Stony Brook Matters

What Makes Rich Gelfond Run?

Rich Gelfond
Rich Gelfond
Rich Gelfond ’76, Stony Brook Foundation Chair and IMAX, Inc. CEO

If you want to know what lit the fire that burns hot within Rich Gelfond, the enormously successful 63 year-old CEO of the big-screen entertainment technology giant IMAX and a proud Stony Brook alum, you might want to begin where he begins: with the visit.

He was only six at the time, but he remembers it vividly. His father, a furrier in Manhattan’s fashion district, had always bragged to Rich that he was the highest paid worker in the shop and a big shot. When the little boy made that visit one afternoon, the big shot took a break to show him around — which is when the boss, the real big shot, snapped, “Gelfond, get back to work!” Rich still shudders with the humiliation — the sadness that overcame his father with his cover blown. And he remembers this: He remembers, at six, saying to himself, “Never me.”

It was a difficult promise to keep. Gelfond’s was a hardscrabble childhood. The family lived in a small Levitt-style house in Plainview, a Long Island suburb, which was stratified ethnically — “Everyone was either Jewish, Italian or Irish,” he says — and economically. The Gelfonds, first-generation Americans of Jewish Ukrainian heritage, were at the low end of that economic ladder. Leo Gelfond hunched over a sewing machine all day stitching pelts. When he came home at night, Rich remembers, he “almost looked like an animal because he was so covered by fur.” It was hardly lucrative work, and what was worse, it was seasonal — no one needed furs in the spring and summer — so Leo Gelfond would have long stretches of unemployment, which led to frequent arguments between Rich’s parents about money. “It wasn’t the happiest household,” is how Rich puts it.

Nor, on the face of it, was it the kind of household that would have sparked a son’s ambition. Leo Gelfond succumbed to what he viewed as his fate, and a sense of defeat along with resentment hung heavy over the family. But Rich’s mother, Sara, who was not particularly optimistic about her own life, did somehow have an undying faith in Rich’s. If, from his father, he determined that he was never going to be dependent on anyone, from his mother, he learned that he would never have to be. She told him repeatedly that “whatever you want to accomplish, you can,” and he internalized that mantra to the point where Rich himself said he was nearly delusional about his prospects for success.

What Sara Gelfond may have detected is that her son had something special — something innate. What he had was chutzpah, which is Yiddish for unabashed nerve. Even now, Gelfond exudes a kind of preternatural calm. There is none of the posturing you might associate with a corporate kingpin, none of the affectation to intimidate or impress. (He insists on being called Rich, not Richard.) Rather, with his slight stature, his smooth, ageless face, his shoulder-length light brown hair and his blue eyes, and his relaxed, affable demeanor, he is almost cherubic. He seems to know exactly who he is, and he seems to be remarkably comfortable with who he is, serene, which is a kind of chutzpah too. There doesn’t seem to be much doubt in him.

There never was. It was chutzpah that inspired Gelfond to find mentors when he was just a boy — surrogate fathers who could guide him and compensate for what his own father couldn’t give him: a neighbor who was a lawyer; another neighbor who was president of the musicians’ union; an uncle who was a modestly successful accountant in San Diego. He talked and he listened, and their success rubbed off on him.

And then there were the businesses — his first stabs at being an entrepreneur. When he was eight, he shined shoes every Saturday at the local barbershop. At twelve, he started the High School Gardeners Association, promising to groom neighborhood lawns, not telling customers that the “association” was just him. More chutzpah. When he was in high school, he and a friend launched a weekly sports newspaper called New York Ball, peddling subscriptions to big companies on Madison Avenue and selling the papers at the Nassau Coliseum and Madison Square Garden. Eventually, he bought typesetting equipment and installed it in his parents’ basement. (His father charged him rent. “He was the kind of guy where I wanted to pay him.”) At 16, he would sit in the Mets’ dugout with Tom Seaver or in the Islanders’ press box. Big big chutzpah. The circulation reached 25,000, he got enough money to buy himself a red 1973 Plymouth Duster, the only kid in school to have a car, and he was riding high, until his printer suddenly asked for all the accounts payable, and Gelfond was forced to close the paper.

He was unfazed. Along with the chutzpah, he had drive — unrelenting, indefatigable, incredible, multi-tasking, focused drive so that Gelfond seemed to be in perpetual motion. While he was writing, editing, and typesetting The Ball, and selling subscriptions to it, he was also crossing the field at his high school each day to work as a shipping clerk at a Decorator’s Walk warehouse. But he didn’t drive himself because he had a fear of failing and was desperate to defeat poverty. Gelfond was fearless. He drove himself because he accounted trying as more important than succeeding: “Trying made me successful.”

