Bill Block, CEO of Miramax

David Stiepleman: Hi, everybody. Welcome back to It's Not Magic, our podcast from Sixth Street. We invite influential leaders to get to the core of how they're tackling complex tasks in their industry and the world. Today's guest has established himself as someone who gets things done in the film industry. He has an eye for determining a storyline's potential for success, but he'll be the first to tell you that the real story lies within the numbers.

Bill Block: As I look at the A in my office is right over the AMC, and I look down there, people going, why are you going to a movie theater? You're going for certain parts of the body to be hit. These aren't brain shots. You're going in on a Friday at five o'clock after a tough week. You want to be scared shitless. You want to be romantically moved. You want to laugh out loud. You want to have an emotional, you know, heartfelt crying experience. And you got to know, I believe, too, really what you're targeting emotionally, and that that delivers enough at a level enough, big enough, you're going to get out the house to see it.

David Stiepleman: That's Bill Block, Chief Executive Officer of Miramax, one of the most active and robust independent film and television studios. Bill began his career as a talent agent, helping high profile actors to capitalize on their careers, and then found his rhythm producing and financing films. My guess is you've probably seen at least one movie that Bill has produced. His portfolio is extensive, including films like The Blair Witch Project, Halloween and Requiem for a Dream. In 2017, Bill was appointed CEO of Miramax, where he was tasked with spearheading a complete production reboot, what was a primarily library-based company, turning it into a film and television production business. Bill will walk us through how he was able to transform the business and discuss the value of thoughtful capital in a creative industry. Producing a box office hit requires some risk and a lot of collaboration, but it's not magic.

David Stiepleman: I actually want to start situating Miramax in the firmament. What do you guys do?

Bill Block: We finance movies and television shows. We're not a distributor. So, it's a library. All the 600 or 700 titles of it. And that's really what do we do. We distribute those titles, and they have such a long life, well, it's kind of unprecedented. Probably $6 billion to $7 billion was spent in P&A, you know, cumulatively on all of them.

David Stiepleman: Define P&A.

Bill Block: Prints and advertising, media buying. So, the awareness of the titles goes on decades later. It's distributing a library and then financing and producing new content.

David Stiepleman: And you came to Miramax when it was acquired about six, seven years ago, something like that, right?

Bill Block: Correct. Colony, when Disney put it up for sale.

David Stiepleman: And the sort of thesis at that point was, okay, we're back. We're going to make movies again. There's a lot in that verb make. And as an outsider, obviously, we all watch movies and TV. We all like think that we're experts. And then you think about… How does this actually get done? You start to talk to people in the industry, it's very complicated. There's a lot of people kind of in the ecosystem. So maybe just drill down a little bit more on like, where are you in the ecosystem and what are you doing, and how are you, how are you bringing people together? When you say finance, I mean, you're doing a lot more than providing capital.

Bill Block: That's the final decision. To finance or not. We're not a distributor, but yes, it is putting together the script, the talent, the package, the budget, the schedule, and then making the decision to go or not go right on it and to source that.

David Stiepleman: What are you doing on a given day, like, or a given week?

Bill Block: It’s Sourcing, it's chasing, it’s discerning, it's reading, it's seeing to. I was a student of Mickey Drexler's, you know, at the Gap. He always went shopping. I always go to the movies still; I go every week. And that's the laboratory. And I always find not many people here do that because we've all read the script.

David Stiepleman: Let's back up. Were you always… You're describing to me… I'm hearing you're kind of a movie nut. You're kind of a TV nut. You love this stuff. Have you always been that way? Were you that way as a kid?

Bill Block: Yes. I've been reading Variety since I was honestly 10 or 11.

David Stiepleman: Wow. How did that happen?

Bill Block: The newsstands of New York.

David Stiepleman: So, you grew up in the city. And what was that like? Tell me about that. Why were you attracted to reading Variety at the newsstand as opposed to something else?

Bill Block: Probably the same reason a lot of people run, you know, in the business, not the happiest home, getting out of it and you know, finding a certain solace, you know, and escape, you know, in movies.

David Stiepleman: Where did you go to watch the movies? What do you remember?

Bill Block: I mean, that was the heyday of art house cinema. So, Theater 80 of St. Mark's, Thalia, The Elgin, I think I saw maybe literally a thousand movies between eight and 18.

