*By the end of World War II, the bandleaders represented by MCA included Jan Garber, Ted Fio Rito, Ted Lewis, Benny Goodman, Freddie Martin, Jack Teagarden, Bob Chester, Phil Harris, Skinny Ennis, Les Brown, Bernie Cummins, Al Donahue, Henry King, Harry Owens, and Tommy Tucker, among others.
*MCA had also raided the Myron Selznick Agency, taking such clients as Errol Flynn, Paulette Goddard, and Ingrid Bergman.
CHAPTER SIX
The Finley antitrust case against MCA went to trial on January 29, 1946, in Los Angeles. F. Filmore Jaffe, Finley’s attorney, set out to prove arguments that MCA’s exclusive arrangement with Wayne Dailard in San Diego had constituted a monopoly, thus creating an illegal restraint of trade against Finley and his business. Jaffe produced evidence of alleged unethical practices employed by MCA, such as forcing other talent agencies bringing dance bands into the San Diego area to split commissions with MCA.
Jaffe had obtained an internal memorandum from the Frederick Brothers Agency that gave evidence of coercion and intimidation by MCA. The memo discussed the dilemma of Jerry Jones, the owner of the Rainbow Rendezvous, a dance hall in Salt Lake City, Utah. A top official with Frederick Brothers wrote that Jones had “said on the phone that he is forced to take nothing but MCA attractions and cannot possibly do business with us in the future unless MCA cannot give him a suitable attraction for his open date. During his recent trip here, [MCA vice-president] Larry Barnett, [MCA agent] Eames Bishop, and Taft Schreiber said it would have to be this way or else they would give T. R. Covey [the owner of the Cocoanut Grove Ballroom, also of Salt Lake City] two name attractions a week, and if such happens Jerry said it would murder his business, as his spot is small and he counts on a steady nightly trade.”1
MCA’s lawyers, Frank P. Doherty and Harold F. Collins, in response to Finley’s charges that the MCA enterprise constituted a monopoly operating in an unethical manner, insisted: “The evidence affirmatively shows without conflict that MCA does not ‘control’ any bands. It is clear that MCA at all times acts only as the employment agent of the bands which it represents, and that the bandleader with whom contracts are made is the principal and acts on behalf of himself and the musicians who comprise the band, all under rules and regulations zealously kept and made effective by the American Federation of Musicians. MCA is not the principal, only the agent.… Any conspiracy which is claimed or asserted was solely that existing between Bishop, Barnett, and [Pacific Square operator Wayne] Dailard.… The Los Angeles office of MCA and not any other office in any other state is alleged or proved to have been involved in the alleged conspiracy.”2
Jules Stein’s deposition dissected MCA’s corporate empire, which at the time included the band-booking agency, Music Corporation of America; the motion picture actors’ agency, MCA Artists, Ltd.; the radio performers’ agency, Management Corporation of America; and the California Movie Company.
Stein* explained that his East Coast talent was handled by MCA’s New York offices; the Chicago bureau was in charge of the Midwest; and the Los Angeles and San Francisco offices shared MCA’s West Coast operations. “Cleveland handles Ohio and perhaps part of Michigan,” he said, “and they interlock with some in Chicago and New York. I think they go as far as Pittsburgh in the East. Dallas handles Texas and goes as far up as Kansas City. There is no sharp demarcation.”3
After ten days of trial arguments and testimonies, the Finley antitrust case against MCA went to the jury. After only a few hours of deliberation, the jury returned to the courtroom and announced in favor of Finley, awarding him $55,500 in damages from MCA. Later, U.S. District Judge Paul J. McCormick, who presided over the trial and had earlier dismissed the charges against Stein, awarded Finley another $9,092 for costs and fees. In his final statement to the court, Judge McCormick called MCA “the Octopus … with tentacles reaching out to all phases and grasping everything in show business.”
