DILLER DOING IT HIS WAY

By BRUCE HANDY

FOR A MAN WHO IS VIEWED BY MANY in Hollywood and on Wall Street as among the pre-eminent media minds of his generation, a man who built the Fox Network, mentored both Michael Eisner and Jeffrey Katzenberg, and brought the world Saturday Night Fever and The Simpsons--for a man who has accomplished all that and made himself hundreds of millions of dollars in the process, Barry Diller sure acts as if he has something left to prove.

How else to explain his three attempts in as many years to amass a media empire he can call his own? Four years after he perplexed the entertainment industry by voluntarily resigning the chairmanship of 20th Century Fox, he could today be running any number of media conglomerates or resting on his laurels with a fat production deal somewhere--the traditional way in which Hollywood takes care of its own. Instead, at 54, Diller has chosen to put his credibility on the line and build his very own empire more or less from scratch. "This is either a worthwhile or worthless proving ground," he says, though it is not quite self-evident, of his efforts to cobble together a new broadcast TV network from a collection of end-of-the-dial stations that in total reach roughly 35% of the country's viewing audience. At this point it would be America's seventh network, something Diller may need more than the rest of us. "Do I wonder why I have this need to keep proving myself?" he asks himself, conducting his own interview. "No. Yes. From this enthusiasm to total failure is a crooked-straight line."

No. Yes. Crooked-straight. This is all a bit Delphic, even coming from someone who is widely acclaimed by his peers--at least for publication--as a visionary. To have a conversation with the man himself is to be instructed in the art of seeing both sides of an equation. He thinks the Internet has been oversold, yet he's visibly excited about his equity interest in the Internet Shopping Network, an online retailer. He claims to despise hype and yet is manifestly adept at its use. He thinks Beavis and Butt-head are, as he once told Rolling Stone, "breathtakingly horrible. But great. No, not great. Good." One might be tempted to say that Diller embraces contradiction with Zen-like equanimity, although equanimity is probably not a strong suit in someone famous for screaming at underlings and hurling bric-a-brac during meetings. One might also be tempted to say that Diller doesn't like to have things just one way when he can have them more than one way.

This hunger is quite evident in a personality whose idea of recreation is getting behind the wheel of his BMW and outmaneuvering New York City taxi drivers. "Driving here is wonderful," he avers, "especially if you want to go fast. There's nothing greater than starting at 125th and Second Avenue and going down to 30th. You can hit the lights, and you have six lanes to maneuver in. I can't figure out why anyone would want to sit in the back of the car."

During an interview at the midtown apartment that serves as his Manhattan pied-a-terre, Diller is restless even in repose. His is a singular physical presence, his fine-boned body at odds with his rock of a head and a gap-toothed grin that is both wary and omnivorous (actually, he looks a lot like David Letterman minus the hair). As Diller talks, he twists himself into ligament-straining positions on the couch. He fidgets with his socks, gets up again and again to fiddle with the thermostat--it's as if he can't help exuding nervous energy.

Diller almost owned Paramount, but in 1994 it slipped away. He nearly won control of CBS, but he lost that too in an abortive bid later that same year. This is what he does own, bought in quick succession last summer and fall: 1) Silver King Communications, whose main assets are 12 TV stations that comparatively few people want to watch; 2) Savoy Pictures, an independent film studio known for producing movies (Last of the Dogmen, for example) that comparatively few people went to see but a studio that owns considerable cash and a quartet of television stations; 3) a controlling interest in the Home Shopping Network, which sells, well, a lot of junk (the company's sales dropped 11.5% over the first nine months of 1995, to $730 million, compared with the same period in 1994).

Diller's managerial and entrepreneurial arts may turn these into far more valuable assets. Wall Street apparently thinks so; it bid up Silver King's stock from $25 to $39 the day Diller's purchase was announced (the stock closed last week at $301/2). Still and all, this is not the kingdom people expected Diller would survey when he walked out on his job as chairman of Rupert Murdoch's 20th Century Fox in 1992 and told the world he yearned to own a network of his own. His assumed ambition was to be a Murdoch, or even a Laurence Tisch.

What kind of network will Silver King become in its wildest, Cinderella-like dreams? Diller intends, he says, to build it from the bottom up with local programming--a national network of distinct and separate voices. It almost sounds like a koan: When is a network not a network? Of course, this is precisely the kind of counterintuitive thinking that has drawn Diller admirers and partners like investment banker Herbert Allen and Tele-Communications Inc.'s John Malone. In practical terms, however, Diller's plan would seem almost too counterintuitive, given the fact that Silver King stations currently produce almost none of their own programming. Thus Diller will presumably be forced to build up separate stables of talented programmers all around the country--a formidable task, as anyone who watches television will know. He is seeking partnerships with local newspapers.

