by Connie Bruck
And for a successful hour show, Fortune estimated, MCA would earn much more. The first three years of Wagon Train, budgeted at $100,000 a week, would probably bring MCA about $17 million. It was easy to understand, then, why Wasserman had been so determined to enter this business. To earn $17 million as an agent, MCA would have to collect $170 million of client salaries—an astronomical sum, notwithstanding all Wasserman had done to drive up stars’ earnings.
Even as MCA extended its reach across the TV industry, its relationship with NBC continued to be the keystone. And yet—vital as NBC was to MCA—there was no question about which was the dominant partner. This dynamic was nicely illustrated in the story of Wagon Train. Don Durgin, then an NBC executive, described the episode. Revue’s Wagon Train, a one-hour Western, had become a great hit at NBC, garnering top ratings for four years. When its next contract was being negotiated, MCA wanted NBC to buy the new episodes as well as a package of the old as reruns. The network had a contractual right of first refusal (the right to bid on renewing the show before it could be sold elsewhere), and, according to Durgin, NBC fully intended to make the deal. And then, one day, Durgin and his colleagues heard that Wasserman had gone to Leonard Goldenson of ABC and sold him the whole package. “Wasserman just took it away!” Durgin said. “And when we screamed, he said, ‘You didn’t act.’
“We said, ‘Wrong! Wrong!’
“So he said, ‘Look, in our opinion, you didn’t act. Anyway, it’s gone. But now we’re going to do a show, The Virginian, and it’s going to be great, and you can have it.’ ”
Durgin, who would become president of NBC in the late sixties, had worked for Kintner at ABC and then had been recruited by him to NBC; Durgin would always defend his former boss when questions about NBC’s relationship with MCA were raised. Now, he tried to explain how that relationship had developed. CBS was king of the half-hour comedies—a high-risk, high-reward business. These shows were hard to create, and there was little middle ground; they either became outright failures or hits. The failures were expensive, but the hits were gold mines. NBC had tried them repeatedly, without success. So NBC executives decided to concentrate on the long form, an hour or ninety-minute show, such as a Western or detective drama; these were more formulaic than the half-hour comedies, so far less risky. This was MCA’s specialty. “MCA was derided as a sausage factory,” Durgin said. “They were thought to be uncreative, boilerplate. But we couldn’t get the great half-hour comedies, so we were dependent on the long form, and MCA was the biggest supplier of it. Then, because we were a big customer, they’d say, ‘If you don’t want that, we’ll do this’—and they tended to lock us in an unholy embrace.”
Dealing with Wasserman was unlike anything Durgin had experienced in his network career. “I had been used to dealing with honest guys. But Lew would misrepresent and let you draw a conclusion at your peril. Anything he had a legal duty to disclose, he’d disclose in full detail. That would make you feel he was honest, and maybe let your guard down. But then you’d discover later that the package had shifted—and if you complained, he’d say, ‘Okay, forget it! We’ll take it back!’ ” In retrospect, Durgin continued, it seemed that he and his colleagues were “little boys in kindergarten dealing with Darth Vader.” Wasserman, he thought, was the smartest executive he had ever known. He had a way of negotiating that let you know he had assessed his advantage to the decimal point (“if he thought he had a 50.1 percent advantage he would be merciless, threatening, nasty—though not in a vulgar way”), and he was always willing to walk away. “He never had any briefcase, never any notes,” Durgin recalled. “Dark suit, white shirt. A handkerchief in his breast pocket, another in his back pocket. He would pat his forehead occasionally, though he was never perspiring—it was just a habit. He was so finished. A very attractive man. I didn’t like him because he was such a shark—but it was a shark you almost had to admire as he circled you.”
Durgin was fascinated, too, by Billy Goodheart’s reminiscences of the early days at Music Corporation of America. “He told me about how they made bookings for Coon-Sanders. They dressed up several guys as Coon and Sanders and sent them out across the country. They figured that, with the exception of some traveling salesman, who would be likely in those days to be in such distant places in such a short time? And Billy told me, also, about the time they were having big troubles with orchestras in theaters, some union dispute. Billy resolved it. In his next expense report, he wrote, $10,000 in cash to bribe some union official. The accountant said, Billy, what is that? What do you think you’re doing, writing that down? Billy said, Okay, okay—he never wrote it again.
