GARTH DRABINSKY
Born 1948, Toronto
Few Canadians have simultaneously inspired as much awe, admiration, skepticism, sycophancy and disgust as Garth Drabinsky — the high-flying entrepreneur behind the joystick of such dazzling, daredevil crashes as Cineplex and Livent. Love him or hate him, you have to hand it to the man for not only building an empire from the ground up, but doing it twice — if not more (surely, the man will make another return to the limelight he loves so much) — and flying the Maple Leaf in the face of star-spangled suits at every turn.
On paper, Drabinsky created the two the largest entertainment companies this country has ever seen, only to lose them both to American interests. Determined to play the same game of self-creation cemented into American consciousness via Hollywood’s marketing of the “American Dream” — to the point where he even took it upon himself to produce the American classic, E.L. Doctorow’s Ragtime, on Broadway– Drabinsky fell victim to a variety of things, not least among them hubris. However, the sheer malevolence and speed of his reversals of fortune in the face of “playing the American game” prove just how unkindly Americans take to the notion of someone coming into their ballpark and trying to win, because whatever Drabinsky did — or did not do — his actions were hardly unprecedented.
The history of the entertainment industry is littered with corpses of high flyers. It’s just that so few of them have been Canadian — and fiercely, rationalistically Canadian — that Drabinsky’s story not only stands out as a colourful aberration in our typically staid, and relatively small-stakes film history, but it made a dent in the Hollywood consciousness when a loud, and not-so-polite, citizen of a country that typically says “sorry” first nearly wrestled control of a premier movie chain away from its American partners.
Born in Toronto on Oct. 27, 1948, Drabinsky was the eldest of three sons born to one-time farmboy and air-conditioning king Philip Drabinsky and wife Ethel. He contracted polio at the age of three, and despite several painful operations to correct the effects of the disease, he still walks with an impaired gait. Of course (given our conditioning by Hollywood), such adversities in early life generally pave the way for greatness as an adult — and Drabinsky, the myth-lover, is first to play into the romantic side of his obstacles: “The pain I was subjected to in surgery was indescribable…. I remember screaming at nurses, screaming for morphine. They had to wean me off the stuff. It was embarrassing, because whatever self-pride you had, you’re reduced to a shriveling idiot. The ordeal is probably the reason I’m so intolerant of people complaining over menial matters.” (Brian D. Johnson, Macleans’ Magazine. 1987.)
A self-proclaimed entrepreneur since he left high school, Drabinsky sought positions of influence. He ran for president of student council promising his classmates wholesale schoËol supplies. He won. He brokered power with grace, and even acted as a go-between between the rebellious sixties student body and the administration. No doubt, his proclivity in the arena of public speaking and the art of a pitch attracted him to law school and earned him a law degree, but entertainment was always his preoccupation and in 1972, he approached Toronto film exhibitor, and local legend, Nat Taylor to see if he would invest in an entertainment rag he was publishing called Impact (a freebie listings paper). Taylor told him “that a magazine that was given away free was worthless” (Public Screening, Jaime Hubbard, 12) and declined to invest in Drabinsky’s weekly.
However, Taylor did remember the young man as “bright” and “confident.” (Hubbard). Years later, when Taylor looked for someone to publish the trade magazine Canadian Film Digest, he hired Drabinsky, who lapped up every drop of knowledge that would spill from Taylor’s lips regarding the two most important elements of distribution: brokering bookings and matching title to house size for maximum returns. Taylor was a bit of an innovator in the business: he was one of the first theatre owners to realize the benefits of a small house and a big house when he split Ottawa’s Elgin theatre in two: the Big Elgin and the Little Elgin.