David Stiepleman: What attracted you? Was it anything, or did you have themes? Obviously, they probably evolve between, between eight and 18.

Bill Block: But you know, the whole rise of, European Cinema – Truffaut, Godard, Fellini, and then the ability to see the Howard Hawkeses, the Lubitsches, the history of it on the big screen at those theaters at the time. It was a big technological shift then too, that I experienced. You had true barriers to entry to get into this. You had to have a sound stage. You had to have significant recording equipment to expertise. And then the Bolex, the Cannon Scopic, certain smaller cameras, CBS actually developed one for the Vietnam War that married sound and film, so they could shoot the war and cover it too. That led to the Easy Riders, and that was the breakthrough for my generation or people like myself say, oh, it's like, you know, the iPhone today, if I got hold of this, I could do it.

David Stiepleman: I wish this were a film podcast. I want to pursue a bunch of different lines that I want to talk about Ernst Lubitsch and talk about. But we're not going to do that because, because I'm not an expert., but I do want to talk about… So you’re 18, you, you went to Columbia – uptown. What did you want to do? Like, how did you see you, did you see yourself like pursuing a passion in film in your life, or you were like, okay, that's great, but I'm going to go be whatever.

Bill Block: No, no. I always wanted to get out here as fast as I could. And, you know, parents who wanted me to go to Goldman Sachs, and that's what I was trained for. And they sacrificed. And I, you know, went to great schools and, you know, my father ultimately said, okay, you know, go do it. I hitchhiked out here at first, and then came back and got a car and loaded up, got a job at the Hollywood Reporter. You know, then you had to be a real touch typist.

David Stiepleman: So, you, you started off like, on the journalism side?

Bill Block: No, secretary.

David Stiepleman: Okay.

Bill Block: Secretary.

David Stiepleman: Got it.

Bill Block:Yeah. That's how you start.

David Stiepleman: Got it.

Bill Block: Secretary to an agent. It was always about getting out here, getting into the business of this.

Bill Block: This is the Wall Street. You can't do it in New York.

David Stiepleman: Yeah, exactly. Let's talk about the sort of, as we progress through this, like, do you still need to be here? And I assume you do.

Bill Block: Not now. I mean, you have soap operas, you have the whole advertising business. And you have a lot of comedy, and you have the news in New York, which are major, the whole advertising world there. You know, and a lot of network broadcast television too, but the film business and television, the production business was out here.

David Stiepleman: Got it. Okay. So whatever information you could find about Bill Block on the internet: You started as an agent, you became a legendary agent. What does that mean? What's that evolution? Do you quibble with that characterization?

Bill Block: Yeah. Yeah. I was a super-agent.

David Stiepleman: Sorry. No, sorry. I don't know the hierarchy.

Bill Block: Yeah. You know, at the time there were supermodels. Super agents is one of the best ways to learn and see. Because it really does come down to, for, I think, in any business, to being involved with people smarter than you. Working with, you know, significant talents that maybe know more than you or do know more than you, and to operate effectively and get things done for them, and with them.

David Stiepleman: How did you get smart on that, Bill? I mean, like, you're like, I'm some movie star. I'm sitting with you and I'm like, they're offering me this. Should I do it? That judgment requires you to know the business, have a sense of what my trajectory is going to be investing is kind of selecting among alternatives, what the alternatives are. Like how did you get smart on all that? How are you doing that like, day to day business?

Bill Block: You know, in a simplistic way… Just it's fundamentally about the filmmaker, the director involved. Money, distribution, marketing. Who's marketing? When are you coming out? What are you up against. Dollars are very important. Two, these are, you know, folks who like to and want to and have the opportunity after usually a long period of struggle that the public doesn't see to make a lot of money. And they know there's a window for it. So, you must, you know, get that. Or if you don't get the top dollar, somebody else will. I won't say who, I once signed a very, very significant star from a rival agency. She was making I don't know, $2 million a movie. I said, I guarantee I will make you $10 million, or I won't commission you. She signed with me. And I made her $12 to $15 million. But immediately upped her price, fought harder, said no. I always teach that. How you say no and when you say no is a skill.

David Stiepleman: It is a skill. Can you dig into that? Like, explain that? Like, that's a creation of scarcity thing. It's a creation of, you know, doing it the right way. Making people want to chase stuff. Like what are talking about?

