by Connie Bruck
Five days later, Jules—still very much the boss—weighed in, also by telegram, and dashed Warner’s hopes for control.
“Dear Jack. Have been discussing Nype matter. Lew and I meeting with Nype tomorrow. However to avoid any misunderstanding and to make certain you have all the facts months ago both Fox and Metro offered Nype exclusive motion picture contracts with radio theatre freedom. Nype refused these offers and has repeatedly stated he will not make motion picture agreement for more than one picture per year with complete radio theatre and television freedom. Will phone you tomorrow after meeting with Nype. Kindest personal regards—Jules.”
Gratifying as it was to Wasserman that he had so shifted the balance of power from the producer to the agent, it was only a preliminary goal. He wanted to be the producer as well as the agent—and that was consistent with what Stein had done before him, when he went from booking bands to producing shows for radio. Stein had kept his eye on movie production since arriving in Hollywood, and in the early forties had even tried to talk Balaban into an MCA-Paramount merger. But it wasn’t movie production that Wasserman wanted to enter, at least not yet—it was television. The talent business had already been well established in Hollywood by the time Wasserman had arrived; he’d had to buy up a lot of it, and, eventually, he was able to shape it to his liking. But the television industry was so new that he could almost create it from whole cloth.
Even territory claimed during its infancy now was tantalizingly available. For in the late forties, programming was controlled not by the TV networks but by the advertisers; it was they who produced the programs they wanted (mainly quiz shows, audience participation shows, and talent shows) and put them on the air in the time slots they wanted. But in 1950, the head of NBC’s new television operation, Sylvester “Pat” Weaver, desperate to improve the quality of programming, decided that the network would have to control it; advertisers would no longer be allowed to buy an entire program, but only short segments of time for their commercials. Ad agency executives were apoplectic, but before long Weaver’s ruling at NBC became the norm for the other networks as well. This development left a vacuum in the TV production business—and an ever-growing one. In 1946, there were only 11,100 TV sets in the U.S., but by 1952 there were 14 million. “The appetite of television is like the great maw of the sperm whale,” wrote Milton MacKaye in the Saturday Evening Post in January 1952. “Thousands of hours of entertainment must be available to the television public, and any guess as to where it will come from is . . . as good as another.”
It would come largely from MCA, if Wasserman had his way. But first he had to win an internal struggle. Stein had made him president just a few years before, but since Stein controlled all the company’s stock, he was still the de facto ruler. And some of Wasserman’s colleagues, bitter about this junior executive’s elevation, were hoping to persuade Stein that his young president’s obsession would be the company’s undoing. The contest became defined as East versus West. It was not yet clear whether TV programming was going to be predominantly live or filmed—that is, produced mainly in New York or in Hollywood. In the early fifties, the majority of TV shows were live, and agents in MCA’s New York office, led by Sonny Werblin, argued that live programming would prevail, and the center of TV production would remain in New York. Stein agreed with them. Wasserman, however, was adamant that filmed TV would prevail; it was more expensive, but it also offered a more consistent product—and it could be reshown. Its home would be Hollywood, he swore, and its master should be MCA. “They were selling live TV in New York, and they said, we should confine ourselves to this, it’s a bird-in-the-hand story—why should we risk what we have today?” Wasserman recalled. “I said, but this is tomorrow.” After a number of MCA’s classically savage encounters—where the combatants tried to inflict mortal wounds on each other, while Stein, imperial, self-enclosed, surveyed the spectacle—Stein supported his president.