He’d put the big, new splashy release in the big theatre and pull the longer-running film into the more efficient little Elgin. This way, Taylor not only stood to sell more popcorn (the oily lifeblood of film exhibition) but he could keep a title longer — and realize more profits, since theatre exhibitors only realize a good percentage of the box office after the second or third week of release; the longer a movie plays, the more money the exhibitor makes — providing they are still selling seats. While Drabinsky was busy soaking up the lessons of Nat Taylor, he was also building a production partnership with Joel Michaels. In 1977, the duo was shooting Silent Partner (Daryl Duke directing Christopher Plummer, Elliot Gould, Susannah York and John Candy) in the bowels of the newly opened eyesore called the Eaton Centre in downtown Toronto. (Drabinsky and Michaels also made The Changeling, the film directed by Peter Medak and starring George C. Scott and Melvyn Douglas as well as Tribute, the Oscar-nominated film starring Jack Lemmon.)
Drabinksy noticed the unused spaces on the lower level and approached Taylor with the idea of building a theatre down there. The landlords, Cadillac Fairview (owned Eaton Centre and would become major partners, CF was controlled by CEMP Investments — part of the Bronfman family holdings), cut the two a good deal on the hard-to-use space and Cineplex was born — an 18-screen theatre that ran mostly European, second-run and art-house fare beneath the parkade of Eaton Centre. Taylor and Drabinsky expanded all across Canada and the United States, following a similar business plan of erecting multiple screen theatres, or else refurbishing grand old movie palaces in decadent detail. They bought The RKO in New York, the Gordon Theatre on LaBrea in Los Angeles — which would later become the award-winning Showcase Theatre.
They spent millions on these reclamation projects. They were labelled fools by the industry, but they nonetheless made a pretty big impression, and no wonder: two Canadians buying up bits and pieces of movie history in Hollywood’s own backyard is a bit of a statement. They put in designer coffee bars. Sold fancy candy and turned their back on the whole low-rent approach to movie exhibition — a legacy that can be seen in every silvery-screened megalopolis in the suburbs, the latest model of multiple theatres now dominating the market. From 1979-1981, the chain went from 0 to 15 locations and 0 to 127 screens. In 1982, they opened the Beverly Center Cineplex in Beverly Hills. It was a big deal. It was the ‘80s. The 14-screen theatre was glamourous and costly. Drabinsky even commissioned a painting by Canadian artist Gerald Gladstone to grace the lobby. (Drabinsky always considered himself a patron of the Canadian art scene and accumulated a large collection of Canadian artwork from the likes of Alex Colville and others. He called this “the great Canadian art program.” He even opened the Drabinsky Gallery in Yorkville. Although, even the artwork later on became something of a Ôlegal nuisance. The Heffel Gallery in Vancouver, for instance, was sued by Drabinsky for bad faith in the sale of Colville’s The Cross. Drabinsky lost the case.)
For the power-brokers in Hollywood, Drabinsky’s in-your-face attitude was too much: “The entrenched executives of the movie colony did not quite know what hit them. That a Canadian, traditionally a modest and retiring nationality, should have the chutzpah to impose his own radical style upon Hollywood, wreaking a major change in the history of American show business, was unprecedented.” (Hubbard, p. 22) The shock was short lived. Tinseltown eventually accepted Drabinsky — if not for himself, for his apparently idiotic spendthrift approach to exhibition. After all, the money that Dr⁄abinsky and Taylor were spending was aimed at furthering their cause: bringing more people to the movie house. Why complain if anyone — even a foreigner — ends up spending money on things you don’t want to? While Drabinsky didn’t hold on to the Beverly Center very long — eventually ceding control to Alfred Taubman (a developer and head of Sotheby’s) — he did get something important out of his foray into the heartland of moving-picturedom: by taking advantage of the U.S. anti-trust laws, Drabinsky was able to get a shot at showing major releases that the studios denied him at home. If he could show them in the U.S., then why not Canada?
It was this logic that he hoped would push Canadian officials into investigating wÍhat Drabinsky saw as preferential booking policies among the majors. On July 1, 1983, Drabinsky had his victory when the majors were forced to sign an agreement that allowed all exhibitors to bid on product, an event that essentially changed the exhibition and distribution business in Canada, at least on paper. Before he achieved his most lasting legacy, Cineplex began to buckle under the weight of its huge debt load from capital expenditures.