*

It was chutzpah too that propelled Gelfond to apply to college, even though no one in his family had ever gotten past high school and even though his parents gave him no encouragement to go (his father said “nerds” went to college), much less any money. The trouble was that his success at business had taken a toll on his academics. He wasn’t a bad student by any means. Anyone could see he was bright. It was just that he thought of high school as a “hobby.” His guidance counselor presented three options: Nassau Community College, Vanderbilt (because it had a scholarship awarded to an aspiring sportswriter, and Gelfond, after all, had edited the Ball), and Stony Brook. A friend of Gelfond’s father, a West Point grad, was aghast. “The kid’s done all this stuff in high school,” he screamed. “He should be going to Harvard or Yale.” Instead he went to Stony Brook (For the record, just about everybody in Gelfond’s circle would go to Stony Brook – from his younger brother to his sister-in-law to his wife.)

Rich and Wife, Peggy Gelfond at the 20th Annual Stars of Stony Brook Gala
Rich and Wife, Peggy Gelfond at the 20th Annual Stars of Stony Brook Gala

It turned out to be a providential decision in a life of providence. He had never set foot on a college campus until he arrived for orientation there. At the time, 1973, Stony Brook was undergoing a building boom. There was mud everywhere. One project, a bridge intended to span two buildings, remained unfinished, prompting students to joke that it was a bridge to nowhere. But not for Gelfond. Stony Brook proved to be the perfect pathway — the bridge from Plainview to the real world, he would later say. Stony Brook is where he found himself.

What Stony Brook offered a boy with rampant energy and ambition was the freedom to do nearly anything he desired — a kind of educational entrepreneurship.

Within a week, he was sports editor of the paper. He began to design his own curriculum, getting a truly liberal education, because at Stony Brook he could. In time, he was elected by his fellow students to be the first student representative on the university council, running on the slogan: “I learned about Stony Brook in the James Pub, not the polity office.” He TA’d classes and even taught a class in the sociology of sports while an undergraduate because at Stony Brook he could. Charles Johnson, a renowned African American novelist from whom Gelfond was taking a philosophy course, invited him to teach the section of the course on Johnson’s new book, while Johnson sat in the back of the room because at Stony Brook he could. When Johnson did interject, Gelfond joked back, “I didn’t call on you.” He now says, “Where else could you do that?” The freedom led to intellectual independence and critical thinking that he isn’t sure he would have gotten at a more traditional, button-down university. “They really valued ideas, and it was more about how to think outside the box than it was about how to regurgitate,” he says.

Though throughout his time at Stony Brook he was still multitasking, working 30 hours a week covering the Islanders, Rangers and Ducks for Newsday, often getting home at midnight and then rising early the next morning for class, he graduated in three years by taking eighteen credits each semester and attending summer school. He was a stellar student, in part because during his first semester his political science professor Mark Landes gave him a C — this after Gelfond took his fall break in Washington, wandered into the office of Judge John Sirica, who had just presided over the Watergate burglary trial, spent the entire afternoon talking with Sirica, and then wrote an account for Newsday. But Landes told him he was giving Gelfond the C as a “gift” because even though Gelfond was one of the smartest students he had ever taught, Landes said he was trying to “scam” his way by, and that if he actually applied himself, it would serve him well. Though Gelfond claimed that at the time he didn’t exactly appreciate the so-called “gift,” he got nearly straight A’s from that point on and would win the William Sullivan Award as the outstanding graduate in 1976. And the lessons didn’t stop with graduation. He returned to the campus one summer to work as an assistant to John Toll, the university’s president who had gotten to know Gelfond when Rich was the student representative, and Toll became yet another mentor, teaching him how to relate to co-workers and subordinates and how to work with a board of directors — skills he would carry into the business world.

Rich Gelfond at the 2015 Launch of the Campaign for Stony Brook
Rich and Peggy Gelfond with scholarship students at the 2015 launch event for the Campaign for Stony Brook. Completed in June 2018, the Campaign for Stony Brook raised $630.7 million, and was the largest fundraising campaign in SUNY history.

Gelfond has remained grateful to Stony Brook for the opportunities it provided and the way it shaped his life. He is a generous donor, endowing a scholarship for students with leadership skills like the skills Gelfond himself had demonstrated while at Stony Brook, and he chairs the Stony Brook Foundation, a 501(c)(3) non-profit that has raised $900 million for the university since its inception. And he doesn’t just give money. He initiates. After he went on a fish diet and suffered a serious case of mercury poison in 2006, Gelfond began underwriting a study of mercury poisoning, using Stony Brook as the point institution. He calls these efforts “philanthropic entrepreneurship” because at so many institutions “you write a check and they send you a statement, while at Stony Brook you can be as involved as you want to be.” In business speak, Stony Brook is, he says, an “undervalued asset,” and he is miffed that successful Stony Brook alums who went on to attend an Ivy League graduate school are more likely to give to the Ivy League school that doesn’t really need the money than to Stony Brook, which does.  It is about social mobility, he says. He believes that at Stony Brook, you can make a real difference in the lives of kids who come from nowhere. He knows. He was one of those kids whom Stony Brook helped catapult out of poverty.