“Well, that was MCA,” Durgin concluded. “It never changed.”
Speculation about some lucre in the MCA-NBC relationship was endemic in the industry. “Let’s be realistic,” said Sal Ianucci of CBS. “Agents did whatever it took—girls, money. I know, because as an executive I was offered it.” Alan Livingston joined NBC as vice president in charge of programming in 1955 and worked on the West Coast, where he was supposed to produce pilots in house. But, he said, “Kintner had no interest in my pilots. He would ask me to do them—it was my job—but he didn’t want to buy them. It was all MCA.” He continued, “There was a lot of speculation that Kintner got payoffs. But did they just flatter him? All I know is that they controlled NBC.” Livingston added that executives at NBC in those days were not so highly paid; he estimated that Kintner might have been making $250,000 to $300,000. “There are different ways of paying off, too. A vacation? A car? A case of scotch every week?” Certainly, MCA was known for its extravagance in gift giving; it had come a long way since the days of paying off attendants in the washroom of the Muehlebach Hotel, or others with Christmas money. Harris Katleman, who was an MCA agent in the fifties working closely with Wasserman, said, “At Christmastime, so much money was spent, you could have run a small country. There were A, B, and C lists. The A list got cars, mainly Cadillacs.”
However much comment it provoked, MCA’s dispensing of favors was only a small part of the system Wasserman had engineered. “Lew was an entertainment mogul without peer,” commented Mike Dann. “I don’t think he was a great recognizer of talent, but he knew how to acquire it and implement it and negotiate for it. Part of the problem was that network executives (me included) were novices about dealing with talent. So it wasn’t just that Lew was brilliant—but also that he was dealing with people who were not professional in the beginning. He came in with a blank canvas.” Dann added, too, that the television industry was largely a white Anglo-Saxon Protestant preserve, populated by executives who had graduated from prep schools and Ivy League colleges—and they were no match for MCA. “The MCA guys did not play by the Marquis of Queensberry rules! They had started out in the nightclubs, and you know who owned them. The early days of MCA’s existence left an imprint on the personality of the company—and it was very different from William Morris, for example. The MCA agents always wore the white shirts and the black suits, but underneath they were guys who were much too smart, too aggressive, too street-wise for most broadcasting executives.
“As a unit, they were the shrewdest people in the history of the entertainment world,” Dann declared. “You wouldn’t want to take a Greyhound bus trip with them, or model your children after them—but they could deliver for themselves.”
If television represented the future for MCA, Las Vegas was the past, revivified—for MCA was at least as big a player in the booming entertainment scene of Las Vegas in the fifties as it had been in Chicago’s in the thirties. It had been a natural progression, from booking performers in nightclubs and hotels to booking them in Las Vegas; the performers were, by and large, the same, and the owners of the entertainment spots were, in a generic way, too. Bugsy Siegel’s Flamingo had opened in 1946; after that came Meyer Lansky’s Thunderbird, and then, in 1950, Moe Dalitz’s Desert Inn. Actually, the Desert Inn was called Wilbur Clark’s Desert Inn; Clark had begun its construction, but when he ran o
ut of money, Dalitz and his friends from the Cleveland syndicate came in. They were happy, though, to have Clark out front, since he had no police record. By the time it was finished, the Desert Inn cost $4.5 million—a Bermuda pink hotel with green trim and a circular drive leading to the entry, ringing a fountain that sprayed water sixty feet high. Wasserman had known Dalitz since he was a young man in Cleveland. For the Desert Inn’s opening night on April 24, 1950, Wasserman booked the floor show—Edgar Bergen and Charlie McCarthy, supported by Vivian Blaine, Pat Patrick, and the Don Arden Dancers. Dalitz had made sure that the crowd was full of high rollers; 150 “$10,000 men” had been invited—that is, men with credit lines of at least $10,000. Wasserman recalled that it was a tense moment for him; it was just hours before the opening that Jack Warner had announced he was barring MCA from the lot (in his temper over the Charlton Heston–Hal Wallis deal), and Wasserman felt he needed to stay in L.A. to handle that crisis. “I told my friends from Cleveland, ‘I can’t come, I have this problem,’ ” Wasserman said. “They said, ‘Fine, you got a problem, you don’t come, we don’t put the show on.’ They wanted me there. So I had to call Howard Hughes, and get a flight on his plane to get back that night.”