Only one major hurdle remained. Screen Actors Guild regulations had long prohibited talent agencies from producing motion pictures, because of the inherent conflict of interest in simultaneously being agent and employer. Television, however, was so new that SAG had not yet adopted comparable restrictions in TV production. Thus, MCA had started producing television shows in 1949, through its newly formed subsidiary, Revue Productions; but Revue’s output was fledgling compared with what Wasserman now had in mind. He knew, too, that the Guild was shortly to adopt rules for TV production. Its existing regulations did contain a mechanism by which an agent could apply for a waiver to produce a movie on a case-by-case basis, and that, presumably, could be applied to television as well; but it would be far too restrictive for him. What Wasserman wanted was untrammeled freedom: a blanket waiver that would allow his talent agency to engage in television production for many years to come. It would in fact guarantee him, in this new field, the kind of edge that MCA had had in its old band-booking and radio days. His control of talent would give him an unbeatable advantage in TV production, and his TV production would only strengthen his hand with talent; these intertwining activities would create a system so powerful that someone not similarly situated could not compete in any meaningful way. As a business model, its only weakness lay in its transparency; it was impossible not to see how overreaching it was. Petrillo, of course, had given Stein a similar kind of waiver years before (and he would give an exemption to Stein now, too, allowing MCA to use not live musicians but recorded music for their TV productions, to help keep expenses down at the start). Petrillo, however, ruled by fiat. The president of the Screen Actors Guild could issue no such diktat. But the president of the Screen Actors Guild was Ronald Reagan.
During the next few months, in early 1952, Wasserman navigated this process in ways so characteristically deft and traceless that even FBI and grand jury investigations undertaken later would be unable to fully reconstruct it. No matter how many times they were questioned over the years, Wasserman, Reagan, and longtime SAG executives John “Jack” Dales and Chester “Chet” Migden would always insist that the waiver was granted solely on the merits of the argument Wasserman had made—namely, that if MCA were allowed to go into television production in an unlimited way, it would create badly needed jobs; and, on a more parochial note, the increase in those jobs in filmed television would mean that SAG would stop losing its members to a rival union, AFTRA, which had jurisdiction over live TV.
Wasserman no doubt made this argument. It was also true, however, that SAG was in the late spring of 1952 engaged in negotiations with the Association of Television Producers over the issue of “reuse payments”—to be paid to performers when TV programs in which they had appeared were reshown. The idea was blasphemy to the producers—but not to Wasserman. According to Billy Hunt, a lawyer who would work closely with Wasserman on industry labor matters for many years, it was Wasserman who inaugurated the reuse payments, in an agreement that was secret at the time. The closely held arrangement was handled by Lawrence Beilenson—a lawyer who had been one of SAG’s founding members and who, a couple of years before this transaction occurred, had left SAG and, after consultation with Jules Stein, started a law firm that would handle the bulk of MCA’s legal work. Beilenson was also Reagan’s personal lawyer. In 1954, Beilenson wrote a letter to Wasserman outlining the secret terms of the deal that had been struck two years earlier. The waiver, he wrote, “was executed under a specific set of circumstances where Revue [MCA’s production arm] was willing to sign a contract giving the guild members reuse fees when no one else was willing to do so.” (In 1962, Reagan—subpoenaed to appear before a federal grand jury investigating alleged antitrust violations by MCA—was questioned about the apparent quid pro quo. He testified that there was none. When Beilenson’s letter was read to him, he said, “. . . It’s quite conceivable then if he says it in this letter.” Asked whether that refreshed his recollection, Reagan responded, “I don’t recall it, no.”)
It may well be that the sweetener made Reagan feel Wasse
rman’s desired waiver was palatable; but the waiver still needed to be voted on by board members (who would be unaware of the backroom dealings). And Reagan could not afford to appear to be steamrolling his board. As lawyer Robert Gilbert commented about the process at hand, “SAG is not a rubber-stamp board. It’s not like the IA. Reagan couldn’t just make the deal one-on-one with Lew. They could have an understanding—but someone else would have to bring the board along.”
That person, as it turned out, was actor and SAG vice president Walter Pidgeon—“whom everyone loved, he was the father image on that board,” SAG’s Chet Migden said. Pidgeon, an MCA client, had recently had his long-standing contract at MGM terminated, along with a host of other actors and actresses. What ensued at the fateful meeting in mid-July 1952 was a debate that raged for several hours, in which virtually all the actors were vehemently opposed to the idea of talent agents becoming involved in production. Migden continued, “Indeed, the waiver was going down, Reagan didn’t say anything, he was in the chair, he was presiding over the debate that was going on. Until Walter . . . said, ‘Look around, so they want to produce, what do we have to lose? Is anybody working?’ He turned to the board members and said, ‘Is anybody working? There’s no work. Where is this town going to go? How are we going to survive? What am I supposed to do, pack my bag and go to New York and work in live television for beans?’ His impassioned speech turned the whole debate around, and suddenly everybody said, Somebody wants to create some work, what the hell is wrong with that?” And the board voted, unanimously, to grant the waiver.
