x Abu Dhabi, UAEMonday 22 January 2018

Only a banker would tell you that you should work for free

Hollywood resembles the Ottoman empire in its final century or two. Everyone knew it was on the way down but it continued to make a lot of people rich.

I'm in New York right now, and I just had lunch with an old friend of mine who somehow, despite richly deserving it, has not yet been fired by the investment bank where he works, in a division devoted to something called "structured finance".

"Structured finance" is the fun term they use when they don't want to say "mortgage backed securities" or "collateralised debt obligations". It just sounds better than those things, which, after all, didn't turn out so well. It's sort of like years ago, when a cigarette company came up with this slogan: "Try our cigarettes! Now with less throat irritation!"

The point, I suppose, was that customers would be so dazzled by the idea of "less throat irritation" that they would forget all about the fact that each cigarette still caused the same amount of cancer.

So "structured finance" is a reassuring phrase: it's finance, of course, but it's structured, and that sounds reasonable and dependable. Never mind the economic collapse of 2008 and the bank bailouts and crippling recession. This time it's different. This time it's structured.

The problem with bankers is that despite nearly ruining their own business, most of them still feel qualified - compelled, actually - to pronounce on everyone else's business.

For instance, I was telling my banker friend at lunch about a television series I worked on, and how great it was, and how disappointing it was that for whatever reason the network decided to cancel the series. He chewed thoughtfully, looked up from his salad, and then he said those words that no one ever wants to hear.

"You know what you should do?" he asked.

"No. What should I do?" I asked, hoping to convey in my tone my total lack of interest in what he thought I should do.

He ignored my tone. "Here's what you should do," he said. "You should just go to the actors and the writers involved and say, hey, let's all do this show for, like, nothing. We'll all just work for equity in the project. Like a start-up. Just be entrepreneurial."


"Yeah, just like do it, for like, no money up front, and put it up on the web or YouTube or whatever. And if it hits, you get a piece of the back end."

"I get a piece of the back end anyway," I said. "Plus fees up front."

"Fine. Just trying to be helpful."

I've heard this before. And not only from investment bankers who still have houses and jobs and cars thanks to taxpayer-supported bailouts, and who are not selling apples on the street thanks solely to some quick-thinking double-talkers in the Department of Treasury.

And part of me agrees with it. Part of me - the thinking, thoughtful, rational part of me - knows that the entertainment business is going through a major, unprecedented squeeze. As the value of television networks plummets, it's only natural that the fortresses of cash that the big studios have become in the past few years will crumble.

Hollywood right now is a lot like the Ottoman empire in its final century or two. Everyone knew it was on the way down. Everyone knew it couldn't last. Still, even in decline it made a lot of people rich.

I tried to explain all of this to my friend, but he was too busy declaiming on my lack of entrepreneurial zeal. "You know the problem with you guys out in Hollywood?" he demanded, fork stabbing the air. "You don't want to take real risks. You just want to keep your cushy little jobs."

This was rich, coming from a guy who works at a bank that makes untold sums by borrowing money from the government (ie, the taxpayer) at a ridiculously low interest rate, and then turns around and lends that same money to businesses and individuals (ie, the taxpayer) at a much, much higher rate. You don't need to go to Harvard to figure that out. A monkey could make money that way.

Should Hollywood cut costs? Yes. But, as I explained to my ruthless investment banker friend, I am one of those costs. I know the studios are going to figure this all out, but I hope they don't do it too soon. This inefficient, overpaid, under-managed and essentially irrational business is my rice bowl, after all. And, honestly, there are still a lot of opportunities in the entertainment business, a lot of shows, a lot of scripts I want to write, a lot of projects I care about. There's a future in entertainment.

But it's a structured future. With less throat irritation.

Even as I said it, I knew my friend wouldn't get the joke.


Rob Long is a writer and producer based in Hollywood