From Paramount to Fox to Expedia: How Barry Diller Built One Massive Business After Another

0:00So this next episode is a really interesting one because it wasn't a normal one. You know, usually there's like a kind of a schtick and a like a kibitz. No schtick. Cut, dry, to the point. That's right. Like often we say like it feels like a conversation in a Jewish deli. Right. This one wasn't like that. This one was about a legendary iconic man who has had a legendary iconic career and almost not accidentally kind of stumbled into becoming who he is, but it was less intentional. Yeah, but if you listen closely, there's a lot of wisdom in this episode. Incredible wisdom. You know, he talks about serendipity, he talks about if you want to do something, find a door and just walk through.

0:41And make sure, you know, if there's exactly, if you want to do something, find something. He keeps saying with a wide lane and explains a strategy. I mean, this is a guy who became the chairman of Paramount Pictures at 32 years old where 10 years prior to that he had no idea no clue about the movie the entertainment business I mean he built he built Fox with Rupert Murdoch he convinced Ruppert to buy Fox right he then goes and creates you know at 49 years old realizes or decides 49 years old that he wants to be our term not his term an entrepreneur well it's interesting you say our term not his term he doesn't like He doesn't like the term entrepreneur.

1:19He finds it pretentious. But yet he defines it at a certain point in a way that true to his nature is quite contrary. And it really makes you think. Exactly. Well, at 49 years old, he decides he doesn't want to be just entertainment business. He sees what is happening with the advent of the internet and digital technology, ends up creating this massive conglomerate, which owns some of the companies you use on a daily basis and buys a travel company from Microsoft a couple weeks after 9-11. For a billion dollars. For a billion dollars. He didn't even get a great deal on it, too. One of the things I think is so interesting is we talked about religion and his relationship with religion.

1:57And he doesn't necessarily self-identify as Jewish, but he says, it's in me. Yeah, he couldn't help it. He couldn't help it. He didn't grow up Jewish. That's right. But he couldn't help. I mean, no matter how far you go and wherever you go, there you are. Yeah, that's right. And you know we asked him about the story which we've asked a number of our guests about that if you look at the major studios in Hollywood, the major motion picture studios across all of them And if you look at where the founders of those students were born They were all born within you know a couple dozen kilometers of each other outside of Poland and we asked him How did that even happen?

2:31And he says they were peddlers and they took their peddling skills that they developed in Eastern Europe to America and they look for opportunity and that opportunity became what is now Hollywood. The iconic hundred-year story of Hollywood and the world's zeitgeist and culture and he's one of the most fascinating people I've ever met. He self-identifies more as a clerk than he does as an entrepreneur. Yeah, but this is a man who on a global scale by any definition, if you ask anyone you know who's in business, they will say that this man is at the top of their stack in terms of entrepreneurs and business leaders that they admire.

3:07Alright, alright. This is one of the most successful people we've ever interviewed. Ladies and gentlemen, Barry Diller.

3:30I actually want to start. Sure. You have been entrepreneurial pretty much your entire life. Dave and I always sort of said that if we had posters on the wall when we were kids, they wouldn't have been of Michael Jordan or some athlete. They would have been entrepreneurs. Who was the first entrepreneur in your life that you sort of looked at and said, hey, that's interesting? I don't really know. This word entrepreneur, I think it's overused so much. The business heroes of my youth now you know this is in the dark ages this is the uh basically the 50s and 60s they really were the founders at that time as you probably know television was the mass media communications and it was really paley william paley who founded cbs uh the sarnoffs at nbc and little Leonard Goldenson from ABC.

4:30And those were, I wouldn't call them entrepreneurs. Well, I don't know. They wouldn't have used those terms. Well, again, I think the term is, it's really hard to nail other than somebody who self-starts something that turns into something. So those were the people that I was wildly impressed with. What made you impressed with them? Because I'm founding things, starting things. I'm just drawn to it. It's just, I don't know. I can't tell you. It's in my area of interest that those things happened with those people that wildly impressed me. Barry, we read your book. It didn't seem, though, that you had that kind of ambition as a kid.