Bill Block: Yeah. I used to … In the mail room… I have to be careful about this. We would watch De Palmer and Pacino Scarface. It's got five great negotiating scenes in it. But one of the first ones is F Murray. A Abraham offers street gangster Pacino, his first real job and also a murder. And he says, no, and everyone says you've got watch this. What the f*** are you talking about? I'm offering you a lot of money. And he has no power, but he turns it down. You kill him, and then he gets what he wants. So, the ability to say no, even at a certain point, Gino too, is reading a wonderful Taylor Sheridan interview too recently is held onto it. Stallone, who was adamant about directing Rocky 2. And so that is where you're aligned with the talent and certain talents who do have a vision and a self-confidence to that. The industry's always going to push back on. You push through.

David Stiepleman: It sounds like your negotiating school was in part the movies. Is that fair? Do you think about movies as like a model when you're thinking about what to do every day?

Bill Block: Some of them, yeah. Sometimes ask, you know, what would Steve McQueen do?

David Stiepleman: It depends, depends on the movie. The Great Escape doesn't end that well.

Bill Block: Yes.

David Stiepleman: Right.

Bill Block: It's usually the right thing.

David Stiepleman: Interesting. As a person or as an or as a character?

Bill Block: As a character. As a moral code.

David Stiepleman: As a moral code?

Bill Block: Yes, as a moral code. what would Bogey do? What would James Garfield do? What would William Holden do?

David Stiepleman: That's kind of incredible.

Bill Block: Or there's multiple selves. The fixed ego is another thing, you know, too. And that's something that plays into decision making too.

David Stiepleman: We talked a little bit about, and I do want to talk about this with you later, about centering yourself and meditation and, and being present. You said that that was really important as an agent. How did you, what was that all about?

Bill Block: Well, yeah, I don't even like the word meditation. Mindfulness. The mindfulness gym of sitting, and, you know, going through the four foundations of mindfulness.

David Stiepleman: When we started, you were talking about the 16-ring circus of making a movie, of making a work. And you were listening all the different constituencies. You're objecting to circus.

Bill Block: No, no. It is. And, you're getting to it, David. You're getting to just how many factors are out of your control? How many exogenous things can come up against you all the way up to the release. You know, too of, had a movie wiped out by a blizzard on the east coast, you know, on a mid-January opening.

David Stiepleman: Right. Can you talk about a project, by name or not, where it's like multiple companies, talent, all of that. What are you doing? Are you the center of the gravity? Are you the eye of the storm?

Bill Block: I mean, no one, but just you know, looking, I've always looked at it, you know, from a financial point of view. I would tell you that, probably the best training I had was at Bain Capital doing the LBO of live entertainment with them. So, but just it's a valuation point of view not a what does the production cost point of view. But a couple of fun examples such as The Blair Witch Project, which everybody passed on, you know, at that Sundance. And we just got it for such a low, good price, that there was very little risk to it. And then the rest is you know movie business history. I think it's still maybe the greatest return on investment for $1 or $2 million that, you know, resulted in several hundred million globally.

David Stiepleman: You've been talking about taste. What is taste?

Bill Block: It's having knowledge of what's great. You’ve got to know what's great first. Having experienced, seen, read, known what's excellent helps discern what’s currently in front of you. Is this excellent?

David Stiepleman: And is that the filter? Is this excellent? Because you do have this tension. I'm sorry to jump around, but you have this tension between I got to do something short term, I got to do something. I got to put up numbers or put up a success today. Because that attracts other business and obviously it makes money and whatever.

Bill Block: And you have distribution pressure. You've got to get it out. You've got to hit your target of four to six a year.

David Stiepleman: But if you go back to that 600, 700 title library, like, I mean, not everything in there is fantastic, but a lot of stuff is. It's pretty extraordinary. And that's a long-term testament to taste, which you don't always see in the next quarter or next two quarters or whatever. How are you balancing that?

Bill Block: I mean, first of all, it's him. I can't comment on him, but whatever, you know, the terrible character flaws of him. The results and taste were, you know, extraordinary too, in my own way. The Blair Witch Project or something fun, you know, too. I'll give you another example quickly. You know, District Nine, too, nobody wanted to do it.

David Stiepleman: So, what did you see? That's a great movie. What'd you see in that?

