Garth Drabinsky Hands Over Financial Control of Livent

News   Garth Drabinsky Hands Over Financial Control of Livent
 
Garth H. Drabinsky, co-founder and guiding power behind the Toronto-based Livent Inc., has announced that he will turn over financial control of the major theatre-producing company to a management team controlled by former Disney and CAA executive Michael Ovitz, who also becomes a major stockholder in the company.

Garth H. Drabinsky, co-founder and guiding power behind the Toronto-based Livent Inc., has announced that he will turn over financial control of the major theatre-producing company to a management team controlled by former Disney and CAA executive Michael Ovitz, who also becomes a major stockholder in the company.

Drabinsky, the movie-theatre entrepreneur who switched to live theatre, was responsible for producing Ragtime, Show Boat, Kiss of the Spider Woman, Barrymore and Candide and building the Ford Center for the Performing Arts on New York's 42nd Street, among other theatres in Canada and the U.S.

But faced with a $44 million (Canadian) net income loss for 1997, according to a statement from Livent, Drabinsky agreed April 13 to surrender his titles of CEO and Chairman to Roy Furman of the investment firm Furman Selz LLC. Drabinsky will take the title of vice chairman and chief creative director for the company. He will retain his seat on the board of directors.

Ovitz has agreed to give the company a $20 million (U.S.) cash infusion by purchasing 2.5 million shares of Livent at $8 a share. Ovitz will control 36 percent of the voting rights on the Livent board. He also gets the title of chairman of the executive committee. Ovitz' new role puts him in a position to compete directly with his former boss, Michael Eisner, at least through Disney Theatricals. Disney's New York flagship, the New Amsterdam Theatre, is directly across 42nd Street from Livent's U.S. flagship, the Ford Center for the Performing Arts.

Another former Disney executive, Ovitz protege David Maisel, gets the title President of Livent, replacing Myron Gottlieb, who becomes executive vice president, Canadian adminstration. Livent spokesperson Eleanor Goldhar said Drabinsky sought out Ovitz' help, and is "thrilled" with the changes. "One of the reasons Garth is so excited about the change is that it will free him to things he does best: producing and marketing our product. Now he'll really be able to focus on those things while other people focus on the management and financial side of the business."

Despite excellent reviews and a long run, Livent's Show Boat closed without making a huge profit. Livent's expensive Candide revival was a flop in 1997, and Ragtime, while gathering some of the best notices of any Livent production, and considered a front-runner for major theatre awards, has not been selling out consistently.

In recent weeks, the company has announced details of plans to produce the new musicals Parade, Fosse, The Seussical and The Sweet Smell of Success, and April 10 announced plans to revise and revive Rodgers & Hart's Pal Joey. Goldhar told Playbill On-Line that the management changes will have no effect on those projects: all will go ahead as planned.

In a written statement, Livent's new chairman and CEO Furman wrote, "Livent now has the structure and combination of talents and expertise to provide -- even more successfully -- a stimulating environment for the creative community, while we also capitalize on the explosive growth in demand for live theatre in the U.S. and international markets.

Also in a written statement, Drabinsky said the company's losses were "short term" and that "the company was meeting its targets for 1998 and expected to report a return to profitability for the first quarter" of 1998.

Sought for a reaction, Stewart F. Lane, co-owner of the Palace Theatre and a producer on Fortune's Fools, The Goodbye Girl, Wait Until Dark, and La Cage Aux Folles, said of the new partnerships, "I think it's a brilliant idea. What could he [Drabinsky] do, wait until it was $4 a share? At $8 there might be something to salvage, and his name still carries clout. My only advice to Michael [Ovitz] is to surround himself with experienced producers and theatre owners. If he needs help, I'm available - but pricey!"

Reached Apr. 14, a spokesperson for the League of American Theatres and Producers had no official comment on the deal: "We have 500 members, so we don't usually comment on their business."

Reached Apr. 15, Chris Boneau, representing Disney Theatricals, also said it wouldn't be appropriate to comment.

Drabinsky presided over a massive multiplex cinema-building campaign at theatre-operator Cineplex-Odeon in the 1980s. He departed that company in 1989, retaining control of its Live Entertainment arm, which he built into Livent Ltd. His first coups came in 1990 when Livent renovated the old Pantages Theatre in Toronto and licensed Andrew Lloyd Webber's hit The Phantom of the Opera as its inaugural production. That Phantom is still running, having grossed $420 million (Canadian), according to Goldhar.

Drabinsky took Kander & Ebb's musical Kiss of the Spider Woman, which had been panned by The New York Times critic Frank Rich in a suburban NY workshop, revised it, added Chita Rivera as star, and opened it to raves in Toronto. The production then transferred to Broadway where it won the 1993 Tony Award as Best Musical.

A lavish (some 70 in the cast) revival of the Kern-Hammerstein-Ferber Show Boat, directed by Harold Prince, won Best Revival of a Musical in 1995, and is still touring. The production makes its London debut April 28, the same date the Ragtime original cast album is scheduled for release in the US by RCA Victor.

One of Drabinsky's innovations (for legitimate theatre at any rate) was building or renovating theatres and naming them after a corporate sponsor. He operates Ford Centers for the Performing Arts in Toronto, Vancouver and New York, and is planning to open another in Chicago (the former Oriental Theatre).

The Livent crown is the $12 million Ragtime, which debuted in Toronto in 1996 and opened in Los Angeles in April 1997 before its January 1998 NY bow, inaugurating the Ford Center on New York's refurbished 42nd Street. Built on the site of the old Lyric and Apollo theatres, the NY Ford Center cost Livent some $22.5 million.

Livent grossed a reported $387 million in 1997, up from $306 million in 1996.

-- By Robert Viagas
(c) Playbill On-Line

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