5:20I didn't. I had no ambition. Where did it build from? How did that come? I think it's biological. You do? I do. And who, what in your family did you inherit that gene from? I haven't a clue. No one in my family that I can imagine. I mean, I don't know that it's inherited in some respect. Of course it is. It's your genealogical DNA. But I do know that up until for sure the age of 19, I had no seeming ambition. My parents didn't think that I would, they really didn't have very much interest, but they did not think that I would ever develop ambition. They thought you were going to kind of just cruise?

6:09They assumed they had enough resources and they assumed that they would always, their resources would be my resources and I wouldn't ever achieve anything substantial. I don't think it was a great negativity. I think it was kind of more than anything, kind of an absence. And so, and I didn't have it. But at 19, when I knew I was interested in the entertainment business, that was the only thing that interested me. and I knew that I'm 19, nobody's going to pay any attention to me, so I thought, where could I go at least, where would a door open that I could start? I've always been an advocate that if you're interested in something, just get through a door, any door, doesn't matter, so long as it's on the broad road of an area of interest.

7:03Once you're on it, everything will take care of itself, and you shouldn't be too choosy or picky so long as the road is wide enough. So I went to William Morris in the mailroom. Actually, you called it the Jewish Vatican. And we had lunch today and we laughed. Basically, that was the topic of our conversation, which was because we've met all these other people that also come from the William Morris mailroom and you referring to it as Jewish Vatican, obviously we understand what you meant by that, but something about this mailroom at this particular agency was this launch pad for so many incredible careers.

7:39Well, because it was a place where you started. And so, and because you didn't have to have any experience, credentials, et cetera, at the time I went, you also didn't really, although you had to go to college, but you didn't really need to graduate at any particular part. Maybe, it's probably different now. I think it's like many things, it's gotten industrialized. Yeah. But then it was just a place you began. So it was the group that was in the mailroom with me. It came from everywhere. There were only probably 10 of us at a time. But it was very egalitarian. And I had no interest in being an agent.

8:26And I just got lucky enough. Everybody else there wanted to be an agent. That was not my ideation. I just thought I could somehow soak up osmotically, if that's a word, aspects of the entertainment business that I didn't know because I didn't know anything. And then I got lucky and I was able to read the fire. So I got this extraordinary foundation for everything in the entertainment business. Barry, you know, you described wisdom that normally gets passed down from parents to kids where just walk through one door and get your start that way. you didn't have your parents giving you that wisdom.

9:04Where did that come from for you? And was your parents' lack of interest the way you described it, was that motivating or was it, you know? I don't think it certainly wasn't motivating. Maybe it was spite. No, no. In a way, it was a wasteland, a desert, if you will. And you had to make of it what you wanted. I wanted to find water in the desert. So I made my path. Other people collapse on the desert because there's no water for them. Were you exceptional in that mailroom? Were you known as someone that was... I was absolutely not only unexceptional. I really think if it hadn't been for my patron, who was their biggest client, they couldn't get rid of me.

9:47They would have fired me in the first months, for sure, because I had no aptitude or desire to be an agent, which was clear. I found the job every other person in the mailroom was out hustling and I was reading the file room you know which was like my it was I went there like you go to school I'm like you go to Oxford to read I went and read the library. And this was what contracts deals that stuff? This is the room five times the size of this room big room file cabinets probably a hundred at least. William Morris had been in business for 70 years at that point, 60 years, 70 years. They had the entire history of the 20th century of entertainment in those file cabinets.

10:44What did you learn? Everything. I learned the foundation of the entertainment business by reading the files of every artist and every transaction and every development of, I don't know, probably a third, half the artist functioning over 70 years. Were there some negotiating tips that you picked up in those files? It was more the mechanics of it. It ain't tips. It's not necessarily factual. Like, you know, the education system that we have that devolves mostly to memorizing facts, which are of no use to you, I don't think. They don't usually stand the test of time. I think what it gave me was an understanding of how it worked.

11:35And so if you have an understanding of how it works, it gave me a lot. And at what point did you feel that there were sort of diminishing marginal returns of staying in the mailroom? No, it wasn't that. I would have stayed there. I mean, I don't think I got through the whole file. I was happy in there. I loved my day. I love to read anyway. So this was, I don't like homework. This was not homework for me. This was just thrilling. Yeah. But they forced me out of it after I think it was about three years. I'm now 22. And they made me go be an assistant to an agent because that was the progression.

