When Hollywood Had a King

by Connie Bruck

  In April 1981, when Stein was quite ill, he wrote a letter to the trustees of the Jules Stein Eye Institute. He was worried about what might occur when a substantial block of MCA stock came under the trustees’ control. “Because I am the founder of MCA, and have been so long associated with it, and because so large a part of my prospective estate is likely to consist of shares in that Company, I am deeply concerned with its welfare,” Stein wrote. He exhorted the trustees, in deciding how to vote or dispose of the MCA shares, to consult with Wasserman (providing he was still the chairman, or still held a substantial stock interest in MCA). “I have great admiration for Mr. Wasserman’s extraordinary intelligence and soundness of judgment. Moreover, he himself is a major shareholder in MCA and our interest in the treatment of MCA holdings would, I am sure, be alike. . . . I ask that you consult with him . . . even if a situation may arise in which he may appear to have a conflict of interest. I have utter confidence in his integrity.”

  Having said that, Stein, characteristically, went on to say what his preference would be, if it became necessary to sell shares: they should be offered first to MCA itself, and if that offer were not accepted, they should be sold through some wide form of public distribution. What he urged them to avoid, with the greatest care, was selling the shares in such a way as to endanger the management of the company and enable an outside interest to acquire control of MCA. It was a prospect that was evidently painful for Stein to contemplate, as he considered what might happen to the company after his death. He felt it was safest left in Wasserman’s hands—but, in truth, it was hard for him to leave it in anyone’s. “While this memorandum is necessarily precatory,” Stein concluded, “I hope you will be guided by it, as it expresses a position of the greatest importance to me.”

  A few weeks later, Stein died. He was eighty-five. About a year before, he had asked Wasserman and Herb Steinberg, who organized many MCA social events, to lunch at the commissary. “Jules started out by saying that he didn’t want his funeral to be an unhappy event,” Steinberg recalled. “He said he wanted people to celebrate his life, because he’d led a good, long life. He had written down what he wanted. It was to be at the Eye Institute, in the open space outdoors. He wanted Benny Goodman and his band, and Dinah Shore. He wanted Chancellor Frank Murphy to give the eulogy. Lew and I looked at each other. What can you say? ‘Okay.’ ”

  After Stein died, Steinberg and Wasserman were both given envelopes Stein had left for them, with all the instructions, typed out, that Stein had issued at their lunch. Steinberg carried them out as best he could. “I called Benny Goodman in Connecticut. He said, ‘I’m not coming in for a damn funeral!’ ” Dinah Shore also declined. The performers, in the end, were Henry Mancini and Helen O’Connell. One of the eulogists was Stein’s granddaughter Katrina, who commented, “This occasion, like all the important events in his life, was produced by my grandfather.” Indeed, it recalled his elaborate staging of the handing out of MCA shares at Misty Mountain in 1954. Once again, nothing had been left to chance—not even the hors d’oeuvres, or the songs (among his selections were “Life Is Just a Bowl of Cherries” and “I’ll See You Again”). She also said, “My grandfather was a very private person. He gave neither his love nor his friendship easily, but once he did you knew that you had it forever.” However ambivalent Wasserman probably was about his patron, he did “tear up,” as he might have put it, in the pallbearers’ procession (which included President Reagan, Jimmy Stewart, Cary Grant, and Jimmy Petrillo). But Edie—sporting a large diamond pin, its letters spelling the word LOVE, and seated near the Stein family—was heard to say in a loud stage whisper, “It’s about time!”

  Lew Wasserman, 1983. Gunther/MPTV

  Chapter 5

  WASSERMAN & SON

  Wasserman had been so dominant for so long that his power had become ingrained in the psyche of the Hollywood community and, certainly, in his own. It should not have been surprising, therefore, that even after cracks in his hegemony began to appear, not many took note of them, and Wasserman continued to comport himself in as magisterial a way as he had before. It was of course only human to resist any diminution of one’s long-held power, even though that very resistance is apt to accelerate its loss—just as the moguls, decades earlier, had resisted the forces of change, only to be engulfed by them. But it was Wasserman who had marshaled those forces, besting the moguls, and who moreover had always been seen by his followers as preternatural. The fact that he was just human, in the end, came as a rude shock to those who had deified him for decades.

