Ron Burkle's Hollywood Follies

By Maddaus, Gene | Variety, March 13, 2018 | Go to article overview

Ron Burkle's Hollywood Follies


Maddaus, Gene, Variety


LAST OCTOBER, RON BURKLE was in Brazil for the wedding of his friend Guy Oseary, with whom he co-founded Ashton Kutcher's tech fund. It was a star-studded affair, with Oseary's management clients Madonna and U2 in attendance. Burkle was seated at a table with a group of women when the conversation turned to Amazon Studios.

Roy Price had been forced to resign the week before under a cloud of sexual misconduct allegations, and the company had let it be known that it was looking for a female replacement. Some at the table saw it as a sign of real progress, but others noted that the new studio head would still be reporting to senior executives and the Amazon board - most of whom were men. That gave Burkle an idea.

What if, he thought, a company was actually run by women? That germ of an idea prompted him to make a bid for the beleaguered Weinstein Co. - which was imploding due to Harvey Weinstein's sex scandal - and install a female-led board. It was viewed by some in the industry as an unorthodox and controversial gambit coming from a man whose dating habits have long been tabloid fodder. "He's the one who's still going to be pulling the strings," says one top studio executive. "Who's he kidding?"

Burkle's attempt to buy the Weinstein Co. almost came together. But after a wild negotiation that seesawed between success and failure several times, the deal finally collapsed last week in the eleventh hour.

For Burkle, it was only the latest Hollywood foray to end badly. The billionaire entrepreneur, who built his fortune in the supermarket business before turning to private equity, has for the past two decades invested heavily in an array of entertainment ventures, generally coming out battered in the end.

He hooked his ladder to some high-profile Hollywood figures, including Weinstein, Ryan Kavanaugh and Michael Ovitz, who in time each fell from grace.

"I think Burkle was better off staying with the industries he knew," says Gene Del Vecchio, a professor at USC's Marshall School of Business and the author of "Creating Blockbusters." "Hollywood is extremely visible. You like to be able to see the movies you helped fund on the screen. You like to wine and dine with celebrities, and that's all extremely enticing. But it's a place where you lose money if you have to rely on other people's competence."

Burkle is known as a shrewd investor, and even in cases that ended in rancor and recrimination, he managed to turn a profit. In 2011, he supplied a reported $200 million investment in Kavanaugh's Relativity Media, which was then desperately in need of funds to release the film "Immortals."

Burkle's Yucaipa Cos. was in a strong negotiating position, and secured its investment with significant collateral. Kavanaugh publicly inflated Burkle's involvement in the company, sources tell Variety, and Burkle was out of the deal by 2013. When Relativity went bankrupt two years later, Burkle was one of the few investors who did not lose money.

Burkle also was a major investor in Al Gore's youth-oriented news channel, Current TV, which never attained the viewership to take off. The channel sold to Al Jazeera in 2013 for $500 million and was shut down.

Among the bitterest Hollywood ventures was Burkle's ill-fated investment with Ovitz. The money man sunk $33 million into two websites, CheckOut.com and TalkCity.com, both of which tanked. The deal ruined their relationship, and in 2005, Burkle sued Ovitz for fraud.

"Every day I wake up, knowing I'm still Ron Burkle, not Michael Ovitz, and every day Michael Ovitz wakes up knowing he's still Michael Ovitz," he said in a statement at the time.

In 2013, he helped launch Three Lions Entertainment, which aimed to create branded TV specials. The company was sued the following year for allegedly failing to pay CBS $2.45 million, and has since shut down.

Then, of course, there was Weinstein. In 2010, Burkle teamed up with the high-flying movie mogul on a bid to buy back Harvey and Bob Weinstein's onetime studio Miramax Films. …

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