Bill Block: Numbers. And, you know, a terrific young talent. And Peter Jackson. See, a Peter Jackson behind it... And the numbers worked working out… There was no equity risk or debt. It could be made for international sales. International sales against bank debt. So, a risk-free proposition near Peter Jackson. Here's the financing.

David Stiepleman: Right, right, right.

Bill Block: Rest is… Yes.

David Stiepleman: I got it. But I guess maybe I'm barking up the wrong tree, that there's this moment where you're sitting, wherever you're sitting, or you're with your team or your team's bringing something to you, and someone's just like, this is the thing. This is great. And you're making a very subjective call. When I think about these businesses, they're very hard to underwrite or they're hard to, because you're backing somebody's taste. You're like, you're going to be a great picker of things that sometimes by necessity no one else is seeing. You keep saying like, everybody passing this, but I saw it or we saw it. And it's just numbers? Or is it not just numbers?

Bill Block: It’s not just numbers, but it’s a large part of it. It's largely the numbers that de-risk it. Sue Mengers once said, you know, I signed Barbara Streisand after Funny Girl. Meaning that I'm not in the new talent business. Now that I admire. That's what you're talking about. Taking a new talent and seeing something there who hasn't proven anything. I'm dealing with proven talents who've had significant successes, who know what they're doing. And have financial and commercial success behind them. A current opportunity that, you know, marries to their skillset. Now then that gets very competitive.

David Stiepleman: You're not in the seed business. You're in the growth business.

Bill Block: Yes. Yeah. No, I'm not in the seed business. Never have been. Not as an agent, nor as a studio executive.

David Stiepleman: Okay. So, then you look at the numbers, you've got some people who know what they're doing, you're putting this all together and still it could go sideways. Give an example.

Bill Block: Well, then that's where you come back to the valuation. Bill, it’s going to cost $50 million but it's not the definition of what it's worth. What's the international market going to give you in presales? What's the domestic market maybe going to look at as an advance against pay or home entertainment at the time. And then what's your tax credit? And then you put in follow on equity, and after that, you add all that up. And that is, you got to back your budget into that. And that's the exercise that we do here. And then it's a runway model. You push it down a runway, you go into pre-production, and you see can all these components come together to hit strike price? You have a bond company that's guaranteeing the delivery too because there's bank debt involved. The convergence of all that in pre-production equals liftoff or abandonment.

David Stiepleman: Got it. A guy in your seat 20 years ago, would they have been talking about the business in this way? I suspect not. And I want to talk about why.

Bill Block: I always have. Because I was doing this 20 years ago. When I did it at Artisan, I did it at Bain. Do you know that was 1998-99, they ran, they were terrific. We ran the first film regression model. It took 12 hours with whatever the microchip was at that time. So it was, the skies were terrific to adjust everything. And it came out, Bill makes $15 million thrillers.

David Stiepleman: That was the answer. That was the answer. That was the answer. That's pretty funny. There's a lot of capitalists come into the space in the last however many years. Institutional capital.

Bill Block: I've seen it all.

David Stiepleman: You've seen it all.

Bill Block: That capital, Japanese capital, German capital. We've never quite gotten the Silicon Valley capital. Been too smart.

David Stiepleman: Really? I thought there's a lot more tech money into the space.

Bill Block: Oh, but in a socially conscious way. But no, other than Amazon and Bezos buying the MGM library, no. No Apple. They're all, cleverly, incorrectly figured out somewhat what I'm doing too. Don't need to be a distributor, don't need to buy library. I'll go right to Endeavor or UTA or CA a myself.

David Stiepleman: Do different types of capital, how they change the way you think about the business or the way the businesses overall run the industry?

Bill Block: You hit something. I mean, the proliferation of platforms and content, the time, you know, there's leisure time studies. So, you and I, how much leisure time do you have?

David Stiepleman: Right.

Bill Block: Got wife and kids. You're lucky to get out to a restaurant. You know, on Saturday. So, from 15 where, you know, a teenager has nothing to besides do their homework, depending, you know, they may have 10, 15, 20 hours of true leisure time. And that compresses as you advance in life. Who are you targeting and you're filling that. TikTok takes up two hours of people's Saturday night media consumption. How deep is your Netflix queue? That's why this strike is going to go on, I believe for a while. The witers’ strike. You saw the nineties pre-internet distribution, complete barriers to entries, three networks, a few distributors to now everybody's a distributor. Everybody's a content creator. And the next step is generative AI. Where everybody...