  The first signs of insurgency came in the area of labor relations, where Wasserman had carefully cultivated supremacy. He had inserted himself into the chairmanship of the Association of Motion Picture and Television Producers (AMPTP), the labor arm of the MPAA. It was a role for which he was uniquely equipped—since he alone had the relationship with Korshak and the union leaders, the historical experience and memory, the willingness and stamina to endure all-night sessions at the negotiating table. All in all, it was a privilege his colleagues in the industry had been quite happy to cede to him for a number of years. But by the early seventies, suspicion of Wasserman had begun to fester. Dan Slusser was a labor relations employee at Twentieth Century-Fox before he joined MCA in 1973. “I was in many meetings when I was at Fox where people said, ‘Watch out for Wasserman.’ They did all think he was getting the advantage,” Slusser said. He pointed out that Universal was strongest in television, whereas the other studios were primarily producing movies for theatrical distribution. “Everybody thought that Lew had this vision of taking care of himself by taking care of television, not theatrical. They thought that when Lew came into the room and said, ‘Good morning,’ he was picking their pocket. He was so smart. They were afraid. They all knew that he could do the math in his head quicker than they could do it on a calculator.” And while a strike would be damaging to theatrical motion picture production, it would be even more devastating to television production, with its fixed schedule. So there was more at stake for Wasserman.

  It was inevitable that other studios’ executives would come to resent Wasserman’s control. Norman Samnick, Warner Communications’ head of labor relations, who was based in New York, recalled that one of his colleagues at the Warner studio told him that Wasserman “treated him like a ribbon clerk.” “Lew was so in command, and the others so subservient,” Samnick continued. “I called Frank Wells [president of the studio] one day, and I said, ‘How did you vote?’ Frank said, ‘You don’t vote with Lew. He tells you what the deal is.’ And when Samnick was in Wasserman’s ambit, he found himself bowing, too. “I remember once I said, ‘An 8 percent increase, no more.’ And Lew came in and said, ‘I just made a deal for 10 percent.’ I said, ‘Ten percent is the right number. That’s what I was just saying!’ ” Given that the deals Wasserman struck were often richer than his industry colleagues thought justified, his dominance was even more galling. “I think he bought labor peace at any cost,” Samnick declared. And even his rich deals seemed more to his advantage than others, since for many years the costs of these deals that involved television were passed on to the networks—and Universal, of course, was the biggest TV producer by far.

  Wasserman had resigned the chairmanship of the AMPTP in the fall of 1974—a move meant to suggest, perhaps, that this system was in fact a democracy. He was succeeded by Gordon Stulberg, the president of Twentieth Century-Fox. But when Stulberg left Fox a few months later, Sheinberg ascended to the chairmanship. Moreover, the AMPTP continued to be run by Billy Hunt, the lawyer whom Wasserman had placed in the job. The changes, therefore, were nominal. Describing how intimately involved Wasserman was in labor relations, Hunt said that most mornings Wasserman would meet with him at the AMPTP offices at about 8:30 before going to MCA. “None of the company presidents participated in the negotiations, except for Lew,” Hunt said. “You could always count on Lew. If you called him at any hour and said, can you come down, we have a problem, he was never
too busy. He’d get in his car and be there. I knew he had ego and vanity—but he’d get in the ditch and start digging with you.” Hunt acknowledged that the industry viewed him as “Lew’s boy.”

  Ultimately, the challenge to Wasserman was fueled by Steve Ross. A onetime funeral home operator who had gained control of Warner Bros. in 1969, Ross had built the failing studio into a major entertainment conglomerate, renamed Warner Communications, with its main properties movies, a record company, and cable. Ross’s passion for cable set him apart from his entertainment industry peers; they viewed it as a threat, and were fighting for government regulation that would hobble it. Ross was playing a role analogous to that played by Wasserman decades earlier, when he had embraced television while the studio chiefs tried to destroy it. If Wasserman saw the similarity, it did not sway him; he didn’t believe in cable, and he did not care for Ross. Ross was decidedly not Wasserman’s type—too brash, too bold, too flamboyant, and, perhaps, insufficiently deferential. Indeed, Ross hoped to succeed Wasserman as industry leader, and he was beginning to position himself in the national political scene. It was not surprising that Ross would tire of deferring to Wasserman in the labor decisions so critical to his movie business.

