The Impresario In Exile

By Richard Zoglin/Toronto

Garth Drabinsky didn't go to the Tony Awards this year, even though two of his musicals, Parade and Fosse, were among the night's big winners. He didn't watch the show on TV either--too painful--though he caught a clip of it on the news up in Toronto. There was Roy Furman, the Wall Street banker in charge of the company Drabinsky had built, accepting the Best Musical award for Fosse, the show Drabinsky had nurtured, and thanking, vaguely, "the people in Toronto who were so helpful in starting this show." For Drabinsky, the "revisionism" is what hurt the most. "It turned my stomach," he says.

The drama of Garth Drabinsky, the Broadway impresario--with a capital I--responsible for such shows as Ragtime, Kiss of the Spider Woman and Show Boat, has taken a turn worthy of a Shakespearean tragedy. The first-act curtain fell last August, when Drabinsky was suspended from Livent, the Toronto-based company he had founded. There he had pioneered a new business model, creating a company that both owned theaters and developed the shows that filled them in New York City and across North America.

The second act has been a deluge of litigation. Following his ouster, Drabinsky was sued in Canada by Livent's new managers, including Furman and Hollywood honcho Michael Ovitz, who had taken control of the company in June. Then came a criminal indictment in U.S. federal court and fraud charges by the Securities and Exchange Commission, alleging that Drabinsky fiddled with the books to disguise Livent's precarious financial condition. He's been accused of hiding expenses, of misleading auditors and devising a kickback scheme that funneled more than $5 million to him and his longtime partner Myron Gottlieb (his co-defendant, who has also denied the charges). The legal donnybrook drove Drabinsky to shelter in his native Canada, although he is subject to extradition, which is awaiting the conclusion of an investigation by the Royal Canadian Mounted Police.

Livent, meanwhile, careened into bankruptcy. Most of the company's assets--theaters in New York City, Toronto and Chicago, along with the rights to current shows and projects in development, including a new version of Pal Joey and The Seussical, a musical based on the works of Dr. Seuss--are about to be acquired by SFX Entertainment, a U.S. company with lots of concert and theater business but little of Drabinsky's creative vision or panache.

Even from a stage well out of the limelight, Drabinsky, 49, fiercely maintains his innocence. "I was absolutely steamrolled into the U.S. justice system," he told TIME, in his first U.S. interview since his legal woes began. "I want the rhetoric to be stripped away and the truth to emerge, and it will." Though he declined to answer specific charges on the advice of his attorney (who was present during the interview), Drabinsky claims in general that he was too busy running the company's creative affairs to pay much attention to the books. "It's not humanly possible that someone as involved as I was in the production of shows, the creation of new shows, the marketing of shows, the building and restoration of theaters, would have any time left to micromanage a huge and complex accounting system," he says. "To suggest anything to the contrary would indicate either ignorance or that somebody was lying."

In a countersuit he has filed against Ovitz and the others who took over Livent, Drabinsky blames his woes on a conspiracy to oust him. By restating the company's finances once they took over, Livent's new managers, he claims, aimed to portray themselves as corporate saviors.

Yet five former Livent employees have given affidavits stating that Drabinsky masterminded the financial misdeeds. Drabinsky's plea of ignorance, moreover, raises some skeptical eyebrows among those who know him as a tireless, hands-on manager. As for Drabinsky's conspiracy charge, Ovitz, several sources say, actually wanted to keep Drabinsky as creative head of the company. The two met in the 1980s, when Drabinsky was head of Cineplex Odeon, a movie-theater chain that he was forced out of because of concerns that the company was overextended. Some are skeptical that Ovitz would not have discovered any financial shenanigans before betting $20 million on an entrepreneur with a reputation for "aggressive" accounting. Yet it's equally hard to believe that Ovitz would rig a scheme that would drive his own company to ruin--and profoundly embarrass him.

Still, many of Drabinsky's Broadway colleagues are reluctant to believe the worst about him, perhaps because he was such an energizing presence. He was a brash, outsize producer who dreamed big, felt passionately and brought new ideas to the theater. Ragtime, his one great achievement, combined Broadway splash with ambitious social drama in a way probably no one else could have brought off. "He was a showman, in the tradition of Mike Todd and David Merrick," says Bernard Gersten, executive producer of the Lincoln Center Theater, which collaborated with Drabinsky on Parade. "The work he did was noteworthy. Credit must be given." Creators like Harold Prince and Terrence McNally worked with him repeatedly--and happily. "He participated with passion, patience and diligence," says McNally, author of the books for Ragtime and Spider Woman. "And he cared about every second of the show."

Even rival producers who were suspicious of Drabinsky's lavish spending admired his guts and studied his moves. He created a unique, publicly traded company in which money from lucrative, long-running hits was plowed back into the development of new work. The trouble, it now seems, is that those hits weren't lucrative enough to keep Livent's furiously spinning plates from crashing to the floor. "One of the things this proves is that the stock market and Broadway don't work together," says Marty Bell, Drabinsky's former associate producer. The rush to create multiple companies of shows like Ragtime and Show Boat, Bell says, was driven by the need for more income. "The focus was on generating cash flow for the fiscal quarter rather than what was right for the company."

Drabinsky insists that the business model he created is sound. "We built a pretty substantial company in nine years," he says. "You could touch the theaters. You could see the assets onstage. I absolutely believe in what the company was set up to do." Yet in 1997, according to Livent's restated financials, the company lost $71 million on revenues of $212 million. Livent's collapse has, at least for now, frightened off others who might want to copy it; Broadway producers are still playing by the old rules, raising money one show at a time.

Drabinsky is a chastened, drastically scaled-down mogul now. Yet he is eager to dispel any notion that he's on the run ("Canada is not a penalty; I'm proud of Canada") or that his creative life is over. He says he's developing a TV series that would be shot partly in New York City and is consulting on two "destination entertainment-cultural developments" being planned in Ontario. The legal morass he faces is "draining, emotionally and fiscally," he admits. "But my spirit is good." It will have to be.

--With reporting by William Tynan/New York

With reporting by William Tynan/New York