12:21As I say, they really would have just said, please, you're not going to ever be an agent. What are you doing here? You were too connected. I had a patron who there was no way. I could have... Did you know that? Did you know that there was... You know, shot someone on the street of El Camino where William Morris was, and they still couldn't have fired me. Yeah. This was a friend of your parents? Pardon me? The patron was a friend of your parents? No, it was a family that I grew up nearby, and it was Danny Thomas, and he was there at that time in the 50s and 60s, their number one client. Wow. Serendipitous.

13:00Yes, so much of my life is serendipity. What happens next? So now you're an assistant to the agent. Did you... Well... Were you able to absorb the same type of... No, no, no. Okay, no. But I learned something else. I learned how to be the best assistant in the world. So there was that, which has served me very well. And ironically, you've had assistants that have also, like Jeffrey Katzenberg, that have went off and done incredible things. Lots of assistants. But anyway, I did that for a year, I guess, maybe, until I'm 23. And then it was kind of clear that I either had to be an agent or I really had to leave the place because there was nothing else for me to really do.

13:50I had overstayed anyway by at least a year or so in this formative stuff. and I'd been asked, this is the tale of true serendipity, I'd been asked to join someone that I'd met who wanted to hire me to be his assistant and he was a middle-level executive at ABC and serendipitously, the day that I left William Morris to join ABC. They fired the czar of programming. They picked my middle management guy to run ABC. And so I moved instead of California being his assistant, I moved to New York. And within six months, I was kind of running the program. You said something interesting, that you learned how to be a good assistant that has served you well.

14:47What did you learn about being an assistant? Why is that so important? You learn how to take care of the details of someone's life. If that person has got a lot of life and you get to figure that out and you get to serve that you learn all sorts of stuff you just I mean if you're have a kind of if you if you have again I have a curious set of biology that allows me to do certain things that other people just wouldn't do so and you're also sort of in the details of these things I think that sort of detail you've I mean as we sort of look at your career, the arc of it, you've used that deep curiosity to go deep on every detail of every transaction in a very remarkable way, I think, and unusual.

15:33Yeah, I like detail. Yeah. I'm a clerk at heart. Yeah. It's not a characteristic typically assigned to entrepreneurs. No. Well, I probably, I'm certainly not a natural one. I was a corporatist until the age of 49 and started at 19. So I had decades of being a corporatist, the antithesis of entrepreneurial life. Circumstances, because I wanted to do something kind of not corporate. So I was kind of forced out again onto a desert to see what I could make of it. And out of that came, yeah, you would say in the jargon of whatever, definitely entrepreneurial activity because we made it up every day.

16:30Yeah. But that, you know, you moving to New York, you getting sort of catapulted up in this, in ABC. You talk about serendipity. Obviously, you had a knack for something beyond just organizing someone's calendar. What serendipity gives you, like luck gives you, and yeah, some people just are unlucky, as we know. Lucky to have been lucky. But what it gives you, or what serendipitous moments give you, is possibilities. The question is, what do you do with them? I mean, a lot of, I think everybody gets some set. Again, some people just are truly unlucky. But mostly people get at different points in their life, luck will shine for a moment on them or on their circumstances.

17:18And then it's, all right, what happens with that? I've had such extraordinarily serendipitous moments that are utterly unpredictable and magic because that is the definition of serendipity. I could have squandered it or not. I didn't. Did you know you were getting lucky in those moments? Oh, of course. You'd be an imbecile if you didn't know that. I mean, this middle manager, for example, getting, you know, promoted because... Yeah, I had nothing to do with that. Yeah, but you did have something to do with what you did afterwards. This idea that there was an opportunity to present this middle manager gets promoted, and you have to say to yourself, okay, this is an opportunity for me to work really hard to prove myself.

