Megan Ellison: Hollywood’s latest player

Sharp-eyed observers of this Hollywood awards season may have spotted, on more than one occasion, pictures of a young woman clad in a dark trouser suit, hair slickly parted, posing alongside couture-wearing nominees such as Amy Adams and Jennifer Lawrence. They may have heard her name mentioned in speeches from grateful actors such as Adams, who picked up a Golden Globe for her performance in American Hustle, or the director Spike Jonze, who won best screenplay for Her.

She is Megan Ellison and, depending on who you talk to, she is either the saviour of an industry that has succumbed to brain-numbing comic-book movies and superhero sequels or a wealthy heiress who splashes the cash on films that don’t necessarily make financial sense.

Over the past three years the 28-year-old daughter of Larry Ellison, founder of US database software company Oracle, has produced or financed a series of critically lauded movies including Paul Thomas Anderson’s The Master, Kathryn Bigelow’s Zero Dark Thirty and the Coen brothers’ remake of the John Wayne classic True Grit. She has also ploughed millions of dollars of her own money into edgy projects deemed too risky by the big studios – for example, jointly financing David O Russell’s American Hustle with Sony Pictures.

Ellison has been rewarded with a slew of nominations at next week’s Oscars. She is the first female producer to earn two Best Picture nominations in a single year (for Her and American Hustle). Her willingness to back the visions of directors such as Anderson, Jonze and Bigelow could even be said to put a 21st-century spin on the sort of cultural patronage practised in Renaissance Italy by the Medici family. “She is playing the role of patron of great filmmakers,” says Bryan Lourd, senior partner of Creative Artists Agency, which has advised Ellison. He calls her “an awesome force in the business . . . She is hands-on, curious about all of it, and works her butt off.”

It helps, when taking such a role, to have money and Ellison has lots of it. Her father, one of America’s richest men, with an estimated net worth of $41bn, gave her a gigantic sum on her 25th birthday – the whisper around town is that it was much as $1.8bn – and gave the same amount to her 31-year-old brother David, who like his sister has become a producer of some repute, with a mean line in blockbusters such as Star Trek Into Darkness, Mission: Impossible – Ghost Protocol and Paramount’s big hit of last summer, World War Z.

But it is Megan, through the filmmakers she has backed and the critically acclaimed movies she has made, who is hitting the Oscar headlines. “People would like to see her fail but she is serious and she is winning,” says David Geffen, the billionaire music and movie mogul, and a long-time friend of the Ellison family. Geffen advised Megan when she was thinking about a Hollywood career and “looks out for her,” he says. “She is quite a girl,” he tells me. “It never occurred to me she would be this successful this quickly.”

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Ellison’s choice of movies has made a splash but she remains an enigma in Hollywood. She has her own style and does not seem inclined to conform: in meetings with button-down studio chiefs she typically turns up in black jeans, black Vans sneakers and black rock band T-shirts. She runs her company, Annapurna Pictures – named after a three-week long Nepalese trek she went on – from a compound of three multimillion-dollar houses that she acquired in the Hollywood Hills (she recently sold the homes for a combined price of $47m but has not yet moved out).

Ellison is gay and, say friends, has been in a relationship for about a year. She shuns all interview requests – she declined to comment for this article – but maintains a very public profile via Twitter, where she has amassed close to 70,000 followers. Her feed is peppered with literary quotations by the likes of Alexandre Dumas – “Happiness is like those palaces in fairy tales whose gates are guarded by dragons: we must fight in order to conquer it” – alongside nuggets from her favourite films, such as this one from Back to the Future: “Roads? Where we’re going, we don’t need roads.” On the day this year’s Oscar nominations were announced she simply tweeted “17”, the number garnered by Annapurna.

“She marches to the beat of her own drum,” says Jeremy Zimmer, chief executive and co-founder of United Talent Agency, which represents stars such as Johnny Depp and Angelina Jolie. “She has a very clear idea of what she is interested in.”

Ellison has always loved movies, friends say. At Geffen’s suggestion she and her brother attended film school at the University of Southern California, where she studied for a year before dropping out. In 2005 she landed her first film credit as a boom operator in When All Else Fails, a short thriller starring her brother, who also directed it and wrote the screenplay: the Internet Movie Database describes the film as “a dramatic thriller about a billionaire’s son who comes to realise the power of life and love”.

She then financed a couple of low-budget movies – Waking Madison and Passion Play – which did not make much of an impact before her production career took off with the Coen Brothers’s True Grit. “She loves film-makers and that’s always the best strategy,” says Amy Pascal, co-chairman of Sony Pictures, the studio that brought Ellison in to co-finance American Hustle and which distributed Annapurna’s Zero Dark Thirty. Pascal underlines the hands-on role taken by Ellison in the films Annapurna produces. “She is in it every step of the way, starting with the inception of the idea. She is on the set all the time and she is involved in marketing . . . everything.”

Not everyone is such a fan and Ellison’s willingness to back filmmakers to the hilt has raised alarm in some quarters. “She knows who the great directors are and wants to be in business with them,” says one person who has worked with her. “How do you get to work with these directors? You say, ‘Yes’ to whatever they want.”

Friends dismiss these criticisms as sour grapes. “Her wealth inspires a lot of envy,” says one. “I don’t hear too many people in Hollywood saying nice things about people who are successful.”

American Hustle has certainly been successful and its global box office haul of $200m represents a terrific return for a film with a production budget of $40m. But other Annapurna films have done less well: for all the critical acclaim surrounding Her, Spike Jonze’s tale about a lonely man who falls in love with his phone’s operating system, the film’s big budget and modest box office haul means it is likely to make a hefty loss: one person with knowledge of the production estimates about $20m.

