Thomas Tull is founder of Legendary Entertainment, Tulco, part-owner of Pittsburgh Steelers, and guitarist for the band Ghost Hounds. Please support this podcast by checking out our sponsors:
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EPISODE LINKS:
Tulco: https://tulcoholdings.com/
Ghost Hounds: https://www.ghosthounds.com/
Pittsburgh Steelers: https://www.steelers.com/
Legendary Entertainment: https://www.legendary.com/

PODCAST INFO:
Podcast website: https://lexfridman.com/podcast
Apple Podcasts: https://apple.co/2lwqZIr
Spotify: https://spoti.fi/2nEwCF8
RSS: https://lexfridman.com/feed/podcast/
Full episodes playlist: https://www.youtube.com/playlist?list=PLrAXtmErZgOdP_8GztsuKi9nrraNbKKp4
Clips playlist: https://www.youtube.com/playlist?list=PLrAXtmErZgOeciFP3CBCIEElOJeitOr41

OUTLINE:
0:00 - Introduction
0:49 - Legendary Entertainment
17:31 - James Cameron
19:26 - Storytelling
29:37 - Allure of movies
33:31 - Future of American industries
52:24 - Tulco
57:34 - Intellectual honest and life lessons
1:08:05 - Colossal
1:12:04 - Warren Buffet
1:20:45 - The Rolling Stones
1:38:55 - Greatest guitarist
1:47:09 - Thomas Tull's music
1:56:35 - Football
2:07:31 - Advice for young people
2:13:17 - Mortality and death

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The following is a conversation with Thomas Tall, founder of Legendary Entertainment, known for producing blockbusters like Batman's Dark Knight Trilogy, The Hangover franchise, Godzilla, Inception, Jurassic World, 300, and many more.

He runs Talco, which is an investment company that focuses on how artificial intelligence can revolutionize large industries.

He is part owner of the Pittsburgh Steelers.

He's the guitarist for the band Ghost Hounds that tours with the Rolling Stones.

But most importantly, he's humble, down to earth, and someone who has quickly become a mentor and friend.

To support it, please check out our sponsors in the description, and now here's my conversation with Thomas Tall.

In 2004, you founded Legendary Entertainment, known for producing blockbusters like Batman's Dark Knight Trilogy, that includes Batman Begins, Dark Knight, and Dark Knight Rises.

The Hangover franchise, Godzilla, Inception, Jurassic World 300, and the list goes on.

It's just some of the biggest movies in history.

What does it take to make an epic movie like that?

Or what does it take to make it happen from start to finish?

Well, look, I've been enamored with movies since I was a kid as a fan, and I think what you need is to be able to tell a great story.

And if you're going to tell a great story, you need a great director.

You got to start with a fantastic script that is able to take some of these iconic characters that we did and put your own stamp on it while still respecting the mythology.

And I had 0 experience in movies and television before I started Legendary.

Total luck that we had the opportunity to make 5 movies at the time with Chris Nolan, who turned out to be 1 of the greatest filmmakers of all time.

But each 1 is its own little startup company.

And I don't think there's any formula to get there, but I know that if you don't have a great director and a great script, if you don't have that foundation, it's hard to pull off.

Who's the CEO of that little startup company?

Who would you say defines the success or the failure of a movie?

Well, when you build a big movie like that, it's an enormous effort, 360 degrees.

I mean, from digital effects, certainly the actors.

I mean, if you have an amazing script, an amazing director, but you don't believe anybody playing the parts, that's a problem.

So the reason I think it was so difficult to pull off.

As I always used to say, you start with a stack of papers with words on it called a script, bring that to life, and you're asking an audience to believe in everything that you're trying to put out there.

And you've got a cast that, even if they're immensely talented individually, they have to mesh together, they have to have chemistry together.

And the director is kind of the general on the battlefield, but if you have a strong producer who's very hands-on, but it truly to me is each 1 had its own story and its own sort of how it came to be and why it worked or didn't work.

So you said you were new to the industry, but you did a lot of revolutionary things with Legendary.

