SHOW BUSINESS: 10% of Everything

Most Americans have never heard of a huge and mysterious corporation called the Music Corp. of America. The mystery is intentional on the part of M.C.A.; it abhors publicity. Yet it is the nation’s top talent agency in the publicity-loving world of entertainment, and is one of the most potent forces in determining what the U.S. sees on TV and movie screens—the General Motors of the entertainment world. Last week the Justice Department was investigating M.C.A. and its smaller rival. William Morris, which together reportedly control 80% of U.S. TV talent. The question: Are they too powerful?

M.C.A. has built its empire on a simple economic principle; it takes 10% on any contract it makes for its gold-plated clients. It gets 10% from movie stars such as Marilyn Monroe, Gregory Peck, Marlon Brando and Gary Grant; from playwrights such as Arthur Miller, Tennessee Williams and William (The Dark at the Top of the Stairs) Inge; and from novelists such as James (From Here to Eternity) Jones, Irving (Lust for Life) Stone. It owns or represents such TV shows as Wagon Train, Tales oj Wells Fargo, Jack Benny, Ozzie and Harriet, Alfred Hitchcock, Dragnet and This Is Your Life. Revue Productions Inc., one of M.C.A.’s subsidiaries, is Hollywood’s biggest producer of TV films, accounts for an estimated 25% of all television films. Another subsidiary, Management Corp. of America, bought Paramount’s pre-1948 movie backlog several weeks ago for $50 million and will distribute the films to television.

M. (for Music) D. In the trade, M.C.A. is known as “the octopus,” but it keeps its tentacles well hidden. Its gross income is also a closely guarded secret, but estimates range as high as $100 million. Secrecy is an M.C.A. policy because the firm believes that publicity is for clients alone. To further their anonymity, M.C.A. agents dress as conservatively as bankers; the M.C.A. black suit is legend. And no one tries to dodge the public eye more than M.C.A.’s small, greying founder, board chairman and boss, Jules Caesar Stein, 61.

Born in South Bend, Ind., Stein originally set out to be a doctor, got an M.D. at Chicago’s Rush Medical College in 1921, studied ophthalmology at the University of Vienna, wrote a learned treatise (“The Use of Telescopic Spectacles and Distil Lensen”) after he returned to Cook County Hospital as a resident. He organized a band in which he played the fiddle, made bookings for other bands for a fee, finally teamed up with William R. Goodheart Jr., who later retired, to found M.C.A. as a band-booking agency in 1924. This sideline proved so profitable that Dr. Stein took it up full time. He signed exclusive rights with hotels and ballrooms, thus forcing bandleaders to come to him. M.C.A. bandleaders who became unruly found themselves with poor bookings. Later he developed other sidelines—sold liquor to nightclub owners as part of the deal for a band, sold his musicians insurance, real estate and cars. He also became a successful stock market investor, bought a seat on the New York Stock Exchange in 1936, still holds it.

Artful Deals. Stein soon saw the possibilities of radio, bought choice network time on which only M.C.A. performers were permitted. M.C.A. spread to Hollywood in 1937, added movie and radio stars to its roster, often by hiring other agents, with their list of clients, or absorbing their agencies. On movie lots, the M.C.A. agent became so powerful that he decided what stars would play in what movies, and for how much, along with who would write the script and direct it. M.C.A. tax men found new ways for stars to save on taxes, notably by getting a percentage of a movie instead of a big salary, thus spreading income over many years.

Competitors charge that M.C.A. does little to build up stars, gets them by raiding other agencies, even has a vice-president in charge of raiding. But moviemakers such as former M-G-M Head Dore Schary say that M.C.A. deserves its success because it works hardest for its clients, constantly plans deals to boost their salaries and its commissions. In 1943 Schary had a dispute with MGM, chucked his job as head of “B” pictures. His own agent advised him to go back to M-G-M because he could not get him another job. But M.C.A.’s Lew Wasserman (now president) took over Schary, and in a few hours closed a deal with David O. Selznick which netted Schary $750,000 in three years. Wasserman builds his deals so skillfully, says Schary, that “your tongue is hanging out when he gets through, and you begin to feel grateful he’s putting it together just for you.”

Just Helpers. Much of M.C.A.’s power is due to its breadth: its talent covers so many fields that it can offer a complete package for a movie or TV show: star, script, and sometimes even financing. M.C.A. makes much of being simply a service organization, brags of the number of executives it has servicing clients, like a college with a low teacher-student ratio. Its executives are paid on an incentive plan; senior executives get a flat $100 a week, plus a bonus—often huge—based on M.C.A.’s performance that year. Founder Stein still owns a majority of M.C.A. stock, and the remainder is held by 45 executives and a trust in which all employees participate.

“M.C.A.’s only asset,” says one officer, “is its executive talent.” Little worried about the antitrust investigation, M.C.A. officials argue that their giant does not control talent, is actually controlled by the stars. Said one top officer blandly: “We’re only employees.”