*

Gelfond was 38 and already a successful entrepreneur in 1993 when, over Presidents’ Day weekend, he took his then wife and two daughters to an IMAX theater at the Smithsonian Air and Space Museum to see a film titled To Fly.  IMAX was an immersive technology invented by three Canadian filmmakers that cast a high-resolution image nearly 100 feet tall with an unprecedented audio to match. The Gelfonds were latecomers to the showing and sat in the front row, dwarfed by the gigantic screen, and the experience was “overwhelming.” It was another bit of providence that Gelfond returned to his office that week to find a book of financials from an investment banker at Donaldson, Lufkin and Jenrette. The book was about IMAX, which, it just so happened, was for sale. Though Gelfond knew next to nothing about the movie business, he had a partner named Brad Wechsler, another entrepreneur cum former entertainment attorney, who did, and the two decided to put in a bid. They raised $100 million, but theater impresario Ted Mann won the auction.  And then more providence: IMAX and Mann couldn’t settle. The sellers came back to Gelfond and Wechsler, who made the purchase. Three months later they went public, selling 20% of the company for $120 million. “Basically,” Gelfond says, “we sold our vision to the public.”

That vision was to take IMAX, which had been confined to museums and to showing short documentaries, and bring it to multiplexes where they would show commercial films in the IMAX format. But, Gelfond quickly came to realize, that was easier conceived than done, even for a driven, incorrigible optimist like him. For one thing, the studios weren’t particularly receptive to newcomers or to new technologies. For another, building an IMAX theater was expensive. For a third, the logistics of showing movies where the reels needed forklifts to be dropped into projection booths were daunting. And for a fourth, there were no movies in IMAX, just the nature, travel and science docs that had been showing at the museums.

Gelfond likes to say that one of the keys to his success is naivete — “not understanding the challenges that no one else would be able to overcome.” Which is why he did overcome them, though not without a flirtation with bankruptcy at one point and a near-sell at another. Eventually, he began to wear down the studios. The turning point came when IMAX convinced director Ron Howard and his production partner Brian Grazer to convert Apollo 13 into IMAX, for which the company devised an algorithm to take traditional 35mm movies, the sort you see at a regular theater, and transform them into IMAX movies, which are huge. As to the theaters, they found a way to fit an IMAX theater into existing multiplexes for roughly $500,000, down from millions that original construction cost. For the logistical problem of large expensive reels, $40,000 per print, IMAX pioneered digital projection, which did away with physical film altogether. (IMAX won an Oscar for technological advances in 1997.) And as for movies, once commercial pictures began being projected in IMAX, a flood began. Now IMAX cannot accommodate all the filmmakers who want their films shown in the format and even shot in IMAX rather than have them converted; last year there were sixty films converted, up from fifty-one the year before. (The Avengers: Infinity War was shot entirely in IMAX.) As a further incentive, IMAX came up with a joint venture plan whereby it puts up most of the capital and takes a percentage of the gross, roughly 30%.

Rich Gelfond with Actress Jennifer Lawrence, Director Toni Myers
Actress Jennifer Lawrence poses for a photo with Richard Gelfond, CEO of IMAX, left, and writer and director Toni Myers, right, as they arrive for the world Premiere of the IMAX film A Beautiful Planet at AMC Lowes Lincoln Square theater April 16, 2016 in New York City.

Things couldn’t be rosier for IMAX now. At the end of 2017, there were 1,370 IMAX theaters in 75 countries with 494 new theaters on the horizon. But it had been a long way from Stony Brook to IMAX. A long, bumpy way.

*

One of the things Gelfond said he discovered at Stony Brook is that he loved the thrill of business, the excitement and risk, and that he had a talent for it. But business was volatile. His Jewish grandmother had told him he was destined to be a lawyer, and he decided to comply because law was the “pathway out of being lower middle class.” So he went to Northwestern Law School, where nevertheless he was much more focused on business than on law — with the backing of one of his law professors, he even optioned a million tons of coal during a coal strike to sell to Midwest utilities — and where, he says, “I was always looking for different ideas,” meaning business opportunities.

