Winemaking for fun and profit (pg. 3)
All told, Johnson and Nelson invested about $22 million to get the cognoscenti buzzing. Waiting five years to release the first vintage only heightened anticipation. Due out in October, the 400 cases of cabernet blend are sold out - although Ovid is withholding some at $175 per bottle for high-end wine shops in key markets. "We're not in this to make money," says Nelson. "It's not that we're throwing money away, but we're building value for the long term. We went in thinking, Let's build this using the best available resources and make no compromises."
When there's no real intention of making money, how do you come up with a price for your baby? Nelson says it's akin to doing an IPO roadshow. "You go out and gauge demand. You show them your product, your financials, your pedigree, and you get a sense for what the price is going to be," he says. "If we think we're in the $175-per-bottle level because in a blind tasting that's who we compete with, to bring it out at $50 will be baffling to the market. You just don't have a choice."
The big night has arrived. The Napa Valley Wine Auction is just getting underway at the swank St. Helena resort, Meadowood. The wine glitterati dropped $2,500 a head to sit in a sprawling white tent and raise their paddles in the name of local charities. Johnson and McMinn are here. Woodbridge just strode past the check-in table with a six-pack of Hundred Acre under his arm and a train of dudes in tow. Jay Leno is the emcee. Oprah Winfrey is sitting with Frank and McPherson, who have been entertaining her for three days.
Over dinner, 44 lots will be auctioned. The most anticipated entrant is also the least adorned: six magnums of the 1992 vintage of Screaming Eagle. Unlike many offerings, it doesn't come in the trunk of a Lexus or bundled with a hot-air-balloon ride for 18 friends; it sits humbly in a wood box. Its only flair is the signature of winemaker Heidi Barrett - the only human being who has scored 100 from Robert Parker five times. Unlike Frank, Barrett doesn't think Screaming Eagle's success has had much to do with the auction. She credits "a really special vineyard and really careful winemaking." (She still shakes her head at how she got involved. "I did that job for so cheap," she says with a small laugh.)
In the course of the evening, several lots perform well, including those that Barrett is or has been associated with: Revana ($100,000 for one 27-liter bottle and a Napa vacation package for four) and Dalla Valle ($200,000 for a half-case plus a six-liter bottle). Three three-liter bottles of Blackbird Vineyards - along with four tickets to Paris and a tour of Coco Chanel's apartment - fetch $300,000. Nelson and Johnson don't offer any of their vintage, but they do make a challenge grant to a community clinic that ends up costing the couple $350,000. Some lots sell for as little as $30,000, which Frank attributes to poor planning. He told me yesterday that it's easy to avoid such a fate: "You have your friends bid up," he said. If you get stuck with your own lot, well, donor discounts dull the pain. And besides, it's for a good cause.
When the Screaming Eagle lot goes live, the tent starts jumping. The auctioneer asks for $50,000. "Do I hear 100? ... One-fifty? ... Two? ... Two-forty? ..." One man will not be outbid. Auction officials identify him as David Li, a Chinese entrepreneur who sold his dot-com recently for $3 billion. The bidding volleys between Li and a man across the tent until Li prevails. The honor of adding six magnums to his quarter-million-bottle cellar costs him a cool $500,000.
It's a high bar set by an austere offering. Frank doesn't do austere. He packaged his Promise with a dinner in Los Angeles cooked by celebrity chefs Mario Batalli and Nancy Silverton. Also included: a walk-on role on Grey's Anatomy, four first-class tickets to New Zealand, an escorted tour of Kiwi wineries with Frank himself, and four tickets to the American Film Institute's Lifetime Achievement Awards next summer.
The bidding starts at $100,000. At 200, paddles are up all around the tent. Friends of Frank are in full force. At 300, the bidding slows, but picks up again as it crosses $400,000; 440, 460, 480 once, 480 twice. A case of Promise (extras included) sold! for $480,000 to paddle No. 10. Cue press release: The new wine from Hollywood moguls Rich Frank and Stephen McPherson sold for just shy of Screaming Eagle. Afterward Frank stands alone outside the tent, looking satisfied and smiling broadly. He created a frenzy, kicked off his vintage in style, and raised a half-million dollars for charity. Not a bad haul.
So who belongs to paddle No. 10? It's Stratton Sclavos, the former CEO of VeriSign and the same guy who won Frank's lot last year. Seems an unlikely coincidence. An old pal? "Not exactly," Frank says with a shrug, as revelers pour out onto the lawn to dance under a star-filled Napa Valley sky. "I'm just glad I'm going to New Zealand with people I like."