The Last Mogul: Lew Wasserman, MCA and the Hidden History of Hollywood

Praised and feared by peer and foe alike, Lew R. Wasserman reigned for most of the second half of the 20th century as the undisputed master of Hollywood in his role as Chairman of MCA Universal – a veritable entertainment factory that manufactured movies, television programming, and popular music at a uniform and cost effective pace that invited comparison to the conveyor belt methods Henry Ford once used to fabricate Model Ts.

Born to Russian émigré parents on March 22, 1913, the future master of Music Corporation of America and Universal Studios grew up amid the speakeasies and silent movie palaces of Cleveland, Ohio. Louis Wasserman worked from his early teens as a candy salesman and usher at night while attending public schools during the day. Following high school graduation in 1930, Wasserman worked for Cleveland’s infamous Mayfield Road Gang operating a casino. He met and married Edith Beckerman, only daughter of Mob lawyer Henry Beckerman, and when the casino went bankrupt in 1936, the Wassermans moved to Chicago where Lew became a talent agent for the Music Corporation of America.

Founded in 1924 by Chicago ophthalmologist Jules Stein, MCA was by far the richest and most influential dance band agency in the world, with ties to both James C. Petrillo’s American Federation of Musicians and Al Capone’s skein of nightclubs, brothels and gambling halls. When Stein moved his headquarters from Chicago to Beverly Hills in 1937, Wasserman rose quickly among the ranks in MCA’s drive to monopolize motion picture, stage and radio talent. Among Wasserman’s earliest clients were Bette Davis, John Garfield, Jane Wyman, Betty Grable, and future President Ronald Reagan. Wasserman cemented their lifelong friendship when he negotiated one of Hollywood’s first $1 million movie contracts on Reagan’s behalf in 1941 with Warner Brothers Studios.

That same year, Edie Wasserman bore Lew his only child, daughter Lynne Wasserman. He spent scant time at home through the rest of the decade, devoting his energies instead to building Stein’s MCA into the overweening talent powerhouse in the English-speaking world. By 1946, a merger Wasserman brokered with Broadway talent lord Leland Hayward catapulted both MCA and Wasserman into Hollywood’s stratosphere. Stein named him MCA President at the age of 36 – the youngest chieftain of a major talent agency with power to make or break careers on a par with that of any of the legendary studio moguls, including Jack Warner, Paramount’s Adolph Zukor or MGM’s Louis B. Mayer. Under Wasserman, MCA became known as “The Octopus” because its tentacles extended into every aspect of the entertainment business and its agents were called the “Men in Black” because they all wore the Wasserman “uniform”: dark suit, white shirt, dark tie.

In the early 1940s, Wasserman purchased one of the first televisions sold in Southern California, set it up in his den, and advised all who visited his home that the clumsy gadget with its poor reception and sparse programming would eventually be the most influential means of communication in the world. In his role as MCA president, Wasserman proved his prescience by creating Revue Productions in the late 1940s to produce most of early television’s programs throughout the 1950s, including General Electric Theater, hosted by Ronald Reagan. As Screen Actors Guild president, Reagan oversaw an MCA waiver of SAG bylaws which forbids talent agencies from engaging in TV or film production. The secret waiver gave MCA the advantage of selling stars at the same time that its Revue Production arm hired them, but by the time the waiver came to light in 1960, Wasserman and his army of agents had secured MCA’s position as the most powerful and affluent force in the entertainment industry.

During the 1950s, Wasserman also turned film stars into independent contractors. He made actor Jimmy Stewart a millionaire with a single role in Universal Pictures’ Winchester ’73. By taking his salary in the form of profit participation instead of a paycheck, Stewart paved the way for actors, directors, producers and writers to leverage their celebrity at the negotiating table. Similarly, Wasserman formed independent production companies for stars like Jack Benny, Alfred Hitchcock, Errol Flynn and dozens of other MCA clients, allowing them to minimize taxes while exploiting their star salaries and expanding their influence in movie production.

