David Geffen: The Hollywood power broker

0:08Five young men sit in a circle. They're naked and sweating. We're in a sauna in Hollywood. It's 1971. Four of the men are probably smoking something, but our fifth man definitely is not. He's short and he talks fast. He's trying to make the foursome feel special. He promises he'll never take on more artists than could fit in this sauna. They shake hands. Our guy has just signed the Eagles. Welcome to Good Bad Billionaire from the BBC World Service. Each episode, we pick a billionaire and we find out how they made their money. We take them from zero to their first million and then from a million on to a billion.

0:45My name is Zing Singh and I'm a journalist, author and podcaster. I'm Simon Jack. I'm the BBC's business editor. And today's billionaire was recommended by a listener named Sheridan. So thank you so much for that, Sheridan, because this really is a quaker of a story. David Geffen is worth$9 billion and was for years one of the most influential meddlers of all time. He meddled in the music business in Hollywood and was associated with some of the biggest names in rock and roll and some of the biggest movies ever made. That's right. Someone who was involved with Crosby, Stills & Nash, Guns N' Roses, Cher, Shrek, Gladiator, even Cats the Musical.

1:22This is a man who knows everyone with the likes of Steven Spielberg, Calvin Klein and Microsoft co-founder Paul Allen on his actual speed dial. Probably our only billionaire to be the subject of a Joni Mitchell song. That's a great accolade, isn't it? Free Man in Paris is about him with lyrics like And that lyric points to his reputation for ruthlessness. So is David Geffen good, bad or just another billionaire? We want to know what you, our listeners, think. It's going to be up to you to decide. But let's travel back to the beginning before he'd ever set a foot in Hollywood.

1:59David Geffen was born in 1943 in Brooklyn, New York to a Jewish immigrant family. His father lost his job during the Great Depression, so his mother became the breadwinner making bras for their neighbours and eventually she opened up a store. David was the baby of the family. He was born 10 years after his brother Mitchell. As a young boy, he slept on the sofa in the living room, but his mother called him King David. And when David was six years old, she had a nervous breakdown. She was checked into a psychiatric unit for six months. David was bullied about his mentally unwell mother and his out-of-work father.

2:31His brother told him, if you're going to get beaten up one way or the other, you'd better fight back. So David learnt early, saying, I don't want to have a fight, but there has to be a cost in fighting with me. From the age of 10, he would visit Manhattan on his own. He loved Broadway musicals and the movies. He once apparently sat through so many showings of Singing in the Rain that his mother called the police to report him missing. I don't blame him. That is an amazing film. But he even managed to turn that hobby into business opportunities. He was sculpting tickets for musicals. His cousin once wrote to her parents, he's enterprising, thinks of nothing but money, but he will have it.

3:08And I hope it will make him happy. Well, let's see. At school, David was a self-described terrible student and he was desperate to get out of Brooklyn. So he left home the day he graduated from high school and moved in with his brother Mitchell in Los Angeles. And he said, from the day I arrived, California seemed like an enchanted land. One day while walking out in Hollywood, David was actually cast to be an extra in a movie. I mean, that's the kind of stuff that people dream about. I'd love to do that. Just go to LA and just find myself as an extra, like one of the zombies or something in a zombie film.

3:36Well, maybe not in this particular film. It was a low-budget film called The Explosive Generation, starring William Shatner. I'm in. So, you know, pretty big name. While he was there, he read a new biography of an MGM studio boss named Louis B. Mayer called Hollywood Raja, and he decided he wanted to work in showbiz. And pretty soon he got his very first in. Now, here's a stroke of luck, because Mitchell, his brother's sister-in-law, Annette, marries the record producer, Phil Spector. Now, he's since become infamous for domestic abuse and a murder conviction, but at the time he was a celebrated, although eccentric record producer, massive name in the music business.

4:15He was already a millionaire in his early 20s, despite being just over two years older than David. So a real sort of something he could see and touch almost like that's what I want to be. David tagged along with his brother to the studio. He got a front row seat to seminal recordings like the Ronettes' Be My Baby. That's really famous for the Spectre sound. It had this famous wall of sound. If you can hear it, it really is an incredible recording. It's an amazing song. And being there for the recording of it must have been quite the sight. But before long, he kind of lost that Phil Spectre connection.

