How MCA Rediscovered Movieland's Golden Lode

By Peter J. Schuyten

It is 6:30 of an August morning in southern California's San Fernando Valley, and the first rays of sunlight are streaming westward over the scrubby San Gabriel mountains. As the light burns off the ground fog, the eye begins to pick out the faint outlines of a tall glass office building known locally as the Black Tower. By Manhattan standards the fifteen-story structure is no skyscraper, but here in the valley it dominates the landscape as surely as its owner and occupant, MCA Inc., dominates the television and motion-picture production industry.

This is the heart of Universal City, the home of MCA and its subsidiary, Universal City Studios, and already makeup artists are applying pancake to the expensive face of Gregory Peck as he is readied for his role in the movie MacArthur and carefully mussing Peter Falk's hair for another day's shooting of "Columbo."

During the following hour, carpenters, painters, electricians, and plumbers begin streaming through the studio gates, followed, in turn, by directors, producers, and writers. By 9:00 A.M. the city is fully awake. Its population has swelled to its seasonal peak of 7,500 as twenty five shooting companies begin to perform that collective magic known as moviemaking.

Not since the heyday of Louis R. Mayer, Adolph Zukor, and Darryl F. Zanuck has Hollywood seen anything like the creative tumult of Universal city or the business success of MCA. The company has become the world's leading purveyor of motion-picture and television fare. Last year the movie operation, Universal Pictures, released the all-time box-office smash, Jaws, which thus far has done a cool $187 million in worldwide film rentals. MCA counts among its other achievements the No. 1 domestic box-office hit of 1974, The Sting, not to mention American Graffiti, which did $52 million worth of business on a mere $1 million investment.

This fall Universal Television began the season supplying nearly one-quarter of all prime-time network TV programming every week. The company provides fourteen hours of shows, versus four hours by its closest competitor (Norman Lear). The products include "Bionic Woman," "Six Million Dollar Man," "Emergency," "Baretta," "The Rockford Files," "Columbo," and "Kojak."

The sweet sound of $175 million. By combining the historically volatile movie business with its own remarkably stable TV operation, MCA has minimized the violent financial swings usually associated with Hollywood. On a much smaller scale, the company also publishes books, presses records, runs a mail-order house, conducts sight-seeing tours, and owns a savings and loan association. In five years, its profits have more than sextupled, to $95.5 million on sales of $8.11 million last year. MCA has been so successful that-unlike others in the film colony-it owes not a penny of long term debt, and looks forward to beginning next year with $175 million jingling in the corporate pockets.

One of the striking things about this operation is that it was put together by an old-time Hollywood agent, Lew R. Wasserman. Now MCA's chairman, Wasserman is a tall, ascetic-looking man given to wearing dark suits and conservative ties. His work is all-consuming, he has no hobbies. He admits with seeming pride that he has never played a set of tennis or a round of golf, and that in his forty-year career with MCA he has taken but a single vacation. Since he gets up at five every morning to begin work, he sleeps on a daybed in his study so as not to disturb his wife, Edie.

Wasserman grew up in Cleveland, where he graduated from high school, and in 1936 went to work for the Music Corp. of America. Ten years later he became president and chief executive of the company, which then enjoyed a reputation as the nation's most powerful talent agency. As successful as the agency was-and it had no peer- Wasserman was dissatisfied with the business. "The weakness of an agency is self evident," he says in a voice that is seldom raised. "You have no assets. They all go home at six o'clock." As Wasserman saw things, the real assets of the entertainment business were the finished product-the movie, the record, the book, even the newly born television program.

Of all these things, Wasserman really had his eye on film production. At the time, of course, film meant movies, and the rules of the Screen Actors Guild prohibited MCA from getting into that business. But as early as 1940, when he had one of the two privately owned TV sets in southern California and used to invite visitors to watch test patterns, Wasserman was convinced that television would dramatically alter the face of the entertainment industry. MCA had already been putting together and selling complete live programs for television, and both Wasserman and the Guild saw a big opportunity in TV for film. He got permission from the union to go into the business.

