by Connie Bruck
Sustained failure was a new experience for Wasserman. And, apart from the psychic cost, it challenged the premise upon which his relationship with Stein had been built. Gerald Oppenheimer, Stein’s stepson, recalled a conversation he once overheard between Stein and Cary Grant: “Jules said, ‘I’m the smartest man around.’ And Cary said, ‘That doesn’t sound like you, Jules—it’s so egotistical.’ Jules replied, ‘I’m smart enough to know Lew Wasserman can run the business better than I can.’ ” For nearly twenty years, Wasserman had given Stein no reason to second-guess his own judgment. Now, Wasserman had. Alan Livingston, a veteran entertainment industry executive who was a good friend of Stein’s, recalled how indignant Stein was about the quality of Universal’s movies. “The movies were so terrible. Jules would say to me privately, ‘I don’t know what to do about Lew. He and his men are agents. They don’t understand movies.’ Lew was not in good standing with Jules at that time, and Jules was quite open about it.”
In July 1968, Stein devised a rather surprising solution. He and Donald Burnham, president of the Westinghouse Electric Corporation, announced that MCA would be acquired by Westinghouse, in an exchange of stock. In return for his $102 million of MCA stock, Stein was to receive a major stake in Westinghouse—and the stock exchange would be tax-free. In the New York Times, reporter Eileen Shanahan questioned the rationale for the merger. She pointed out that it highlighted “the extent to which the tax laws provide a positive inducement to mergers, particularly on the part of owners of closely held or privately owned companies, whose management is getting along in years—a description that fits MCA. If the owner or owners sell the company, or their stock in it, they must pay a capital gains tax on any increase in the value of the company since they acquired it. But if the company is merged with another, through an exchange of stock that is handled just right in every detail, what also amounts to a sale, the company escapes taxation.” It was a fitting coup for Stein, who had built so much of his fortune through aggressive tax maneuvers. He gave an uncharacteristically fulsome, sanguine-sounding interview to Robert Wright of the New York Times; asked about his motives for the merger, Stein replied, “I’m getting to the point in life when I think it would be great to become associated with this kind of company. I’ve always had great respect for Westinghouse since the days I attended school just south of Pittsburgh [where Westinghouse has its headquarters]. It’s a delightful marriage.”
The deal’s architect was a young MCA executive named Daniel Ritchie, formerly at Lehman Brothers, who had joined the company in 1960. Ritchie, who came from a socially prominent family and enjoyed strong Wall Street connections, was a Stein favorite. “In the mid-sixties, he was perceived in the company as the president-to-be,” said Sidney Sheinberg, then another young executive at the company. Ritchie was one of a troika of executive vice presidents appointed at this time. “There had been a lot of pressure from Wall Street that MCA was a one-man show,” Sheinberg added. “Lew was never the kind to whisper and cajole in Wall Street’s ear—he was respected, but perceived as too secretive.” The Westinghouse deal was another sign of Ritchie’s ascendance. Shortly after it had been announced, Sheinberg said, “I was in the dining room at Universal, and Don Burnham was welcoming us into the Westinghouse family. He was saying, we’re going to let Lew Wasserman run the company—but there was a kind of alpha-dog dominance. I thought, he’s going to be an active boss. This is not going to work!”
On November 1, 1968, MCA announced that its merger with Westinghouse had been delayed due to continuing discussions with the Justice Department’s antitrust division. (In addition to being a manufacturer of electrical equipment, Westinghouse operated commercial radio and television stations.) Westinghouse, though, seemed caught off guard by the MCA announcement. A Westinghouse spokesman said that he had no information about it. He said the Justice Department had indeed requested information, which was furnished by both companies, and that MCA then began discussions with Justice. As far as he knew, though, Westinghouse was not engaged in any discussions. Roughly six months later, in April 1969, MCA announced what had become widely expected—the merger had been called off after prolonged discussions with Justice. There seemed little question, though, that the deal’s demise had more to do with internal machinations at MCA than any overruling external force. Sheinberg, for one, believed that “the Westinghouse deal was something Wasserman had been hustled into”—and, ultimately, “Wasserman essentially put the kibosh on the deal, by deliberately not trying to cure whatever problems Justice was having.” It would not have been the first time that Wasserman appeared to be acted upon by Justice, and yet achieved the outcome he would most have wanted.
