Back to the Future

National Lampoon is secretly readying a parody issue of The Hollywood Reporter for release any day. But how will we know the difference? Certainly not by spoofing the latest Vivendi Universal news. The last time Barry Diller and Marvin Davis squared off, singer Michael Jackson was raising bucks for “We Are the World” instead of hanging babies from balconies. Now it’s Round Two.

In one corner, you have Diller, the darling of Wall Street but now the despot of Universal City. Most guys would be thrilled to rule over movie and TV studios and theme parks and cable channels. But not our Barry, recently promoted to co-chairman and chief executive of all of Universal Entertainment, including music. The world‘s most pompous mogul had the audacity to be identified last month on CNBC’s Kudlow and Cramer only as “Chairman CEO USA Interactive,” the puny public company he personally controls. On the show he dismissed his stewardship of Universal Entertainment with the line “I‘m just a little guy with some small entertainment assets that I have some responsibility for . . .” Cramer cooed: “Your humility is astounding.”

Then Diller showed where his loyalty really lies. As he told Kudlow and Cramer, “I’m not going to do anything that‘s going to hurt the shareholders of USA Interactive where, by the way, all my equity resides.” And what about Vivendi Universal? Diller praised “the work that they have done” to come out of a liquidity crisis.

That’s right, they. Not us.

No one was drilling Diller about this arrogant display of disengagement when both Vivendi Universal stockholders and employees need reassurance from every general in charge. But that‘s what a $1-a-year CEO (what Diller is being paid for the Universal gig) buys you: not George Marshall or Norman Schwarzkopf but Benedict Arnold. The truth that no one wants to say out loud is that Barry is interested only in Barry.

Diller seems intent on singlehandedly demoralizing what used to be the crown jewel of entertainment companies and is now the new Sony, what with its fifth owner since 1990, the stock price down 76 percent, and Vivendi’s accounting under three investigations on two continents. (But, unlike Sony, Universal has been having lots of success for some time now.) Let‘s not mince words here like The New York Times did last month: Universal insiders are not just “unhappy” with Diller, they’re suicidal. “Nothing would make us happier than for us to drive a bus off a cliff with him in it,” one source told the Weekly.

It‘s not just that Diller is nickeling-and-diming Vivendi Entertainment to dress up its financials; he doesn’t care how he does it. “All he cares about is the bottom line,” an insider told the Weekly. “The owners love it. The people who work there loathe it.” Worse is how despicably he‘s treating people there. “The way he talks down to them, as if they’re idiots and he‘s a genius, is painful to be around,” one witness described. The infamous micromanager also expects already overloaded underlings to do hours of busywork that he doesn’t need or read. One source grumbled: “It builds no goodwill. And it‘s exhausting.”

The result is that everyone tries to keep out of Diller’s way as much as possible. But Barry is all bark and no bite -- for now. “He‘s scared of making waves,” noted one insider. “All the top executives at Universal have considerable goodwill in the community, and Barry doesn’t want to be the guy who fired them for no good reason.” Not that Diller is toothless. He has those veto powers. “The French can‘t make a move without him,” one insider told the Weekly. “Barry’s got them by the balls. They‘re lucky he doesn’t squeeze them off.”

Enter Marvin Davis, the world‘s most unlikely white knight, a once massive megabuck oilman whose metier was gobbling up companies and collecting greenmail until the Fortune 500 discovered the Pac-Man defense. Today, Davis is 77 years old and so physically diminished by medical ailments that two bodyguards have to carry him around. But Davis has billions and a still-healthy appetite, judging by his $20 billion offer to swallow Vivendi Entertainment whole.

After years in which Davis kicked tires on deals but did not follow through -- whether it be Northwest Airlines or NBC -- his sudden reappearance to put Vivendi Entertainment “in play” was so surprising that at first no one took it seriously. Even Davis himself is fond of saying, “All you have to do is look at the pretty girl, and everybody thinks you’re sleeping with her. You don‘t have to put up any money. It doesn’t cost you.” The Wall Street Journal broke the news, but its online headline identified him as “Martin Davis” (from Paramount‘s pre-Viacom days). The Los Angeles Times had Davis owning the Beverly Hills Hotel and Fox Tower, both sold ages ago.

Davis’ deal guy stresses it‘s a serious offer, and speculation swirls that Davis wants to buy the behemoth for his movie-producer son John. But back to the future.

Davis, first a Seventh Avenue garmento and then a Denver wildcatter, burst onto the Hollywood scene in 1981 when he purchased 20th Century Fox with oil profits. Davis had fun owning a studio. Aaron Spelling would send him 200 leftover lunch sandwiches, and Davis would eat them all. Davis would talk about “how much I love my family,” then point to a portrait of the M*A*S*H TV cast on his wall. But too often even savvy tycoons who want to bask in the reflective glow of media glamour and cultural power by buying their way into Hollywood eventually meet an obstacle. For Davis, that was Diller, brought in from Paramount to run the studio. “Davis told me that whenever he signed contracts giving control to some manager, he knew that as the owner he could step in whenever he wanted,” says Alex Ben Block, who wrote a book about Fox. “But Davis said that with Diller that wasn’t the case. Diller made him live up to the contract.”

Diller wanted a fourth TV network. But to his surprise, 20th was technically bankrupt. At Davis‘ urging, Diller sought out junk-bond king Mike Milken to raise $250 million in commercial paper against Fox’s assets. Inside the library of the Davis mansion in Palm Springs, Diller delivered an ultimatum to Davis: He‘d go through with the Drexel bond offering only if Davis sold him actual equity in the studio. According to Block’s book, Davis said no. “Then why should I raise it?” asked Diller. Davis‘ eyes narrowed: “You have no choice. You’ve left your other job. You‘re here. It is your mess now.”

Wrote Block: “The Diller-Davis relationship would never recover.”

Diller brought in Rupert Murdoch to buy the studio on an installment plan. One insider tells the Weekly that Davis often said he hoped Murdoch would miss a payment just so he could take back the studio “and fire Barry Diller.”

The two men today have a lot in common: their insatiable greed, their lust for revenge, and the fact that they really, really, really hate each another. Want proof? During the CNBC interview, Diller denied being “in any kind of race” with his one-time boss -- “particularly how swift you think the various parties can walk, or run. But that’s another issue.” And, back in the early 1990s, Davis was attending an over-the-top Hollywood bar mitzvah when Diller climbed into a gravity-defying ride that flipped him 360 degrees. Staring at Diller, Davis remarked, “Those fags sure have funny ways of having fun.”

Okay, National Lampoon, now top that.

If you want to contact Nikki Finke, send an e-mail to

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