Las Vegas in the fifties was paradise for the mob. Although most of the owners operated behind semilegitimate fronts who were the licensed “owners,” that was about the only subterfuge required. (Even Meyer Lansky operated from the offices of the Thunderbird; agent Martin Baum, who worked exclusively for the Thunderbird for a time, recalled that “Lansky did not want to overpay. He checked every place an act I booked had been booked before. God forbid he found anyone had even once paid less!”) The casinos were the economic lifeblood of the town, and in this insular world, mob members were accorded the respect they felt they deserved. Years later, a longtime Las Vegas resident would express a nostalgia for these days, saying, “It was a real Western town, where people took care of their own. Yes, there was skimming, and the government didn’t get its full share. But if you worked in a casino and anyone in your family was sick, there was money to take care of that—it was all so personal, everyone knew everyone.” And the skimming—the process by which cash is taken after it leaves the tables and slot machines and before it is officially counted—was carried on with ease, as couriers fanned out with suitcases of money to Chicago, Miami, New York, and Geneva. For performers, too, Las Vegas represented a kind of windfall; they could make more money there than anywhere else. And MCA, as usual, controlled most of the major bookings. No other talent agency even had an office in Las Vegas.
“MCA ruled Las Vegas. You couldn’t take on MCA,” a former MCA agent told me. “Yes, there was some competition, here and there—but MCA was it.” He explained the facts of life in Las Vegas during this period. “There was all this cash. The way it worked was that performers would get salaries, and then they would get ‘salad’—maybe they’d get $7,500 in salary, and $50,000 in salad. Now, the agents obviously had to make some arrangements, because they were aware of the salad and they of course got their commission off the salad as well as the salary. For the performers, what to do with the cash was a problem. You couldn’t spend it on tangible assets, like a house or a Rolls-Royce—because then they’d say, you made $100,000 this year, how’d you buy that car? You had to spend it on jewelry, furs, or somebody’s rent.” If you spent it on jewelry, for example, and the IRS questioned you, he continued, “you could say, ‘I got a great deal, but I never knew how great it was. I paid one thousand for that ring, you’re telling me it’s worth fifty thousand? My God, I wish that guy was still in business!’ ”
Like any closed society, Las Vegas had its own system of reward and punishment. “This was a world in which favors were done all the time,” this former agent continued. “And if you were working in this milieu, you were friendly with the guys. . . . I remember once I did a favor for some of the guys, and they said, ‘What can we do for you?’
“I said, ‘No, nothing, that’s okay.’
“ ‘No, really, what can we do?’
“ ‘No, I’m telling you, I’m fine.’
“ ‘But we want to do something.’
“ ‘No, it’s okay, glad to do it.’
“ ‘Well—is there anybody you really don’t like?’ ”
When debts were owed to a casino, he continued, legal action was not generally contemplated; rather, each casino owner had his own ways of dealing with the delinquency. Beldon Katleman, the owner of the El Rancho—who had booked Reagan as an emcee in his casino in 1953—had a distinctive approach. (He was a longtime friend of Wasserman’s and the uncle of Harris Katleman.) “Beldon Katleman was a tough, tough guy—nobody wanted to mess with him,” this former MCA agent said. “He had this box he always kept with him, and there was supposed to be enough in there to put everybody away. When people owed the El Rancho money, first they’d get the bill. Then they’d get a bill, marked ‘late.’ Then they’d get another one, marked ‘overdue.’ Then they’d get another one, marked ‘final bill.’ Then they’d get a picture of their house. And then they’d pay.”
One of the top MCA agents in Las Vegas was a man named Jim Murray, who did a good job for MCA but was decidedly not cast in the Jules Stein mold. “We were the personal appearance guys, we were not part of the ‘snob berets,’ as we used to call the guys in radio and TV,” Murray said. He had started out in MCA’s New York office as a fifteen-year-old office boy in 1943, and eventually graduated to become an agent. “I went from the New York office to Chicago to Miami [where he booked Havana, too] to Vegas. I knew how to talk to the crooked noses. I was a saloon-booker, and dealt with the boys.” He arrived in Las Vegas in 1956. “They shielded who was who in Vegas by having an entertainment director—but I was so close to the guys I would go to them (the entertainment director was sometimes the third man down).” The symbiotic relationship between the mob and the stars, he explained, went beyond the hotels where they performed. “The boys ran the jukebox business. They could make a star, by putting nine of her records in their jukeboxes. Then the boys would say, ‘If I do you this favor, you play my club.’ ” After the Desert Inn, many other hotel-casinos had opened—the Sands, the Tropicana, the Riviera, the Fremont, the Stardust—and they were all vying for top entertainment. Recalling how he had had to juggle the competing interests of Moe Dalitz, Jack Entratter [the Sands], Morris Lansburgh [the Flamingo], and others, he rolled his eyes, saying, “It wasn’t easy.”