In 1962, a lengthy federal Department of Justice investigation into MCA’s monopolistic practices resulted in a face-off between Wasserman and Attorney General Robert Kennedy. In order to avoid criminal and civil penalties for alleged anti-trust violations, MCA divested itself of its talent agency at the same time that the company bought struggling Universal Pictures and Decca Records. Literally overnight, MCA quit the talent business and created the largest entertainment assembly line in Hollywood. Building on its Revue library of detective shows, westerns, situation comedies, and specials, MCA and Wasserman transformed the moribund Universal Pictures into Universal Studios: the largest and busiest lot in Hollywood. A backstage motion picture studio tram tour hatched by Wasserman’s brain trust became second only to Disneyland as Southern California’s biggest tourist attraction.

Wasserman succeeded Stein as MCA chairman in 1969, expanding his role beyond Hollywood to Washington D.C. and every corner of the globe. During this period MCA expanded its influence to publishing (Putnam/​Berkley), retail stores (Spencer’s Gifts), banking (Columbia Savings and Loan) and even Yosemite National Park, where MCA monopolized concessions. At its height, MCA had offices in 42 countries and beginning with John F. Kennedy, Wasserman became consigliere and a major contributor to Presidents Lyndon Johnson, Jimmy Carter, Bill Clinton and, of course, Ronald Reagan.

While much of MCA/​Universal’s output during Wasserman’s rein was negligible, the studio nurtured a host of producing talent that moved through the Universal TV, music and movie mill as if it were a finishing school before they blossomed on their own, including Steven Spielberg, George Lucas, Ron Howard, Stephen Cannell, and Stephen Bochco. During Wasserman’s tenure, the studio won an Academy Award for The Sting and Emmys for enduring programs like Columbo and The Rockford Files, but Wasserman and his successor as MCA president, Sid Sheinberg, were far more interested in profit than art. Thus, MCA led Hollywood’s negotiations to keep wages low and profit margins high, cutting costs at every turn. Sets, stars and scripts were recycled so often that Universal became a universal butt of jokes about Hollywood homogeneity during the 1980s.

His non-stop quest to meld developing technology with his passion for profit continued to make Wasserman an innovator, just as he had been in the early days of television. In the early 1960s, he installed one of the earliest industrial computer systems at MCA headquarters and in the late 1960s, he acquired patents for digital and laser technology that would eventually make MCA the pioneer in developing CDs and DVDs. MCA locked Sony Corporation in an epic struggle to corner the early market on video cassette recording, ultimately winning the battle to make VHS tapes standard in the U.S., but losing the war over MCA’s right to prevent taping off of television in a lawsuit that went all the way to the U.S. Supreme Court.

Despite MCA’s continued dominance through the 1970s and 1980s in television, popular music, and motion pictures with blockbusters like Jaws, Back to the Future and E.T., Wasserman opted to sell MCA in 1990 to Matsushita Electric for a then-whopping price of $6.13 billion, of which Wasserman’s share was more than $500 million. He and Sheinberg continued to manage MCA on Matsushita’s behalf through 1995, but a falling out with the Japanese over profligacy in the production of the MCA production Waterworld ended in a surprise sale of Wasserman’s beloved MCA/​Universal to the Canadian liquor company Seagram. Within weeks of the takeover, Seagam CEO Edgar Bronfman Jr. dismissed most of Wasserman’s executive hierarchy, supplanted Wasserman in all but an advisory role, and slowly eased out the 82-year-old MCA patriarch. In 1998, Wasserman left the MCA headquarters building –renamed for him – for the last time. He continued in his role as a major Democratic Party fundraiser and contributor to Southern California institutions ranging from UCLA to the Holocaust Museum, but bowed out of his beloved motion picture business. He died at 89 in his Beverly Hills estate on June 4, 2002.

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