“This was my own idea. We tried in every way and we ran into the fact that I wasn’t a GE employee so I wasn’t eligible for any of their pension plans and so forth. BBD&O didn’t have anything like that. All they could think was maybe withholding some more and creating a pension fund but this didn’t sound satisfactory to me. At the end of five years they wanted to come in and talk again and I wanted to keep one foot in the clear because if you wait until March, as they had made me wait for five years to talk about options, and they don’t take up the option, you are out a year’s employment. It’s too late to launch yourself into another program if you should suddenly want to go into that kind of setup. I’d be working every five years whether they were going to take up an option. We’ll let them worry about the other end, as to whether they are going to have me next year. Now, at the end of—it was at this time that they went out with the negotiation year coming up, the sixth year of the show, that they really came close to going in other directions and I got calls. For example, Dick Powell, he asked me, it had been made plain to everyone, CBS and everyone, that there would be no dealing and it did not look good that General Electric insisted that I be part of it and he asked if I had any relationship with Revue that makes this impossible, and I said, ‘Dick, I have kept out of it completely, no, I am not employed by the advertising agency. I value my relationship with General Electric. I think I have established that.’ I said, ‘I have not entered into it,’ and I told him, I said, ‘Dick, you know, I would, of course, enjoy very much working for you.’ I have known him for many years. We were veterans of the Warner Brothers battle and I told him—so I said, ‘I stand pat.’ I naturally had a loyalty to the fellows at Revue. We have been making a show and doing a good job. So I am out of it. Once they see who is going to make the show, then I will make my decision about where I do it. I said, ‘You know, of course, I would love to work with you.’ CBS, I have heard since, has talked around and gossiped that the reason they didn’t get the show was because I refused to go along if they produced the show, and that is an out-and-out lie, and the only reason they are saying that is because they have to save their face.”
“How did Revue compete successfully for each renewal contract with General Electric?”
“Well, I suppose they had a way of negotiating for them and had been successful.”
“And the fact that this is an anthology and they could guarantee talent?”
“I don’t think any more than anyone else could. Dick Powell is, for example, a fine anthology show. I did shows, single guest shots. I did a show for The June Allyson Theater. I have done guest shows for those other companies. Actors go where there is a good show. I think one of the things that happened was that MCA recognized there was no financial benefit because no one—this business costs the same wherever you make it. A show is a show and costs so much money. I think they personally came back to where they had success. Now, at this time in dealing with these companies I was told that they had said this, too, that I would have to go with them. They reassured me. They wanted me. They said they had asked these companies if they were prepared to do whatever was necessary to get me and Dick Powell and CBS had both said they would be willing to work out some arrangement involving ownership in the show. Now, all films—there are no secrets in the business. I know this. Dick Powell told me, as a matter of fact, told me what my situation would be. At the time I was amused because I knew BBD&O and GE didn’t realize in this we were negotiating to produce the show. The thing they always resisted was my employment with the company. I called Lew Wasserman and I told him what I knew. I said, ‘Lew, it’s now apparent to me, as it must be to you, that I represent a certain measure of the success of the show. In other words, I am now in a bargaining position that I wasn’t in when the show started. We are approaching negotiations so I have a question. I have known you many years. I want to know one thing.’ I asked Lew Wasserman, ‘In the show for General Electric what are my services worth to go on with General Electric?’ and Lew said, ‘That’s a very good question and it deserves a very good answer.’ He said, ‘I’m going to the Springs and I’ll let you know when I get back.’
“When he came back he called me. He said, ‘The answer is,’ and he gave it to me, and it was a salary comparable to what I was getting plus twenty-five percent in the films, even those films in which I am not engaged. This was more than any of the other fellows offered.”
“Mr. Wasserman had guaranteed to you at this time, and if I misstate it in any way, please correct me, he stated at this time that you would receive from Revue Productions the terms which he had told you. In other words, he would assure that Revue gave you these terms, is that correct?”
“That’s right.”
“Is that what he told you?”
“Yes.”
“Would you please relate again because I lost the thread. Directly what ownership interest did Wasserman say Revue would give you?”
“That it was comparable to the salary I was getting plus the fact, by now becoming an employee of Revue, I no longer paid MCA commission. So that automatically gave me a ten-percent raise in salary, and they gave me twenty-five-percent ownership in all films made in the GE Theater, not just those in which I appeared, but all of them.”
“Did Mr. Wasserman in this call Mr. Schreiber or anyone else at Revue?”
“Mr. Schreiber was in the office.”
“Mr. Schreiber was present at the time?”
“Yes.”
“Did Wasserman advise Schreiber to make such a form available in a future contract by you and Revue?”
“Well, he didn’t have to. They were sort of sitting like you two gentlemen are sitting so it was obvious one was speaking but they were both agreeing.”
“In other words, Wasserman was speaking and Schreiber was nodding his head like a mare?”
“That’s right.”