His antagonists in the company, however, were not so easily subverted. Chief among them was Taft Schreiber. Stein was closer to Schreiber than to any other employee. Though Schreiber was ten years Stein’s junior, the two men had really come up together, starting with their early, shared Chicago experience. When Schreiber, still a teenager, had come to apply for a job as an office boy at the Music Corporation, he brought his clarinet along (he had a little band, and was hoping for a possible booking, too), and the fearsome Billy Goodheart asked him to play a number. After listening, Goodheart asked what he was doing to earn money, and Schreiber responded that he was working part-time as a shoe salesman while going to school. Goodheart told him to go back to selling shoes—but Stein interceded and hired him. Schreiber set out on the course that would become the regimen at MCA for many years to come. He started in what was then called the “shipping room,” opening and passing out mail, sending advertising to prospective buyers, acting as relief switchboard operator. Eventually, he progressed to helping with arrangements for one-night bookings, and then to accompanying an orchestra as a road manager. It had been Schreiber who came up with the idea of asking Western Union branch managers to send in lists of all the dance halls in their area. And he soon became known as someone with a keen financial mind who was, also, a consummate salesman. He had a rather homely countenance, but his force of personality could smooth its uneven features. He was close to Stein’s brother, Bill—and this, too, probably endeared him to Jules. “Bill Stein was like an elder brother to me,” Schreiber said later. “Much of the training I had came from him. Jules Stein and Goodheart gave me the formal education of contracting, railroad routing, and one-night selling, but it was Bill who instilled the excitement and enthusiasm into the daily routine. Bill was continually dinning into my inexperienced ears the simple facts of salesmanship: ‘When you are with your customers, remember they are friends. If you don’t have anything to sell, leave them with something—information about the business in general, what their competitors are buying, what bands are coming up. Never gossip with a band leader or buyer about another band or customer, for when you leave he will wonder what you are saying about him.’ ”
And Schreiber learned to operate in the same Chicago milieu that Stein did. Many years later, he would recall that when he was still just an office boy he had noticed a modest establishment, the Persian Hotel, which had a large ballroom but no band. He urged the manager to book bands for his hotel, and the manager referred him to someone at the Metropole Hotel, who, he said, had more authority to do so. Schreiber met this person, sold him on an MCA band, and then on more of them, which were placed in other hotels he evidently controlled. Months later, Schreiber received a letter from the Metropole man, expressing his pleasure in their dealings, and concluding, “If you ever need any help, let me know.” It was a meaningful offer. The Metropole was well known in Chicago in those days as Capone’s headquarters, and Capone took a great personal interest in obtaining bands and celebrities to appear in his locales (commitments that he expected to be honored, as Joe E. Lewis painfully found out). The way Schreiber told the story, however, he did not even realize that the Metropole was Capone’s headquarters until several years after he had been doing business there—and the Metropole man, he said, turned out to be Capone’s representative.
Not Capone. It seems like a sanitized version. But Schreiber, in any event, was the single person in the company, particularly as the years wore on, who would have been most likely to know the secrets of the Chicago life that Julie Stein left behind.
Even after Schreiber had sustained the rude shock of Wasserman’s being named president, he was so secure in his relationship with Stein, and so devoted to the company, that he apparently did not feel dislodged. “Taft thought he was the number two person to Jules, even after Lew was named president,” asserted George Smith, who joined MCA in 1966 and became close to Schreiber. “But when the company went public, he saw that Lew had twice as much stock as he did. He was crushed by this. He spent more and more time on his art collection, and hardly came to work.” By this time, Stein and Schreiber both were serious collectors; Stein, of his eighteenth-century English antiques, and Schreiber, of remarkable pieces of modern art. They inhabited one social stratum, and Wasserman another. After the acquisition of Universal, however, Schreiber once again became more involved in the business. He was the head of Universal TV, and he was also active in developing the company’s real estate. And as Wasserman began to craft a political role for MCA, he relied on Schreiber for versatility; they were “covered,” Wasserman said, because he was the Democrat and Schreiber the Republican. But the two men never had an easy coexistence. And in the late sixties, as the company’s losses mounted, Schreiber saw opportunity, and stoked the fires of Stein’s displeasure with Wasserman.
“I called Taft ‘Doctor No’—whatever Lew did, he found fault with,” recalled Albert Dorskind, who was an executive vice president, along with Dan Ritchie and Berle Adams. “I had a big fight with Taft. Taft said, ‘Lew doesn’t know what he’s doing with these two-hour movies for TV, he’s losing money on these!’ ” Schreiber had told Stein that that was the case, and he wanted the in-house accountant to compile a report. Dorskind told the accountant, instead, to hire Price Waterhouse to do an audit. “Taft stormed in, saying, ‘What did you do?’ ” Dorskind continued.
“I said, ‘The chairman is entitled to the truth.’
“He said, ‘I’ll never forgive you!’ ”
Schreiber even began fulminating to outsiders. “I went to my dentist (who was also Taft’s) one day,” recalled Frank Price, one of Universal’s top TV producers, “and he said, ‘Boy, what’s going on at MCA? Taft was in here, just steaming!’ ” By this time, Jennings Lang, who had metamorphosed from agent to TV producer, was heading movie production. “Taft had called Jennings, whom he didn’t like anyway, and asked him for some information about movies. Jennings, essentially, had said, ‘Butt out!’ ” Price said. Schreiber’s increasingly choleric view was that Universal would continue making terrible movies until they brought in seasoned movie producers—instead of these agents, as Stein had complained to Alan Livingston. Wasserman was so keen on Lang that even after the scandalous episode involving Lang, Joan Bennett, and her aggrieved husband, Walter Wanger, Wasserman had not fired him. But in Schreiber’s view, Lang was unfit for his new role, and insolent besides. By mid-March 1969, it was an open secret at MCA that Schreiber was urging Stein to oust not only Lang but Wasserman, and that Stein was listening. In the new, proposed configuration, Schreiber, sixty-one, was finally to become president, to be succeeded about a year later by a younger man, Berle Adams, an agent who had started with Music Corporation in Chicago in the forties.
