Warner’s C.E.O. Is Bullish on the Big Screen
When a quiet and courteous DVD executive named Kevin Tsujihara ascended to the Warner Bros. throne last year, Hollywood did not know quite what to make of him.
Lacking the usual show-business personality traits — screaming, scheming, showboating — and entering from the musty world of home entertainment, Mr. Tsujihara seemed awfully corporate for a business built around creativity. He had almost no experience managing movie or television show production. And yet this low-profile son of egg distributors was given the job of steering the motion picture industry’s biggest and most storied studio.
“In the beginning,” said Robert A. Daly, a former Warner chairman, “there were a lot of people who asked themselves, ‘Kevin who?’ ”
Nobody is asking that now. Since last March, when he won a bitter succession battle to become C.E.O., Mr. Tsujihara, 49, has surprised Hollywood with bold moves that belie his nice-guy demeanor. He persuaded J.K. Rowling to expand the Harry Potter movie universe, something most people thought was a nonstarter. By hiring the flashy Fox executive responsible for “American Idol” and paying $273 million for part of Eyeworks, a Dutch entertainment company, Mr. Tsujihara moved to fix one of Warner’s most glaring weaknesses: overseas reality-TV production.
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Scenes from “Gravity,” a Warner Bros. release that won seven Oscars this year. Credit Warner Brothers Pictures
He parted ways with one film financier and instantly teamed with another, securing $450 million to make 75 movies. Earlier this month, he risked a fight with theater owners by experimenting with the simultaneous release of “Veronica Mars” in theaters and through on-demand services. And he has already duked it out — twice — with no less a force than Harvey Weinstein, who started a naming-rights battle with Warner over “The Butler” and is suing the studio over its “Hobbit” series.
The signals seem easy to read: Despite what many agents, producers and directors may have thought, Mr. Tsujihara’s reign will be anything but dull.
On one recent morning, just after breakfast with another new Hollywood kingpin, Jeff Shell, chairman of Universal Filmed Entertainment, Mr. Tsujihara sat in a stylish armchair inside his sparsely decorated executive suite in Burbank, Calif. “This was Jack Warner’s office,” he said with a grin, referring to the mogul who founded Warner in 1923. “I’m building a desk that is a replica of his desk. It’s really cool.”
During an hour-and-a-half interview, Mr. Tsujihara came across as a relaxed father (of two young children) with a passion for sports. He loves the San Francisco Giants, owns a racehorse and likes to play basketball during lunchtime at the Warner gym. He seemed to be enjoying his new rank — he recently attended a Los Angeles Lakers game with Will Ferrell — while also finding it a bit confining; he now reads so many scripts that he has less time for books. “That’s a bummer,” he said.
But mostly he wanted to talk about the future. “Warner Bros. should be setting the course, making the hard decisions,” Mr. Tsujihara said, speaking in a careful, measured cadence. “In a very difficult operating environment there are clearly opportunities.”
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“Godzilla,” a planned summer offering with Bryan Cranston and Aaron Taylor-Johnson. Credit Kimberley French/Warner Bros. Pictures Continue reading the main story
For instance, as film companies either sputter (DreamWorks Studios), cut back on production (Paramount Pictures) or lean harder on television departments (Sony Pictures), Mr. Tsujihara is betting big on cinema. There is, he said, “a real opportunity to lean into theatrical using our scale and using our distribution power.” Despite problems ranging from sky-high marketing costs to competition from video games and 50-inch flat-screen TVs, “we think theatrical can be a growth engine,” he said.
This summer, Warner will release eight movies, compared with five in the same period last year — the most of any studio. It’s an aggressive gamble that has some analysts worried; only one of the films, “Godzilla,” is a lower-risk remake or sequel. “If we were in charge of Warner’s studio, we would HIGHLY consider moving one or two of these films to later in the year or early 2015,” Doug Creutz, an analyst at Cowen & Company, wrote in a research note.
While acknowledging the risk, Mr. Tsujihara sees an opportunity to start new franchises and to send a message to Hollywood’s top writers and directors: Bring your projects to Warner, because we are not pulling back. A steadily pumping pipeline of movies also suggests an optimism about the future of home entertainment. He sees evidence that studios are starting to train consumers to buy movies digitally (big profit) rather than renting them (small profit) or watching pirated copies (no profit).