So at that time and now, what is the good, the bad, and the ugly of the business of filmmaking?

What are some interesting holes that you were able to, or like problems that you were able to fix, what problems still exist that can still be solved?

Well, look, the business has changed so radically since 2004.

When I started Legendary, DVDs were still a cash cow.

So, you know, that's how far things have come.

The reason that I started it from a business perspective was at the time it was a $30 billion industry, and there was no institutional capital around the movie business.

I was fascinated by that because almost every other category that you look at of that size has institutional capital, private equity, et cetera, is a cottage industry set up around it.

I was perplexed and fascinated that that didn't occur.

And the way the movie business worked was unlike any business I'd ever looked at before.

So after kind of convincing myself that you could actually make money if you were disciplined and had the right approach, went out, raised the money from the capital markets, which was Herculean, still maybe the hardest thing I've ever done in my career to walk around and say, look, I have no experience.

I've never done this before, but you know, and the second thing, being very fortunate at the time, was able to partner up with Warner Brothers.

Warner's at the time was run by a man named Alan Horn, who besides being creative is also a Harvard MBA, so really understood what I wanted to do.

And Alan was just an absolute gentleman, someone that I still look up to, to this day.

After Warner brothers, he went and ran Disney with their run between Marvel and Star Wars and everything.

So between Alan being responsible for Harry Potter, the Dark Knight stuff, and then on to all the Disney stuff, he probably had as great a career as anyone I've ever heard of in the movie business.

So my first focus was around sort of 2 concepts, global, worldwide, large tentpole films and franchises, and then the business aspect of being, bringing long-term institutional capital to bear.

I'm gonna ask you dumb questions, which is part of the style, I guess.

But just for people who don't know, including me, what is institutional?

Well, so if you're starting a company and you go around to a bunch of your successful friends and say, hey, you should invest in my company.

Well that that's sort of that's great and it's capital, but it's not getting money from Fidelity or T Rowe or You know a sovereign wealth fund or an endowment fund from a university that has large pools of organized capital that has a long-term point of view on your business.

So if you get money from your neighbor who's a successful dentist, next year, the dentist may say, hey, times are hard.

If your partners with Fidelity or Morgan Stanley or any of these institutions, they have the capital and the wherewithal to say, okay, I'm looking in this over the next 5 to 10 years.

And I thought there was an opportunity to bring that type of capital to the movie business to be patient.

And the benefit of that patient, so it's long-term, you have to deal with fewer parties and they would do much larger investments.

What are the sort of the challenges of that kind of investment?

Well, I think the benefits in some ways are they're professionals who are largely dispassionate.

It's like, look, if you're hitting the numbers you told me and you're hitting your plan, great.

And the other thing that always was interesting to me about the movie business is if I'm investing in an artificial intelligence company or a chipset company or something like that, a lot of the institutions don't have the technical expertise to really truly grasp what's being done.

So they don't, you know, other than good business practices, they're not offering every little opinion.

The movies and television are completely approachable Meaning everybody has an opinion So, you know whether it's I think you guys chose the wrong actor for that, or why did you do that move?

So it invites a lot more sort of second guessing and things like that.

So that was always 1 of the idiosyncrasies of the business that I thought was interesting.

And then when you talk about private equity versus public equity, if you're a public company where the companies are traded, you want to buy Microsoft shares, you just go to your broker, go on TD Ameritrade and buy them.

If on the other hand, you're talking about private equity, that's institutions or individuals investing in private companies.

So thus, if you have pools of capital that mostly invest in private equity deals, that's how you'd think about

It's difficult to make those happen because it's individuals, you have to sort of, what, have dinners and agree.

It's much more human, much less mechanical, I would say.

Now, and again, massive difference between large private equity shops who are professionalized and in the same category that I mentioned earlier versus private individuals who are wealthy or whatever.

But again, it's much more individualized when you're going to people who like your idea and just say, I'd like to invest in this.

Is that from all the kinds of investments you've seen, what do you think is the most conducive to creating works of genius, whether that's in technology, AI space, or whether that's in movies?