On March 15, the day Wasserman celebrated as his fifty-sixth birthday, he drove to South Central L.A. to meet with black community leaders and the city police chief in an attempt to forestall possible riots. (At the time of the Watts riots in 1965, Wasserman, called on by the mayor, had driven into Watts to meet with community leaders; through his political and philanthropic activities, he had become increasingly active in Los Angeles’s civic life.) He would later say that tempers ran high at this meeting, on an unseasonably hot day for mid-March; he had suffered chest pains, and when he returned home, his doctor, diagnosing heart trouble, had prescribed two weeks complete bed rest, with no phone conversations, and no business conducted. Wasserman may or may not have been ill—and he did remain at home—but he was far from incommunicado. “Lew was supposed to be home sick, but we all understood he was not,” said MCA executive George Smith. “He was placing calls to Hal Hoss, who was chief financial officer. It was the film division that was doing poorly, that was what was hanging around Lew’s neck.” Wasserman had just fired Jay Kanter, head of European production, who was responsible for a large amount of losses. “He was saying, look at the numbers in the film division. Take out the advertising, take out this movie, take out that. He’s very numeric. When he’s getting ready for combat, he will arm himself by looking at it five different ways . . . he focuses on the relationships of numbers to each other.
“I’ve seen him do it,” Smith continued. “He takes people on, and they’re not prepared, and he does the numbers one way, then another, until they don’t know which side is up, or what is happening. It’s not that he’s fabricating anything. It’s just that there are these different ways of looking at numbers, and most people can’t keep up.”
This corporate intrigue was taking place at an awfully awkward time for Stein. The Sheraton Universal, the first high-rise hotel to be built in the San Fernando Valley—and the first of three planned for Universal City—was ready for business. Doris and Jules had been actively involved in its design and decorating, importing chandeliers, tile, and furniture from Europe; Doris is said to have had the George V in Paris in mind as a model. To celebrate its opening, the Steins were planning a society gala more spectacular than anything they had ever done before. By this time, Doris’s social striving had been rewarded, gaining her entrée to a level of international society she could barely have imagined at the start. The previous September, for example, the Steins had been invited to twin events—two Portuguese parties, two days apart, hosted by the Antenor Patinos, and the Pierre Schlumbergers, respectively—that were considered the social events of the year, if not the decade. The Schlumbergers entertained 1,200 guests, serving a twenty-course dinner on silver plates. For the Patino party, their mansion was redecorated, and the food, chefs, and hairdressers were all imported from Paris. Among the guests were Henry Ford II, the Duke and Duchess of Windsor, the Begun Aga Khan, the Duchess of Argyll, Count Paolo Marinotti. It was that same titled class that Doris wanted for her Sheraton Universal party, which was also to feature the premiere of the new Universal movie Sweet Charity. But how were they to induce such people to travel such a distance? Well, by making it free. Planes were chartered from Paris, from New York, from Palm Beach. “It’s the most amusing idea I ever heard of,” said the Duke of Windsor when he received his invitation. It ranked as “one of the country’s biggest, longest, and most opulent social extravaganzas,” Charlotte Curtis wrote in the New York Times, describing the guests as “extravagantly dressed princesses (including Princess Gina of Liechtenstein), playboys, Irish aristocrats, titled Frenchmen, tycoons, interior decorators from three countries, members of nice but no longer inconspicuous old families, movie stars, and all the other odds and ends of what passes for international society.” Of course, since this was a Stein enterprise—and one that cost an estimated $250,000—there was a tax angle. Several days after the three-day event, which began on March 26, a New York Times editorial, entitled “. . . and Grossness in Los Angeles,” noted that at least part of the bill would be deducted as a business expense from MCA’s taxes, and suggested that “the House Ways and Means Committee, exploring tax reform as one means of combating inflation, may be a little less than overjoyed at the thought that tax money may have helped to provide 600 members of the jet set with free roundtrip flights from New York and Paris—to say nothing of room and board at something a mite above relief levels.”
Still homebound, Wasserman was not attending the opening gala—but Edie was determined to. “Edie called and said, ‘I want you to take me to the party,’ ” declared Herbert Steinberg, an M
CA publicity department executive who was very close to the Wassermans. As Steinberg escorted Edie into the Sheraton’s baby-blue ballroom, lit with crystal chandeliers, “you could see the buzzing going around the room—the pro-Lew and anti-Lew factions. It was important to Edie to be there, because she didn’t want people to think that he was pulling out. She wanted to be very visible.” Steinberg danced with her, as did a couple of other MCA executives. “She said, ‘C’mon, dance with me, kid,’ ” one of them recalled, and remembered, too, as they danced, what she had prophesied about the certain fate of those who were trying to overthrow her husband. “She hissed in my ear, ‘We will piss on their graves!’ ” He paused, and added, “Remember Jimmy Westerfield, the guy who played the head of the goons in On the Waterfront? You’d think you were listening to his voice, coming out of her mouth.”