Ronald Reagan and Walter Pidgeon. Gene Lester/Screen Actors Guild
The board’s action that night would arguably influence the history of television—and it certainly changed the life of Ronald Reagan. Wasserman had been doing his best to find Reagan movie jobs, but Reagan’s performances, unfortunately, spoke for themselves (in 1951, he was reduced to playing the chimpanzee-raising professor in Bedtime for Bonzo). Las Vegas was just becoming a new mecca for entertainers, and Wasserman tried Reagan there, too; but as MCA agent George Schlatter, who handled Reagan’s engagement at the Frontier casino, said, “He was an omelet.” Now that MCA was not only booking talent but also producing TV shows, however, it had far greater latitude in its search for a successful venue for Reagan; and, before long, it found one. Beginning in 1954, Reagan hosted and often starred in the General Electric Theater drama anthology programs, ultimately becoming a producer of the show as well. There was much talk around Hollywood about how Reagan had managed to land this fancy new job, which resurrected his career. The connection was hard to miss. Jack Dales, a longtime friend of Reagan’s, whom Reagan in later years would appoint to state government positions after Dales retired from SAG, always tried to put the best face on it. In handling the waiver situation, Dales said, “I think Ronnie did more or less what he thought he should—and then he was rewarded for it, with the GE job.”
Billy Hunt was less equivocal. “Lew always told me the waiver was Ronnie Reagan.”
With the waiver won, Wasserman launched MCA into the TV production business. The television industry, still relatively nascent, was populated with many neophytes, but Wasserman was not one of them. He had a sophisticated understanding of the broadcasting business from his years of experience in radio. He and other MCA agents had well-established relationships with the major advertisers and their advertising agencies. And, most important, MCA by and large controlled the talent. Other agents had become producers (Leland Hayward, for one), but none had gone into production with the force of a talent agency behind them. It was a really remarkable coup. Now, in order to square the circle in signature MCA style, Wasserman needed only to achieve a liaison with one of the three major TV networks. Many years had passed since Stein had negotiated his exclusives, whereby a dance hall owner agreed to buy only from the Music Corporation of America and in return got first pick of the top bands in his area. This was a different era, to be sure, with different players, and a different business. But the basic tenets Wasserman was applying remained unchanged.
By the early fifties, CBS had established itself as the premier network—and it had done so with the help of MCA. William Paley had become fascinated with radio when he was buying advertising time for his father’s cigar company in Philadelphia, and he had acquired the Columbia Phonograph Broadcasting System in 1928. During World War II, the most competitive arena for the networks was news, and CBS radio—with Edward R. Murrow, Eric Sevareid, William L. Shirer, and others—produced programs that drew the largest audiences in broadcasting. But CBS had been second to NBC in entertainment programming for roughly twenty years, and it was not until the so-called Paley Raids of 1948 and 1949 that CBS, overtaking NBC, was really launched. The blueprint for those raids was created in mid-1948, when Wasserman and Taft Schreiber suggested to Paley over lunch that he could have the Amos ’n’ Andy show—one of NBC’s most popular radio programs—if he were willing to pay for it in a tax-friendly structure they had dreamt up. MCA represented the creators of Amos ’n’ Andy, Freeman Gosden and Charles Correll. Like so many of MCA’s high-earning clients, they were affected by the staggering income tax rates—as high as 90 percent—introduced by the Revenue Act of 1941. But if they were to incorporate and sell their assets (their show’s scripts and characters) to CBS for a given sum and a percentage of future profits, then their income from CBS would be taxed at a capital gains rate of only 25 percent. Paley jumped at the idea.
