"Await Smoke Signal on Alan Hirschfield
: Columbia Shuns Daily Bulletins," headlined Wednesday's
Variety. ". . .
Hirschfield
is given high marks by Wall Stre
eters." the paper noted. " 'He engineered the recovery.' says David Londoner, the widely respected enterta
inment-securities analyst for We
rthcim & Co. 'He pulled off a whole bunch of brilliant things.'
Alan and
Berte
had a long lunch at Quo Vadis on Thursday. They planned to leave with Laura the following week for Maine to visit Scott at camp, and then go on to Wyoming where Marc was at camp. They would be gone for a week or ten days and would return to Wyoming for a longer period in August. Alan, meanwhile, was looking forward to perhaps the most spectacular act of self-pampering he had ever indulged in: He was going out that weekend and buy himself a Ferrari. It would cost $35,000, but he could afford it, he had always wanted one, it had been a rough year, and he felt he deserved it.
Berte
agreed.
In his office, in his limo, and at home over the weekend,
Hirschfield
tried to draft a new letter to the board of directors. It was very difficult because he knew that anything fully acceptable to the board would be unacceptable to him. The process reminded him of all the unacceptable demands that had preceded it. If only he would reinstate
Begelman
, everything would be all right.
...
If only he would hire Bob Stone, the board would get off his back.
...
If only he would let Stone survey the Financial control systems
...
If only he would retract his letter . . .
The difficulties of waging a proxy fight loom
ed larger, too. He and Adle
r continued their secret meetings with lawyer Sidney Silberman.
Hirschfield
, however, abhorred the prospect of fighting and losing, and he had to be willing to accept that risk.
Another voice from Wall Street was heard on Friday evening. July 14. Lee Isgur of
Paine Webber Mitchell Hutchins,
a large brokerage firm, appeared on PBS's
Wall Street Week
and said. "If the board of directors will stop arguing among themselves and renew the president's contract at Columbia Pictures. I think that's going to be a very attractive stock."
Unfortunately for Hirschfield. Wall Street was not a monolith. Wall Street included Herbert Allen, and Herbert Allen was contemptuous of much of the "analysis" of the entertainment business that was disseminated by the big Wall Street firms. Herbert was particularly irked by the comments that had f
lowed from Merrill Lynch, Werthe
im, and Paine Webber that week. He had heard about the luncheon that Hirschfield had given at Laurent and he knew that those firms' analysts were among the guests. Hirschfield is supposed to be mending his fences inside the company. Herbert thought, and instead he's out campaigning for public support.
Hirschfield
disseminated a four-page letter on Monday to Columbia Pictures Industries' twelve thousand stockholders commenting on the most recent executive appointments and the general state of the corporation.
"...
It is noteworthy that we enter the new fiscal year with more completed films, more productions in progress, and more projects in development than at any time in the past five years. . . . Columbia Pictures Industries' future era of growth will follow a very successful five-year period under the corporate-management team which joined the company five years ago. Our first goal was to rebuild the corporate financial base. Next, the company's management team was strengthened. We then accomplished diversification in order to stabilize earnings volatility. During this past fiscal year, now at a close, we believe the results of our efforts and planning have become evident. . . . Thank you for your support and cooperation."
Leo Jaffe called on Tuesday to inquire about the status of
Hirschfield
's new letter to the board. Alan put him off. Clive Davis inquired about the letter on Wednesday. Alan put him off, too. He was preoccupied with the logistics of his trip to Maine and Wyoming starting the next afternoon. Fly to Boston. Tight connection to Portland, Maine. Rent a car. Back to Portland. Boston, Chicago, Denver. Private plane to Cody
, Wyoming, just in time to see
Marc ride in the camp rodeo parade.
Hirschfield spoke briefly to a Lehman Bros, investment banker about some potential deals for Columbia, to the Ferrari salesman about his new Ferrari, to Lee Isgur of Paine Webber to thank him for his comment on
Wall
Street
Week,
and to David Geffen, who called in from Malibu to see how things looked. Things looked relatively peaceful. Joe Fischer, who was leaving Wednesday afternoon for a few days in the Hamptons, commented on how quiet the company had been since the July 5 meetings two weeks earlier. Fischer said he thought the atmosphere might be improving slightly.
At 6:15 Hirschfield dropped in briefly to greet guests at a private screening of
The Eyes of Laura Mars
in the Columbia projection room, and then went home to help
Berte
pack for their trip.
SIXTY-TWO
The next morning—the morning of the day he was fired as the president of one of the world's leading movie companies—Alan
Hirschfield
shopped for a movie camera.
Wanting to take movies of Scott and Marc at their camps, he had compared prices advertised in the
Times
and decided to try the Camera Bam at Forty-fourth and Madison. As one who enjoyed tinkering with gadgets,
Hirschfield
took his time, anticipating only a few slow hours at the office followed by a trip to Maine. He examined several cameras and made a selection. Then he bought a new Nikon still-camera, a supplementary lens, a bag, and some film.
At about 10:30 he called his executive assistant, Lorraine Bcckman. There was an urgent message. A meeting of the board of directors had been called for later in the day, and Herbert Allen was anxious to see Hirschfield as soon as possible. Alan said he would be in shortly.
