by Connie Bruck
Wasserman had been busy arming himself with numbers as usual, but in this instance his people probably provided him greater leverage. Over the years, one of Stein’s favorite maxims had been that MCA’s biggest asset was its manpower. (Wasserman, too, had subscribed to it, echoing L. B. Mayer’s phrase, “Our assets go home every night.”) Now, as sides were chosen, Wasserman had the advantage. “Berle called me into his office and told me he was going to be the next president,” recalled Sheinberg, then head of TV production. “I said, in that case, I’m quitting.” Lang paid Stein a visit, and told him that if Wasserman were fired, Stein would have three resignations—from himself, Sheinberg, and Price.
Shortly after Stein’s festivities ended, Herb Steinberg recalled, “Jules came over to see Lew at home. Lew told him, ‘I’ll leave the company anytime you want me to—but your key executives are going with me. You’ll have a company without people.’
“Jules said, ‘Don’t be silly! Nothing of that sort was contemplated.’ He changed one hundred eighty degrees.” A couple days later, Stein issued a public announcement that the MCA board of directors had unanimously reaffirmed Wasserman’s position as president and chief executive officer, and had also taken the unprecedented action of extending the appointment for the full term of an additional year. “While usually these elections are determined by the board following the annual stockholders meeting in June,” Stein’s announcement continued, “it was determined advisable at this meeting to dispel the unfounded and unjustified rumors regarding Lew Wasserman leaving the company.”
The rapprochement, however, was halfhearted. Less than four months later, in July, MCA announced another merger—this time, it was to be acquired by Firestone Tire & Rubber Co., in a deal reported in the press to have been advanced by Schreiber, a close friend of the Firestone family. But in September, this merger, too, was called off, without any explanation. Wasserman had won another skirmish; but in order to regain his power, he had to improve the company’s performance. Later, Wasserman would take pleasure in reviewing the history of MCA and noting that it never had a year in which it lost money—but 1969, with net income of only 31 cents per share, came closest to spoiling that record. George Smith recalled that in early 1970, they resorted to measures that seemed incongruous for this historically cash-rich company. “Our cash flow was so thin. Because of tax losses, we could get a refund of prior taxes. Usually the refund took six or eight months. I said to Lew, I’ll fly up to Sacramento and see if I can walk it through. We got the check a week or so later. It was only a $5 million check, but it meant a lot!”
No source was too negligible. Another MCA executive recalled Wasserman’s summoning him and showing him a list of small-time band pianists. Since the dissolution of its talent agency, MCA had continued to collect 5 percent commissions on income from deals its agents had negotiated. “He said, ‘I want these commissions!’ I said, ‘I can’t do that! You want me to go to Long Beach, find these guys who make about $100 a week, and tell them that they owe us several thousand dollars?’ He said, ‘It’s in the contract—I want it!’ ”
Finally, in 1970, Universal had a hit movie, Airport—the first of the disaster movies. It was the biggest by far in the company’s history. It had cost $10 million, and by 1972 would gross over $50 million; it received ten Academy Award nominations, and Helen Hayes won an Oscar for her performance. It was the restorative that Wasserman needed. And its success was all the more stunning, in a way, because it was so counterintuitive. As its producer, Ross Hunter, commented in an interview for an oral history in 1984, “We did Airport . . . when everybody in town was doing Easy Rider and Five Easy Pieces, and porno pictures, and street pictures. And they said, ‘Nobody’s going to the movies except young people.’ And I said, ‘Well, that’s because there are no movies for adults. But you give them a good old-fashioned Grand Hotel of the air’—which Airport was—‘and they will come out in droves.’ And the picture’s grossed over $200 million. . . . And, again, the studio fought me, they called it ‘Hunter’s Folly,’ they hated it. They didn’t even come to see a day’s rushes. And now of course they are the people who were in back of it.”