Judge McCormick added that he had found “that there is ample and substantial evidence to support and sustain the implied finding of the jury that the defendants have conspired to restrain interstate commerce and to monopolize interstate commerce in that portion of the business of musical entertainment involving bands, orchestras, and attractions furnishing dance music at places of public entertainment.…”
Jules Stein was incensed. “The jury, by this decision, has in effect censured the efforts of our company in behalf of our clients in seeking the best places of employment for the maximum wages consistent with the furtherance of the artists’ careers,” he told the press.
Within a month of the verdict, rumors of a major MCA shakeup circulated on both coasts. Sonny Werblin, the New York MCA chief and second in command to Stein, and M. B. Lipsey, the head of the Chicago office, flew to Palm Springs for a series of meetings with their boss. Most talk centered on Stein, who was thought to be considering stepping down as president in favor of Werblin.
But after the first week of meetings, the only changes made were the reshuffling of several second-level personnel and the elevation of Larry Barnett as “coordinator of all orchestra and recording activities for MCA.” During the second week of meetings, Leland Hayward, Taft Schreiber, and Lew Wasserman were summoned. Despite MCA’s statements that “no other changes would be made,” the Hollywood trade publications continued to speculate that Stein was stepping down.
After meetings during the second week in March, MCA continued playing its game with the press, still insisting that no major changes would be made. But in reality changes were being planned. Stein was not stepping down, he was stepping up—to become MCA’s chairman of the board. And the new president was not Werblin—who had suffered a near-fatal heart attack a few years earlier—or even Taft Schreiber. Instead, Stein said he was going to name vice-president Lew Wasserman as MCA’s new president and chief executive officer, saying of his thirty-three-year-old protégé, “Lew was the student who surpassed the teacher.”
As of April 26, 1946—Stein’s fiftieth birthday—Stein slowly eased himself out as the key day-to-day operator of MCA, and Wasserman began to assume the mantle of one of the most powerful executives in the entertainment business. The move became official on December 16, 1946, at MCA’s annual meeting. Wasserman’s formal promotion came ten years to the day after he joined MCA.
The tall, lanky, soft-spoken Wasserman presented a sharp contrast to the usual image of the glitzy, high-pressure Hollywood agent. He always wore the clothes that he made MCA’s trademark: plain dark suits, white shirts, and skinny dark ties. Competitors called MCA’s agents “the black-suited Mafia.” Like Stein, Wasserman fanatically shunned all forms of personal publicity. With the moral support of his wife—Edith Beckerman, whom he had married in 1936—he worked seven days a week, sixteen hours a day in his plush Beverly Hills office. Impatient with inefficiency, cold and brusque when angry, he was a ruthless, hard-nosed negotiator. A self-admitted high-stakes gambler, he was considered an incisive thinker who made decisions quickly.
Wasserman preferred to dispense with paperwork, rarely writing memoranda or keeping personal records. Without any advanced education, he had made himself an expert at finance, taxes, law—and especially sales. For all of his business ferocity, even his most critical Hollywood rivals considered him a smooth, charming, likable, and honest man who had a natural tendency to understate his own considerable accomplishments. Every project he touched seemed to become successful—though shrouded in secrecy.
*In 1945, Jules Stein and his family purchased a two-story, semicircular Mediterranean villa, built on two acres on Angelo Drive in Beverly Hills. The mansion had been designed by Wallace Neff, a famous architect. Stein’s neighbor across the street was Greta Garbo.
CHAPTER SEVEN
The Justice Department had watched the Finley case closely, as part of its continuing scrutiny of the monopolistic practices within the entertainment industry. At the same time, it was doing battle on another front with James Petrillo and the AFM.
In 1946, the U.S. Congress pa
ssed the Lea Act, best known as the “Anti-Petrillo Act,” which prohibited the AFM from forcing broadcasters to hire more musicians than they needed.* Soon after the law was passed, the AFM contested its legality in Chicago’s U.S. District Court, which ruled it unconstitutional. In their appeal to the U.S. Supreme Court, government attorneys stated that the Lea Act “represents the deliberate judgment of Congress as to the existence of an evil affecting the broadcasting system of the nation and as to the best method of remedying such evil.” The Supreme Court overturned the lower-court decision, stating that the Lea Act was indeed constitutional.