Warner also see movies as an international play — the Chinese box office grew 30 percent last year, to $3.6 billion.
Looking out a window toward Warner’s 35 sound stages, Mr. Tsujihara spoke solemnly about the pressure he feels to keep the studio’s engines firing. Home to enterprises as diverse as Batman, Bugs Bunny, “The Big Bang Theory” and TMZ.com, Warner had operating income of $1.33 billion last year, up 7.3 percent from a year earlier. Global box-office receipts for 2013 totaled $5.04 billion, the most of any studio. With 63 programs in production, Warner is the No. 1 supplier of television shows.
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“Man of Steel,” for which Warner plans a 2016 Batman-Superman movie as a follow-up. Credit Warner Brothers Pictures
“This is not a turnaround,” he said. “But I do want to run the company differently as a way to improve and grow.”
Only 14 months ago, Mr. Tsujihara was still caught up in a two-year, three-way race to succeed Barry M. Meyer, who retired as Warner’s chief executive last March. Bruce Rosenblum, the studio’s highly polished television president, was seen as the likely winner. Mr. Meyer, who led the studio for 14 years, had himself risen through the television division. Warner’s movie chief, Jeff Robinov, was a dark-horse candidate.
Mr. Tsujihara was selected over his rivals (both of whom have since left the company) in part because he had experience with the disruptive technologies that are unraveling the entertainment industry’s traditional business models. As president of home entertainment, Mr. Tsujihara labored to prop up slumping DVD and Blu-ray sales while also prodding consumers to begin buying movies digitally. He also ran the studio’s video game division and led its antipiracy efforts.
But his diplomatic skills were also crucial. In 2010, it was Mr. Tsujihara who flew to New Zealand to lead a tense negotiation that allowed Warner, Metro-Goldwyn-Mayer and Peter Jackson to proceed with the “Hobbit” trilogy. Mr. Tsujihara and his team convinced New Zealand’s prime minister to agree to a deal where the government contributed financing and agreed to introduce new labor legislation to keep production going. (A suit brought by Mr. Weinstein seeking a greater share of the “Hobbit” profits, however, continues.)
Jeffrey L. Bewkes, the chief executive of Time Warner, which owns the studio, said he saw in Mr. Tsujihara a leader who could not only force Warner’s famously siloed divisions to work more cooperatively, but could also get along with newly installed chiefs at the conglomerate’s HBO and Turner Broadcasting units.
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A scenes from “The Big Bang Theory,” the hit sitcom. Credit Michael Yarish/Warner Bros. Entertainment
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“I don’t want people sitting with their egos in their fiefdoms,” Mr. Bewkes said. “Collaboration will only make us stronger.” In a lengthy telephone interview, Mr. Bewkes went on and on about Mr. Tsujihara’s talents. “Kevin is exceeding my already very high expectations,” he said.
Mr. Tsujihara said his ambassadorial style — “behaving like a human being” is how he put it — reflected his unpretentious upbringing in Petaluma, Calif., north of San Francisco. His parents, second-generation Japanese immigrants who were forced into California internment camps during World War II, owned the modest Empire Egg Company there. The youngest of five children, Mr. Tsujihara grew up making egg deliveries. Summer jobs included sorting eggs on a conveyor belt and mucking chicken coops.
After earning an accounting degree from the University of Southern California and an M.B.A. from Stanford, he founded a business called QuickTax that went belly-up. In 1994, through contacts at Ernst & Young, he got a job at Warner managing character licensing for Six Flags theme parks, among other duties. Soon, he was climbing the rungs.
Wherever he learned the skill, his deft touch became clear to Hollywood’s creative community last September. That is when Warner announced that Ms. Rowling had agreed to adapt for the big screen her “Fantastic Beasts and Where to Find Them,” a 2001 book billed as one of Harry Potter’s Hogwarts textbooks. Three megamovies are planned. The main character will be a “magizoologist” named Newt Scamander. The stories, neither prequels or sequels, will start in New York about seven decades before the arrival of Mr. Potter and his pals.