Hunter plainly prided himself on his knack for knowing what the public wanted. The critics might pan him (and Vincent Canby did, for Airport), but, he said, millions of people proved the critics wrong. He had a fairly realistic view of his product (“It may not be a great work of art, it may not give you a lesson in literature, but it will entertain you”). But he had a somewhat grandiose view of his role. “Many times I had to do a movie to save the studio, because the studio would be going under,” Hunter said in the oral history. “And I could only do just so many movies, because I was only one person. For instance, the little Tammy movies that I did in the middle of my career—why would I do a Tammy movie? Because I felt there was such a need for Mom and Dad to take that child to a movie that they could really be unafraid to take it to. . . . And of course the reviews were horrendous. We were hit right smack in the face. They said it was corn—which it was; saying it was old-fashioned—which it also was; saying it was very sweet—which it was. Then the millions and millions and millions started coming into the box office, and Universal was back in business. . . . So it was exciting. It was really thrilling for me. I love the fact that I didn’t want to do the movie, but I felt that I should for the industry.”
Hunter’s tendency to cast himself as savior, however, turned out to be his Achilles’ heel. Throughout the sixties, Hunter and Wasserman were quite friendly. They were both Cleveland boys, and Hunter, like Wasserman, had worked as an usher in a movie house there as a teenager. After Wasserman took over Universal, he treated Hunter exceptionally well, lavishing on him all the perquisites due a successful producer, and Hunter was frequently invited to the Wassermans’ parties. Then came Airport, which should have forged an even stronger tie. However, in his memoir, Universal publicist Bob Rains recalled that at the time of the movie’s release, rumors about Wasserman’s being fired were still prevalent. “As the Airport box office figures started coming in and new theatre records were being set daily, Hunter supposedly told several people he had saved Wasserman’s job,” Rains wrote. “Unfortunately, Hunter’s claims were printed as well as repeated by Hollywood’s gossip lovers. Shortly afterward, Hunter’s contract came up for renewal. It was not renewed—he lost his salary, studio car, offices, and even the art on his home walls. Now normally, a producer with the successful track record Hunter had would have been at another studio immediately on a long-term basis. He was not.” Hunter produced only one more theatrical film—Lost Horizon, for Columbia in 1973.
The newly empowered Wasserman moved deliberately to settle other scores. He dispensed with his three executive vice presidents, each in a way commensurate with the level of their disloyalty. Ritchie, who had challenged Wasserman with the Westinghouse deal, resigned in 1970, and eventually joined Westinghouse. Dorskind, who had tried to take a middle road during the coup, lost his title and was removed from the board. “Lew wanted him, in effect, to disappear,” Smith said. “Lew and I would be sitting in a meeting that was pleasant, going well—and then he would say, ‘Call Al Dorskind.’ I would think, ‘Oh no, I don’t want to see this.’ Al would come in. ‘Sit down.’ Then, ‘What do you think of that?’ Al would say something, and Lew would say, ‘That’s the dumbest idea I ever heard! Get out of here!’ It was awful to watch. Like some sort of psychological need Lew had—but he wouldn’t fire him.”
Stein was suffering from abdominal adhesions as a result of the surgery he’d undergone for cancer in 1959, and now he had surgery to correct them. He became critically ill. As Stein was hovering near death, Wasserman summoned Adams to his office and told him he was fired. To the surprise of many, including himself, Stein recovered. He called Adams and apologized to him for what had occurred, but said there was nothing he could do, according to Adams. Commenting on Wasserman’s timing in firing Adams, Herb Steinberg said, “Lew is like a home-run hitter,
who waits for the right pitch.” He added, though, that Adams was really not much more than “an innocent bystander—Taft was the devil, whispering in his ear. Taft hated Lew.”