So creating something special in this world.

Enough money that whatever endeavor you're going into that you're not so nervous about the edges, right?

If I have $100 to spend and I think I can create a perpetual motion machine or something for $104, I can't do it because they're all over me about the budget.

So I would say making sure that you have enough capital, making sure that that capital is patient enough so that it's, if you're gonna do things that are extraordinary, it takes some time and you're gonna break stuff, right?

You're gonna have a whole bunch of film on the cutting room floor, so to speak, or if you're in the lab, you're going to have a whole bunch of broken stuff.

And I also think it's very important at the beginning, and I always try to do this with companies I invest in or buy, is make sure that you have a philosophical and somewhat mechanical alignment with the management team.

So that going in, you both understand, hey, this is how we think about this problem or this company.

This is what we feel like our culture is.

And these are the metrics by which we'll agree to measure them by.

Because if you don't have that shared, you know, hey, we're going to take this journey, then I think that's where people get upset, disappointed, etc.

What about this is a weird question, but constraints.

So this is both for filmmaking and investment.

Do you think more money is always better?

It's like constraints and almost like a desperation and deadlines are a catalyst for creativity, for productivity, for sort of innovation.

So can you kind of speak to that as an investor, as a creator, like what's the right balance here?

Well, I think if you're focused on a particular problem or a company or a thesis, If you have that focus and you feel like, I have unlimited resources or renewable resources, so there's really, there's no leverage in the situation.

There's no, If I fail at this, I'll just go get more money.

I think that's a hard way to be resilient and to think of new ways to solve problems.

So I think capitalizing things just, you know, to the nth degree does create some problems.

So I think there's that perfect blend of don't starve the oxygen to the point where you make short term decisions or non-strategic or thoughtful decisions because you got to pay the rent.

And on the other hand, you can't have it be like this, you know, everlasting gobstopper of whatever you want will just keep flowing the cash because that doesn't create any friction points that I think do result in works of genius and things that are transformative.

1 of the things that is interesting to me about society sort of writ large is I Think that when you go through hard times And you have to do things that are uncomfortable and you don't want to do them because you're tired because you're that in some ways builds up that you're comfortable being uncomfortable muscle.

And I sometimes think we're losing that a little bit And you can't sort of paint with a wide brush, but that's 1 of the things that I kind of observe and hope that we don't go that way.

I do think challenge and discomfort are a kind of gift as like overcoming that.

It's like from every perspective, from a human perspective, it's a source of happiness and fulfillment, overcoming challenge.

But from a business perspective, I see like if something is really difficult, to me it's also a sign that most others would, or many others would fail at this point.

When people tell you that something is impossible, I love that.

Because it's like, all right, well then that's what a lot of people would believe.

And that gives you an opportunity to be the person who shows it's not impossible.

And you, of course, you might be wrong, but if you're not wrong, you have the opportunity to stand out.

So going through that hardship, taking those big risks, it's going to really pay off.

So like discomfort is a feature, not a bug, of both personal life, it's just good for life, but for business, it seems like just good business sense.

If something is hard, it's probably a good idea to do that.

I don't know if you can answer this, but what's the most expensive movie you were involved with to make and why was it, you don't have to say numbers, but like, does something stand out as being exceptionally expensive and why is it expensive?

I think Jurassic World was pretty expensive.

And frankly, the crazy thing about my life is all the stuff that I loved as a kid somehow came full circle back into my adult life.

And having the opportunity while I was out there to, to develop a friendship with Steven Spielberg and Then have have my name on the same film as Steven Spielberg.

I mean that that was pretty surreal So that was an expensive film You know Dark Knight Rises was an expensive film.

But again, to me, there's a difference between expensive and irresponsible and expensive because the vision warranted.

And it turned out financially, it certainly did.

Yeah, with Jurassic World, it's I mean, I can't even imagine having those meetings cause like you have to create so much and so much of it is obviously not real.

Is that where a lot of the cost is in the, you know, the computer side of things?