17:59Well, I'm not so sure of that. I mean, I don't know that it was... Of course, I recognized that this extraordinary thing happened. But my methodology was not to say, oh, now I must make of this. It's my biology. I just, I did what I had to do. You know, I didn't, I didn't say a forethought. Oh, now I'm going to handle this this way or that way. I have no, I have no moves, no game. Yeah. So it was just circumstantial. For a guy with no moves and no game, the results speak for themselves. You know, you went from a clerk to being incredibly creative. I mean, you created the made-for-TV movie. Yeah, yeah.

18:42I'm not saying I don't have certain abilities, because I do. I'm not prideful of that, because I didn't have any, I didn't do it. Meaning, in other words, it wasn't like I manufactured it. It's just I've got some abilities and I've got some disadvantage. and my abilities in certain areas, again, biological, part of all sorts of stuff, manifested themselves in things that became very successful. But let's pause there for a second. So, you know, one of the conversations Dave and I were talking about in our research was, let's just talk about ABC movie of the week, okay? That, for most people, would say, well, that's interesting that he created that and helped develop that.

19:27But actually, we look at it like, well, that's a scalable business model. That is a new thing. Now, maybe you didn't look at it in that way. You said, hey, this is a good idea. We should do this. But the idea of you creating a scalable business model for us as entrepreneurs makes it sort of feel like you were always kind of looking at, like, there seemed to be a real strategy there. There wasn't. No strategy. I thought. How'd you come up with that? I thought, like anything, that it was a solidly good idea. By nature, by nature, I'm a contrarian. and what I saw on television was repetitive and it created in me the idea, well, there's a void there.

20:07What is the void? Well, something television hadn't done. What hadn't it done? It wasn't by some negative process of sussing out it that way, but I just thought, now, that's a solid, good idea. Thankfully, I was able to convince a couple of people at ABC. Many people thought it was, most people thought it would fail. But I was able to convince a couple of people that it was something worth pursuing. And so I'm 24, almost 25. And I got the ability to do it myself because everyone thought it would fail. And it didn't fail. You remember what the first movie was of the week? Yes. It was called Something in Darkness.

21:00Story. Was it good? It was terrible. But it got a huge rating. It wasn't terrible, but it was real melodrama. It also created a moment for people in their week, I think, which was interesting. I mean, it was like something you did as a family. It was appointment, like many successful television shows at the time, because at that time, of course, there was no recording. So you either watched it or it evaporated. It wasn't seeable again. So if there was something that was popular, it got, and again, there were only three networks, and there were probably then 85 million households. So you could get a third to half of those households, which is an extraordinary number of people, to watch your programming.

21:46so you created it and you could create things that became true events and stayed in the culture yeah and staying in the culture is something right now that's very very rare things don't stay in the culture very long you think things are just moving so quickly is that is that i think there's so many options yeah there were very few options then now there's i mean there's an option a millisecond that's right yeah and at that point i mean again you couldn't necessarily go and put a streaming service on it was Sunday nights you watched a movie or Thursday night you watched a movie yeah it's you you you had it was appointment viewing you had to go there to do the thing at that moment or it passed yeah so once you have this sort of hit you're 24 years old you're not going to say this but we'll say it you're kind of a you know big shot in inside of ABC at what point do you realize that hey I'm actually I can do more of this was it obvious at that point Steve Adubato, Jr.: When you say more of this, what do you mean?

22:45Steve Adubato, Jr.: More of these ideas that would change? Steve Adubato, Jr.: Well again, it's all evolutionary in the times and the next thing I thought was well why not do long form? At the time we called them novels for television, later called the miniseries and that was a great experiment that worked as well. And so those were my, I mean, I really never liked series television. It always bored me. But these kinds of things that hadn't been done before always fascinated me. And those two forms took up really the bulk of my time at ABC until I was 32 and left. Yeah. And what was the catalyst for that leaving?

23:34Because you like working. I paraphrase Marlon Brando, somebody made me an offer I couldn't refuse, which was to be chairman of Paramount at the age of 32. Jeff Lerner, Jr.: How does a clerk's mindset help you do things that haven't been done before? Dr. It's too flipped for me to use that for everything clerk's mindset. Obviously, in some respects, yes, I am acclimated and I have abilities as a clerk. I have other abilities too, which I have come to realize are real. Did you know that at 32? I've never known that. Interesting. No. So, but you becoming chairman of Paramount at 32, what was Paramount in that era?

