HOW MODERN HOLLYWOOD DOOMED JEFF SKOLL'S PARTICIPANT MEDIA DREAM

At the Oscars in 2019, one production company was at the center of the year's most talked about films and on the cusp of the industry's sweeping trends. The man who backed it, however, wasn't at the ceremony.

That year the films made by Participant Media collected 17 Oscar nominations, for Green Book, which eventually won best picture and went on to gross $321.8 million worldwide, Roma, which broke Netflix into the best picture race for the first time and RBG, the documentary about Supreme Court Justice Ruth Bader Ginsberg that managed to become one of the highest grossing independent films of 2018.

In an indicator of Participant and its backer, tech billionaire Jeff Skoll's unique, dual missions, the Oscar gatherings Participant threw that year included a viewing party for the National Domestic Workers Alliance at the Jane Club, a nod to the lead character in Alfonso Cuaron's Roma, and a post-show party at the Palihouse, where Cuaron and Green Book director Peter Farrelly celebrated. Skoll, who had spent most of the Oscar season dealing with a health issue and had greenlit both films, sent congratulatory texts to his top executives.

"It was a high point because those were movies we built from the beginning," says one of those execs. "It was surreal. [At the Oscars] the Roma row was sitting in front of us and Green Book was behind us."

When Skoll announced on Wednesday that he plans to close Participant Media, his 20-year-old socially conscious production company, the news brought into sharp relief the decline of the company from that 2019 pinnacle. Though the closure caught most of Hollywood by surprise, Skoll had been quietly exploring selling Participant for over a year, according to two sources with knowledge of the conversations, and had approached Laurene Powell Jobs and eBay founder Pierre Omidyar. 

Skoll, who notified his staff of roughly 100 people with a memo citing "revolutionary changes in how content is created, distributed and consumed," brought in his own auditors last month to examine Participant's books. "People knew it would be bad, but no one expected this," says one person with knowledge of the audit. 

Skoll, 59, had prided himself in the company's mission of instigating social change through storytelling. When he couldn't find the right buyer - one who would maintain the company's do-gooder aim - he decided to keep the Participant library and the company name himself. Participant CEO David Linde, who has been in the top job since 2016, has yet to comment on Skoll's drastic action.

A Canadian engineer who was the first president of eBay, Skoll didn't fit the profile of a rich dilettante dabbling in Hollywood to meet stars and get invited to parties. He was an introvert, more interested in reaching audiences, and was well liked by Participant's staff, according to multiple people who worked for him.

"Jeff was a great boss" says ​Jonathan King, who headed up feature production at Participant for more than a decade, and now co-runs Laurene Powell Jobs' Concordia Studio with Davis Guggenheim. "In the early days when he was running the company day to day, he was very engaged, ran a good meeting and was fun to be around. It was very clear what we were trying to do." At that time, Skoll was splitting his time between Northern California, where the Skoll Foundation is based, and L.A. "Later, he was still a good boss from afar, because he had spent enough time that he trusted us."

Says another source: "He's a brilliant guy, and he seemed very proud of us. He saw Participant as part of his legacy."

One of the many top studio executives who dealt with Skoll and who were paid a handsome fee to distribute Participant films says he found him "likable but unusual, and he was definitely socially awkward."

Skoll's health may also have played a role in his decision to step away from Hollywood, say multiple sources. He has been treated for a serious autoimmune illness and has a decades-old back injury. In 2014, when working to help NGOs and epidemiologists contain an outbreak of Ebola in Africa, he contracted yellow fever. A representative for Skoll declined to comment on whether his health is a factor in his decision to close Participant. 

The departure of two key executives, King, who left in 2019, and documentary champion Diane Weyermann, who died of cancer in 2021, had a profound impact on Skoll and affected the direction of the company, multiple sources say. "Diane was a pillar at the company, and her personal ethos shaped it. Her death was a horrible, horrible loss," says one industry source. That their absences came as the COVID-19 pandemic was rocking the industry only contributed to the sense that Participant was adrift. The company had a round of layoffs in 2022 and became more risk averse in its investments, going from fully financing scripted features like 2019's Green Book and Roma, to just backing 25 percent of a documentary. As shrewd as Skoll was, Participant hadn't foreseen the rise of streaming and the threat to theatrical distribution, which was exacerbated by the pandemic.