Convincing the famously independent Ms. Rowling to dive back into film was a coup. “When I say he made ‘Fantastic Beasts’ happen, it isn’t P.R.-speak but the literal truth,” Ms. Rowling said in response to emailed questions. “We had one dinner, a follow-up telephone call, and then I got out the rough draft that I’d thought was going to be an interesting bit of memorabilia for my kids and started rewriting!”
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“Arrow,” a series shown on CW. Credit Cate Cameron/CW
She added, “When Kevin got the top job, he brought a new energy, which rubbed off. He’s a very engaging person, thoughtful and funny.”
Not everyone is such a fan. A few Hollywood players have suggested, for instance, that Mr. Tsujihara has had a successful early run largely because Mr. Robinov left behind hit movies, including “Gravity,” which took in $715 million worldwide and won seven Academy Awards. Asked about the sniping “Gravity” chatter in particular, Mr. Tsujihara said: “I don’t think it’s catty. Quite frankly, Jeff deserves the praise.”
Mr. Tsujihara faces the same daunting challenges as any Hollywood studio chief: scraping for material to make into hit television shows and movies, pushing into restrictive but booming international markets and finding ways to meaningfully cut marketing expenses, something that he called “our next big opportunity.”
But Warner also has unique puzzles. Efforts to resuscitate its Looney Tunes animation franchise have repeatedly failed to gain traction. The studio has been painfully slow to establish a slate of films based on DC Comics characters like Wonder Woman and the Flash, watching as Disney’s Marvel Entertainment churns out one superhero hit after another.
Mr. Tsujihara noted recent progress on both of those fronts. Dan Lin, a Warner-based producer, is working on multiple sequels to “The Lego Movie,” which became a surprise blockbuster last month. (Mr. Tsujihara was directly responsible, having bought a company that makes Lego-themed video games in 2007. That led to the film, which has taken in more than $390 million worldwide.)
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“The Looney Toons Show,” from Warner Bros. Animation. Credit Warner Bros. Entertainment Continue reading the main story
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As for DC Entertainment, cross-studio collaboration to make better use of its comic book characters appears to have accelerated considerably since Mr. Tsujihara took over, in part because he eliminated some management layers. (He has not named a chief operating officer and did not replace Mr. Rosenblum and Mr. Robinov, choosing instead to divide up their duties and assume some himself.) Two new television shows are coming to the CW and Fox, including one based on the Flash and another on a young Batman, and a film series will be announced in the near future, Mr. Tsujihara said. It is expected to include a “Justice League” movie.
Underscoring his aggressive approach to the DC Comics universe, Mr. Tsujihara and Dan Fellman, Warner’s domestic film distribution chief, recently moved the studio’s untitled Batman-Superman movie — a hotly anticipated follow-up to last year’s “Man of Steel” — to a release date in May 2016 previously claimed by Marvel for one of its own films. It created an industry dust-up, and Marvel retaliated with a date change of its own. But the move sent a blunt message: Warner takes a back seat to no one.
Warner is equally determined to become more of a player in reality television, a potentially huge profit center, particularly overseas, that will require the studio to move out of its comfort zone. To lead this charge, Warner is relying on Mike Darnell, a former Fox executive who favors oddball Western wear and is known for boundary-pushing concepts like “Temptation Island.” Mr. Tsujihara said: “I want Mike to question everything and bring an entirely different sensibility.”
Mr. Tsujihara faces some succession issues of his own. Peter Roth, chief content officer for Warner Bros. Television, will turn 64 this year, according to public records. (The studio declined to provide his age.) Mr. Roth, who has deep relationships with TV producers like J.J. Abrams and stars like Ellen DeGeneres, is viewed by the industry as nearly irreplaceable. On the movie side, it is lost on no one that Sue Kroll, 53, president of worldwide marketing and international distribution, would like greater responsibilities.
“If the company is going to grow he’s eventually going to need a chief operating officer,” said Mr. Daly, the former chairman.
Mr. Tsujihara’s early track record suggests that he will figure these things out. So far, his decisiveness and evenhanded approach have earned him far more devotees than detractors.
“I don’t need to blow smoke,” said Chuck Lorre, the Warner-based creator of “Two and a Half Men” and “The Big Bang Theory.” “I trust Kevin not to make shortsighted decisions based on ego. He’s a very mature, sophisticated executive.”
The no-nonsense Mr. Lorre had one more compliment: “And he’s a nice fella.”