The problem, as Gelfond saw it, was that he was an outstanding law student, which put tremendous pressure on him to continue his legal career. He succumbed. He decided to forgo business, took a coveted clerkship with a federal judge on the Third Circuit Court of Appeals in Pennsylvania named Max Rosen, who became one of his most significant mentors, and then joined Cleary, Gottlieb, a prestigious New York law firm where he edged back toward business by specializing in mergers and acquisitions. He was making a fortune, he says, but he was miserable, which is when providence appeared again — albeit providence of an odd sort. Gelfond was told he wouldn’t make partner because he spent too much time with clients and too little in the library. He was devastated. By this time he was married with two children. “I thought my life ended.”

It turned out that his professional life had actually just begun. He immediately veered into his real love: business. Inspired by a 99-cent dry-cleaning chain that some cousins of his in California had opened, he began a franchise of his own. (At his Cleary Gottlieb going away party a partner quipped of Gelfond, “He used to do law. Now he does shirts.”) He eventually sold the business to Colgate-Palmolive — “It was a mess” — but he was unfazed by the failure, especially when one of his partners in the venture, James Simons, another generous Stony Brook donor, sent him a comforting note: “The business failed despite you.” After dry-cleaning, he wound up at Drexel Burnham, for a time one of the nation’s hottest investment firms, and he rose quickly there. “It was like the Wild West.” But Drexel was caught in some legal improprieties and went bankrupt. That prompted him to start his own investment bank, Argosy, but when he and his partners had a falling out — Gelfond didn’t just want to fund other people’s dreams; he wanted to buy companies of his own — he left and became a one-man investment banking operation with clients that included the French government. He says he made millions.

And yet he was still looking for a company to buy at which he could finally ply his own entrepreneurial instincts. And that’s when he went to the Smithsonian.

*

After nearly 25 years as IMAX’s CEO, Gelfond says no business is “crisis proof,” and he admits that growing up poor has always made him security conscious, but IMAX comes pretty close to being a sure thing. The company is already deploying laser projection that is an upgrade from digital; it is working on technology to improve the image on television and computer screens; it has joint ventures on both IMAX screens and home TVs in China, where Gelfond was one of the first Western entertainment executives to see that market’s potential and where he has built an indigenous IMAX team from the ground up to embed IMAX in China’s entertainment culture.  (It has 853 theaters either in operation or in backlog in Greater China.) And it is sinking its roots deeper into commercial filmmaking. Gelfond had recently spent a month in Los Angeles mainly talking to studio heads and talent, including director Christopher Nolan, who has worked closely with IMAX and who shot 75% of Dunkirk in the IMAX format.

With so much of entertainment migrating to the Internet via Netflix, Amazon and Hulu, Gelfond remains unconcerned. “There are two businesses,” he says, talking about movies. “One is the blockbuster business. One is the `other’ movie business.” He says the `other’ movie business, small, mid-level movies, is changing rapidly, thanks to streaming services. Meanwhile, the blockbuster business is largely unaffected. “The blockbuster business isn’t about making movies. It’s about making franchises. It’s about creating sequels. It’s about creating merchandising. It’s about creating theme park rides. It’s about creating TV shows.” And IMAX is in the blockbuster business. “We’re almost a way to define what a blockbuster is,” he says. “So they need us for blockbusters, and we need them for blockbusters.” He adds that this is not just an American phenomenon, but a global one. IMAX shows Chinese blockbusters, Indian blockbusters, Russian blockbusters.

But here is where Gelfond parts company with so many of his entrepreneurial, corporate titan confreres. He isn’t obsessed just with status or money or even with the future of his business – a business he professes to love. He is also looking outside IMAX, to the future of leadership itself, and that brings him back to his childhood and to Stony Brook.

“To have a full life,” he says, echoing something he learned from his mentor, Justice Max Rosen, “it’s not just about your career or about what everybody can do in terms of making you money. It is about how you make a difference in the world.”

Gelfond wants his difference to be helping young people – talented students from those lower economic precincts who need mentoring, guidance, scholarships and a way to build the sort of entrepreneurial skills he has parlayed into success. That is the role that Stony Brook plays in his life now, which is seeing that it plays a role in the lives of others who seek to climb. Gelfond is literally never far from that visit to the fur shop, near 29th Street and 7th Avenue – the visit that lit his own fires – and he doesn’t want to forget it.  He lives just a block away, where he can look out his window and see the building and feel the old hurt and appreciate just how far he has come.

—Neal Gabler, Award-Winning Journalist, Historian, Film Critic and Stony Brook Faculty Member

 

 

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2 comments

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  • I lived just a few houses from the Gelfonds and. was close friends with Leo and Sara .Richard impressed me from a very early age and I am not surprised at his amazing success.I later moved to another house in Plainview and the friendship continued.I hope that I was the lawyer that Richard was talking about in the interview.Justin L Cooper. Justincooperesq@yahoo.com

    • Justin- You were indeed the lawyer my brother Rich was talking about!! He has never forgotten and continues to embrace those times many years ago in Plainview. Plenty of fond memories too.

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