David Stiepleman: Okay, you're going there. Let's go there. There's a lot to talk about in what you just said. First of all, let's talk about who you're competing against. So, you were talking about on Saturday night, people go out to the movies. This is earlier in the conversation. And you're like, you know, I’ve got to figure out when I want to release. Because that could kill me. Now you're competing against absolutely everything.

Bill Block: Yeah. A game launch, a sports launch, a TikTok, you know, the social media.

David Stiepleman: You thinking about what's going to work? I mean, that has to have fundamentally changed over the last 10 years.

Bill Block: It does. And, it has, tightened my target to I'm looking at you below the neck. So, as I look at the A in my office is right over the AMC, and I looked down there, people going, why are you going to a movie theater? You're going for certain parts of the body to be hit. These aren't brain shots. You're going in on a Friday at five o'clock after a tough week. You want to be scared shitless. You want to be romantically moved. You want to laugh out loud. You want to have an emotional, you know, heartfelt crying experience. And you got to know, I believe too, really what you're targeting emotionally, and that that delivers enough at a level enough, big enough, you're going to get out of the house to see it.

David Stiepleman: I see. So, the other things that are competing for attention. You're in the, I have got to try and capture share of the attention business now.

Bill Block: I've got to compete. I can't compete with Marvel. I cannot compete on the superhero level, or on special effects level. Right. So, I have to compete on the emotional level.

David Stiepleman: Got it. And how much of that is, is a function of, if you look at our kids' generation, they're looking at things in bite sizes. The attention span is a lot lower, blah, blah, all that stuff that you read in the popular press. Is that right? Is that how you're thinking about what your competence?

Bill Block: You think about that too much, David, too much about your target audience. So, you're fortunate to get, you know, certainly males under 25. Very little interest in going, so it's males over 35, females over 35 too. And that's where the bulk of the exhibition audience is. Except for the occasional something too.

David Stiepleman: The sort of big event that everybody feels like they have. Are you seeing difference differences from market to market globally? Like the XUS big markets? Are they different in terms of…

Bill Block: Yeah, I'm an internationalist. The Middle East is exploding in a demographic and terrific way. I call it the new China. And there's really exhibition is coming on there. The demand is coming on there, and it's local. But yeah, if you go to Shinjuku, and, if you're outside a, it used to be a Subway in Moscow, you'd see, you know, DVDs of your current release for $2

David Stiepleman: Right. We've been talking about, you know, large exhibitions, but streaming is a very different thing.

Bill Block: The dramatic quality and a lot of the great writers have moved there too, which is so satisfying about it. So that shift in excellence has moved to, and the great writing, and producing has moved to the platforms in many ways, these terrific series.

David Stiepleman: Is that a function of the distribution mechanism?

Bill Block: It's an expansion of storytelling. So, narratives have changed. Writers have changed. So, the kind of episode ending, the old the television model is now a continuous story over 10 or 12 hours. It takes some terrific, deep writing.

David Stiepleman: No doubt. Rewind. You got here sever years ago or so. Your first year, what were you trying to… Obviously Miramax a storied name, the big library, but you were really trying to build something new on it or next to it or whatever, as part of it. What was that like? What were your first 90 days, 180 days? What were you trying to do?

Bill Block: Well you know, it was mostly cleanup. Had a legacy securitization that was sucking all the cash flow out of the company. That was hedge fund modeled.

David Stiepleman: So that was the financing that was backed by the cash flow on the actual…

Bill Block: Yeah. So, Colony was securitizing, library was dividending, you know, correctly to themselves, so that needed to be replaced with a senior facility that could be used for production. Massive overhead reduction that had to take place. We went from 150 to 50. Getting out of distribution. Coming clear to the town that we're a pure financier. And restating the proposition to the talent. This is the home for getting it done. Certainty. And then distribution optionality.

David Stiepleman: How do you get that out there to the talent? Like, what are you doing?

Bill Block: You have to go see the Brians, the Richards, the Jeremys, and make a case to their agents. Why us? Because top talents have six opportunities. So, make that to them.