Decades later, it was plain that he was still proud of his MCA affiliation—though he had had to pay a personal price for it. Reaching into his jacket pocket, Murray brought out a navy leather billfold, embossed with gold lettering, “MCA Profit-sharing Trust,” and the name, “Murray Fusco.” He said that after he had worked at MCA for a number of years, his department head had announced to him one day, “You’re now Jim Murray.” He had not wanted to change his name, and his father had not been able to accept it. “But there were big Fuscos,” Murray explained—Joseph Fusco was indicted along with Capone in 1931 on five thousand Prohibition law violations. “And the name Fusco just wouldn’t do.”
From the time Stein made Wasserman president, he had stepped back from the day-to-day running of MCA. He still kept a sharp eye on what transpired, but he no longer had to engage in the rougher side of the business, and he was free to concentrate on what absorbed him most. That, as ever, was money—but now, money in its finer, post-acquisition phases. Its investment, and its securitization, and its retention, through one intricate tax-saving structure after another. Asked once how he spent his leisure time, Stein responded in his cut-and-dried manner, “I don’t live on the golf course. I would rather deal with corporate tax problems and the intricacies of corporate structure. I relax that way.”
Stein had of course invested clients’ money since the early days, and while he personally did not come up with all MCA’s tax schemes, he encouraged and rewarded others’ ingenuity. MCA had become increasingly tax-savvy; its incredibly complicate
d structure, with ultimately more than two hundred subsidiaries incorporated in many different states as well as abroad, had been designed that way largely because of tax considerations. The English antiques that filled every MCA office were being depreciated as they gained in value. In the forties, when taxes were so high, MCA had focused on tax-saving measures for its clients; there was the capital gains idea that Wasserman and Taft Schreiber had taken to Paley, and there was also another, conceived by Wasserman, through which talent—if they remained outside the U.S. for eighteen months or longer—could receive all monies tax-free. And there were oil-drilling partnerships that sheltered income for Stein, his MCA executives, and other business friends.
The creation of MCA’s profit-sharing trust in 1944 had given Stein the chance to indulge himself in the pleasures of corporate finance. Judging from his correspondence when he was negotiating the terms of this trust with the Treasury Department, it is clear one reason he was establishing it was that he was worried about losing his best people—Wasserman, above all. In the fall of 1944, Stein pointed out in a letter to his attorney that Metro-Goldwyn-Mayer had recently instituted a pension plan, one that was much talked about in Hollywood. (Louis B. Mayer, of course, had already tried to hire Wasserman several years earlier.) And Stein was disturbed about the government’s suggestion of a ceiling on salary. “If you have to settle for a top of $100,000, it would be feasible, however anything less than $75,000 would be trouble. I am hopeful I will get approvals to pay a few of our men $75,000 this year otherwise I will really be sweating. . . . Wasserman is worth $150,000 a year to many companies here and Jack Warner asked me the other day if I could spare him.”
As the trust was ultimately constructed, MCA’s contributions (15 percent of the employees’ annual compensation) and any profits earned by their investment were tax-exempt until they were distributed to the employees. Stein, therefore, had a very large pot of money to invest—by 1955, he was directing the trust’s capital mainly into the stock market, and its assets were over $4 million—and one over which he enjoyed virtually complete control. (His fellow trustees were his brother-in-law, Charles Miller, and his close friend from Chicago Edwin Weisl.) This trust did benefit MCA employees; but it also worked as a restraining device. For if an employee were to leave MCA less than six years after arriving at the company, he would forfeit all his interest in the trust; after six years, he would receive a mere 20 percent; after seven years, 40 percent. Only if an employee were to leave after ten years at MCA would he be entitled to 100 percent of his interest in the trust. It was a considerable financial deterrent to jumping ship.