As part of its antitrust investigation, Justice Department attorneys interviewed Charles Wick, a top executive of the William Morris Agency, the first band-booking agency on the West Coast. Wick had at one time been a musician with his own orchestra, as well as a composer and arranger. For a short period, he was the administrator for Tommy Dorsey’s orchestra.
Wick alleged that aside from MCA’s talent agency and similar business ventures, “They also sell liquor to hotels to whom they sell orchestras.” He estimated that MCA’s bands grossed $15 million a year and that MCA’s cut was at least 12.5 percent of that, or $1.8 million. Wick told the attorneys that at least three bandleaders—Tommy Dorsey, Harry James, and Kay Kyser—each grossed a million dollars annually. He also admitted splitting commissions with MCA when singer Vaughn Monroe played at the Pacific Square in San Diego. Monroe had since left William Morris and joined MCA.
“Do you know of any affiliation between MCA and the American Federation of Musicians?” one of the antitrust lawyers asked.
“That is very explosive ground. I know of none. I’ve heard of rumors. I don’t say I entertain that view.”
“Wherein would there be some connection between MCA and AFM, if there’s any?”
“Well, this is only academic. If I may not refer to MCA, I could say that the likely affiliation between a union and an agency of this sort, if such existed, and which I have no reason to believe exists, would come whereby various strict union rules governing the coordination of the agency and the artists in relation to the union and the various entertainment purchasers might be released or overlooked or specially construed in a fairly moot situation in favor of the agency.”
Later, when Wick was asked why MCA was so successful, he replied, “The main factor of MCA’s dominance is the fact that they can force a particular [dance hall operator] to accept an MCA orchestra, because MCA wants to play the band at that particular point at that particular date because of a matter of good routing for their orchestra.”
The government attorney asked, “How is MCA able to force them to do that? What pressures can it bring?” Wick then told a story about Gordon Coffey, a dance hall operator in several California towns. “[Let’s say] he [Coffey] wants one of our bands and MCA wants to knock it out. If he doesn’t take the band they [MCA] want, they can say ‘We’ll give our bands to someone else in your territory and you will get none, and that’ll break you.’ They can do that. That is another form of coercion: the law of supply and demand.…”
“Do you think that these same efforts of pressure are exerted in other parts of the United States?”
“Very definitely.”
“Your organization runs into it frequently?”
“Yes. It is generally known in the field, even by musicians. They can also pressure hotels and nightclubs … in the same manner to take the bands they want to give you. They say, ‘If we give you Mr. X box-office, we want you to take Joe A and Joe B no-draw.…”
“What pressures could MCA bring upon its own bands to, more or less, make them play where they wanted them to?”
“Well, if their band is of top quality, they usually, in their personal relationships, act as diplomatically as possible, and therefore, with a top band, they would not bring any kind of direct pressure, because a top band is not solicitous of their good favor. However, a band that is not top, they can bring all kinds of pressure just, more or less, by intimidation, because they can tell him that only so-and-so may be available to his group in the way of bookings.…”
“Do you know of any instances where MCA had undertaken to do some pirating [stealing of clients]?”
“Oh, yes. Although I will say, in all fairness, that all agencies sandbag their opponents, although personally I will say—not professionally—that MCA’s business tactics and scruples are highly questionable. That is a personal view, and I was very surprised when I came [to William Morris at] the amount of integrity and ethics they try to maintain in the face of pretty stiff competition.”1
A few days after the Wick interview, Holmes Baldridge, special assistant to the U.S. attorney general, sent a memorandum to Fred Weller, special attorney for the department’s antitrust office in Los Angeles. Baldridge concluded that MCA’s activities—in its representation of actors, entertainers, and musicians, along with its subsidiary holdings—were nationwide rather than confined to the West Coast area. He added that most of MCA’s name bands broadcasted over networks covering much of the United States, and that “this fact should strengthen the commerce phase of the case [against MCA].”
In his response, dated March 22, 1946, Weller replied: “If the facts developed are consistent with our present information, this looks like a good case. We are anxious to expedite it as much as possible.”