But Schreiber, Wasserman’s diehard adversary, was beyond his reach. “Taft and Jules were as close as you could get,” Steinberg declared. Stein would never countenance Wasserman’s firing Schreiber—indeed, when Stein was so ill, he was said to have given Schreiber voting power of his stock. To some MCA employees, trying to interpret kremlinology, it appeared that Schreiber and Wasserman were now yoked in a kind of shared power. Certainly, with a Republican administration in power, it was Schreiber, more than Wasserman, who was the far more visible political player. Stuart Spencer, a Republican strategist close to Ronald Reagan, recalled that he had called Schreiber in March 1969 to ask for his help on a project, and Schreiber had demurred, saying he “had his hands full,” Spencer said. “A short time later, word leaked out about what had been happening at MCA. When I saw Taft, I said, ‘You sure did—trying to kill the king!’ ”
Schreiber’s introduction to political life had begun not long after Wasserman’s—unsurprisingly, since it was meant to be a tandem effort. In 1965, Schreiber joined the group of wealthy Republicans, later known as the Reagan kitchen cabinet, which was supporting Reagan in his bid to unseat Democratic governor Edmund “Pat” Brown in the 1966 election. Others in this group included Los Angeles businessmen Leonard Firestone, Holmes Tuttle, and Henry Salvatori, retired investment banker Leland Kaiser, and Reagan’s lawyer, William French Smith. Schreiber was a natural addition, inasmuch as he had been Reagan’s agent (making the life-saving deal whereby Reagan became host of the TV series General Electric Theater). Further, as the sole representative of the motion picture community in this group, Schreiber could provide an important bridge to a moneyed world. Spencer-Roberts, the Southern California firm that Stuart Spencer co-founded, was managing the campaign. “Leonard Firestone brought Taft into the Reagan kitchen cabinet early on,” Spencer said. “He was smart, cunning, charming as hell when he wanted to be. He was a listener. In the beginning, I thought he was listening so much because he was on a learning curve. Before long, he figured out there was only a slim difference between show business and politics, and then he was ready!
“Nobody in that Hollywood colony took Reagan seriously,” Spencer continued. “Taft did, some. He saw the potential. Taft knew everybody. He got Frank Sinatra to support Reagan. Warren Beatty admired Reagan—in that he had the guts to do what he did, crossing that line that Warren never quite could, from actor to politician.” Attempting to target Reagan’s being an actor, the Democrats had produced a half-hour TV program, entitled Man vs. Actor, which showed Governor Brown saying to an integrated class of small children, “I’m running against an actor, and you know who shot Lincoln, don’tcha?” Remarkably enough, the Democrats excerpted that segment and ran it as a one-minute spot during the campaign’s final week. “That was a mistake,” Spencer declared. “And I think Taft got on the phone to a lot of people in Hollywood. I mean, it was not a nice thing to say about actors. I remember I asked him, did you really get out and cultivate that? He just smiled, the way he did when he didn’t want to answer.”
While Schreiber was attempting to mobilize Hollywood for Reagan, Wasserman was hard at work supporting Brown. “Reagan was disappointed in Wasserman—because he was a good friend, and Reagan expected him to support him for governor, and he didn’t,” Spencer said. Nancy Reagan took it even harder than her husband; it was a breach that would not be fully healed for many years. But if Wasserman’s approach to politics discounted friendship, it was not because Wasserman was so driven by ideology. In Spencer’s view, both Wasserman and Schreiber had their political leanings but they were, above all, practical men, driven by their business. “If Jules woke up one morning and said, Taft, you do this on the Democratic side, and Lew, you do this on the Republican side—I think they would have done just fine,” Spencer commented.
Even without Wasserman’s help, Reagan won that race by a huge margin. Now that he was governor-elect, however, he had to find a way to support himself in this new incarnation. Spencer recalled the governor’s dilemma. “Reagan had no savings, no investments. He had had a salary from General Electric Theater, and he had only two assets, his house in Pacific Palisades, and the Malibu ranch property. The idea was to create income from the sale of that ranch property. Reagan would of course be receiving his salary as governor, he wouldn’t be out in the street. But [this sale] was the only way they could continue living in the style that they wanted.”
As detailed by Howard Kohn and Lowell Bergman in a 1976 story in Rolling Stone, Reagan had bought some of the Malibu Canyon property in 1951 and continued to add to it over the decade—paying $85,000 in all. Its 290 acres were surrounded by land used by Twentieth Century-Fox to shoot movies that required an arid-looking, craggy backdrop. In December 1966, shortly after his election, Reagan sold 236 acres of his ranch to Twentieth Century for $1,930,000, or $8,178 an acre. (Reagan had paid only $275 an acre.) Twentieth Century also signed a six-year option to buy the remaining fifty-four acres, at $8,000 an acre. At the time, a movie company spokesperson said that the purchase had been made because Twentieth Century might move its corporate headquarters there. This did not occur. Then, in 1968, Reagan bought acreage from a partnership headed by Kaiser Aluminum Corp., for cash plus his remaining fifty-four-acre parcel; with the caveat that if Kaiser couldn’t sell that parcel within a year, Reagan would buy it back. After a year, Kaiser said it could not sell it; and when Reagan was told he needed to repurchase it, his lawyer said it would be bought instead by a company called Fifty-Seventh Madison Corp. (which was controlled by Jules Stein). Twentieth Century, for its part, waited until 1974, and then sold the 236 acres, which it had bought for more than $8,000 an acre, along with its other property in the area, to the state of California; the movie company received $1,800 an acre overall.
