Since founding SBE Entertainment Group LLC in 2002, entrepreneur Sam Nazarian has made a name for himself as Hollywood’s foremost nightclub impresario. But the 31-year-old businessman, who left college to start a telecommunications firm, has been branching out. There’s his Element Films production company, his popular Katsuya Japanese restaurant in Brentwood and other pursuits. The son of Iranian immigrants who settled in Los Angeles after the Islamic Revolution, Nazarian credits much of his success to his father, Younes, a co-founder of chip maker Qualcomm Inc. Now, Nazarian has set his sights on the hospitality industry. He plans to open a high-end hotel on La Cienega Boulevard next year at the Le Meridien at Beverly Hills property. He claims it will rival the Peninsula but aimed at a younger clientele. Another hotel property is slated for Miami. The Business Journal recently talked to Nazarian in his sleek Beverly Boulevard office, replete with marble and a wall of nearly a dozen flat panel televisions tuned to different channels.
Question: SBE stands for Sammy Boy Entertainment. Did you ever think you’d be the head of a major company named “Sammy Boy?”
Answer:
No. Growing up Sammy Boy was my nickname. The first film deal I did my entertainment lawyer said, “OK, we need to set up an LLC.” At the time I was just giving street addresses (for LLC names) because I was doing real estate deals. So he said, “Well what’s your nickname, let’s have fun with it.” So I said Sammy Boy. I thought Sammy Boy wouldn’t be as appropriate as SBE, so it became a little more institutionalized.
Q: How did you get your start?
A:
I started my own telecommunications company when I was 20, Platinum Wireless. I started it on my own. At that time my family was in the telecom business; they were one of the founders of Qualcomm. So I wanted to do things on my own. Within one year we had 125 employees. And subsequently I sold it to diversify our family assets into real estate.
Q: That’s a long way off from starting clubs.
A:
After I came back from school at NYU I saw L.A. was really promoter driven; it was whatever warehouse the promoter told you to go to and (clubs) had a short shelf life, maybe six months. The operators didn’t know how to operate; they let promoters run their doors. People would come from New York, big chefs, big names, and not understand how finicky L.A. is. If you are on the wrong side of the street, don’t have an outdoor area or good valet, some things won’t work. You have to live the market. And that’s what we did.
Q: Be more specific.
A:
What we did with SBE, we weren’t just the owner of the nightclub. We focused on West Hollywood, and picked up dance licenses. I picked up the only dance license on La Cienega. The communities are strong and the licenses can’t be duplicated again. There are only three dance licenses on Sunset Boulevard, our Time Square.
Q: Where did the get the money to do this?
A:
I got the funding for my first nightclub from the proceeds of the sale of my telecommunications company.
Q: When you were growing up in Los Angeles, did you go out to clubs?
A:
When I was in high school, there were a couple of major staples. There was the Gate, there was the Roxbury and the venues did the speaking. You planned your week around going to the Roxbury, kind of like Studio 54.
Q: Your nightclubs, such as Hyde, have been hits with the Hollywood set. Explain their success.
A:
We have focused on spending money to build a product that is accessible to a demographic not just between 21 and 25. Hyde is for people who appreciate design. It is for people who appreciate the fact that we spent a good seven months on brand building, forgetting about construction. Hyde is the first time really ever in L.A. we’ve brought the sophistication of Milk & Honey or Double Seven in New York. It’s really handmade drinks. It’s not just a cool place. Once people come in there they see the amount of detail that went into this little place.
Q: Sounds like a change for Los Angeles, which has not always been considered a good nightlife city.
A:
Five years ago people used to scoff at L.A. as not really being the pinnacle of anything outside of Hollywood. We’ve shown the country that L.A. can have some level of sophistication and quality of dining.
Q: And you’ve managed to do all this without graduating from college.
A:
I went to college for three years. I think it is different for everybody. My sister is a PhD, my brother is an MBA and my other sister is an architect. My parents never really had much of an education because they weren’t afforded one. It was very important to them. You will see that in a lot of immigrant families, that’s the first thing they really focus on. For me, the education I got from NYU was being there at 17 by myself and learning to adapt. New York City is not a very welcoming city. I arrived in Union Square and the first person I was greeted by was not a school official, put it that way. I was always an entrepreneur, trying to find ways to do things on my own; that was the way I benefited.
Q: Why didn’t you finish?
A:
After my second year of college, the opportunity arose to start my own company so I felt I was better served to pursue that rather than complete my degree.
Q: What do your parents think of your success in the nightclub industry, which sometimes has been seen as an unsavory business?