“Have you been advised at any time during the period 1954 to 1959 by anyone that you should have an ownership in GE Theater?”
“Oh, yes.”
“By whom?”
“Well, along toward the last year or so when it was obvious we were hot and successful, we were a top show, and we had become film, why, there were people then who thought, knowing the circumstances, the fact that I was on a five-year contract, were throwing up their hands in horror. One was an agent, Mr. Coryell, said this. I should be and so forth. Dick Powell, and, as I say, I am very fond of Dick, we are old friends. Yes, it had now come to the point, there was no justification for this and I was in such a bargaining position that this would be proper compensation. I did not feel—in the earlier years I thought I had a pretty good deal.”
“Did you call an attorney or any type of advisor, Mr. Reagan, with respect to your contract with Revue which gives you part ownership of GE Theater or did MCA act completely with Revue in this regard?”
“Oh, no, when it got down to details of working out the actual terms of employment contract and so forth and we negotiated also a thing in the employment contract of extra money also into the buildup of a retirement fund for tax purposes, then I talked—I had to talk to a lawyer, of course, and—”
“Who?”
“I have a business manager and I talked to my business manager.”
“Who is he?”
“David Martin. There was no question of talking to anyone as far as I was concerned about the terms. I know the business. I know what I think is fair and I was, frankly, very pleased and happy and thought that I had about all the traffic could bear and—”
“In other words, you feel MCA-Revue gave you the best possible deal?”
“Yes, because I will tell you something. My contention was I thought I only had a right to bargain for ownership of the films in which I appeared. I have been out on the road for several weeks now and they have made a few pictures. I haven’t even read the pictures and I own twenty-five percent of them.”
“When do you think you will realize the money from ownership?”
“I t
hink several years.”
“When the films that are being made now go into—”
“Distribution and they go out. I have had some slight percentage of residuals of guest shows I did on film before I went to work before. Some have brought in some money, some don’t.”
“The first one in syndication of the films which are presently being made will not give you any money, correct?”
“I doubt it because we run a little loss.”
“Don’t say ‘we.’ You are running that loss. Revue isn’t.”
“No. Of course, let me put it this way: the sponsor does not pay the full cost of producing our film. They cost more than the sponsor pays to get his first run of the film.”
“You mean Revue sells them cut rate?”
“This is quite common with many companies. The ownership of the film belonging to the producing company and not to the sponsor is the profit in many of these. Now, there is always an extra benefit.”
“Let’s stick to the track, Mr. Reagan. Revue is selling the General Electric Theater, right now, each series below what it costs them to produce, both below- and above-the-line costs. Are they still in the black with respect to these films?”
“I’m sure the packaging fee and their distribution and so forth, I am sure that they must have.”
“They will still be in the black?”
“Probably.”
“And you won’t go back into the black, as it were, for many years?”
“Wait a minute. In the meantime I am drawing a pretty handsome salary. I am not just working for an ownership.”
“That’s correct, sir, but in fact you do have an ownership that might not be realized for several years?”
“Yes, I don’t want to get it for several years. Right now my senior partner claims all of it.”
“The Internal Revenue again. In any event, you are personally satisfied with this arrangement?”
“Yes, so satisfied that I have, since the arrangement was made, told people I wasn’t interested once or twice when they have proposed another series to me, leaving the General Electric Theater to do another series in which I would have even more ownership.”
“Have you had any offers by other TV producers other than Revue over the last five years?”
“Yes, I have been sounded as to what my position was with regard to GE Theater, could I do another series and so forth, and I have had to say, no, I can’t do another series. It’s exclusive and I’m sorry.”
“What other discussions or conferences has Lew Wasserman mediated in your presence aside from what you have already related?”
“Those were the only two I remember, the one about foreign film rights and the one about the terms.”
“You can’t recall ever having been in the presence of Lew Wasserman and Taft Schreiber before in which you were interested in what was being discussed?”
“No, I don’t.”
“Have you ever met anyone, sir, who has told you that they had sent a script or inquired about your availability from Mr. [Park] or some other MCA official and was informed that you were not available which fact was never conveyed to you?”
“No; as a matter of fact, Mr. Park is very, very sure that he always sees that I know of every inquiry made of my services, whether speaking to a luncheon club or show or not. Just from that point alone he has repeatedly assured me that he makes sure I know all. He lets me know even when he thinks that there are some things that are so ridiculous that I call him back and ask him if he was out of his mind for bringing them and then he tells me the reason he brought it to me was because—”
“Did you ever express any discontent or complaint or any ire, as it were, with respect to the contract which MCA negotiated with respect to BBD&O and GE in 1954 to MCA?”
“No.”
“You never complained?”
