Michael Ovitz's take jogged Dunn's memory—and yeah, he was right.
Wall Street had been dipping its toes into Hollywood for two decades, starting with stock investments and equity financing. Sure, it was the movie biz, but at its core, it was still a financial game—and they were pros at that. Then, in 2003, slate financing hit the scene, marking Wall Street's first head-on tango with Hollywood studios.
It didn't go well.
That year, Merrill Lynch teamed up with Paramount to launch a private equity fund called "Melrose." The plan? Invest in 25 Paramount films over the next two years, covering 20% of the costs. Per the deal, Paramount would skim 10% of the gross as a distribution fee, then split the rest with the fund. On paper, it was airtight.
But Wall Street's greenhorn dive into Hollywood's inner workings left them blindsided. Paramount, playing the game like old pros, wiped out most of the slate's profits through industry tricks, leaving Merrill Lynch with nothing but losses. Sue them? Sorry—Hollywood had been fleecing outside investors for over a decade and had the playbook down pat. On the surface, Paramount's moves were fair, square, and legal—no cooked books in sight.
Lesson learned. From then on, private equity firms and investment banks brought in "middlemen" as guarantors for slate deals with Hollywood. These intermediaries had to bridge Wall Street and Tinseltown, understanding the industry's ins and outs while keeping tabs on the money flow.
So, Wall Street stopped dealing directly with Hollywood. A wave of middleman companies popped up—Relativity Media, Legendary Pictures, Dune Entertainment, Kingdom Films, you name it.
Michael Ovitz, a Hollywood vet, saw the whole picture. And with his agency roots, he was a natural fit to play that middleman role, linking Wall Street cash to Hollywood dreams.
Dunn let out a relieved breath and grinned. "Alright, how about this? To make it easier for you to pitch to Wall Street's funds and banks, Dunn Capital will put up $100 million. We'll start a company together."
Michael's eyes lit up.
Whether Dunn's Wall Street rep was legit or not, his name in the film world was pure thunder. Tell investors even Dunn was jumping in with both feet—wouldn't they come running?
"If we pull that off, it's half the battle won!" Michael paused, then added with gusto, "Tell you what—I'll chip in $80 million personally, and AG will toss in $20 million. That's $200 million total. Enough to show Wall Street we mean business!"
Since getting ousted from Disney, Michael had been itching to reclaim his glory. Like Jeffrey Katzenberg, who'd left Disney vowing to outshine Michael Eisner and prove himself—that's what birthed DreamWorks. Michael had that same fire.
Dunn stood, striding over to shake Michael's hand firmly. "Deal. I'll wait for your good news!"
Michael laughed. "Don't worry. Compared to slate financing, Disney's little blacklist is kid stuff. One week—I'll have it sorted."
"I trust you." Dunn paused, then smirked. "Oh, since it's a new company, what should we call it?"
Michael teased, "Well, it can't be Dunn Media or Dunn Fund Management, right?"
Dunn cracked up, thinking for a sec. "Since we're dealing with Hollywood and investing in films, it should sound like a movie company. How about… Legendary Pictures?"
"Legendary Pictures?" Michael hesitated, then nodded. "Good name. Slate financing's a game-changer for Hollywood funding. We're making legends here!"
With Michael Ovitz on board, Dunn felt a weight lift off his shoulders. He could focus on prepping the A Beautiful Mind crew without sweating the chaos.
Jack Nicholson joined smoothly, snagging the role of William Parcher for $1.5 million. Ed Harris, who'd tried to gouge Dunn with a sky-high fee thanks to Disney's blacklist, got axed. Dunn couldn't stand opportunists like that.
Days passed with no public peep from Dunn about Disney's ban. To outsiders, it looked like he'd caved under Michael Eisner's thumb. Eisner, smug as ever, figured he'd sized Dunn up wrong—thought he was a heavyweight, but a little pressure, and he'd folded. Small fry after all.
Dunn's unusual silence sent ripples through Hollywood's inner circle. The towering rep he'd built over the past six months seemed to be losing its shine under Eisner's heavy hand. But beneath the surface, a quiet current was stirring—stirred by none other than Michael Ovitz. Nobody knew it yet.
Dunn stayed cool as a cucumber, but his buddies were freaking out. Mel Gibson even called, ranting over the phone, cussing out "those Jewish bastards" for choking Hollywood and ruining movies.
Dunn fired back, ice in his voice. "Mel, that's racist! You realize if this gets out, you're done for good?"
Mel didn't care, fuming. "Gets out? What, you gonna snitch on me?"
Dunn snapped, "It's not about me spilling anything. Your whole mindset's messed up! Spielberg, Katzenberg, Bill Mechanic, Michael Ovitz—they're all Jewish, and they're all helping me! Mel, you've got to watch yourself. This matters!"
Mel shot back coldly, "Worried about me? You're the one getting crushed by that Jewish prick Eisner!"
"Mel, chill out!" Dunn barked. "I'm warning you again—drop the racist crap. It's your career, your life on the line! And don't forget—Nat's Jewish too!"
Mentioning Natalie Portman softened Mel's tone a bit. "You know I don't mean her."
Dunn sighed. "Mel, people blurt stuff out unconsciously. You've got to rein it in. If you slip up somewhere and spew anti-Semitic garbage, you're toast in Hollywood."
Mel went quiet, then let out a wild laugh. "I've got it under control. As long as you don't squeal, no one'll know!"
Dunn's voice darkened. "Just be careful. Also… I heard you've got a domestic violence rap?"
"Who said that?" Mel's tone sharpened.
"Doesn't matter who. Did you or not?"
"No!"
Dunn snorted. "Better not have. You know if that leaks, it's as bad as the anti-Semitism mess!"
Mel grumbled, "Goddamn, kid, you're a drag. Here I am, trying to stick up for you, and you're lecturing me. Forget it—I'm done talking!"
He hung up.
Dunn sighed, shaking his head. Mel Gibson's temper—too many tough-guy roles, maybe. Hopefully, he'd chew on today's chat and not repeat his past life's mistakes.
By mid-August, Spider-Man's global box office smashed another milestone: $470 million in North America, $650 million overseas—$1.12 billion total! It wouldn't top The Phantom Menace's $580 million domestic haul, but beating its $1.18 billion global take? Locked in.
Universal had already wired the splits: $249 million from North America, $266 million overseas—$515 million total. After Universal's $1.12 billion distribution cut (which covered the $60 million promo costs and other expenses in their 10% fee), Dunn Pictures pocketed $400 million!
Spider-Man was still running, with another $120–150 million expected, though Dunn's share would shrink. U.S. theater splits taper off over time—55–58% in the first two weeks, dropping to 45% after ten. That's why modern blockbusters bank on those opening weeks, then crash like a waterfall, off screens in three months for the home release window.
Back in his talks with Michael Ovitz, Dunn had dug into the numbers. For Hollywood's big studios, a 20% movie return was a win. But Spider-Man? The stats were insane.
No home entertainment, no merch, not even off screens yet—and Dunn Pictures had already raked in $400 million at the box office! Budget was $150 million, plus $40 million extra promo cash from Dunn, offset by $42 million in German and UK tax rebates. Crunch the numbers, and Spider-Man's return rate so far? A mind-blowing 170%!
That's the Dunn Pictures magic.
A measly blacklist from Disney could take down Dunn or crush his company?
Dream on!
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