4:45Phil left Annette for the Ronettes' lead singer, Ronnie. Instead, he looks for jobs on the periphery of show business. At 19, he becomes an usher for the filming of TV shows at CBS. But he's fired on the evening of the assassination of JFK after getting into a fight when someone badmouths the late president. And as we'll see, he is a lifelong Democrat. So David Geffen has no money. He's forced to go back to New York and he gets a job as a receptionist at a production company. And it's there that he asks a casting director how he can get into the entertainment business. She asks him if he's any talent, to which he replies, absolutely not.

5:22So she suggests that he becomes an agent because, in her words, you don't have to know anything. I'm sure some agents listening might disagree with that. It's very interesting, this, because throughout his career he surrounds himself with talented people. But, you know, a lot of people would say he lacked any talent of his own, apart from making money, of course. Anyway, not yet. He gets$55 a week. That's around$550 in today's money because he gets a job in the mailroom of the William Morris Agency, which is the biggest agency in the world. That and Creative Artist Agency are the two big things.

5:53You sign to one or the other if you're a big star. So he tells a bit of a porcupine to get the job. He says that he graduated from UCLA, University of California in LA, where he'd actually been rejected. He had intercepted the letter from the university, forging a fake one. Within a week of working there, he has this epiphany that he actually, despite basically lying to get the job, he can do it. In his words, although with a few expletives taken out, they bow on the phone. I can bow on the phone too. But David also works hard. He comes in early. He leaves late. He uses his Christmas vacation to work in the mailroom of the LA office.

6:30And in the mailroom, he makes friends with another aspiring agent, a man called Elliot Roberts, whom we will return to soon. He also makes friends at the very top. After hearing that the president of WMA, Nat Lefkowitz, worked on Saturdays, he starts coming in on a Saturday to try and meet him. And it works. He befriends Nat, who becomes something of a mentor to him. There's a story that David actually stole a client list from his boss and took it directly to Nat. His boss found out he was furious. He fired him. But David went straight to Nat, who as president reversed the firing. I mean, this is pretty much the thing that you don't do when you work for an agency.

7:08Well, it's funny, isn't it? Because I know lots of people who work for agencies of one type and another, not necessarily in show business. And the client list is the kind of crown jewels. And a lot of people say, before I leave, I'm going to put a little thumb drive in there and download it off and off I go. Now, it's considered a massive no-no and it's definitely a sackable offence. But it is, you know, that's the keys to the kingdom. Being an agent of any kind, it's just about the relationship. It is just about FaceTime. And as we'll see, David is very, very good at that. Yeah, he was quickly promoted up the ranks to become a TV agent at just 23.

7:42He had a secretary, an office and was earning around$300 a week. That's$3 ,000 a week in today's money. So not bad money. and he realised that the way to be the most successful was to be a signer. This is a person who brings in the talent into the agency and one of the first clients he signed was a young Lorne Michaels who would go on to create Saturday Night Live. But then he meets Gerry Brandt, an agent at WMA who'd signed the Rolling Stones. Gerry tells him that the music department is the place for a young agent to make a name for himself and it's also the place to coincidentally make a lot of money.

8:18So he decides to pivot. Yeah, it's interesting. I was talking to a record company person the other day and they were saying that one of the most successful people in his industry was a person who'd signed, I won't say the name of the act because they might be listening. He's still alive clearly. Yeah, well, and this act is still very big and currently touring. Anyway, but the point is, is that if you bring something like that, which is a real rainmaker for an agency, you do get paid a lot of money. And remember, this is a period of change in the music industry. in the 1950s and 60s it was the record companies the producers who held the power if you think even back to like Elvis Presley and some of the early Motown records it was the producers who earned all the money and the artists didn't have much power the singer the songwriter had very little control but rock music had begun a shift in power towards artists and their representatives so it was this environment that David Geffen was first starting to come up but he needed his very first client and he gets one after a friend plays him a folk singer named Laura Nairo.

9:16Laura wrote good songs but she was quirky, hair down to her thighs, purple lipstick, Christmas balls for earrings and she'd also recently been booed off stage at a festival. Poor Laura. David convinces Laura to be his client and gets her out of all her old contracts. He becomes her agent and her manager. Now it's worth stopping here to do a quick explainer on the difference between an agent and a manager. Because if you're not familiar with the showbiz world or the music world, they kind of all sound like the same thing, but they are very different. So a manager is a central figure. They guide every single major decision.

