New Money.

Unlike L.A.'s Original Empire Builders, Today's Rich Are Brand Managers

ONCE upon a time, Los Angeles had a business elite that was rough, ruthless and utterly committed to the greater growth and prosperity of this region. It included men like Henry Huntington, who a century ago proclaimed that "Los Angeles is destined to be the most important city in this country."

That was when L.A. had 100,000 residents, and a lot more cattle.

Today, the city has more than 4 million residents and L.A. County is 10 million strong; yet in many ways, our elites rarely have the kind of passion and commitment to the region that was commonplace a century ago.

Not that all the changes have been bad ones. The old elites were frequently racist, violently anti-union and, at least in a genteel manner, anti-Semitic as well. Today's elites are, in contrast, heavily Jewish, or made up of other ethnics, such as list-leader Kirk Kerkorian, the son of Armenian immigrants. In politics, the latest rich are as likely to be bankrolling left-wing Democrats as conservative Republicans.

These shifts have become morel notable in the 15 years that the Los Angeles Business Journal has been identifying L.A.'s richest. In 1986, many of the names on the list belonged to solidly conservative families -- the Disneys, the Chandlers, the Kecks. The industrial giants looming over Los Angeles tended to come from businesses like energy and acrospace, where the preponderant ethnicity tended to be WASP and the politics close to these of Richard Nixon and Ronald Reagan.

Indeed, the richest of 1986 could be best seen as part of the last generation of "boom town" Los Angeles -- a place where engineering solutions, often rammed through despite environment or social costs, made the creation of a giant metropolis possible. It was still a Los Angeles that reflected the mindset of the city's modern founding fathers, like Huntington or Harrison Gray Otis, founder of the Los Angeles Times.

Today's elites bear only some passing connections to those of 1986. For the most part, they come from the worlds of finance and entertainment, transactional geniuses as opposed to builders of vast new empires. It's revealing, for example, that the only prominent aerospace people on the list -- Steven Ferencz Udvar-Havy, Leslie and Louis Gonda -- built their fortunes not making planes, but leasing them.

This transactional model is even truer for telecommunications and entertainment people who dominate the top of this year's list. Although they maintain large operations in Southern California, many of these executives see themselves more as managing a brand than building a brick-and-mortar empire. Jerry Perenchio, who owns the Spanish-language TV network Univision, keeps headquarters here but most of the programming comes from Miami or Latin America. Univision's loyalties and programming are more Latino-global than American or Angeleno.

The same can be said of the other brand managers -- Steven Spielberg, Michael Eisner, Haim Saban, David Geffen -- whose product is profoundly global and is often sourced from a vast array of places. Like financiers Ron Burkle and Eli Broad, theirs is a profoundly "cosmopolitan" world view, and rarely intersects with that of smaller Los Angeles-based businesses that are more at risk from shifts in the local political culture.

This can be seen most dramatically in the fact that Antonio Villaraigosa -- the most avowedly left-wing serious candidate for mayor of Los Angeles in the last half century -- probably won the votes of half the top 10 richest people in Los Angeles. More than that, Eli Broad and Burkle have been among the leading financial backers of the former Speaker's labor-dominated campaign.

The new elites, and their attitudes, bring both advantages and dangers for Southern California. Their lack of provincialism, for example, speaks volumes about the fact that, as Huntington predicted a century ago, Los Angeles has become, if not the most important city in the country, certainly among the top two or three. And as Los Angeles continues to undergo a massive demographic transformation, the elites' lack of clear racial prejudice, even to the point of embracing a benign multiculturalism, could help ease the ethnic shift for the business community.

But "enlightened" elites also pose a serious problem. In the past, the wealthiest circles tended to have so much invested in Los Angeles -- both financially and psychologically -- that they made sure that the political leadership did not undermine the city's economy. Today, the new elites often have only a small portion of their total investment in the region, and much of that frequently is tucked away in the golden ghettos of the Westside.

This means the top powers in town often are not focused on the day-to-day issues of L.A. business. They can afford to be liberal in a way that a small businessperson may not. Often they simply are too rich to feel the typical businessperson's "pain," and too remote, in terms of their own economic self-interest, to risk sullying their images with the politically correct media, academics and left-oriented celebrities.

But for all their possible shortcomings, those on this year's richest list, in one important way, more closely resemble the founding generations at the turn of the century than even their 1986 predecessors did. Almost to a man (there are few women), they are self-made people, most of them from outside the region or even outside the country, who made their way to Los Angeles and chose to make their fortunes from here.

If anything represents a source of hope for the future, it is this fact. Los Angeles may lack the concentrated drive towards manifest destiny of its original elites, but it remains one of the world's greatest stages for entrepreneurial daring and dreaming big things.

Joel Kotkin is a senior fellow at the Davenport Institute for Public Policy at Pepperdine University and at the Milken Institute in Santa Monica.