COMPANY TOWN : Some Entrepreneurs Say Smaller Is Better

At a time when heavyweight owners like Ted Turner and former Creative Artists Agency partners Michael Ovitz and Ron Meyer are selling the successful businesses they created to join mega-conglomerates, it’s time to hear it for the entrepreneurs who are pioneering their own paths in the face of some pretty daunting competition.

DreamWorks SKG, formed exactly a year ago this week by ex-Walt Disney Studios Chairman Jeffrey Katzenberg, music mogul David Geffen and Oscar-winning director Steven Spielberg, is well into the throes of creating a small-scale, talent-driven studio of the future.

Two months ago, entertainment bigwig Barry Diller announced plans to take control of Silver King Communications with hopes of shaping a dozen home shopping stations into a new TV network.

And just this past Friday, Robert Crestani, the head of worldwide television at William Morris, announced he’d be leaving his position after 19 years with the company to partner with former Disney TV Chairman Richard Frank in a newly created programming venture with cable giant Comcast Corp.

Each of these new endeavors seems potentially very risky. And each faces uphill battles as the new order of the day begins to take shape. That is, the industry looks to be increasingly dominated by such deep-pocketed media giants as Time Warner-Turner, Disney-ABC, and the John Malones, Sumner Redstones and Rupert Murdochs of the world, which seem to dwarf these new kids on the block.

But the entrepreneurs see opportunity in the cracks. In fact, one can only assume that these compulsively driven personalities are merely egged on and seduced by such a formidable challenge.

These are all smart guys, each of whom has had ample opportunity to work for big established media companies. Instead, they’ve all chosen paths that allow them to be more in control of their own professional destiny.

Crestani, for one, had been courted over the years for a variety of key industry jobs, including most recently the top TV post at MCA Inc. And, in an industry wrought with instability and management upheaval, the 41-year-old agent had one of the most secure jobs in Hollywood. His power as the head of the TV department at William Morris was underscored by the fact that he was the youngest board member at one of the industry’s most powerful, old-line agencies.

When he told his colleagues last Thursday of his plans to leave and become president and part owner of C3 (Comcast Content & Communications)--a new endeavor formed to oversee the programming interests for Comcast--the news came as a major shock to most of them.

Here’s a guy who presumably woke up one day and asked himself, “Is that all there is?”

In an interview Monday, Crestani said that although he loved his job, “I knew that one day I was going to wake up and I would want to be more than an agent.”

“I felt now was the time to be an entrepreneur in this business. . . . Bigger is not necessarily better and there are many opportunities for creative people to be very successful and alternative to the big structures,” he said.

Crestani added that although he was a stockholder at William Morris, “having an equity stake [in one’s own media company] is the name of the game today. . . . I looked at what was happening in the global media business and wanted to be a big player in the world market.”

Last month, his partner and new boss, Frank, made a similar decision by accepting the chairmanship of C3 after having spent his entire professional life as a career executive at such well-established entertainment concerns as Walt Disney Co. and Paramount Pictures. When he resigned as chairman of Disney’s TV and telecommunications unit in May, Frank expressed interest in becoming an entrepreneur in the converging cable, computer and telecommunications markets.

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Diller has long been a pioneer and visionary, even when he worked for Fox Inc., for which he successfully launched the fourth network, much to the surprise of industry naysayers. When he left Fox in 1992, it was because he wanted to be an owner. His attempts to own his own network have been thwarted over the years, and his plan with Silver King (in which he’s invested a modest $6 million of his own money) is also being greeted with naysaying.

In assuming their new industry mantles, both Diller and the Crestani-Frank team are only partial owners. Since Diller’s venture has the full backing of Malone’s Tele-Communications Inc.--the largest cable operator in the country--and Crestani and Frank’s C3 is bankrolled by the fourth-largest cable operator, Comcast, their downside is virtually nil. But to realize the value of the assets they are building from scratch, these executives will have to rely on entrepreneurial wiles.

The DreamWorks troika started with a blank slate. They raised a $2-billion war chest ($1 billion in equity and a $1-billion credit line from Chemical Bank) to create a movie, TV, music and interactive studio from the ground up that would be an alternative to the Hollywood majors. (DreamWorks also made a $1-billion pay TV deal with HBO and is in the midst of securing an additional $750 million to $1 billion in international free and pay TV deals.)

The start-up in no way resembles the major studios of old or the Time Warners and Disney-ABCs of today or tomorrow, which are driven less by entrepreneurial spirit than by quarterly earnings.

As Katzenberg said when the company was announced last year, DreamWorks will exist as an “independent sovereign state.” The founders hope to create a non-bureaucratic outfit bent on nurturing talented people and their ideas.

Caught on the run in New York, Katzenberg declined to be interviewed for this column other than to quip, “I don’t know what motivated any of these other people, but the reason why I pursued this entrepreneurial path is because I needed a job.”