9:49They're thinking about the artist and their overall career strategy, and they make money from that. So they typically earn about 15 to 20 % of the artist's gross income. But an agent focuses specifically on live performances and appearances. So they'll be booking, for instance, festival appearances. they typically earn about 10 % of the artist's live performance income only. So being an agent and manager, you're kind of coining it in from all sides. Getting paid both ways. Well, David gets Laura an audition with Clive Davis, who's an executive at CBS Records, who offers her a recording contract on the spot.

10:24In the process, Clive becomes his friend and another mentor figure to David. Now, in 1968, Laura's album is released to critical success, has a cult following, but it doesn't sell that many records. So David pulls strings with successful artists like Barbara Streisand, for example, to record cover versions of Laura's songs. Now, you might be asking yourself, why? What kind of money is there in cover songs? But David understood that owning music publishing is where the big money can be made because publishing is the songwriting itself. It's the melody, the lyrics, the structure of the song. So with Laura, David set up a publishing company called Tuna Fish Music, which was named for her favourite food.

11:03Quite a quirky gal, this Laura. Under this company, the proceeds from Laura's compositions would be divided equally between them. So when cover versions of Laura's music made the charts, David and Laura made money. Yeah, and there's quite a few famous people who do that. There's a woman called Diane Warren who's written loads of songs for people like Aerosmith, Don't Want to Miss a Thing, which was in the Armageddon film. Everyone thinks that Steve Tyler was getting all the money from Aerosmith, but actually Diane Warren wrote the song, the music, the lyrics, the structure and she was getting most of the money and actually he's done a great deal if he's getting 50 50 with the person actually wrote the songs when he's really not done that much himself he's making money out of someone else's talent which is what the whole point of being an agent and a manager is it's also the reason why you might find some old pop stars particularly from the 90s or the 2000s when you wonder hey where this person even disappeared off to a lot of the time they've disappeared off to write songs for other artists yes exactly anyway by 1969 the value of Laura's catalogue is peaking and David decides to sell up.

12:04So he sells Tuna Fish music. He makes a deal with Clive Davis and Clive Davis at CBS will acquire Tuna Fish music for$4.5 million. Now that's $40 million in today's money. At the time, almost unprecedented amount of money for a solo artist's catalogue. Remember, 50-50 split with Laura so David walks away with over $2 million. $20 million in today's money. So he's a millionaire and only five years on from working in the mailroom. Pretty good progress.

12:44By this point, David is making a name for himself in the industry at large and a rival New York agency, Ashley Famous, offers him a job to head up their music and concert department. Now, he'd actually been laughed out of the Ashley Famous office when he'd interviewed for them just a few years before. But now they're offering him a grander week, which is more than double what he's getting paid at WMA. And once at Ashley Famous, he poaches the agent of Bob Dylan and Janis Joplin. But he doesn't stay there long. Within a year, he moves on again, this time to be vice president at Creative Management Artists in Los Angeles.

13:17He's finally back in Hollywood. And just in time, because there's a new music scene emerging there, the folk rock scene centered around Laurel Canyon in Hollywood. and do you remember Elliot Roberts, the guy who worked in the mailroom with David? Now they've remained friends and Elliot has just become manager to artists from this very scene. Two artists called Neil Young and Joni Mitchell. Two of my faves, I have to confess. Now when Elliot takes on a new super group, Crosby, Stills and Nash, that's David Crosby, Stephen Stills and Graham Nash, used to be in the Hollies, he asked David to co-manage them with him.

13:52So David finally leaves his talent agency and sets up a management company with Elliot. Together, they start expanding. They take on more artists in the scene. But David differed from Elliot and other managers at that time. He didn't really live that kind of long-haired, hippie rock lifestyle. As the New Yorker put it, for anyone trying to understand Geffen's success in the rock business, it's worth keeping in mind that at crucial moments, when millions of dollars in royalties hung in the balance, he was the only person in the room who wasn't high. Oh, interesting. I've got to say, what's the point in working in this industry if you're not going to live the lifestyle?

14:28How boring. It's true. But clearly, like David Geffen did, you can make a lot of money if you can keep your head. We're all around are losing theirs. Well, producer Paul Rothschild, who David had squeezed out of the Crosby, Stills and Nash deal, was less flattering about him. And he said, when David Geffen enters the California waters as a manager, sharks have entered the lagoon. The entire vibe changes, he says. It used to be, let's make music, money's a byproduct. Then it becomes, let's make money, music is a byproduct. Interesting criticism of David there. And something I think that a lot of musicians nowadays would say about the music industry themselves.