David Stiepleman: What about culture internally? Like, how do you think about that? The thing you hear all the time is, you know, culture eats strategy for breakfast. Is that right in your business? And how are you setting culture and what are you doing? Because if you look at it from the outside, culture of this town is that it seems tough. Is that right?

Bill Block: I hear it's small. I mean, we did for kicks come up with our corporate mission statement.

David Stiepleman: Just for kicks or for kicks.

Bill Block: Internally. It's not on a website or anything, but it's number one, Have fun. Have fun. Pain can be fun but embrace it. And number two is, get it done. You know? And number three is, make money. It's as simple as that. Have fun, but get it done. And then… Make some…

David Stiepleman: How do you reinforce getting it done? That's important. How do you reinforce that?

Bill Block: The deal making. Because the deal making can be prolonged. So, cut to it. Get to the bottom line. There's no clay court tennis here. It's serve and volley. Either, you know, come in within the first few exchanges. No prolonged backends. Here it is. So, we redid that. We came up with best definitions, clean accounting, real participation statement, paying to as the alignment and trade off for price reduction. And financial certainty.

David Stiepleman: Got it. How often are you talking to the talent? When you're putting a project together are you giving them helpful suggestions? Are you trying to get involved in the creative process do you draw a line and say, you guys go do what you want to do? Or is there a middle ground? How do you think about that?

Bill Block: I would say it's 80% talent within the economic moat or box that we build. And then the other 10 to 15% is marketing feedback, which I try to provide for them because I've always been weary, David, of what I call a subjective executive. I know what works. I know what you want to see. I have the secret sauce. And that, by the way, executives perpetuate that halo around themselves to justify a lot of things. I'm not a believer. It’s 90% the artist that you're in business with. And one thing we do here is all writer directors. All writer directors.

David Stiepleman: Tell me what that means.

Bill Block: One voice. We don't develop a script and hire a director.

David Stiepleman: I see.

Bill Block: Which is the studio model.

David Stiepleman: If that gets around, people have to be very excited to work.

Bill Block: Right. I'm a star executive. I know you're paying me a lot of money. Just as you said, I know how to pick them. That's the whole thing, the mystique. So, I'm going to develop a script and, and I'm going to hire you to direct it, and you're going to come in and tell me what I want to hear to get the job. And then you're going to listen to me because I am a movie genius. And tell you exactly what it's going to take to win.

David Stiepleman: Recipe for disaster.

Bill Block: Exactly. This is why you see, I believe, 80% failure. I'd rather go down with a single voice, a writer director. And I've gone up far and away, you know about 90% of the time with them. So, the job is to back them, package them, take that vision, all the way.

David Stiepleman: You mentioned AI before. Part of the writer's strike we also refer to that is, you know, drawing lines around what AI should be used for, what should not be used for. How do you think about that?

Bill Block: I haven't looked at what the issues of what it should or shouldn't be used for, so I don't know. But you would use it in any positive way you could, particularly for storyboarding, previsualizing. Rex Woodbury or somebody smarter than myself said that this is going to be, is going to do to production costs, what the internet did to distribution. You take Elemental, which cost maybe 200 million I think in five years, you're doing that movie for 15 or 20.

David Stiepleman: How does that change the sort of overall structure of the town?

Bill Block: It again, allows for more voices to come in and do it. They're still going to need money. They're going to need marketing in a newer and smarter way. To break through and be able to be found. How does one become a star? It is through marketing.

David Stiepleman: That's interesting. I mean, the talent pipelines are very disintermediated. Now you're finding people on TikTok and YouTube and they're making I don't know how many stories. What has that taught you about what that kind of talent onscreen talent was.

Bill Block: It's the narrative capability. And that's a tougher form to crack. Commercial directors came and went for the most part, doing a 30 or 60 second spot that looks terrific. That takes two days to light beautifully. Is not the same as shooting 120-page script, you know, in 40 days at all. So maybe my own confirmation by a certain way, but the short form is very different. Powerful, advertising driven than what you're paying for in long form content.

David Stiepleman: We were just talking about you, vis-a-vis the writer director model and sort of the benefits of that. Pull the camera out and people who are providing capital into the business, who also think that they can be helpful. And sometimes that's sold as kind of like a virtue of thoughtful capital. We can be helpful. Not just money, but intellectual capital. Is that useful? Or is that like, you don't know what you're doing.

Bill Block: No, I've experienced that. Thoughtful, helpful capital.