Weller and government antitrust lawyer Herman Bennett tried once more to intiate a full-scale federal investigation of MCA. In the detailed memorandum, they outlined their case against the talent agency, again requesting an FBI investigation. Using the Finley case and the conduct of its original defendants—Jules Stein, Larry Barnett, and Eames Bishop—as evidence of MCA’s antitrust violations, Weller and Bennett wrote: “It is believed that an FBI investigation will disclose that other individuals, affiliates of MCA, and other corporations are implicated in the conspiracy and that such investigation will also disclose facts that warrant a grand jury investigation.”2
Specifically, they charged that MCA had “exerted pressure” on those with whom it did business for the following purposes:
1.It has compelled promoters to agree to take only MCA bands or that a great percentage of bands used by them be MCA bands.
2.In setting up their schedules, promoters have been compelled to take bands which they did not want.
3.Promoters have been prevented from using bands under contract with other agencies.
4.Other booking agencies have been forced to split commissions with MCA on receipts of bands under contract with other agencies.
5.MCA has compelled promoters against their will to accept an MCA band merely because MCA wanted to play the band at a particular time and place. This is sometimes done even when the promoter has other commitments with other agencies or other bands.
6.Bands have been pressured to play at certain places.
7.It has compelled bands to refuse to play at certain places and for certain promoters.
Weller and Bennett continued: “For a thoroughly complete investigation for the purpose of uncovering the entire MCA setup with all of its affiliates, interests and tentacles, its financial setup and its control of other phases of the entertainment industry, it would seem necessary to have a grand jury investigation in order that the books, records, correspondence, and office memoranda of MCA could be called for evidence.
“For the time being, a Bureau investigation covering certain cities and more or less confined to band-booking agencies, bandleaders, hotels, nightclubs and the larger ballroom operations should disclose substantial evidence of the illegal practices of MCA and a monopoly and restraint of trade in ‘name’ and ‘semi-name’ bands.”
During the spring of 1946, the antitrust office in Los Angeles formally requested that the U.S. attorney general order an FBI investigation of the corporation. Specifically requested were probes of the relationship between MCA and the AFM and their sweetheart relationship; MCA’s takeovers of the CBS Artists Bureau and the Hayward-Deverich
Agency; and the subsequent takeovers of such businesses as the Mike Falk Agency and the William Meiklejohn Agency. Further, the FBI was asked to investigate the practice of commission-splitting and a variety of devices of coercion and intimidation against bands and dance halls utilized by MCA.
On June 24, U.S. District Court Judge Paul J. McCormick, who had presided over the Finley v. MCA case, upheld the final verdict but overturned the jury’s decision on the damages awarded to Finley, indicating that, upon reconsideration, “the jury’s fixation of the damages for the inquiry to the plaintiffs by reason of defendants’ wrongdoing does not conform to the yardstick of certainty required by the decisions of the courts of the United States.”3
Ironically, just the previous month, Larry Finley—who ended up winning only his attorney’s fees—had booked his first MCA band, Tiny Hill and his orchestra, into Mission Beach for a two-week stand. All communications and contracts between Finley and MCA were handled by mail, and not a word about the booking was breathed to Pacific Square, which, by then, had been sold by Dailard.
The court’s equivocation in the Finley case quickly put a damper on the whole MCA investigation in Washington. In the Justice Department’s rather condescending August 12 reply to the Los Angeles office’s request for the FBI investigation, George B. Haddock, special assistant to the U.S. attorney general, wrote: “The attorney general has expressed a personal interest in this investigation.… [But] at most it would appear that MCA is monopolizing the business of placing name bands, or, stated otherwise, the business of supplying name band entertainment.… The trouble here is the fact that bands are not fungible, and it would be an extremely difficult thing to draw any distinction between name bands and non-name bands on the basis of merit of the entertainment they produce. The non-name band of today becomes the name band of tomorrow. Usually, where we attempt to charge monopolization, we have involved a commodity capable of specific definition on some basis other than the price which is being paid for it as of the time the complaint is filed.”
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