15:08But next, David takes on a then unknown artist from the scene, Jackson Brown. He unsuccessfully shops Jackson's demos around the record labels. They're not interested. But in the process, he gets some advice from Ahmed Etigan, the charismatic, cultured and very rich head of Atlantic Records. Atlantic Records, massive record label. Now, Ahmed suggests that if David believes in Jackson, he should start his own record company to sign him. So he does. Ahmed described David as very bright and very fast. Ahmed becomes another mentor figure and he convinces David to buy a Picasso. So clearly David's already moving in rarefied circles.

15:45I suppose we're in the late 60s, early 70s here. So, you know, you probably could buy a Picasso if you were a young millionaire like him. These days you have to be a billionaire. David took Ahmet's advice. He established Asylum Records in 1971. So named because the music business, in his words, is an insane asylum. It also means a refuge and a sanctuary. So a double meaning there. Now, Asylum completely shaped the music scene on the West Coast. You probably will have heard of it if you're a fan of any of these artists. He signed the biggest ones out there. Joni Mitchell, Tom Waits, the notoriously impossible to sign Bob Dylan.

16:19And on Asylum, Joni Mitchell chartered with her song You Turn Me On, I'm a Radio, which was initially written as a joke for David Geffen, who was desperate for her to make a radio-friendly hit. But David also signed a fledgling band called The Eagles, whose 1976 greatest hits album, interesting factoid here, is still the best-selling album in America of all time. and remember he promised to keep Asylum small, only as many artists as he could fit in that sauna? Hmm. Within a year, David sold Asylum to Warner Communications for$7 million, although he remained at the time president. And in a way, I suppose, if he's doing so well, odd to sell it so quickly.

17:01But I think what we've already seen is he's quite a nomadic kind of business person here, isn't he? Yeah, he sees opportunity, picks it up, exploits it as quickly as he can and then just kind of moves on. Although this is probably, we've had this discussion before, we probably would have done this because we're always saying that we would have got out way too early. That's it. The first few million we see were gone. Or maybe the fumes from the sauna finally got to him. So David described his sale as a stupid mistake, a mind boggling, idiotic decision. And you have to kind of agree with him because a year later, with the success of artists like the Eagles, Asylum was worth$50 million.

17:35So Warner Communications really nabbed a good deal there. But despite this, David said he finally felt rich after he sold Asylum Records. But that newfound wealth put him in therapy five days a week. He said, I no longer could tell myself it was about money and still didn't feel quite right. I crashed. So clearly just getting loads of money wasn't really filling anything inside him. Yeah. So this is the age old thing. You know, you set out, we'll just want the money. Then you get there and you think now what? And then you're left with your with yourself. And he had quite a few things to deal with himself.

18:07Well, let's move on to some of that, actually, because in therapy, he tried to deal with his sexuality. A few years earlier, he had come out as gay to a friend and he'd avoided the Vietnam draft, actually, by ticking yes to the question, do you have any homosexual tendencies? But in therapy, he decided he wanted to be straight. One night at the Roxy, which was also a nightclub he'd recently opened, he was sitting at a table with Bob Dylan when he was introduced to Cher. They talked all night long and within three days they were living together and although she was still married to Sonny Bono publicly, that relationship had ended in private.

18:42David and Cher are together for 18 months. They eventually go public about their relationship at the Grammy Awards, no less. He even proposes to her with a ring in Hawaii. David says he didn't really know he was gay and he was genuinely in love with Cher. He wouldn't be the first or the last gay man to be in love with Cher. Yes. But while they were together, Cher recorded with Phil Spector against David's advice. And much to Phil Spector's displeasure, David would often join Cher in the studio. And one day, Phil pulled a gun on David. So Cher stopped recording with him entirely. But Cher eventually left David for musician Greg Allman, who she would marry.

19:20Greg Allman, one of the all-time great guitarists, by the way. David was heartbroken, humiliated by their public breakup, especially when he read in Time magazine that Cher had said of him and her ex-husband, Sunny, that she traded one short ugly man in for another. Oh, ouch. Ouch. But things are about to get even worse. By 1975, David was disenchanted with the music industry, so he made his first move to get into the movie business. He gets a job as vice chairman of Warner Brothers Pictures, but it was, in his words, a disaster. I love the fact that his first job... Was a vice chairman. ...as vice chairman.