Why Twentieth Century bought the land at all—and paid such a fantastic premium—was puzzling, to say the least. In 1980, when Reagan was running for president, Wall Street Journal reporter Jim Drinkhall asked Reagan’s lawyer, William French Smith, about these transactions—the original sale, and the follow-up. Smith replied that they were “strictly arm’s length” and “plain ordinary commercial transactions.” At the time of the original Twentieth Century purchase from Reagan, Richard Zanuck was the young president of the company; his father, Darryl Zanuck, was the chairman, but the company at that time was mainly run by Richard. Asked recently if MCA had played a role in that purchase, Zanuck replied, “If it was anyone, it was Taft”—and then declined to say more, other than to volunteer that “it was not a payoff.” Zanuck’s longtime close friend and partner, David Brown (who was working for Twentieth Century at that time), told me, “It was a sweetheart deal.” Asked whether company records might reflect how the decision was made, Brown said, “It wouldn’t have been discussed at a board meeting, because then notes would have had to be taken.” Brown added, too, that Richard Zanuck, who had a difficult relationship with his father, was very close to Schreiber. “Taft was almost like a father to Dick.”
Considering the incestuous history of Reagan and MCA—especially the all-important SAG waiver, which the government had investigated in the early sixties, searching for evidence of a bribe paid Reagan—it would have been too brazen for MCA to have purchased the property outright in the original transaction. Twentieth Century, somehow, was a willing candidate. “Taft arranged it all,” Spencer declared. “And Jules would be willing to do it, too, because he was pretty close to Reagan, and he was used to taking care of clients who didn’t know how to handle money.” Indeed, Stein had been doing just that for Reagan in the area he knew best. As Drinkhall wrote, “After his 1970 California tax return was leaked to the press, Mr. Reagan confirmed that he hadn’t paid any state income taxes that year and that one of the reasons was losses in tax shelter investments”—specifically, with Oppenheimer In
dustries, a cattle-breeding concern whose principal shareholders were Stein, his wife, Doris, and his stepson, Harold Oppenheimer.
On a more quotidian matter, too, Reagan turned to Stein. Years later, Stein recalled that when Reagan was about to begin his first term as governor, Reagan came to see him, saying he wanted to buy a fine desk from him for his office in Sacramento. Reagan had visited the MCA offices many times over the years, and was familiar with Stein’s eighteenth-century furniture; he had come to the right place for something distinctive to grace his office. “I told him to select a desk from the MCA tower,” Stein said. “He went around with me and, much to my surprise, he picked a reproduction. We had grown so rapidly that I had to use some reproductions at the tower. . . . I told him he had picked a reproduction and that it would be inexpensive. He took it.”
Schreiber’s debut on the national political scene came with the Nixon presidential campaign in 1968. Its chief fund-raiser was Maurice Stans; and, according to Spencer, who was active in fund-raising in this campaign, Stans relied on Schreiber for the California operation. Schreiber worked closely with fellow fund-raiser Herbert Kalmbach, and the two men became social friends, often playing golf together. Following his victory, Nixon made Stans his secretary of commerce, and offered Kalmbach the position of undersecretary. (Schreiber always insisted he wanted no political appointment.) Kalmbach elected instead to build his law practice. And after Nixon asked Kalmbach to become his personal attorney in the spring of 1969, Kalmbach’s practice flourished; his firm, Kalmbach, DeMarco, Knapp & Chillingworth, moved from Century City to large offices in a downtown skyscraper, and its client list expanded to include a number of major corporations, including MCA.