Deja vu in Cimarron City.
Although its early years in television-film production were lean ones, by the mid-1950's MCA's Revue Productions was solidly in the black, turning out such favorites as "Alfred Hitchcock Presents," "Bachelor Father," and the "General Electric Theater" (hosted by an actor named Ronald Reagan). Wasserman had also bought Paramount's pre-1948 film library for $50 million, giving MCA a reservoir of nearly 750 films to rent to television stations.

But by the late 1950's, Wasserman was faced with a problem. Rebue was leasing space from Republic Studios, which had no back lot-that make-believe land with hundreds of building facades and streets that can be made to represent locations all over the world. To a man trying to establish his production credentials, it was embarrassing to have TV viewers from as far away as Australia writing to complain that a street in "Cimarron City" looked suspiciously like one in "Tales of Wells Fargo."

So Wasserman went looking for new quarters. In those days the movie business was on its back, land prices were skyrocketing, and studios were selling off their movie lots to real-estate developers. By Wasserman's lights, that was equivalent to a farmer eating his seed corn. He went precisely in the opposite direction and bought in the run-down Universal studio lot for $11,250,000.

He then embarked on a modernization program that ultimately cost $110 million. "Very few companies in the industry had spent money on capital-improvement programs," he observes. "The theory had been don't spend any money you can't charge off to a film. I'm not going to say we can walk on water, but we were defying conventional thinking."

In a race with boredom.
MCA brought this same spirit of initiative to what had excited Wasserman from the beginning-developing the potential of the medium as an entertainment form. Originally, weekly dramatic series were only thirty minutes long, which tightly constrained the development of characters and plots. "We felt very strongly that television, because it was a visual medium, would follow the form of film," says Wasserman. "It would shift from the short form to the long form." It was time, he thought, to give his creative people their lead, to let them take television as far as it would go, to pioneer new forms and create new formats. In short, it was time to develop the market.

The big money market for television producers is prime-time TV, and the secret to capturing it is innovation. Viewers don't want to watch the same old fare season after season, so the producer is in a perpetual race with boredom. The competition is heightened by the fact that there are only three commercial network customers, sixty-three prime-time hours to be filled, and a score of regular suppliers with all kinds of ideas up their sleeves.

The producer that comes up with a successful programming idea not only sells that particular show but also gets a reputation with the networks for knowing how to handle the new genre. MCA was the first producer to expand the half-hour dramatic series to an hour, with "Wagon Train" in 1957. Five years later it took its popular one-hour series, "The Virginian," to ninety minutes, and ratings soared.

The way to fill the pipeline.
When Wasserman innovates, he often has something more subtle in mind than merely latching onto a bigger hunk of prime time. To the audience, the television season runs from mid-September to early April; after that the network goes into reruns and the viewer goes to sleep. But to the producer the season begins in June, after the networks begin to order shows for the fall season; it peaks in late August, and goes at breakneck speed right into January, before tapering off and ending in February.

That leaves three months in which the studio has almost no television business and another month or two when business is slack. Wasserman figured he could fill a lot of the idle time by selling the networks on the idea of one-shot movie features made specifically for television. Many of these could be filmed during the off-season.

The concept of a made-for-TV movie was widely regarded in the industry as a bold but questionable enterprise. The real question, of course, was whether people would watch a movie on television that nobody had previously heard of and was of less than theater quality. As Frank Price, head of Universal Television, says now, "CBS and ABC and every other supplier in town were happy to say why it wouldn't work." NBC, on the other hand, thought it would work, and in 1965 made a deal with MCA that called for the delivery over the next few years of some thirty television movies, to be called "World Premiers."

The arrangement set off reverberations throughout the industry, and Wasserman remembers only too well the flak he took. "One major executive in our industry told me at the time that I was an idiot to make the deal. He thought I'd sold the product for too low a price. We did spend a hell of a lot of our own money on it, but we wanted to be certain we'd have enough production to keep the facility fully occupied." NBC subsequently renewed the deal several times so that even today MCA is producing "World Premiers" and making money at it.

Page 2 >>