David Stiepleman: We like to think we are that, but I'm wondering if it's true in the creative business.

Bill Block: Well, it's totally true to me, but I've worked with private equity too, so it's a different experience. I think so. I go back to Bain, or our current owners are completely analytical. Bain Capital. It is, what's the regression model? What's the forecast? What's your downside? And like that for the green light. What's your deals, do you know? How much of the backend are you giving away to back it in?

David Stiepleman: Thoughtful capital can actually be useful in a creative business. We're not just all tourists.

Bill Block: Oh God, yeah. Because that's the process of a green light there. Once again, nobody should be kidded. Anybody who's in this seat and is going to be deploying hundreds of millions of dollars is reporting up to a board that is looking at you. And you've got to bake that in well in advance too. And let the talent know that too. It's part of the runway we're talking about. You don't have a green light yet, right? I’ve got to go to the board. We have got to do this and that. I'm a big believer in marketing and positioning studies. Is there demand out there? I could tell you some stories about that too. Okay. Here's a good one. Here's a quick one that just came to mind. So, after the Blair Witch Project, I'm just a genius. I mean, really, the guys at Bain Capital looked at me like, whoa.

Bill Block: And so filled with myself, I think, okay, I'm going to now make great horror. Horror is in. I'm going to make horror movies. And I go back to one of my old favorites. Do you know Willard, a rat movie? I get the rights, I develop it, and now whatever I say is going to get done. But I checked myself. I sent it to a top marketer at the time. Joseph Health got market cast who did research. He came back with his findings and said, you can't make this movie Bill. And I said, what? I want to make this movie. You can't make it. People's primordial fear of rats, they will not go. And I'm telling you, this statistical. This is 80, 90%. And I go with it. I say, okay. I put it in turnaround new line, picks it up, makes it, and loses 25 million. So that was an early lesson. Shut up. Listen to the demand analysis. And, you know, I've been relentless about ascertaining that always since before green lighting too.

David Stiepleman: Animate the rats. That's my takeaway. Ratatouille. Animate the rats.

Bill Block: That's by the way, a better way.

David Stiepleman: I guess so. I still cringe a little bit seeing the rat in the kitchen. Yeah. I still cringe a little bit. Memorabilia – let’s talk about screen bid.com.

Bill Block: We have a joint venture with Heritage and the perfect partner and platform to really open up this whole world. Essentialism, it's fascinating. The essence we attribute to something a famous or a great person has been involved with. You know, John F. Kennedy's tape measure sold for $50,000.

David Stiepleman: Wow.

Bill Block: It was his, he really used it. So, the providence of hero worn items too. It's a whole new world now too, especially television, but it has to be authentic too, and it's Jennifer Anderson's dress that she actually wore. Do you know, on Friends. And there's only one of them.

David Stiepleman: Do you have a collection?

Bill Block: No. So that platform is to sell them. I collect art, but it's the same thing.

David Stiepleman: You know, I feel like I came here from the finance world, and I happen to be the romantic in this competition. And you're like the stone-cold numbers guy. It's hilarious.

Bill Block: Why did we attribute essence to, you know, here this table, whatever it is, this prop, if somebody significant was involved with it.

David Stiepleman: Describe sort of the essence of the business in 15 years. What do you think it's going to be like?

Bill Block: 15 years from now? I've got to tell you, I'm so fortunate to have kind of this front row seat, on where it's going. This may be me what my historical thesis has always been. Talent, not me. I see that getting even more significant. I've said this to our partners. Consider investing directly as, Mayor and Staggs have done directly in significant talents. The Reese Witherspoon Company, et cetera, too. I believe that is where it is going. As distribution gets owned by the platforms to studios ultimately sell and conflate together here too. You want to, for the next five to 15 years, be an equity partner of X major director, X major star who's going to consistently deliver content. And historically, the Castle Rocks or even, you know, DeVito had a great company, Mel Gibbs, and had a great company too, where they worked for themselves, worked themselves, delivered their own product, brought in others. I see that from an investment point of view as the future.

David Stiepleman: Those companies will be making things across the spectrum in terms of content.

Bill Block: Correct. Directors cross the spectrum too. And you want to finance, own, be in business, you know, with them. Jerry Cardinal's Redbird, I think very cleverly in business, or Ben Affleck. And to sit down with Ben Affleck now is to be talking to frankly a formidably smart businessman. As well as a great artist.