Immediately after the announcement of the Amos ’n’ Andy deal, Wasserman returned to Paley and offered him Jack Benny—the linchpin of NBC’s impregnable comedy schedule on Sunday night. The Benny deal, though, proved much more expensive and complicated. David Sarnoff, the longtime chairman of RCA, NBC’s parent, had not fought the Amos ’n’ Andy defection, but now he authorized a move to retain Benny by offering him nearly twice as much as CBS. Paley countered—and Sarnoff decided, ultimately, that the prize was simply not worth the cost. Hovering over the transaction was a legal question—would the Bureau of Internal Revenue consider the capital gains scheme an evasion?—which worried Sarnoff more than it did Paley. (Indeed, the bureau ruled against the transaction, but that ruling was subsequently overturned in the courts.) The more fundamental reason that Sarnoff did not fight harder to keep Benny, however, was his view of the business. NBC had been created primarily to help sell RCA radios and, later, television sets; and Sarnoff, a pioneer in communications technology, resisted the notion that a mere star could be the engine of his business. Wasserman was summoned to see Sarnoff (who, since his wartime service, chose to be referred to as “General”) in his executive suite at the RCA Building in New York’s Rockefeller Center. “He said, ‘Nobody tunes in to Jack Benny—they tune in to NBC. We’re not making this deal,’ ” Wasserman recalled.
But Paley, the inveterate showman, understood the importance of talent. And within months, in deals brokered mainly by Wasserman, most of NBC’s top entertainers—Burns and Allen, Edgar Bergen, Red Skelton, and Groucho Marx—flocked to CBS. By the end of 1949, CBS Radio had twelve of the top fifteen radio programs, and for the first time CBS was number one in commercial broadcasting—a position it would hold long into the television era. It was by no means an unmitigated blessing. CBS had been home to many of the finest, if money-losing, programs in broadcasting, such as those created by Norman Corwin, the accomplished radio dramatist; but with these raids, Paley began to implement his decision to operate the network on more strictly commercial terms. If the game were only about profits and power, though, Paley emerged from this match the undisputed champion.
One might have expected the role Wasserman had played in Paley’s triumph to forge a bond between them. Paley had been in the entertainment business nearly as long as Jules Stein, and he knew MCA well. Indeed, when the Justice Department in 1941 had brought pressure upon the radio networks to divest themselves of their talent management activities, arguing that they should not be both carriers and providers of talen
t, CBS had sold its Artists Bureau to MCA. If anything, Paley knew MCA too well. “Paley did not like the MCA guys,” longtime CBS programming executive Michael Dann said. “He was as tough as Lew. He was a killer, as much as Lew. But he wore the gray suit with the perfect tie, and he had the home in Lyford Cay with the French chef, and he had married the most beautiful and elegant woman in the world, and he had his Matisses and Monets and Picassos, perfectly placed. It was quite a jump for a guy from Philadelphia, whose father was a cigar maker. And the MCA guys embarrassed him. They were too crude, too blatant.”
“Paley had a great distrust for just about all agents and everything in Hollywood,” said Frank Stanton—the man chosen by Paley in 1946 to be president of CBS, who then ran the network with Paley for more than a quarter century, earning a reputation for his acumen and integrity. Stanton added that he and Paley would on occasion have dinner with Stein and Wasserman, but “it was strictly for business reasons. There was no rapport.” He recalled, though, that after one of these dinners, Paley had remarked to him how good Wasserman was at handling people—which was no small compliment from Paley, master of the art. “Lew could be very charming—that was part of his effectiveness,” Stanton commented.
Beneath the charm, though, what Stanton perceived in Wasserman was mainly muscle. “Anything you wanted in the colony, he could get for you. He had all the connections, he knew where all the bodies were. And people had such fear of Lew. Because he played rough—blocking careers, pulling talent out of one picture into another. If a producer were reluctant about something, Lew would do something over here”—Stanton gestured, as though pulling at an invisible web strand—“to make the guy do what he wanted over there.”
