27 September 2007

Art imitating life imitating art:
Hedge Funds in Hollywood

Popular culture, which is created by some of the least business-savvy people on the planet, has always been slow to latch onto business and economic trends. The covers of large-circulation magazines are a good contrary indicator. And TV, movies, and books are even worse. Twelve to 15 months can elapse between the first formal pitch of a new sitcom and the debut of the pilot. With movies and books, the lead times are even longer. By the time the film hits the multiplex or the book shows up on Amazon, the business phenomenon it describes has frequently gone bust—which is why hedge-fund managers and their investment-banking cousins should be very worried about the onslaught of Wall Street-themed pop culture.

We've seen this before. Tom Wolfe's Bonfire of the Vanities timed the zeitgeist—and the market—perfectly, debuting in October 1987, the month the 1980s bull market came to a crashing end. But Oliver Stone's Wall Street didn't hit the theaters until December 1987 and tanked at the box office as a result. After a few punk years, Wall Street caught fire again in the mid-1990s. But programming executives didn't catch on to the new wave until much later. Darren Star, who had neatly captured a cultural moment with HBO's Sex and the City, rolled out The $treet on Fox in the fall of 2000. This show about the professional and personal lives of attractive employees at a New York brokerage firm arrived at a time when Wall Street was falling out of favor, and lasted just 12 episodes, one more than Bull, which was also about the professional and personal lives of attractive employees at a New York brokerage. The real-estate bubble produced the ABC sitcom Hot Properties, a bawdy sendup of the lives of four attractive real-estate brokers. It debuted in the fall of 2005, just as housing prices were about to peak, and went into foreclosure after 13 unfunny episodes.

Real estate has been replaced in the public's imagination by hedge funds, private-equity firms, and really rich people—who are enjoying record bonuses, a degree of income inequality not seen since the Gilded Age, and a popular-culture renaissance. For the last several months, analysts (and envious journalists) have been eager to call a top in the phenomenon of extreme wealth creation, pointing to phenomena like the explosion of hedge funds, or Blackstone founder Steve Schwarzman's over-the-top birthday party, or this summer's credit crunch. But the best signals of the impending fall of the ultra-rich can be found in TV Guide.

The fall slate includes Dirty Sexy Money, an ABC drama about an insanely rich and charmingly dysfunctional American family based in New York ("they put the upper in Upper East Side"). And Big Shots, an ABC drama about four insanely rich and charmingly dysfunctional corporate hot shots based in New York. And Cashmere Mafia, an ABC drama about four insanely rich and charmingly dysfunctional female corporate hot shots based in New York. (Frances O'Connor plays Zoe, a "top investment banker.") The sidekick on CBS's new vampire show, Moonlight, is "eternally young, wealthy and mischievous Josef, a hedge fund trader who relishes his uniqueness."

And there's more to come. Doug Ellin, who developed Entourage for HBO, is making an HBO series based on a hedge fund. He hired writers this summer and hopes to launch the series next summer alongside Season 5 of Entourage. Ellin and his crew better hurry, though. If this fall's TV slate isn't enough to make you think big, New York-based money is overplayed, other news coming out of Hollywood should. Fortune reports that Michael Douglas has committed to reprise his role of Gordon Gekko in a sequel to Wall Street. By rights, the new Gekko should have evolved from a corporate raider into a hedge-fund manager or a private-equity honcho. But at least one Hollywood-type has learned from history. Cognizant of the fact that movies can be extremely poor market timers, screenwriter Stephen Schiff is hedging his bets. "I don't want to date the film," Schiff told Fortune when asked about Gekko's professional life. "With what's going on right now, the question is: Where will the unassailable money end up? It might not be hedge funds."

By Daniel Gross

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