David Stiepleman: Yeah. Other technologies you see coming? People talk about VR and sports, you can go beyond the field, or you can be sitting in, you know, front row seats or whatever. Is there something similar in the movie business?

Bill Block: If you see in the last 20 minutes of the Vision Pro demonstration to the Apple goggles, I see it as a window. I see it as a licensing opportunity. So that where you're going to take, one of our, you know… From Dusk till Dawn and IMAX it inside. Add a fee, add a window day and date, or within a certain first month exclusively to Vision Pro, perhaps. I see them as licensing opportunities.

David Stiepleman: Got it. So now I imagine you kind of going down to the AMC and seeing what's out there. My grandfather was in retail, and he always used to like, walk around the department stores and like take notes on whatever he was taking notes on.

Bill Block: I talk to people too.

David Stiepleman: I bet you do. But setting that aside, movie night at the Blockhouse, like, what are you putting on?

Bill Block: Oh, I'm just… First of all, movie night at the Blockhouse? My kids have zero interest in that. I can’t get them to watch that.

David Stiepleman: Why?

Bill Block: They don't watch an old movie. It's in black and white. Dad, are you nuts? Yeah, and, it's from the sixties. How old are you? So, it’s a little scary. I've watched this over 50 years, and it has evolved like all art forms. Who reads novels?

David Stiepleman: Do you read novels? What are you reading? Anything good?

Bill Block: Yeah. I tell you what, I've done some old high school reading, and I'd say it's the one novel he wrote and it's throw the mic down. There never was anything to write again after it. And he was always pursued. Why didn't you write another novel?

David Stiepleman: That’s Salinger you're talking about?

Bill Block: Talking about Ralph Ellison’s An Invisible Man. Oh, Jesus Christ, man. To reread it. It is surrealistic. That's why it can't be made into a movie and shouldn't ever be.

David Stiepleman:Oh, interesting.

Bill Block: It's complete social surrealism. That is bizarre. Frightening. And just riveting too.

David Stiepleman: I got to go back and read that.

Bill Block: That and Virginia Woolf, do you know, because that that stream of consciousness it went back to again. Do you know Mrs. Dalloway? You can go anywhere in that book.

David Stiepleman: That was a good movie.

Bill Block: Yes. Chris Miller, Chip War.

David Stiepleman: Wow. Yeah. Excellent call back to another guest on the podcast. We appreciate that.

Bill Block: That was a great one. It was good.

David Stiepleman: Anyway, thank you. This has been great.

Bill Block: I hope so.

David Stiepleman: I've learned a lot.

Bill Block: I hope so.

David Stiepleman: And we really appreciate it.

Bill Block: I appreciate you. Alright. Thank you, David.

David Stiepleman: That was Bill Block, CEO of Miramax, and we spoke with him at his offices in Hollywood on July 6th, 2023. Finding the middle ground between financial and creative processes is something I think Bill accomplishes really well. He's a numbers guy at heart, but he does a great job at uniting functions within the business' ecosystem towards a shared goal. Instead of inserting himself in every part of the creative process, Bill takes the approach of encouraging others with his get it done mentality and allowing his creative teams to do what they do best, craft compelling stories that audiences will enjoy. Above all else, it's clear that Bill has a great appreciation for the art of film and its ability to have an immense impact on our lives. Thanks for taking the time, Bill. I learned a lot from our conversation. I hope you all did too. Thanks for listening.

David Stiepleman: You've been listening to It's Not Magic, a Sixth Street podcast. You can read more about our guests on sixthstreet.com and subscribe wherever you get your podcasts. If you enjoyed today's podcast, please share it, and follow us @SixthStreetNews on Twitter for more news on the show and our firm. Thanks to Sixth Street's production team, Patrick Clifford and Ritvi Shah for putting this together, with sound engineering by Stephen Colon. Our theme song is, It's Not Magic, an original creation by Patrick Dyer Wolfe. Once again, I'm David Stiepleman. Thanks for listening.

David Stiepleman: The views expressed in this podcast are not necessarily those of Sixth Street and Sixth Street is not providing any investing, financial, economic, legal, accounting, or tax advice or recommendations in this podcast. Please see additional disclosures on our website for more details.