Tinseltown's Busiest Father And Son ActBy
It was not the kind of job a recent college graduate normally gets. But then, John Davis wasn't a normal college graduate. The son of billionaire Marvin Davis had just wrapped up his BA in history at Bowdoin College and was ready to work. So his father pulled him right into the middle of negotiations to buy the Oakland A's baseball team. Davis, then all of 22, even flew to Chicago for one-on-one meetings with Charles O. Finley, the team's flamboyant owner.
As with many other Marvin Davis forays, no deal materialized. But the adventure served to hook John Davis on dealmaking, and a father-son team was born. While 66-year-old Marvin still makes most of the decisions at Davis Cos., John, now 37, is pulling more of the strings. An odd couple outwardly--Marvin tips the scales at more than 300 pounds while John is fit--they seem to complement each other. "It's sort of his yin to my yang," says John. "I've got the Harvard MBA case-study outlook, and he has the great instincts of an entrepreneur."
Entrepreneur isn't a word that comes to most people's minds when they think of Marvin Davis these days. Rather than starting businesses, he spends most of his time chasing them. Since 1985, the Davises have mounted unsuccessful takeover bids for a number of America's best-known companies (table). As investors, they almost always walked away with a tidy sum when another, higher bidder bought the company. Marvin Davis "has danced around the altar more than anyone else in Hollywood," says Jeffrey B. Logsdon, entertainment analyst with Seidler Amdec in Los Angeles. "You have to be pretty skeptical about a guy who never seems to take the plunge."
Still, rumors persist that Marvin Davis will soon swing a major deal. The main reason is that last year he sold the famous Pebble Beach (Calif.) golf resort for nearly $1 billion. Early September's rumor mill had the Davises interested in Continental Airlines Inc. or NBC Inc. The network's parent, General Electric Co., insists NBC is not for sale. And the Davises have since backed off of Continental. But John Davis promises that they are willing to spend big. His father declined to be interviewed.
To keep busy, the older Davis has quietly begun drilling for oil in Texas and Louisiana. With longtime partner Myron Miller, he is also trying to line up investors to bid on hotels and commercial buildings. "Buying and selling gives Marvin a thrill," explains ex-partner Thomas J. Klutznick, who split with Davis in April to develop real estate on his own. "He's a player, and he likes people to know that."
HARD-WORKING. Davis and son operate from a swank two-floor suite in Los Angeles' Century City section. The board of Davis Cos., which meets surrounded by a floor-to-ceiling mural depicting the history of the Davis empire, includes John and Marvin as well as his younger son Gregg, 28. Gregg focuses mostly on the family's real estate, including their Sports Connection health club chain and the new, 70%-leased Water Garden complex in Santa Monica, Calif. John plays a bigger part, both in selecting takeover targets and in valuing them.
Bored by real estate and oil deals, John Davis is most comfortable in the entertainment arena. His Davis Entertainment Co., initially bankrolled by Marvin, owns three TV stations and produced seven movies last year. They are mostly low-brow fare such as Predator 2. This year, Davis Entertainment has six more movies in production. John recently won the movie rights to the best-selling novel The Firm, and he is working up a TV movie on the KGB. He's also venturing into sports programs, including a recent NFL season preview on ABC. "He works his butt off," says MGM Pathe Communications Co. Chairman Alan Ladd Jr., for whom John produced the coming thriller Shattered. "He's not one of those rich kids who just play with Dad's money."
Schmoozing at the posh Hillcrest Country Club, John Davis looks and acts nothing like his famous dad. He is extremely careful about what he eats, aware that his father gained much of his weight in his 30s. Preppy and buttoned-down, John mixes smoothly with Hollywood's young elite. Arnold Schwarzenegger and Maria Shriver are frequent guests at the Malibu home of John and his wife, Jordan.
Marvin is, well, different. Demanding and intense, he lets employees know just how he feels. "Marvin tends to flare up, and his first flare-up is always `Sue `em,' " says Sam Lusky, a public-relations man who worked for Davis in Denver. As owner of Twentieth Century-Fox Film Corp., executives say, he got a kick out of exercising somewhat dubious control over the creative process. It was Davis, for instance, who insisted on putting Sylvester Stallone in the woeful musical Rhinestone.
PLENTY OF CASH. Naturally, John Davis vows that his father's tough-guy image is off base. As for the widely held idea that Marvin loves to shop for companies but not to buy them, John Davis has a ready answer: "We're in the deal business, so we probably see 50 to 60 deals a year," he says. "The problem is that we've got a lot of money, so every time we take a look at something people assume we're ready to buy."
The relationship between Marvin and John Davis in many respects mirrors the one Marvin had with his own father, Jack. A onetime amateur boxer who came to New York from England with less than a dollar in his pocket, Jack Davis launched a hugely successful dress company. Later, when Marvin got a business degree from New York University, he persuaded Jack to bankroll him in the oil business. By 1952, Marvin Davis had moved his operation to Denver, and by the oil crisis of the early 1970s, he had become one of America's leading wildcatters.
With prices soaring, Davis sold most of his oil properties in 1981, bought the Fox studio, and moved his headquarters to Beverly Hills. Marvin went Hollywood in a hurry. His 25,000-square-foot Beverly Hills home, bought from singer Kenny Rogers for $20 million in 1984, has its own 50-seat movie theater and a state-of-the-art gymnasium. Along with his wife, Barbara, he is known for giving lavish parties, including one in September at which the Duchess of York, Sarah Ferguson, was the guest of honor.
John is similarly enamored of the Hollywood scene. After Bowdoin, he graduated from the Harvard business school, and jumped into the movie industry. When Marvin bought Fox, he installed John as head of production of low-budget films, later moving him up to production chief and onto the studio's board. When the elder Davis sold Fox to Rupert Murdoch, the sale agreement granted John rent-free use of one of the studio's green-and-white bungalows to launch his film company, Davis Entertainment.
A DUD. Today, his office is adorned with replicas of airplanes, testament to his current interest in transportation. It was at his urging that his father bid $3.2 billion for Northwest Airlines in 1989, only to lose to Al Checchi. Likewise, he was key in their aborted $5.4 billion bid for United Airlines Inc. 17 months later.
The Davises' most notable dud is Spectradyne Inc., the money-losing hotel-movie service John persuaded Marvin to buy for $635 million in 1989. Now, John is trying to reverse its fortunes: In a joint venture with Playboy, John recently helped design a monthly magazine for hotel guests. Meanwhile, the Davis clan is also working on a way to trim Spectradyne's $506 million debt.
As for bigger deals, John insists he and his dad are in no great hurry. "There's nothing wrong with letting our money gain interest," he says. Nice try, John, but your friends know you better than that. "Doing deals is fun for these guys," says Bram Goldsmith, chairman of Beverly Hills-based City National Bank and Marvin's frequent golfing and gin rummy partner. "With this much money, they don't need to do anything for the rest of their lives. But the chase is exciting."
THE BIDS AND THE BUYS
1981 After selling oil properties, Marvin Davis buys Twentieth Century-Fox Film. Sells it four years later for gain of $325 million
1986 Offers to buy CBS; bid rejected as too low. Pays $136 million for Beverly Hills Hotel, sells it a year later for $200 million
1987 Bids for Resorts International and shows interest in Lorimar Telepictures. Both rebuff him
1988 Offers to buy Dallas Cowboys football team, but backs out after deeming asking price too high
1989 Bids for Northwest Airlines but loses. Launches takeover of United Airlines, drops bid when UAL rejects increased offer
1991 Having sold Pebble Beach golf resort the year before, he is rumored to seek a takeover of NBC or Continental Airlines
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