Yeah, those are generally pretty massive components of the budget and especially if you're doing it and inventing things as you go.

I mean, Jim Cameron is 1 of those filmmakers who is designing the plane as it's flying in such a brilliant way.

And I've got to know him over the years and just in awe of the way his brain works.

Can you speak a little bit more to him in terms of, cause you're such a fascinating person cause you care a lot about technology.

You care a lot about the cutting edge of technology.

So how does he, a creator, a director, build the plane while it's flying?

Like what's the role of innovation in this whole process?

And john, john Landau, his producing partner.

And 1 of the things that just fascinates me about Jim is, so he makes Titanic, and there's a bunch of underwater cameras and things that they need that don't exist.

So he goes and invents them and you know, has a good grasp of engineering and has not only the imagination but the ability to lead a team to build them.

I got to go down early when they were shooting Avatar at a warehouse, I think it was, where they were shooting.

And as they were explaining to me how they were capturing it and that they could go back later because they created the environment, it blew my mind.

And I said, okay, this is truly, people talk about a big leap, this certainly is 1.

So He has continued to push the envelope in terms of the art of the possible.

And I just think he's an incredible genius in that way.

So you in the realm of music care about story, storytelling.

Is there some aspect in which money and beautiful graphics get in the way of story?

In filmmaking, so if you think, If you think about Jurassic World, obviously that's an experience like any other.

Like, what do you think about the tension between story, experience, and like visual effects?

big effect shots, and all kinds of tricks to cover over the fact that you don't have a very interesting story to tell.

Where I think you have these incredible filmmakers, we mentioned Chris Nolan and Jim Cameron, Guillermo del Toro, you know, you could go on and on, folks that just see the world differently and use technology to enhance the storytelling, right?

To make you believe differently, rather to make you not just suspend your disbelief, but to feel like you're immersed in it.

So I've certainly seen it done expertly and I've seen it done poorly.

You've talked about this a little bit in the past.

You kind of left the the movie making business at an interesting time.

There's been a lot of excitement with Netflix, with TV.

So the role of film in society has changed.

So what do you think is the future of movies versus TV?

Like if you were as a business person, as a creator, as a consumer, as a technologist, are thinking about the next 10, 20 years, what do you think is going to be the Godfather, the great pieces that move us as a society in the next 10, 20 years?

Well, So, and I think the other category that I would add to that, that will be the next great medium is truly immersive virtual reality in which new storytellers will emerge, especially when you can go into VR and there's enough computing power to sustain it and to allow it to be social and for you to have different paths to go down.

That'll be, I think, the next realm of what storytelling and experience will look like.

Do you think a video game kind of world, or is it more movies, or is it more social network, or is it all of it kind of blending reality and gaming and movies?

Yeah, I thought if you saw Ready Player 1, which I love the book and the movie was cool too, but that's 1 version of it, right?

Where you go in, now everybody's talking about the metaverse and all that, but you go into a world that's fully rendered as yourself and you interact with that world.

The other side of it is to go in somewhere between being a passive observer, but being able to move around your point of view and experiences, which I think is interesting.

And then I think another adventure, so to speak, I could think of is a blend of video games, so there's a mission, right?

There's obstacles, there's everything, and you move through it, but it's immersive and it tells a story at the same time.

And that's why I think you're gonna see new amazing storytellers that we don't know yet that understand how to innovate and how to make you feel something in that environment.

And to your earlier point, you know, I saw probably around 2015, when Netflix decided to be bold, put out House of Cards, put out all the episodes, leave you in charge of the pace at which you would view them, which I thought was great.

And I can't tell you around Hollywood, anybody that says that everybody thought it was a great idea is not being truthful.

Because everybody I talked to said this is their idiots, right?

They're, what do they know about moviemaking and TV.

And what I saw happening was if you look at what Netflix pulled off, and they realized that there isn't really a moat around the studios, you really could make stuff and really good stuff.

And so they started to create their own content.

That pulled in Amazon, which pulled in Google through YouTube, and then you had Hulu, then you had Disney deciding that they're going to have Disney Plus.