A:
My parents were at first a bit hesitant about my being in the nightlife business, but they’ve since seen the immense creativity that we’ve been able to bring to the business.
Q: Is your father still at Qualcomm?
A:
He spends most of his time doing charity work now. He is still very strong minded and strong willed. He has had to make it twice he had to make it the first time and then again (after) the Iranian Revolution and he is a hero in my mind.
Q: Was he a big influence?
A:
Yes, in his business theory of how to deal with people, and in how important integrity and your name is. That has translated to everything I try to do. The theories translated, but he was more into manufacturing, government defense and ultimately the high tech sector.
Q: Do you go to your clubs?
A:
Much less than I used to, when you have to get up for 7 a.m. construction meetings, dealing with institutional partners and banks based out of New York.
Q: But you’ve been seen photographed with Hollywood starlets.
A:
It’s certainly a fun side of our business, but I’ve never gotten wrapped up in it. My greatest satisfaction is seeing people enjoying our venues and our movies.
Q: Tell us about Element Films.
A:
I saw it initially as an opportunity for bridge financing. We had a couple of relationships with lenders that were loaning to film companies and projects specifically, and that’s the way I approached it. I approached it from the lending standpoint. Through that we came across a company that had started doing small films, very low risk. Subsequently we did about seven films, a couple being very successful, we got into Sundance right away. We got into Cannes with “Down in the Valley.” It’s been a five year run. We’ve made the film side a very legitimate and exciting part of what we do.
Q: What’s your niche?
A:
Whether we are doing a $10 million horror movie or a $40 million thriller, we want to make sure people come away feeling that it is a film smartly made and well made. We are not Fox spending $200 million on a movie but we are still creating an amazing product for $20 million. I think we are being recognized in our segment. We have two big wide release films coming out in the next two months, one is “Pride” with Terrence Howard and Bernie Mac. We control everything from distribution to marketing; in every aspect we are a studio.
Q: Now you are shifting your focus these days to hotels. Tells us about that.
A:
Four or five years ago we looked at the L.A. market and saw a discrepancy between the amount of unbelievably sophisticated people living in the city without the adequate amount of sophisticated venues for them. Now we have under our own umbrella the SBE Hotel group. We have two major hotel properties the Le Meridien at Beverly Hills and the Ritz Plaza in Miami. Both will soon be redeveloped and rebranded, by (noted French designer) Philippe Starck. We’ve signed him to a 15-year exclusive contract in North America, Mexico and the Caribbean.
Q: Where does he fit in with the company?
A:
He has a design team of eight people in Paris. He designs it all himself. He lives it. When you talk to him about St. Tropez or the Middle East, he gets it. He does everything from his Target product line to Puma shoes. He’s not just a designer of interior space. He brings so much credibility. He is not a guy learning on our dime, we are learning on his. He has been one of our biggest assets.
Q: How did you land him?
A:
When I started launching SBE I was in such awe of what he had done. It took us a year to get a hold of him in his French office. During that time he was about to sign a global deal with a huge partner. So we didn’t know if we could have him or even have him work on one project. Luckily for us that didn’t happen and we did sign him.
Q: How will your model for a hotel company be different from others?
A:
On the hotel side you have the Four Seasons as a perfect example of one of the best hospitality brands in the world. We are trying to build our generation’s version of the Four Seasons. Just because you are going to a luxury product like the Peninsula or the Four Seasons doesn’t mean it has to be stuffy and scripted. That’s a big statement to make.
Q: It must be difficult to balance this many pursuits. What is your typical day like?
A:
These days we are working on a couple of really big projects, which start me off at about 7 a.m. checking in with specific consultants. I am into the office by about 9 a.m. It all depends on where we are that particular day. I always joke that within two hours I can go from a design meeting for our new hotel, to finalizing a new film we are going to do; to talking about budgets on a restaurant we are going to do, to dealing with close to 1,000 employees. At any moment your gears have to change.
Q: Sounds exhausting.
A:
But that’s what I love about it. At any time we could have bankers coming in from New York and we could have to go out until 2 a.m. One thing I have always been consistent on is having to be up very early in the morning or things don’t keep moving.
Q: Think you’ll ever find time for a family?
A:
Very soon.
Sam Nazarian
Title:
Chief executive
Company:
SBE Entertainment Group LLC
Born: 1975;
Tehran, Iran
Education:
University of Southern California and New York University
Career Turning Point:
Leaving college to start his own telecommunications firm
Most Influential People:
Father, Younes Nazarian, and Tom Barrack of Colony Capital LLC
Personal: Single, resident of Hollywood Hills
Hobbies: Collecting art and cars