The solution to their cash flow problems came in the form of an IPO. Engineered by Myron Gottlieb (head of Merit Investments and business partner), the IPO raised about $4 million, but when interest rates moved up in the teetering days of Trudeau’s time in office, the stock crashed to the point wh4ere the Ontario Securities Commission put a halt to trading. The miracle of self-creation appeared to be over. Drabinsky was sinking in a red sea of ink. He looked to Norman Levy, a Hollywood producer he met while shooting The Changeling. Levy worked at 20th Century Fox as vice-chairman, and together with his billionaire boss Martin Davis, the two bailed Cineplex and Drabinsky out of a cash bind. For reasons that aren’t all that clear — some have speculated it was an anti-Canadian bias — Davis wanted to get out of the deal with Drabinsky and the relationship dissolved after nine months.
Without a major cash infusion, Cineplex was vulnerable again. This time, it was the Bronfmans (Canada’s one-time liquor barons who recently sold their legacy to Vivendi after Edgar Jr. tried to make it big as a movie dude h˘imself with the leveraged purchase of Universal-MCA), via Leo Kolber, who bailed him out when CEMP (named after heirs Charles, Edgar, Minda and Phyllis) bought the majority share interest in the company — an alternative they thought preferable to putting Drabinsky out of business for not paying his rent to Cadillac Fairview, a subsidiary of CEMP. The other good news was that in Dec. 1982, the Combines Investigation branch brought the studios to the mat. Six months later, the studio chiefs signed a letter of intent guaranteeing everyone access to their product through a bidding system. Garth won the proverbial battle, but war was brewing. Before it had time to wage in earnest, however, Drabinsky — flush with Bronfman capital — bought out Odeon from Ïthe Zahorchak family for $22 million.
He also purchased a string of U.S. theatres called the Plitt circuit (1985) . He was now a real presence in the U.S. Instead of being the demure Canadian in the face of closing one of the biggest theatre deals in history, Drabinsky lorded his accomplishments over the Americans, even alluding to their antiquated ages at a NATO (National Association of Theatre Owners) convention. Plitt understated the case when he said: “I think most of these people were unhappy with him and his entrance into the business.” (Variety, April 26, 1989). Even though it was obvious he was in their face, and not making great friends along the way, Drabinsky continued to assert his vision and kept building. By 1986, he had formed a relationship with MCA and then-president Sid Sheinberg to keep the acquisitions coming and the debt-load guaranteed by deeper pockets. MCA was a fully integrated entertainment corporation with fingers in music, publishing, television and movies.
But it was top heavy and bottom poor. It needed an exhibition partner to achieve — as all companies desire to achieve — vertical integration. Sheinberg and Drabinsky had lunch. Not long after, they had a deal, too. MCA would take a 49-per-cent interest in the company for an initial $159 million US. In return, Cineplex would give MCA a foothold in exhibition. It looked good, but it would have looked better in hindsight had Drabinsky told the Bronfmans (who bailed him out) that he was going to sell half of what was now called 7Cineplex-Odeon to MCA. With more money in the company coffers, Drabinsky bought more. And more. And more. He bought Sterling Recreation, Walter Reade and Circle theatre chains. The acquisitions earned him the name of Darth Grabinsky in the industry, Garth Vader to his own employees — but that wasn’t necessarily a bad thing in a business where fear goes a long way towards getting the desired result.
Most people in the industry figured their wholesale acquisition agenda boosted theatre prices far beyond their worth — but since it was Drabinsky who caused the inflation, and in turn paid the inflated prices, no one was all that eager to stop him. Moreover, he had the pitch. “Through the sheer force of his personality, doubters became believers (Hubbard, 66).” Drabinsky justified the gushes of cash leaving Cineplsex coffers with plans of closing in on key markets. He was right….up to a point. Debt continued to mount. He sold some theatres throughout rural Ontario to Carena Bancorp Inc. in an effort to show some bottom-line good news. But the deal was bad for two reasons: it was too rich and posed no risk to Carena, and second, it ticked off the Bronfmans for a second time. Carena was owned by Hees International Bancorp Inc.– controlled by Peter and Edward Bronfman, the Toronto cousins of the Montreal Bronfmans who were bought out of the Seagram inheritance for $20 million.