"Am I interested in a national voice?" wonders Diller. "Probably--sure I am. But that's not what I'm trying to do. My job is to say, 'Is there a local voice? Can I be of service? Can I get you?' " He refuses to be more specific concerning how he plans to go about getting you--as a viewer, he means--but he will speak to where he sees his opening: "Local broadcasters all look exactly the same. Local newscasts are terrible. Except for weather and sports, they're uninformative. They should just have one master shot of police and ambulances and yellow police tape because that's all they run. It's the Eyewitness News-ization of America." Again, he won't say what kind of alternative he'll offer, although a passing reference to the MacNeil-Lehrer NewsHour seems to offer a clue. Building a profitable network on the back of civic-minded public-affairs programming--now that's really counterintuitive.

Of course, if Diller wanted to do things the easy or obvious way he could have; he reputedly turned down offers in the past year from both Edgar Bronfman Jr. (to run MCA Universal) and Michael Eisner (to join him as No. 2 man at Disney). "Barry has had these unbelievable silver trays offered to him, and he's always said no," says his best friend, designer Diane Von Furstenberg. Why no? "He's not a pig," she explains. "It's not about greed with him. It's ambition, it's vision, and that makes him different and makes him a nice person." An interesting theory: ambition leads to niceness.

As for Diller, others who know him speculate that his need to strike out on his own is to some extent born of necessity, given his inability, at this point in his career, to share power or work harmoniously for others. Diller himself doesn't sound unduly deferential when he describes his drive to succeed: "A lot of it has to do with willfulness, whether you're capable of imposing your will on the process. To the extent that you insist, you at least have a prayer."

Actually, that is a pretty nice way to put it: Diller has been "insisting" for most of his career. His notoriously aggressive management style has left subordinates humiliated and emotionally bruised. He describes it as "bashing idea against idea to get stuff out of yourself and other people" and admits that to those unused to the process, his methods can seem "nasty...No, that's overly harsh. Or not harsh enough."

Whichever, Diller's ferocity has stood him in good stead since his William Morris mail-room days; he attended a party thrown by childhood friend Marlo Thomas and got into a characteristically vituperative argument with Leonard Goldberg, then a vice president at ABC. The older man, impressed with Diller's "willfulness"--Diller's word (again)--eventually offered him a job at the network. There he helped invent the mini-series, popularized TV movies and had the perspicacity to hire young Michael Eisner away from his job as a CBS children's programmer.

In 1974, at 32, Diller was named CEO of Paramount Pictures. With Eisner, whom he installed as president, Diller made it the most profitable Hollywood studio, year in and year out. He was considered a lock for the chairmanship of Gulf & Western, Paramount's parent company. Then he lost a power struggle and jumped ship for 20th Century Fox in 1984. His reason for subsequently leaving Fox in 1992 was straightforward: "It's not mine," he said at the time. "I'm both young enough and old enough to want to own my own store ... It's the one thing I haven't done." In other words, though he had fought his way into becoming one of the most powerful men in Hollywood, he felt the need to prove himself all over again (with the kind help of an estimated $150 million parting package from Murdoch). This is the sort of itch you acquire when, even as your net worth is accreting into the low nine figures, pal David Geffen's is pushing a billion.

What followed was what one might call Diller's John the Baptist phase. He announced that he was going to take a year off and ponder the future of the entertainment industry, then emerged after a mere six months in the wilderness, if that's a fair description of schmoozing it up with the likes of Bill Gates and John Malone. Diller was now preaching the new religion of interactivity--though, to give credit where credit is due, so was virtually every other sentient being in telecommunications in 1992. Owning a traditional broadcast network, Diller told the New Yorker with a cavalier, would-be mogul's flair, "would be fun. But even as I say it, I bore myself."

Instead, he bought about 13% of QVC, the cable-TV retailer that is the Home Shopping Network's prime competitor. But he hadn't quite shaken his yen for upscale properties and in short order was using QVC to launch the exhaustively chronicled bidding war for Paramount that he lost to Viacom's Sumner Redstone. By the summer of 1994, Diller was describing a projected takeover of CBS as his "destiny." But Comcast, a cable company that owned a 15.5% stake in QVC, squelched the deal and then tendered its own offer to buy out Diller's share of the channel. Bitterly disappointed but $100 million richer, Diller came to his present pass, the tragedy of a man still forced to fly around the country in a Gulfstream II when all the other boys have Gulfstream IVs.

"Diller likes to climb mountains," says Brandon Tartikoff, former head of the NBC Entertainment Group, who was a direct rival when Diller was at Fox. Tartikoff tells a story that reflects Diller's competitive fire. The two men attended the same Los Angeles party in 1990, on the day that Tartikoff announced NBC's fall schedule. "Barry came up, and we shot the breeze for a while. And then he leaned in close and said, very casually, 'We're going to announce that we're putting The Simpsons against The Cosby Show.' It made me feel sick to my stomach." At the time, the notion of scheduling Fox's most successful show opposite one of the most popular TV shows of all time seemed foolhardy to many. As it happened, The Simpsons held its own and went on to become a cornerstone of Fox's schedule.

Reminded of the incident, Diller denies any undue malice in the way he handled Tartikoff. But later, he serves notice on competitors who would doubt or challenge him now. "I have never functioned in an environment of support," he says. The implication, of course, is that he hasn't had to. Diller doesn't expect slack from anyone, including himself.

--Reported by John Moody/New York

With reporting by John Moody/New York