work for him. Surely, he added, the
Time
review, which also had appeared prior to the public opening of the film, had righted the balance and the film could look forward to other good reviews.
With just a hint of condescending smirk, Herbert Allen listened to the conversation and said little. Instead of backing
Hirschfield
, he belittled the significance of the article.
Hirschfield
could do nothing but seethe.
There was little time for plotting grand strategy at 711 Fifth Avenue that week. Most of Hirschfield's time was consumed by the details of the moment. He discussed with an intermediary the possibility that Mic
hel Bergerac, the chairman of Re
vlon, might like to become a member of the Columbia board of directors. He conferred with a delegation from the Cancer Research Institute about the program for the evening of the
Close Encounters
world premiere. He received a report from Mickey Rudin in Las Vegas that there was no evidence of gambling by David
Begelman
. He questioned Joe Fischer and Allen Adler on the advisability of Columbia's buying
Book Digest
magazine. He promised to bring his personal tax and investment adviser's services to the attention of Barbra Streisand and Jon Peters, who would be his guests in Scarsdale on Saturday. He took hundreds of phone calls. Ray Stark. Dan Melnick. Herbert Allen. Michael Phillips. Peter Gruenbergcr. Lew Wasserman.
Melnick
again. Stark again. Terry Allen Kramer. Dino De Laurentiis. Jack Valcnti.
Melnick
again, from Paris this time. Todd Lang. Nathan Cummings. Dick Munro of Time Inc. Herb Ross. Alan King. Ray Stark again.
Michael Phillips again. Jann Wenne
r. Herbert Allen again. Mike Nichols. Jack Valenti again. Leonard Goldberg. John Tunney. Matty Rosenhaus. David Geffen. Gerald Levin of Time Inc. Terry Allen Kramer again. Jack Valenti again . . .
More than Hirschfield let on, he had been upset by his talk with Herbert Allen on Tuesday and by a discussion with Matty Rosenhaus later in the week. It appeared that the board of directors actually was preparing to support the restoration of David
Begelman
to the presidency of the studio. They seemed unimpressed by
Hirschfield
's arguments against it. And their own rationale was beginning to take on a rehearsed tone; undoubtedly they were discussing the question among themselves and then repeating the most compelling arguments to him at every opportunity. Even if they honored their pledge to leave the final decision to him, they were eminently capable of rendering the decision-making process highly uncomfortable. If it were just another close call on a routine business matter, Hirschfield would not have been so concerned. But he failed to understand how anyone could seriously advocate Begelman's reinstatement, particularly in the light of the newly discovered Marty Ritt forgery. The arguments in favor of
Begelman
were naive, and it was unlike Herbert and Matty to be naive. Maybe David Geffen was right. Maybe Ray Stark was casting a spell right into the Columbia
boardroom. Maybe people did see
things differently in Hollywood.
Hirschfield
hoped the board would come to its senses without any angry confrontation. Peter Gruenberger would not complete his inquiry for another week or two. Maybe he would find still other forgeries. How many would it take to convince Herbert?
Hirschfield
wondered.
In the meantime, Hirschfield felt the n
eed for independent counsel
verification that his stance against Begelman was logical and correct, assurance that he was not blind to some crucial insight that validated the board's position. On Friday, November 4, a mild, dank day in Manhattan, he walked the block and a half to International Creative Management on Fifty-seventh Street to have lunch with Sam Cohn, perhaps the most influential talent agent in the world. Though Cohn worked for ICM, the world's largest agency, he functioned with a great deal of independence, essentially as an agency within an agency. Cohn's power stemmed in part from the diversity of his clients—directors, producers, screenwriters, and authors, as well as stars. Woody Allen. Mike Nichols. Sidney Lumet. Meryl Streep. Roy Scheider. Arthur Penn.
E.
L. Doctorow. Jay Presson Allen. Bob Fosse. Robert Benton. Robert Altman. Lily Tomlin. Liza Minnelli. Peter Yates.
A small, middle-aged, sandy-haired, chain-smoking man given to sweaters, chinos, and loafers, Sam Cohn dealt with Hollywood not as a single place (he hated Los Angeles) but as a global state of mind enveloping Beverly Hills, Manhattan, London, Paris, and any number of other locales which easily could be reached from the constantly blinking telephone console in his office eighteen floors above Fifty-seventh Street. Sam Cohn had an overview that many people on the coast lacked, and it was this overview that Alan Hirschfield sought. Cohn also knew David Begelman well as a friend and professional associate, having worked closely with him in the same talent agency for years. But Sam Cohn also was fond of Alan Hirschfield and the way he had run Columbia Pictures. And
Hirschfield was gratified to learn
that on the issue of David's embezzlements he had Cohn's support.
"As badly as I
feel for David as a friend," Cohn said, "it's morally and socially unacceptable for him to get off. He should not stay in the company and he should not be given a lush production deal."
"Social and moral considerations
are
not paramount with my board," Hirschfield replied.
"Well, you have to deal with the issue of the poor black guy who robs a gas station versus the white-collar criminal. There's no way around it."
"The board thinks David is irreplaceable."
"That's ridiculous." Cohn said. "He's not irreplaceable. No one is irreplaceable. There
are
lots of good people. Melnick is sensational. Whether for the interim or permanently, he's very good." Hirschfield left Cohn's office feeling much better.
Je
anie Kasindorf of
New West
magazine spent four hours at Sid Lull's apartment on
Wilshire
Boulevard that afternoon and left convinced that she was on to a major exposed Although Luft rambled and was emotional and nervous, he seemed to be able to show in elaborate detail how David Begelman had mishandled Judy Garland's money in the early sixties. The documentation was voluminous and Kasindorf would have to examine it meticulously. Fortunately, there did not seem to be much competition on the Begelman story. The press had been silent for a month.
A limousine pulled into the driveway of the Hirschfield home in Scarsdale Saturday afternoon and deposited Barbra Streisand, Jon Peters, and Streisand's son, Jason Gould. It was a "relationship" visit, somewhat similar to
Hirschfield
's dinner with Leonard and Wendy Goldberg in Beverly Hills the previous week. Hirschfield, on the one hand, and Streisand and Peters, on the other, were circling each other, neither knowing quite how the absence of David Begelman might affect the Streisand-Peters relationship with Columbia Pictures. David
Begelman
and Barbra Streisand had been close for more than a decade. David had helped to guide the formative years of her career in the sixties, and while at Columbia had presided over the making of some of her most popular pictures including
Funny Lady
and
For Pete's Sake.
Streisand was close to Ray Stark, as well. Separately, in 1977, Jon Peters had agreed to produce a film for Columbia. Tentatively entitled
Eyes,
it would star Faye Dunaway and would be Pete
rs's first film production not involving Streisand.