Undeterred from his dreams of building something really, really big — at this point, it’s hard to know if even Drabinsky had a clear idea as to what he was really shooting for — Cineplex had accumulated $664-million debt. Drabinsky sold off assets, such as a post-production facility, but it didn’t inspirie investor confidence. Besides, by this point, there were people betting on Drabinsky to fail — stock market traders who stood to win big if Cineplex stock tumbled. Rumours flew on both sides of the border about the long-term future of the upscale theatre chain. Without market faith, things can turn drastically for the worse. And that’s what happened. Drabinsky found himself coq-fighting with Hollywood hitters like Columbia head Charles Kaufman over distribution of certain titles. It was a pissing contest he lost and he began to look vulnerable. Disney challenged as well, and the two companies stopped doing business together, resulting in a huge loss for Cineplex when it didn’t have access to top-grossing movies.
Tension erupted between MCA and Cineplex, or more precisely, between Drabinsky and Sheinberg (who gets the nickname “the devil” in Drabinsky’s autob5iography, Closer to the Sun). According to producer David Puttnam the problem may, in part, have been the result of lingering, nationalist distrust between the two men. “You have people who are used to dominating a field suddenly presented with people from other countries asserting themselves. There’s a built-in conflict.” (Hubbard, 81) Tensions between the two large, confident and self-made men came to a head after MCA got wind of Drabinsky’s clandestine plan to buy out the Claridge shares (part of the Bronfman family holdings), and gain controlling interest of the company.
After weeks of backroom brokering, there was an almost legendary shareholder shakedown that pushed Cineplex-founder Drabinsky (and his partner Myron Gottlieb) out of the company he created. Part of his separation agreement with Cineplex i[ncluded taking with him the live entertainment concerns of Cineplex and the Pantages theatre in Toronto, a property that Drabinsky treated as a labour of love, refurbishing its gold leaf ceiling and every other ornate detail in the ageing entertainment palace.
Drabinsky was in the process of staging Phantom of the Opera at the Pantages, and had already pulled in $20 million in advance ticket sales. When the lights went up on the production, Drabinsky found himself at the helm of a whole new entertainment company that would make just as many headlines, and cause just as much shareholder fury: Livent. Meanwhile, Cineplex-Odeon’s longest standing senior executive, Allen Karp, would to run the npw 1,800-screen movie theatre chain as it eventually became part of the U.S.-based Loews theatre chain, operated by Sony. Not even that partnership put Cinepleèx assets back on solid ground, however.
In January of 2001, the exhibition business was reeling from the effects of a poor summer movie crop and over-expansion. Several large exhibitors went down, and Loews Cineplex — teetering on the brink of bankruptcy protection — was the subject of yet more deal-making, and was finally picked up by Gerald Schwartz in the spring. LIVENT Livent’s history shares so much in common with that of Cineplex — particularly on the charge of inventive bookkeeping — that it’s hard to imagine why people didn’t run away when they saw him coming. But according to all accounts, Drabinsky is a great cheerleader and an even better salesman; a rainmaker with enough charisma to make people believe in his dream. In Canada, a country that has steadfastedly refused to give in to the sweet talking stranger from out of town, the fact that Drabinsky was a proud Canadian seemed to bãe enough to at least temporarily suspend disbelief. With a whole new venture under his command, the empire builder wasted no time in expanding the Livent premise into other markets.
