The first time I met Marvin Davis, the billionaire businessman who passed away last month at age 79, he still owned 20th Century Fox and I was an associate editor at Forbes magazine, based in Los Angeles. Like most of the financial press, I was fascinated by Mr. Davis, who had become enormously wealthy in oil and real estate before becoming a controversial figure in Hollywood.
Like every other reporter, I wanted to interview Mr. Davis, who preferred to avoid too much detailed scrutiny. He had a half-dozen public relations specialists across the country working to keep him out of the press.
After months of being rebuffed, I set a deadline. I was going to write my article without talking to him. Shortly afterward I got a call. Mr. Davis was willing to meet, but first he wanted an initial meeting. And if that went well, he would then schedule an on-the-record interview. I didn’t see much downside. At least I would get some face time. So I agreed and a date was set a few weeks later.
We met in his airplane hangar-sized office on the Fox lot in west Los Angeles. As soon as I was ushered in, Mr. Davis was on his feet greeting me with a big bear hug and presenting me with a gold pen with the Fox logo on it. His accent reminded me he was a native New Yorker, as he talked in big numbers, threw around big ideas and seemed to know an amazing number of big shots.
By the time we parted, I felt we had developed a kinship. Mr. Davis assured me we would be doing our real interview shortly. Of course, it was all a charade. As I was to learn later, he did the same thing with reporters from Fortune, BusinessWeek and other media outlets. The meet-and-greet, the mixed messages from an army of PR people, were all really just stalling techniques.
I couldn’t help but like him even though I was being played. While in life he was many things that he appeared to be-a dedicated family man, a person of great appetites (whether it was business, movies or deli food) and a lover of Hollywood lore-he remained secretive about his business activities, and for good reason.
He appeared at the time to have come to Hollywood as a white knight who would restore Fox to glory, but he was really lured to Hollywood as a real estate speculator. While Fox was faltering as a studio, it was loaded with assets acquired from the huge profits generated by “Star Wars” in the late 1970s. Those included real estate, movie theaters around the world, the Aspen and Pebble Beach resorts and much more.
secret partner
Although it wouldn’t be revealed until years later, Mr. Davis arrived with a secret partner to help with the financing and a secret agreement to sell most of the movie and TV operations to another press-shy billionaire, Kirk Kerkorian, who already owned Metro-Goldwyn-Mayer. The secret partner was later revealed to be Marc Rich, an oil and commodities trader, who put up half the money while allowing Mr. Davis to retain voting control over the studio.
Shortly after the purchase, Mr. Rich famously got in trouble with the U.S. government for doing business with countries such as Iran and Libya during an embargo. He went into exile in Switzerland. About 15 years later Mr. Rich would make headlines again when President Clinton, on his last day in office, pardoned him.
Mr. Davis and Mr. Rich actually put up little of their own money to buy Fox. Using partnerships and loans, they took possession and then immediately sold assets to pay off the loans.
Throughout his career, Mr. Davis showed an uncanny knack for selling at the top of the market, whether it was oil, Denver real estate or the Beverly Hills Hotel. He later would be famous as a “tire kicker” in business, meaning he considered a long list of deals from acquiring airlines to sports teams to Universal Studios, but only if he could get a bargain.
Mr. Davis later bought back Mr. Rich’s half interest in Fox from the U.S. government. He used the poor performance of the studio in that era and other factors to set a low valuation for the studio. Two years later he would turn around and sell the studio to Rupert Murdoch for an enormous profit. In other words, bad movies and failed TV shows made him richer.
It was classic Marvin Davis, using OPM (other people’s money). It is how he got rich in oil. He used to specialize in a deal in which for each well he drilled, investors put up the entire cost, while his company did the actual drilling and kept a significant ownership interest.
Mr. Davis once told me he liked the TV business much better than movies because it was more like the oil business. He could use OPM. The network put up a license fee that covered much of his costs, and the rest could usually be recouped in the after-market. Once a show was working, just as once a well was gushing, it was a predictable and very profitable business.
A year or so after the sale, Mr. Kerkorian had a change of heart. He bought United Artists instead, merging it with MGM, and no longer wanted Fox. By then, Mr. Davis had figured out that the studio could make him even richer, and he was greatly enjoying the lifestyle.
The stars he watched on-screen were now fighting for an invitation to one of his extravagant parties and wanted to be on the list for the Carousel Ball, one of the nation’s largest charity events, started by the Davis family to raise money for research into children’s diabetes, which afflicted their daughter Dana. Long held in Denver, the event later moved to L.A., and it continues to be one of the biggest fund-raising evenings in the universe. Mrs. Barbara Davis announced shortly after her husband’s death that the Carousel Ball, scheduled for Oct. 23 in Beverly Hills, will go on as planned, in Mr. Davis’ memory.
Mr. Davis loved owning the studio and the clout it gave him in Hollywood. He even used those same connections to find new investors for his oil and other businesses. He moved his family to one of the biggest homes in L.A. and became a regular at Spago, usually dining with celebrity friends.
I once asked Mr. Davis why, if he and his family loved owning Fox, he had sold. He told me he had no choice: He was a trader. And if someone offered him more than he thought a certain property was worth, he had to do the deal. After all, for Mr. Davis, there was always another deal, right up until the end.