24:21Were they an underdog at that point? Well, after I got there, they were an underdog for the first two years. we failed miserably and we were the least successful company for like almost two and a half years. Did that make you feel your luck maybe ran out? No, it made me feel that my ability, nothing to do with luck, absolute ability was long gestating. And so it took me to fail first before I could succeed. But when you got the job at Paramount, you just mentioned you never really were able to feel your abilities. When you got that job, were you thinking, yeah, I'm good, or no, right? Absolutely not.

25:11I was thinking, you must be crazy to give me this job. The other chairmen were? Because I did not qualify for it in any way. I was the first person to come into the movie business from television. So I absolutely thought this is kind of crazy that I was given this opportunity, but I was. And yet you wanted it, right? You must have had some confidence. No, absolutely. I didn't want it. I couldn't turn it down. I mean, it was, you can't. It was so ridiculous. Being a middle level executive at ABC and being offered to be chairman of Paramount at that age is not like something, as someone said to me, because I said, think I'm going to say no.

25:52They said to me, listen, we'll have to send you to a home for rehabilitation. Because it's such an insane opportunity. Yes, of course I had to say yes. But I didn't really want to. I loved my little life at ABC. And that made you also come back to Los Angeles? No, no, no, no. Paramount. At that time, movie companies, senior most management was in New York. Right. LA was where you made the stuff, but you manage the enterprise, the marketing, the distribution, all the other heavy departments were really based in New York. So I commuted, which I'd done for years anyway, between New York and LA. I commuted between New York and LA every 10 days or so.

26:42I'd switch. You met your mentor at Paramount, right? Charles? Charlie Bluthorn, who ran Gulf and Western. I would never call him, I don't like this word mentor. What do you call him? What do I call him? Charlie. How come you don't like the word mentor? I think it's, again, it's overused. It's become industrialized. The whole mentoring process, I think, is often a bunch of noise. I mean, I think that most people, by osmosis or by observation, rather than being mentored by somebody, pick up appropriate experience for the conduct of their lives. But Charlie gave you a lot of that osmosis. No, that's not really true.

27:35Charlie was an industrialist of the most extreme order. I mean, he was probably the leading industrialist of about a 15-year period. He was involved in big business transactions and things that I never had anything to do with, really. Was there a curiosity about those deals? No, not really. I was running my paramount life. He was a great supporter of mine, and he was involved in big, big business. So I got to observe big, big business, which had some small fascination for me. But I was really about making movies. Barry, you fake it till you make it, saying that you love and so do we. When did you feel, I mean, you had a great run at Paramount.

28:25Was there a moment where you're like, OK, I've made it. I no longer need to fake it? Never. I still feel the same one. Us too. It's ironic, isn't it? Yeah. I think it's good. You think so? Yeah. It certainly keeps you humble, but it also, you know, we've interviewed all these incredible people like you for this project, Big Shot. We often ask, you know, when did you know that you made it? And 29 out of 30 interviews, they've said, I haven't made it yet. And we're talking with people in some cases, you know, in their 90s who are, you know, wealthy beyond belief. And the only person, I won't say who it is, one person said they actually did make it out of the group.

29:02I mean, that's a blessing and a curse maybe because it keeps us humble. It also keeps us ambitious. It would be an easier path to say, or a more liberating path to say, oh, okay, I know things I've accomplished, of course. I'm not totally a dope. But I think it would be easier. And if I were capable of doing that, but I'm not capable of doing that. I don't think these other people are either. It's just in their stuff. As you get older, what's also liberating is realizing that you may not know anything, but no one knows anything. And everyone's just trying to figure it out. That's always true. And I find that to be a liberating.

29:44Actually, that happens as we get older. We're finding that just kind of saying it out loud. Yeah, I'm still trying to figure it out. You don't want to do that in your 20s. And we're in our 40s now. And it is easier. Let's talk about after Paramount. What happens next? Well, after Paramount, I went to Fox. And what's Fox at this point? Fox is a movie company and making some television shows. And I got the idea of starting a fourth network. There were only three at the time. And I thought a fourth network, an alternative to the three was a good idea. What was the angle? What do you mean angle? Just like adding a fourth network?