By 1995, it had opened a brand new theatre in Vancouver and had plans of creating a circuit with six theatres in four cities, including Toronto, Vancouver, New York and Chicago. The glow of Garth was back, if only for a short time. In a story that would later prove somewhat prophetic, Vancouver author Evelyn Lau wrote about being a guest at the opening of Vancouver’s brand new, $24.5-million Ford Centre for the Performing Arts: “A mood of happiness filled the air, the happiness of the guest who is glad of whatever is put before him and ecstatic if it is actually something good. The applause during the show was frequent and generous. Afterwards, we descended the converging marble staircase to the street; the two wide streams of people pouring down the stairs was a vertigo-inducing sight that made me think of the gala scenes in action movies, just before something devastating happens.” (Vancouver Sun, Dec. 9, 1995)
By 1996, the business pages were full of stories about Drabinsky’s personal million-dollar bonuses and declining Livent revenues. The stock was once again on thin ice. The deal to open the Oriental in Chicago was mired in red tape and construction slow-downs and his high-profile stake in the New York market, a 1,821-seat theatre created from the gutted remains of the Lyric and Apollo Theatres on 42nd Street, was a rich endeavour indeed. Funded through a variety of tax-incentives from the City of New York, who had everything to gain from a revitalized theatre district and the investments of Disney (the nearby revitalized New Amsterdam Theatre) and Livent in the area, as well as Ford Motor Company cash, the cost of resurrecrting the new building was estimated to be $30 million US. In New York, where Drabinsky occupied the offices of legendary Great White Way producer J.J. Schubert, he hoped to avenge the movie business for not only his bum rush from the seat of power, but that of legitimate theatre’s as well.
The kings of 42nd Street fell in the wake of Edison’s popularization of motion pictures. When Drabinsky opened the theatre on January 18, 1998 with his impressive production of Ragtime, he truly believed theatre was in for a large-scale comeback. He bet big on his hunch. He created the largest producer of live entertainment in North America, but the returns didn’t pour in as expected — particularly in Vancouver, where Drabinsky had projected that half a million people would see Sunset Boulevard and only 190,000 did. Profits tumbled. They recorded a loss of $44.1 million for 1997, comápared to a profit of $11 million in 1996. The cumulative debt in the company was estimated at somewhere around $220 million.
No more than five months after opening the Ford Centre in New York, Drabinsky abdicated as chairman and CEO of Livent to U.S. interests headed by New York financier Roy Furman and L.A. super-agent Michael Ovitz (founder of Creative Artists Agency). He said the move was personally motivated. “Nobody on my board was asking me or telling me to do it. This was something I took on my own initiative, using several relationships I had in the business….The thing I know about myself right now is clearly that the passion I have for producing theatre is unbridled. I’m not in Livent for the job. I don’t need to work any more … but I want to stay working hard for what I am passionate about — the creative process,’ Drabinsky told Southam News reporter Jamie Portman after he s´witched posts. While the new American bosses, Ovitz and Furman went to great lengths to calm any fears of a malevolent U.S. presence in the Northern fortress, it was hard to ignore the optics of the takeover, which looked like Canada was surrendering its hard-won clout on the cultural scene to yet more deep-pocketed Yankees — who seem to win at absolutely everything because to them (if the Nike ads are correct), winning is more important than playing the game.
The team assured the Canadian media that Drabinsky’s creative vision would be honoured, and as for personal relationships, Furman said: “Garth likes me, I like Garth, Garth likes Michael, Michael likes Garth… He (Ovitz) has great admiration and affection for Garth. He always thought that Garth was a big thinker and a big doer, that he left everybody else in the dust.” In June, Drabinsky found a supporter in business buddy, Livent board member and fellow “think-big” e…ntrepreneur, publishing mogul Conrad Black. Southam, which happened to be one of Livent’s biggest creditors in the wake of Drabinsky’s massive marketing campaigns that purchased — or at least booked — hundreds of pricey, full-page newspaper ads, agreed to purchase a five per-cent stake in Livent, a deal worth $12.2 million US ($18.1 million Cdn), or $8 US a share ($12), for 1.5 million shares. Southam president and respected business man Don Babick hailed the move. “This represents an attractive diversification opportunity as well as an attractive investment.”