“Oh, yes, I have had one complaint and it was solved very easily. We almost made a mistake. We didn’t know BBD&O and General Electric asked for twenty weeks a year of my traveling when we first started. I refused to go for twenty and got it down to sixteen. This was supposed to be in two tours of eight weeks and it only took us seven, because GE sent a man with me on the tour so he could get as flat-footed and tired as I was. It only took us about five of the eight weeks to know we had bitten off more than we could swallow. No man lives to do the eight-week tour, and not give snarling lessons. So they asked’ me—I must say General Electric was quite nice about this. Wouldn’t even bother with Revue or MCA. At the end of this tour General Electric asked me what I thought should be the amount of time we could handle and we boiled it down to about twelve weeks, not to [exceed] three or four weeks [at a time].”
“Did you state this to MCA as a complaint?”
“No, I didn’t need to. I stated it to General Electric.”
“My question was, sir, have you ever complained to MCA concerning the initial contract which they entered into?”
“Oh, no.”
“For GE or BBD&O in 1954?”
“No. Then after the end of the twelve weeks or so as we began to make more film and less live shows, I then one day out here said to MCA or Revue, it could have been either one, said, ‘Next year let’s tell the fellows we can’t handle this many weeks.’ I finally got it down to six weeks a year and last year they got it up to eight again on me so eight weeks is the limit of the tour, not to [exceed] two weeks away at any time.”
[Fricano then asked the grand jury foreman:] “Mr. Hauer, does the grand jury have any questions of this witness?”
[A juror asked Reagan:] “Are you still working for BBD&O or are you working now exclusively for MCA?”
“I am now on an employment contract within which I have a partnership interest with Revue.”
[A juror:] “You are under contract to BBD&O, is that correct?”
“No, by doing this other thing they now had to take the thing they didn’t want to do at first. BBD&O has had to—by the fact that I was their employee if they wanted me they had to take Revue. This had never before existed until I wanted this change of ownership of the films. There was some hassling between Revue and BBD&O about that. BBD&O resisted but they were in an untenable position because they didn’t have anything comparable to offer me.”
[A juror:] “Mr. Reagan, does your salary on these tours, I mean, do you get any extra salary for the tours you make or is it included?”
“It’s included in the salary, although General Electric pro-rates a portion of my salary as being for those tours.”
[A juror:] “And does MCA get a portion of that?”
“No. When I was a BBD&O employee, MCA took its usual commission of my salary. When this other arrangement was entered into, MCA lost the commission because under our actors’ contract they can’t take a commission.”
[A juror:] “I was going to ask you, Mr. Reagan, did anyone from MCA know you were called in this afternoon?”
“No. Well, wait a minute. I laughed this morning and told a few of the fellows at Revue, we were rehearsing the start of a new show, and I told them they had to get me clear because I had an appointment down with you folks. So the only thing I told them before I came down, I would come back and let them know if they were still working for Revue or not.”
[Fricano asked:] “With whom did you have these conversations?”
“Stan Rubin, the executive producer of the show, the director we have hired for this particular show we are doing, and Jeanne Crain. She is going to be the leading lady on the show. We had lunch together before I came down.”
[Fricano continued:] “Did anybody from MCA tell you they knew you were going to appear before this grand jury?”
“No.”
“The only discussions you had with MCA personnel were the ones you had today?”
“At lunch when I told them where I was going after I called and found out the time I was to come.”
[A juror:] “Off the record, please.”
(Off the record discussion.
)
[Fricano asked:] “Just to clear up one point, sir, for my own benefit. At what time did Mr. Wasserman tell you what your terms could be with Revue, as having a percentage interest, that is, in the General Electric Theater; what year was this, do you remember?”
“It would take in all of last year’s shows and as a matter of fact, it was retroactive because we had already started producing and so forth and so it included shows that had already been made.”
“Do you recall the year, sir, when you first entered into the contract with Revue giving you a production interest?”
“Well, now, wait a minute. I was on the five years of salary. I did one year which would have been 1959 and ’60 season, yes.”
“It was either ’60 or ’61?”
“I am certain for the shows of the ’60 and ’61 season and now the ’61–’62 season.”
“Do you remember what year it was that you had the discussion with Mr. Wasserman concerning your ownership interest in the GE Theater?”
“Yes, that would have been when we were talking about the production of the shows for last season which would have been in the spring of ’59.”
“That was when you had the conversation with Mr. Wasserman?”
“Yes.”
“And Mr. Schreiber?”
“Yes.”
[The grand jury foreman said:] “No other questions, Mr. Fricano.”
[Fricano added:] “Mr. Reagan, the grand jury is finished with you for the moment. Actually, you are still under subpoena, sir. If we require your presence again, we will so notify you.”
*Excerpts have been published by Daily Variety reporter David Robb, who uncovered the document, and Dan E. Moldea and Jeff Goldberg in City Paper. (See bibliography, p. 365, under heading “On Ronald Reagan and MCA.”)
*Rule 16-E required all SAG members to use only agents and subagents franchised by SAG when seeking screen-acting employment. In a Justice Department memorandum, dated May 13, 1955, the Antitrust Division charged that the requirement was illegal, because SAG “does not have the right to establish a ‘white list’ of agents with whom its members can deal.”
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