19:52It would be nice. Anyway, at one point, he tells director Clint Eastwood to shave 20 minutes off his film, to which Clint responds that he'll make his next movie a rival Paramount. And although the few movies released under him at Warner Brothers do okay, he can't stand the corporate bureaucracy and within less than a year he's actually fired. Then, aged just 34, he's diagnosed with bladder cancer. You would think that someone like David would try and distract himself from this news with work, but he actually can't. Warner Brothers have him on a non-compete clause, so he's on gardening leave for the next few years.

20:27And this is, I guess, I would love to be put on gardening leave, to be honest. It's a kind of non-employment state where you're not allowed to work for anyone else because your former employers have decided you're too much of a risk. Potential competitor. A potential competitor. You'll bring that kind of knowledge to a competitor and use it to do them in. Yeah, the worst thing for a lot of agencies, because the thing about agencies, as we say, it's all about the relationships. So if somebody who's got relationships up sticks and leaves, the last thing you want them to do is to take all those relationships with them because that's the lifeblood of the company.

20:58And some people will have to wait out that gardening leave before they set up a rival agency. It happens in advertising too. It happens in all sorts of places. Worth noting as well, you also get paid to go on gardening leave. So you're literally getting paid to garden. It's the best kind of leave to get. Anyway, he, in inverted commas, retires to New York. During the days he lectures at Yale, he invests a huge amount in real estate and art. He becomes friends with Calvin Klein. At night, he parties at Studio 54. This is the best gardening leave ever. At this point, many believed David Geffen's star was fading.

21:28He was a bit of a has-been. But in fact, it was only the end of his first act. Get this. In 1980, David was told he never actually had cancer, that it was a misdiagnosis. That's got to be a good day. I mean, a good day for David Geffen, a bad day to be David Geffen's doctor. I guess so. I imagine you'd basically want to sue someone if you found that out. I think, but let's face it, your first reaction was one of incredible relief. I mean, the years he spent believing that he was going to die actually did give him something quite important. He finally admitted to himself that he was gay. He said, I was in the hospital waiting to find out whether it had spread, whether I was going to have to be mutilated or whether I would die.

22:08It all sank in. Then I realized there is no time to waste in life. And what does he do with that extra time? He fell in love with a 19 year old named Stephen Anton. when he introduced that first boyfriend to his mother. All she did was look him up and down and say, he's not Jewish. That's great. So let's recap. He's cancer free. He's contract free, as the non-compete clause had run its course. And following advice from Paul Simon, I love the way we're just dropping these names in here. He decides to return to what he does best, another record label. Apparently Geffen Records was named as such because Calvin Klein told him, you'll get laid more.

22:45If the record company is named after you. Sound advice. Sound advice depends on how successful the record company is, I think. Immediately, David starts signing some of the biggest names in music. Donna Summer, Elton John. To bag John Lennon, he even offers to sign before even hearing the record. He goes on a charm offensive with Yoko Ono. Just three weeks after releasing John and Yoko's record, Double Fantasy, John, of course, was shot in front of Yoko as they walked back from the studio. David had been with them earlier that evening. David rushed to the hospital, but John Lennon was already dead.

23:19So he escorted Yoko home. I think I was nine years old at that time. I remember it like it was yesterday. Everyone in the playground was talking about it. Oh, my God, John Lennon's dead. Because it meant the Beatles would never get back together. It was such a huge moment. Wow. So really, David Geffen's at the centre of culture, really. Yeah. And his label actually does incredibly well over the next decade. So he has Neil Young. He's got Joni Mitchell, Don Henley, Peter Gabriel, Olivia Newton-John, lots more musicians. He's also a really good talent spotter within the business itself. So halfway through the decade, he hires new A &R guys to shake things up.

23:52A &R, Artists and Repertoire, it stands for. They are the kind of people who are kind of noses to the ground, sniffing out things. They're the people who go around clubs and whatever, trying to find people, sniff out new talent. And these A &R guys, they tap into the 80s heavy metal scene, which is bubbling up. So they sign Guns N' Roses, Aerosmith. He even signs the rock makeover of his former girlfriend, Cher. If you remember, Cher went through a really big leather and chains phase. I do remember that, funnily enough. So David Geffen's conquered the music industry and he's still determined to make it in movies.