He dawdled at t
he Camera Barn a little longer and then strolled up Madison and over to Fifth. It was hot and very humid—one of the most uncomfortable days of the summer. Just as Alan arrived at the office, Herbert called again and said that he and Dan Lufkin wanted to see Alan immediately. The three men conferred privately in the boardroom prior to the meeting of the full board of directors.
Herbert Allen had planned the firing with the utmost secrecy so that Hirschfield this time would not have a chance to pull any last-minute surprises. Fay Vincent had agreed to take Hirschfield's job. In addition to gaining the approval of Matty Rosenhaus, Vincent had passed the inspection of David Begelman's close friend Sy Weintraub, whom Herbert had sent to Washington to interview him. Vincent's salary would be well in excess of
five times his annual pay of
$47,500 at the Securities and Exchange Commission and roughly twice what he had been making in private law practice. Having conferred with Herbert and attorney Bob Werbel frequently by phone, Vincent had flown up the night before, stayed at the Regency, and now was ensconced downstairs at Allen & Company. He had just been introduced to Irwin Kramer and Leo Jaffe for the first time. Werbel had polished the "firing script" that he had drafted for the board meeting two weeks earlier. A public-relations firm, Kekst & Company, had been retained to handle press announcements of Hirschfield's firing and Vincent's hiring. By Thursday morning, under tight security, the releases had been drafted, edited, typed, reproduced, and were ready for distribution to the media.
In the boardroom with Alan and Herbert, Dan Lutkin spoke first.
"We've been thinking very hard about everything, and we've decided things just can't go on any longer. For the good of the company, something's got to give, and it's got to be you. As long as you're here, this thing is just going to continue to fester. It's not going to solve itself."
"You've got the right dynamics," Hirschfield said, "but you're focusing on the wrong people. As long as the board keeps acting like it has been, we'll have problems. If I'm in your way, then just say so. But don't tell me the company can't run because I'm here. The company can't run because the board won't let it run."
"Well." Lufkin replied, "you're entitled to your opinion, but we feel the only solution is for you to leave."
Herbert Allen said: "This is the hardest conversation I've ever had to have. You know I've told you many times that we came to this company together and I'd always hoped that when we left, it would be together. But it's clearly not in the cards."
"It's clearly not in your cards, Herbert, but that's your decision," Hirschfield said.
"No, it's the board's decision. It's for the good of the company for you to resign."
"I'm not resigning. If you want to fire me, then you'll have to fire me."
"We wish you'd reconsider," Lufkin said. "It would cause less pain and anguish for everybody."
"I'm not resigning. I don't
agree with what you're doing. I
think it's a horrible injustice to me, and even worse, to the company and to some very loyal peop
le. But it's your prerogative. I
think this is what you've always wanted. I've been in your way. But I won't resign."
"Be that as it may, we have to move forward and do what we have to do," Herbert said. "It's too bad it had to end this way."
Benumbed, Hirschfield returned to his offi
ce and called Berte in Scarsdale
, his father in Oklahoma City, Joe Fischer in Amagansett, and Bill Thompson in Boston. He was unable to reach his own lawyers, Haines and Silbcrman, but he supposed there was nothing they could do on the spur of the moment. He briefed other Columbia executives who were in the office, and then summoned Jonathan Rinehcart, the public-relations man whom he had retained for such a contingency and who had been at the meeting in
Hirschfield
's office on the evening of the Fourth of July.
Matty Rosenhaus spoke first at the board of directors meeting. Sanctimonious to the last, he looked straight at Hirschfield and said, "I want you to know, Alan, that this is not something any of us wanted. It's a terrible, terrible day for Columbia, and for me personally, and for each of us pe
rsonally. We had hoped to work t
his thing out, but it just wasn't meant to be. Nobody feels worse than I do. We've had our disagreements, but nobody ever wanted [his day to come. It's a terrible, terrible
day. It's a sad day for all of us, and I
just w
ant you to know that we all feel
badly." Hirschfield said nothing.
Rosenhaus began reading from a typ
ed sheet, drafted by attorney We
rbel and headed "Final Draft."'
"Whereas
, the Board of Direc
tors of Columbia Pictures Industrie
s Inc. has given extensive consider
ation to its management needs; a
nd
"Whereas
, in such context the Board of Columbia has been requested to consider renewal or ex
tension of its existing employm
ent arrangements with Alan J.
Hirschfield
; and
"Whereas
, members of the Board
have had extensive discussions o
n the matter and have duly deliberated thereon; and
"Whereas
, upon deliberation t
hereof the Board considers adopt
ion of the following resolutions t
o be in the best interests of C
olumbia and its stockholders;
"NOW, THEREFORE. IT IS HEREBY RESOLVED AS
FO
LLOWS:
"1.
That Columbia not renew or extend its present employment arrangements with Mr. Hirschfield.
"2. That Mr. Hirschfield be and hereby is removed as President and Chief Executive Officer of Columbia and is relieved of all responsibilities as an employee of Columbia under his existing employment agreement with Columbia.
..."
Herbert Allen seconded the motion.
Leo Jaffe
denounced the firing as a "disaster and a disgrace." The resolution carried 5-to-2 with
Hirschfield
and Jaffe voting against it.
Hirschfield wept briefly in the deserted hall outside the boardroom but composed himself and returned to his office. Most of the tears were shed by secretaries—those on the eleventh floor of
711
Fifth and those on the second floor of the Columbia building in Burbank as the word was flashed to the coast. The company executives for the most part sat in their offices in silence or spoke quietly with each other.