Paul Thomas Anderson’s 2012 film The Master, a mesmerising story of a cult-like figure, also delighted critics. In the FT, Nigel Andrews’s five-star review called it “a glorious movie, an omnivorous, many-coloured satire on the chameleon-hued carnivores of our souls”. Financially, though, it was a flop: made for $30m, “it was never going to make its money back”, says a person familiar with the matter. It is estimated to have lost as much as $20m.

Hits and misses are a fact of life in Hollywood but Ellison’s critics say she has struggled with budgets on her movies, which tend to spiral. “She can be reckless,” says another person who has worked closely with her. “Zero Dark Thirty was supposed to be made for $50m and became closer to $70m.” (The film eventually grossed close to $140m worldwide.) The budget on Foxcatcher, Annapurna’s new film that will be released this year and stars Channing Tatum and Steve Carell has also soared, according to one person familiar with the matter.

“She doesn’t have a real business model,” the person says. “If she reads [a script] she likes, she pays whatever she wants.” A deep-pocketed financier willing to pay whatever it takes for a film with finite commercial potential can set unrealistic expectations for directors, actors and other talent, the person adds. “All of a sudden we have talent who come to us afterwards and say, ‘Well, Megan gave me whatever I wanted’. She’s good for the film-maker,” is their summary: “she’s just bad for the business.”

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Ellison’s friends and supporters vehemently disagree. “In my experience she is as savvy and careful as they come,” says Mark Boal, the screenwriter who won an Oscar for The Hurt Locker and also wrote Zero Dark Thirty. “She drives a hard bargain but unlike a lot of financiers she has taste.”

“She’s not some heiress throwing money around,” says another friend. “Some of her projects don’t make complete financial sense on paper but the balance she is trying to strike is someone who is a supporter of film. She is smart about the bottom line.”

Without Ellison, they argue, intelligent films that challenge audiences would be harder to make and release. They have a point: the big studios – Warner Brothers, Paramount, Universal, Walt Disney and Sony – are making fewer bets on smaller movies in the $30m to $50m range and, instead, are concentrating their firepower on “tentpoles”, films with the potential to do so well around the world that they can support a studio’s entire slate of films. Tentpoles mean big-budget blockbusters – movies in the $150m to $250m range – that can become franchises with spin-offs and sequels: think of Disney’s The Avengers or Warner Bros’ Batman films.

According to Bryan Lourd, studios used to be keener to support more maverick talents. Stanley Kubrick was championed by Warner Bros, in particular Bob Daly and Terry Semel, the two men who ran the studio in the 1980s and 1990s. Pascal agrees that Ellison is something of a throwback to earlier times. “The thing about Megan in a funny way is, young and new as she is, she’s pretty old school. She is like the guys who did this job a long time ago.”

There was a period, in the 1990s, when studios ploughed more of their resources into edgier movies. Miramax, the company started by Harvey and Bob Weinstein, revolutionised independent cinema with hits such as Pulp Fiction (1994) and Shakespeare in Love (1998); in response each of the big studios created their own “independent” divisions.

But in the past few years the pendulum has swung the other way and most studios’ independent units have been closed, victims of cutbacks and a shrinking appetite among executives for smaller, more challenging movies – at a time when the quality of writing and directing in television has soared. “The studio system for making movies has become far more difficult for producers and directors because the studios’ desires are so narrow,” says Cassian Elwes, an independent producer and financier who is in the Oscars race this year, with Dallas Buyers Club.

The studios, says Elwes, want to make movies that can gross hundreds of millions of dollars worldwide. “But the studios are owned by conglomerates and unless the movie makes $300m or $400m it won’t move their stock price. So a movie that costs $25m that makes $25m profit won’t interest them because the risk of losing $25m outweighs the positive of making $25m on it.

“To the studios, that whole middle section of films – serious dramas with major stars – are a big pain because it takes just as much work to make them as it would to make Iron Man 5. There’s this whole middle ground of directors and stars and the studios don’t want to make these movies. And into the breach steps Megan Ellison.”

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Ellison is not the first billionaire to come to Hollywood with grand plans. From Howard Hughes in the 1930s to Jeff Skoll, the internet entrepreneur who was the first full-time employee of eBay, and Gigi Pritzker, a member of the family behind the Hyatt hotel group, well-heeled investors have put money into movies – often with mixed results. Pritzker’s company Odd Lot recently released Ender’s Game, a science fiction film that flopped; Skoll’s Participant Media has produced well-received films such as Good Night, and Good Luck (2005) and Syriana (2005) but was also behind the recent box office bomb The Fifth Estate.

But none of these outside investors has had as rapid an impact as Ellison, who, in only a couple of years, has upended the established Hollywood hierarchy. “Compared with some of her predecessors she has been more aggressive,” says Mark Boal.

So what motivates her? She has more money than she will ever need, thanks to her father’s wealth: the elder Ellison recently bought his own Hawaiian island to go with an empire that includes a great swath of Malibu and a victorious America’s Cup team. Friends insist she is in it for the long term and that she wants to create a sustainable business. Others say she just loves movies. “For her, success is films that endure,” says Boal.

One friend says she is “not worried about playing the game – currying favour with studio people or agents. She’s interested in being in business with the talent. It’s like someone who has decided they want to be a top-shelf art collector . . . they can get access to the very best.”

There is also the possibility that she wants something which, history has proved, money cannot really buy. “She could never do better than her father in terms of making money – it doesn’t matter if she makes or loses money on these movies,” says a former colleague. “She wants to do something that her dad can’t do. And that’s win an Oscar.”

Matthew Garrahan is the FT’s media editor. The Academy Awards take place on March 2.