  In the summer of 1975, the producers had begun negotiations with the IATSE for a three-year contract that would take effect the following year. The two sides were very far apart. Three years earlier, the union had accepted a deal with slight increases, subsequently made even more meager by inflation; and the new president of the IATSE, Walter Diehl, who had succeeded veteran Richard Walsh, was determined to make up for the IATSE’s earlier concessions. Moreover, Walsh had really not believed in the utility of strikes; Diehl let it be known that he believed differently. Wasserman, his producer-side colleagues knew, essentially agreed with the union that this deal needed to make up for the last. The question was, would they follow Wasserman’s lead, as they always had before? “The real story started on a plane with Steve Ross and Alan Hirschfield, in June 1975,” Samnick said. Hirschfield was then the president and chief executive officer of Columbia Pictures Industries; Columbia had been nearly bankrupt when Hirschfield took over in 1973, but by now it was regaining its financial health and Hirschfield was being hailed in the press as a wunderkind. “Hirschfield had been an investment banker at Allen & Co., involved in Steve’s decision to buy Atlantic Records, so he had credibility with Steve. And together, they started second-guessing Lew,” Samnick continued. Frank Wells, head of the Warner studio, became Ross’s agent, and Wells found an ally in Dennis Stanfill, chairman and chief executive officer of Twentieth Century-Fox. Formerly an investment banker at Lehman Brothers, Stanfill had come to Los Angeles in 1965 to be vice president in charge of finance for the Times Mirror Company, and he had joined Twentieth Century-Fox in 1969. These three CEOs, then—Ross, Hirschfield, and Stanfill—were all relative newcomers to the industry; but they were also self-assured, successful, and ambitious men, to whom obeisance did not come naturally.

  Stanfill had had the opportunity to observe Wasserman from different vantage points since he’d arrived in Los Angeles. When he was working for Times Mirror, he saw Wasserman’s efforts on behalf of Buffy Chandler and also her husband, Norman. Stanfill pointed out that those relationships had not only enabled Wasserman to broaden his base, but also gave him the opportunity to exert considerable influence on the Los Angeles Times. Once Stanfill joined the motion picture industry as a novice, he understood Wasserman’s advantage there. “One of Lew’s great strengths was he had continuity in his job over so many years,” Stanfill remarked. “He had a strong base, he had control of his company. He could afford to take the long view.” And his closeness to the unions provided many benefits. For, as Stanfill learned on the job, “It’s not just the big agreement you make with the unions, but the day-to-day workings with them. There can be a dispute about something—say, Teamsters on a location say we should have seven drivers, and the producer says, we need only three. Well, if you don’t work it out, you can have a strike. But if you—like Lew—have the power buttons to push, then you don’t have these disputes.”

  The confrontation finally came in early September, when Billy Hunt made a staggering offer to the union. He did so, he said, after having had lunch with Wasserman and Sheinberg, who approved his proposal: a 15 percent increase the first year, followed by 12 percent the second, and 12 percent the third. Ordinarily, increases were in the 3 to 5 percent range. “It may have been the most expensive contract the industry had ever negotiated—though I know it was seen as a catch-up,” said Nick Counter, the attorney who would succeed Hunt at the AMPTP.