And the next thing you know, you have some of the biggest companies with the largest balance sheets on the planet being in the creative business.

If you're an independent, that's bringing a knife to a gunfight to be sure.

The other thing that it used to be that movies were where the big things happened and television was sort of, it was small screen, different experience.

And you had something like Game of Thrones come out, which was not only on the same epic level visually and storytelling wise, but had the budget to be able to do it.

And now, I think you're you're seeing you're seeing all kinds of different storytelling taking place.

And also like that it's, you're not pigeonholed into a time.

You can do a 3 part mini series, a 5 part mini series.

You can do television that's, you know, all kinds of different format.

And that I think is allows creators to do a lot more interesting things.

It is also interesting to consider the role of companies that enable that, like the capital that enables that.

You know, without Netflix, you wouldn't, and HBO, you wouldn't have some of these epic shows.

And so if we're thinking about the virtual reality world that you're talking about, it's interesting to consider who will enable that.

You know, now, like you said, Facebook is talking about meta and metaverse, but it's unclear that just having money is enough.

Netflix did a lot of really revolutionary stuff.

There's a lot of companies that have money that don't quite do as good of a job yet at enabling creators of creating revolutionary new content that changes the whole industry.

And that's probably going to be the case with virtual reality.

There is a lot of money needed to enable experiences like in terms of compute infrastructure.

There needs to be a huge amount of money there, but You also need to somehow give freedom to creators to have fun, to do their best work.

And at the same time, like provide the perfect amount of constraints, all of that together.

Like however Netflix makes it happen, they do a pretty good job.

Cause it's a very constrained platform, but yet all the creators I've ever talked to, comedians and so on, that work with Netflix are really happy because they feel free to create their work.

Yeah, and I think a lot of times, companies are a letterhead, but it boils down to the people.

And I think I've known Ted Sarandos a long time who ran the studio at Netflix and now took over for Reed running the company.

But Ted, very smart, talented guy and understood early how to cultivate talent and relationships with talent, which is important.

When you're dealing with creative people, their motivations and their goals are not always the same.

And so in terms of being able to communicate with creative people that are not always A to B to C is a talent.

You know, but I think that you're gonna see different formats.

I don't think, I mean, going to a theater to see a massive movie on that screen in that format is a fundamentally different experience.

And I think you're gonna find movies, my old shop Legendary just put out Dune, which I thought was phenomenal.

When we secured the rights to Dune years ago, I was over the moon because it's, I love the book.

And that's a movie that I think you see on the big screen.

I think when Avatar 2 comes out, I'll wanna see that on a big screen.

But I think you're gonna see a ton of content is obviously being produced, and it's not all gonna go to a theater-going experience.

So you're gonna see, I think, different versions of this over the next 5 to 10 years.

In case James Cameron is listening to this.

So he officially agreed to talk at the time of on this podcast at the time of Avatar 2 release.

I'm just holding you to that in this recorded conversation.

You know, they win Oscars, they're historic in nature.

There's something about TV shows, even when they're epic like Game of Thrones, that they're forgotten much quicker in history.

I don't know, maybe that's because we haven't had enough of them, but the De Niro performances and the Scorsese films, all the great films that kind of we think of throughout the generations that define generations are films.

I mean, Look, to me, going in a darkened theater with a bunch of strangers and the lights go down, and you go on this journey, there is something special and magical about that.

And I think movies have been a part of our cultural fabric forever.

And for some reason, Hollywood in America was, you know, uniquely positioned to do a great job with it, right?

And not that there aren't great foreign movies, but far and away, American movies, you know, are dominate the, not only the world market, but, you know, and so whatever it is that we do well, or Hollywood does well, You know, there's something in the water apparently, but I agree that I love movies and I will, you know, for the rest of my days.

It's interesting how creators can move back and forth now as well, That used to be a complete no, no.

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Thomas Tull: From Batman Dark Knight Trilogy to AI and The Rolling Stones | Lex Fridman Podcast #259