In an era when studio chiefs are spending just as much time dealing with stockholders, government lobbyists and multinational operations as deciding which projects to greenlight, is the MBA becoming an increasingly invaluable asset for the industry's power brokers? Some say the degree provides the kind of training that enables them to look at the business from, well, a business standpoint.
"The entertainment industry is very much a business today," says Alan Horn,
president and chief operating officer of Warner Bros. Entertainment. "And in a
world where all the (film) companies are owned by large conglomerates, it
helps to speak their language."
With a keen understanding of management techniques, accounting, investment and
financial practices, the MBAs in positions of prominence -- like Horn, Sony
Pictures Entertainment chairman and CEO Michael Lynton is a Harvard Business
School alumnus, while former MGM chairman Chris McGurk is an MBA grad from the
University of Chicago and producer and former Sony Pictures chairman Peter
Guber earned his MBA at New York University -- are, in many ways, far more
prepared for the modern world of show business than legendary tycoons such as
MGM's Louis B. Mayer or Columbia's Harry Cohn, who famously made decisions
based on "the seat of my pants."
An MBA "helps you view what a lot of people see as a crazy, creative
enterprise as a business," McGurk says. "It also helps you with dealmaking
because a good MBA program will focus on value creation. And it helps you
become a better problem solver. A real key to solving problems is sorting
through the 95% of information that is useless and focusing on what's
important -- an MBA teaches you how to do that."
Today, Horn, Lynton and their peers are involved in acquiring other businesses
-- Sony's multibillion-dollar investment in MGM, for example -- or working
with hedge fund managers on major deals -- as Horn did recently when his
studio brokered a multihundred-million-dollar pact with Legendary Pictures.
While these men continue to oversee their studio's overall slate, these days,
they typically leave the day-to-day operations to their production presidents.
Despite the increasingly corporate nature of Hollywood, however, executives
with MBAs are just beginning to infiltrate studio ranks in large numbers,
primarily because other industries pay them more. Considering that many MBA
graduates come out of school with $100,000 or more in tuition-related debt,
they often don't have the luxury of taking a $400-a-week job in an agency
"The (financial) trappings of being an MBA (in other industries) are such that
you have to really want to be in the entertainment industry," Lionsgate
acquisitions chief Peter Block says. "You come out of an MBA program and see
all the big dollars being dangled at you, and no matter how many times during
your studies you said, 'I want to get into the (film) business,' the dollars
dangled by accounting firms and others make it unattractive.
"When I was at business school, many people wanted to work in 'the business,'
but when they realized the disparity between that and other businesses, they
much preferred the paycheck in other areas," Block adds.
Principal Communications Group communications associate Hans-Dieter Kopal says
he had to consider the salary gap when he was debating whether or not to
pursue a career as a publicist. "If I wanted to be a stockbroker, I would make
a grip-load more money," says Kopal, a graduate of Loyola Marymount University
who worked at Universal Pictures before moving to his current job. "But in the
long run, I will get there, and I will enjoy my ride more."
Other young executives seem to be adopting that same attitude.
"Now, because the industry is changing so much and it is such a dynamic world
with new business models being created every day, this attracts many of the
business school students," says
Jon Kaplowitz, who graduated from Harvard Business School in May and now
serves as head of business development for World Poker Tour. "Also, because
there are so many entrepreneurial activities within entertainment now, thanks
to the new technology and the YouTubes and Googles, everybody is circling the
wagons and trying to figure out how to capitalize on this. All these things
offer not only an interesting opportunity (for graduates) but a way to explore
entrepreneurial opportunities that weren't there a couple of years ago."
Harvard Business School already has begun to pursue these opportunities by
creating an Entertainment and Media Club, which organizes a four-day "trek" to
Hollywood each winter, when students meet top executives -- which is precisely
how Kaplowitz found his current job.
Still, he says, the fact that many of the top business schools are on the East
Coast and have long ties to Wall Street and consulting firms means that
Hollywood needs to do a lot more to recruit the best and the brightest. "(They
need to show) these are not the run-of-the-mill, traditional operational jobs;
they're giving a real opportunity to figure out how to integrate new media
businesses into the older entertainment world," Kaplowitz says.
Of all the business schools in the U.S., only USC offers an MBA program
specifically tailored to entertainment, though the Entertainment and Media
Management Institute at UCLA's Anderson School of Management does offer an MBA
with an entertainment specialty.
Those programs are attracting up-and-coming executives who already have jobs
in the business but are trying to make themselves more marketable or broaden
their professional horizons. Amy Powell, senior vp interactive marketing for
Paramount Pictures, decided to put herself through UCLA business school while
holding down her studio job in order to enhance her understanding of all
aspects of the industry.
"I was very much a creative mind, but I realized that I wanted to understand
the business from a more holistic point of view," she says. "And that meant
understanding the business behind the business. I loved my job, and so I
decided to get my MBA while I was working."
Powell says that her education has proved beneficial, though she acknowledges
that in her current post, its benefits are often tangential to the work she
does day to day.
Lynton agrees that sometimes MBA training isn't always applicable in the most
practical sense, but he does think that its emphasis on thinking critically is
"What (the degree) doesn't teach you is two very necessary things," Lynton
says. "There are moments when you really have to trust your passions over cold
analysis. Business school really favors the latter, and sometimes, you have to
fight that instinct. And the second thing is, it doesn't encourage you to pull
the trigger. It does ask you to perpetually look for more analysis, which is
why a lot of MBAs make really good consultants or bankers."
If Lynton's and Horn's track records are any indication, MBAs seem to make
pretty good studio chiefs as well.
"Any media executive in today's world has to have a facility with numbers,"
says Randy Falco, president and chief operating officer of NBC Universal
Television Group and an MBA graduate from Iona College in New Rochelle, N.Y.
"It may not be that they need to be MBAs, but certainly they need to
understand the language being spoken."