Little Shop of Winners

By Elaine Dutka/Los Angeles

If appearances were relevant, no one would suspect that the David Geffen Co. is a show-business powerhouse. It functions in a homey, two-story structure tucked between Sunset Strip's office buildings and Beverly Hills' mansions. Its owner and chief executive, the boyish Geffen, 45, often dresses for work in blue denim, wears a two-day beard and avoids any restaurant that requires a tie. Yet in an industry dominated by such giants as MCA and Gulf & Western, the Geffen Co. has become a serious contender, a factory of hits. Started in 1981 with just three employees, it pulled in $26 million in profits during 1987 and is expected to top $40 million this year.

Geffen is already a mini-conglomerate, making its mark in three entertainment fields: music, movies and Broadway. On Geffen Records, the debut album by rockers Guns N' Roses was ranked No. 4 on last week's Billboard chart. The Geffen film division scored this year's sleeper hit, the comic ghost story Beetlejuice; Geffen Theater co-produced M. Butterfly, the 1988 Tony Award winner for best play.

The man with the taste for success is a college dropout who lives by his well-cultivated wits. A connoisseur of hard rock and fine art, Geffen invests in performers and producers he trusts and usually gives them the freedom to follow their own instincts. "I see myself as a baby doctor. The product's not mine actually, but I've assisted in the process."

Born in Brooklyn to Russian immigrants, Geffen showed no taste for academics. At New Utrecht High School, where his senior yearbook predicted he would be a dentist, Geffen finished in the bottom tenth of his class. But he was inspired by business, an interest nurtured partly by his mother's proprietorship of a bra-and-corset shop. After dropping out of two colleges, he padded his resume with a fake degree from UCLA and landed a job as a mail- room clerk at the William Morris talent agency. (He still faults the company for requiring that credential for a low-level job.) Moving up quickly, Geffen became an agent for such 1960s stars as Joni Mitchell, the Association and Laura Nyro.

Geffen started his own label, Asylum, in 1970 and became the leading purveyor of the California Sound. Among his artists: Linda Ronstadt and Jackson Browne. After selling Asylum to Warner Bros. in 1972 and running it for three years, Geffen spent an unsatisfying year as vice chairman of Warner's movie division. "I had to deal with bureaucracy and politics. It just didn't work," he explains.

Then came a traumatic change in his life. Geffen developed a bladder tumor, which doctors removed and declared to be malignant. Believing that stress had contributed to the cancer, Geffen, then 33, decided to change his priorities. Canceling his subscriptions to Variety and Billboard, he began teaching business courses at Yale and UCLA, collecting art and investing in real estate. After four years in his new life, he consulted cancer specialists for a second opinion and found that the first diagnosis had been incorrect: he was fine.

Geffen wasted no time moving back into show business. In 1981 he started Geffen Records under an arrangement in which Warner Communications financed the fledgling company and distributed its products. As Geffen launched his second career, his colleagues noticed a difference. Says Mo Ostin, chairman of Warner Bros. Records: "David is still incredibly tough and ambitious, but he softened considerably after the cancer scare. He's far more concerned about people than in his previous incarnation." Before long, Geffen signed up the likes of Elton John, Peter Gabriel and John Lennon and Yoko Ono. He branched into theatrical ventures, co-producing Cats, which still reaps $6 million a year in profits for Geffen. He scored with two other hit musicals: Little Shop of Horrors and Dreamgirls. Geffen's movie division produced the successful After Hours, directed by Martin Scorsese, and Risky Business, which launched Tom Cruise into superstardom.

Geffen's entertainment mill is still working overtime. To buttress his roster of established stars (among them: Don Henley and Jimmy Page), he is breaking in such new musical talent as Edie Brickell & the New Bohemians and the Australian ingenue Kylie Minogue. Geffen has three films under way, including Men Don't Leave, starring Jessica Lange. His next Broadway candidate is Miss Saigon, a musical by the composers of Les Miserables.

Geffen, whose romantic partners have included Marlo Thomas and Cher, now leads a privileged single life. (His estimated net worth, according to Forbes magazine: $240 million.) In his gallery-like apartment on Manhattan's Fifth Avenue, the walls are covered with the works of David Hockney, Jasper Johns and other modern masters. From his Malibu beach house, he skims the Pacific in a 20-ft. speedboat. Like most self-made men, however, Geffen is consumed by his work. "My greatest fear is getting bored," he explains. "I'm always taking notes on the imaginary yellow scratch pad in my mind." Given the profit potential of his daydreams, his competitors might like to have a peek at the occasional carbon copy.