  At an emergency meeting of the studio presidents, the other companies argued that Hunt had had no authority to make the offer. Wells and Stanfill were Wasserman’s most vocal adversaries. “Frank Wells and I thought it was just too rich,” Stanfill said. “Lew by and large had run the AMPTP, and Frank and I felt we wanted to have a strong voice in this, because we wanted to get the costs of the industry under control. We were demanding to have some participation in these industry decisions.” The only studio to side with MCA in supporting the deal Hunt had offered was Paramount. (MCA and Paramount were partners in CIC, of course; and some thought that Barry Diller, head of the Paramount studio, saw political benefit in casting his lot with Wasserman—or, also, aspired someday to be Wasserman.) Faced with this open revolt, Wasserman told the group that Hunt had been authorized and, therefore, they were “reneging”—and since he would not be party to that, he was resigning from the association.

  It was a stunning turn of events. It is true that in the Wasserman code, reneging was an unpardonable sin. He had built his relations with the unions on the foundation that his word was his bond. Robert Gilbert, the labor lawyer who negotiated with Wasserman for many years, said, “On occasion, I would work something out with Wasserman over the phone. Some of his subalterns would try to make a hit with the boss, trying to welch on what Wasserman had agreed to. I would pick up the phone and call Wasserman, and tell him that so-and-so was not living up to our agreement. He’d say, I will talk to him and the check will be on your desk this afternoon.” But it was surely not only the issue of “reneging” that prompted Wasserman’s dramatic exit. For just as the seeds of the rebellion had been planted months before in the conversation between Ross and Hirschfield, so Wasserman’s response, too, must have been at least as deliberate. (Regarding Wasserman’s resignation, Hunt remarked, with wry understatement, “Lew was not an impulsive person.”) Why Wasserman did what he did would remain a matter of some debate; but what he had done was plain. Aware of his colleagues’ growing restiveness, Wasserman had decided to make sure an offer was extended that was so rich that it was virtually guaranteed to provoke the rejection it did.

  Wasserman and Sheinberg arranged to meet with Diehl the next day in a suite at the Hollywood Roosevelt Hotel. No longer bound by membership in the AMPTP, Wasserman wanted to strike a separate deal—similar to the one that Hunt, with Wasserman’s approval, had already offered. According to an IA member who was working closely with Diehl and attended the meeting, Diehl laid out his demands, and Wasserman and Sheinberg walked down the hall to confer. “Walter felt we had asked for so much that they’d never do it,” this IA member recalled. “He said to me, we’ll compromise on this. And when they walked into the room, he started to offer it. They said, no, we’ll take it.” Universal and Paramount both agreed to this deal—a 39 percent wage increase over a forty-two-month period; with benefits included, some estimated that it represented as much as a 57 percent increase. “Afterward, we were told that the union was shocked to be able to get that much,” said Marshall Wortman, a labor relations executive at MCA, echoing what Diehl’s associate had said.

  The fate of the other studios remained uncertain. Diehl is said to have offered to Wasserman to drive an even harder bargain with them. Faced with the prospect of a strike—while Universal and Paramount remained open for business—the others were helpless. �
�They begged to make the same deal,” Wasserman said, smiling at the recollection. “I could have kept them from making it, but I don’t play that kind of pool.” So they made the deal Wasserman had authored—and were punished for their challenge, just as Wasserman had punished past challengers. Of course, Universal, too, had to pay these huge increases (though some would be passed on to the networks). But as Chuck Weiss, a corporate vice president at Twentieth Century-Fox, pointed out, “Universal could well afford it. The other studios didn’t have much in the pipeline. At the time, we were struggling at Fox.” They believed they were paying the price, he said, “for crossing Lew.”

  Wasserman’s revenge, however, was costly. Universal and Paramount formed a separate organization, the Alliance, to deal with labor issues. Over the next few years, the unions and guilds had the advantage of being able to play the AMPTP off the Alliance, and vice versa. In 1980, there was a long, bitter Screen Actors Guild strike, and in early 1981, a Writers Guild strike. “Those strikes happened in part because there was no cohesive unit for bargaining on the producers’ side,” said Nick Counter, then a labor lawyer in private practice. When he was asked to head the AMPTP in 1981, Counter said, “My condition for taking the job was that they would solidify the association. I told them, you can’t be in this position where the unions and guilds can whipsaw you.” The two groups then rejoined in what was named the Alliance (instead of the Association) of Motion Picture and Television Producers.