By August of 1998, Drabinsky must have been having big-time deja-vu: After the Ovitz-Furman takeover, he was suspended as vice-chair of the company and escorted from the Toronto headquarters when the new management team uncovered “serious irregularities” in the Livent books. The day after Drabinsky was shown the door, shareholders launched a class action lawsuit against the company in a New Yorflk district court alleging they had been “mislead” into buying “artificially inflated stock.” As the investigation continued, there were reports of double books and other financial wizardry. Out of pocket shareholders started looking to lynch the financial auditors who prepared the year-end statements and there were calls across the Canadian investment community to change the way reports are compiled and checked in order to assure investor confidence.
Drabinsky did not take all this sitting down. He tried to protect his name by launching a lawsuit of his own against accounting firm, KPMG, for breach of confidence and conflict of interest. KPMG were investigating him for Livent after being his own accountants for many years and because they are examining books that they, themselves, prepared. For all the pain and misery, Drabinsky was asking for $26 million in damages. In court documents, Drabinsky claimed the weeks that followed his removal from the Livent offices were “were tÃhe worst two weeks of my life,” a roller-coaster ride that left him feeling “completely besieged, violated, humiliated and distraught.” Drabinsky won the first volley. The court ordered a halt to the KPMG investigation because of conflict of interest complaints. “This is clearly a mortal blow to management and clearly a statement to [Michael] Ovitz that when you come to Canada you play fair or you suffer the consequences,” Edward Greenspan, one of Drabinsky’s lawyers, said after the decision. He had a day of victory in court, but soon, the RCMP were on the trail. So was the FBI and a host of agents from securities commissions on both sides of the border.
When revised financial statements were released, the company was in debt to the tune of $230 million. The company’s credit rating was downrated by two bond points. On Nov. 18, 1998, the company filed for protection from its U.S. creditors under Chapter 11. Gottlieb and Drabinsky are fired. The company zalso launched suit against the two, seeking to recover $225 million in damages from alleged fraud and accounting irregularities. With few friends left in the entertainment industry, Drabinsky found a pal in the auto parts giant, Magna International, who hired him as a consultant for some real estate ventures on a monthly basis. The rest of Drabinsky’s time in 1999 was spent fighting extradition orders after New York authorities issued arrest warrants, as well as launching a full-on character defence of his — and Gottlieb’s reputation. The two said they had been the victims of a well-designed “conspiracy” to smear their professional reputations. On the up-side, the company’s productions of Fosse and Parade earned 17 Tony nominations and SFX, the world’s largest producer of live entertainment, offered to purchase three of Livent’s theatres (in New York, Chicago and Toronto — noot Vancouver) and slate of productions for upwards of $100-million US. In Nov. of 1999, the formal ending of Livent takes place with the auction of several Livent furnishings, including the “one of a kind” slate board room table.
In March of 2000, Drabinsky was named marketing consultant to Conrad Black’s National Post — the newest Canadian daily in the country. But that’s not all. Drabinsky settled out of court with KPMG for $11 million and in June 2000, Drabinsky announced his imminent return to theatre production with The Island, by South African playwright Athol Fugard, to the Bluma Appel Theatre in Toronto’s St. Lawrence Centre beginning May 1, 2001. The play is a critically-lauded anti-apartheid piece, and is a co-prodiction with Britain’s Royal National Theatre and the Market Theatre of Johannesburg. The future of the Ford Theatre in Vancouver remains uncertain, although several companies are looking into acquiring the property adjacent to Moshe Safdie’s coliseum-styled public library, including a plan that would turn the facility into a digital theatre that could host web-events for the world. For the moment, Drabinsky remains in the shadows, but there is little doubt the big dreamer with the obsessive passion for drama and a dramatic passion for Canada will be a presence — for better or worse — on the Canadian entertainment scene for a long time to come.
– Katherine Monk
FILMOGRAPHY (as producer): The Disappearance (1977), The Changeling (1980), Tribute (1980), The Amateur (1981), Losin’ It (1983).
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