"If you're a guy like Jeff Skoll who wants to co-finance movies that may not work in the theaters anymore, you're going to A) lose a lot of money and B) not get the social impact you're looking for," says a studio executive who has done business with Skoll. "The marketplace has changed materially since he first started, and he's no longer super involved. I don't know that the Participant brand means what it used to in today's environment." 

A graduate of the Stanford School of Business, Skoll was at the center of the Silicon Valley boom of the late 1990s. He left eBay with a $2 billion cashout and a circle of powerful acquaintances, many of whom remain his friends today, including Elon Musk, former Paypal COO David O. Sacks, eBay founder Pierre Omidyar and investor Keith Rabois. Skoll was interested in using his wealth, which today Forbes estimates at $4.5 billion, to make a major philanthropic impact, and founded The Skoll Foundation in 1999 to fight global poverty. 

In 2004, Skoll arrived in Hollywood and founded Participant with the motto "A good story, well told, can change the world." Early movies he and his top executive Ricky Strauss put together attracted star power and major studio partners, including the 2005 George Clooney historical drama Good Night, and Good Luck, distributed by Warner Independent and the Charlize Theron-starrer North Country, released by Warner Bros. But it was Al Gore's climate doc An Inconvenient Truth in 2006 that put Participant on the map, winning two Oscars, collecting nearly $50 million at the worldwide box office - a remarkable sum for a documentary - helping Gore win the 2007 Nobel Peace Prize and igniting a global conversation about climate change. Documentaries would become a Participant staple, making up 50 percent of the 135 films it has released, while the company found broad audiences for scripted films including The Best Exotic Marigold Hotel, Contagion, Lincoln and The Help.

Skoll would visit sets, attend premieres and read scripts. "In the early days, if we wanted to do something, I would give him the script," says one former Participant employee. "He would read it that night. We would talk about it the next day, and then we would say, are we going to pursue this or not? Gradually, he would step back and say, ‘I trust you, you do it.'" 

Multiple sources say Skoll was willing to run Participant at a loss - to a point. "There were all those people working on social impact that was never meant to generate revenue," says one former Participant employee. "He knew that the company would never make money, and he was OK doing that." 

But when then-Participant CEO Jim Berk orchestrated the launch of cable network Pivot, which focused on social issues, in 2013, the losses grew, and in 2015 Skoll commissioned a McKinsey & Company audit. "That was a huge investment and a terrible business idea on Jim's part that lost $200 million to $250 million," adds the source. "That's different from operating a company at $15 million to $20 million deficit every year."  Berk was fired and Skoll returned to run day-to-day operations, opting to use a small office between King and Weyermann, versus Berk's old digs. Soon he hired Linde, who formerly ran Focus Features for years before a brief stint as co-chair of Universal, to be Participant's new CEO. 

Skoll's impact in Hollywood extended beyond Participant. He made a multi-million investment in Summit Entertainment in 2009 as means to get his movies into theaters, but then Lionsgate bought Summit. In 2015, he helped throw Steven Spielberg a lifeline as one of the backers of a new company, Amblin Partners, which restored Spielberg's first production shingle, Amblin, to prominence and marked the end of DreamWorks SKG. Spielberg's team had already worked with Participant on several high-profile films, including Lincoln and The Help, and Skoll put up $200 million, with Reliance Group and eOne also investing in the venture. The Amblin-Participant pact ended in 2020, and Amblin was later rebranded Amblin Entertainment.

Skoll's tie to L.A. weakened when he and TV executive Stephanie Swedloe divorced in 2019, and when the pandemic struck, he sold his two L.A. mansions and moved to Palm Beach, Florida focusing more on his foundation and his investment firm, Capricorn Investment Group. It's also a state with no capital gains or income tax, where many of his Silicon Valley crew have residences.

As Participant prepares to wind down, the company has nine projects either currently in theaters and on streamers or awaiting distribution, including Shirley, the Netflix Shirley Chisolm movie starring Regina King, Food Inc 2, a sequel to the company's 2008 corporate farming expose documentary, being distributed by Magnolia and We Grown Now, a drama set in Chicago's Cabrini Green housing complex in the 1990s, from Sony Pictures Classics. 

While no longer backing film and TV projects, Skoll will maintain some industry relationships via his philanthropic organization, the Skoll Foundation. Last week at the Skoll World Forum in Oxford, England, George and Amal Clooney spoke about their work at the Clooney Foundation for Justice, and Skoll's foundation awarded $2 million to Illuminative, an organization that consults with film and TV companies about the representation of Native people on screen.

2024-04-19T20:24:45Z dg43tfdfdgfd