MCA's No. 2 Tower of Power : Sheinberg Reigns Supreme as Wasserman's President--and Heir Apparent

Times Staff Writer

Within the confines of MCA Inc.'s forbidding "Black Tower," the authority of Sidney J. Sheinberg, president and chief operating officer, is virtually unchallenged--because Lew Wasserman, chairman and chief executive officer, wants it that way.

If there are any doubts on that score, Wasserman will gladly lay them to rest.

The 74-year-old MCA chairman, slowed by surgery to remove polyps from his colon two months ago, calls Sheinberg's 14-year tenure as president "outstanding." Quietly, he adds that Sheinberg ultimately will inherit control over his own 5.2 million MCA shares--perhaps as Wasserman inherited partial control of a massive block of stock placed in trust by the entertainment conglomerate's founder, Jules Stein.

"(Sheinberg) is certainly going to succeed to my estate. It's all set up," says Wasserman, his voice only slightly hoarser than usual since returning from a stay in Cedars-Sinai Medical Center.

(Wasserman is unclear about his precise plan, or whether Sheinberg might somehow share control of those shares, valued at more than $300 million, with Wasserman's wife Edith or daughter Lynne. Sheinberg claims to be unaware of the chairman's plans. "Honestly, I don't know. He's never told me about it," he says.)

Wasserman, the stuff of legend, is now back in his MCA office and apparently set to continue working for years. But his pronouncement puts an imposing seal on his longstanding plan to achieve that rarest of events in Hollywood: the orderly transfer of power to a hand-picked successor.

Six-foot-two and Texas-born, Sidney Sheinberg is the sort of character only Hollywood could invent. A lawyer by training, he is both vehement and tender, bellicose and reserved, passionately angry one moment and coolly rational the next--as if someone had once explained to him that the perfect movie mogul is half artist and half gunslinger, and he had believed it, but was never quite comfortable in making the parts fit.

By many accounts, Sheinberg is intensely private. Unlike Steve Ross, chairman of Warner Communications, or Merv Adelson, chairman of Lorimar, the MCA president is rarely seen wining and dining celebrities, and prefers to spend weekends with his wife and two married sons.

The Sheinbergs have a house at Malibu's star-laden Broad Beach. But they hold themselves closely, and, according to friends, seem more at ease going to the movies in Westwood than working the room at glitzy entertainment social events.

But Sheinberg can be brutally forthright. He will sometimes refer to business opponents as "idiots," and ideas with which he disagrees are just "stupid."

Occasionally, his language is even more colorful--so much so that it has been claimed in Hollywood that he's out to resurrect the Goldwynism.

In fact, he appears to have invented the "Sheinbergism," a metaphor that tends to become hopelessly mixed when a quick tongue moves even faster than a very quick brain.

"You've just reinvented white bread," the MCA president has been heard to thunder. Or, as he pronounced on another occasion: "Charlie is really a one-man Sherlock Holmes."

Sheinberg admits to possessing a temper--although no more so than Wasserman in his prime. "I'm not sure I understand how I came to be regarded as a heavy, and Lew Wasserman turned into a nice guy," he says during an interview at his Beverly Hills home.

(MCA executives privately confirm that Wasserman has shown plenty of pique in his day. "People have been known to run when Lew threw things," says one company officer who prefers to remain anonymous.)

Yet even Sheinberg's closest associates say it is often difficult to know whether he is really angry, or merely playing the provocateur.

Irving Azoff, an aggressive former rock band manager recruited by Sheinberg to head MCA's fast-growing record division, maintains that Sheinberg uses confrontation as a management tool. "Sidney always has a very definite opinion about everything," says Azoff. "But even if he doesn't agree with you, he's the first to say, 'Do it anyway if you believe in it.' "

But Stanley Newman, a friend of Sheinberg's since college and now head of MCA's consumer products group, adds: "Sidney doesn't always know how aggressive he seems, which sometimes keeps people from working as closely with him as they should."

What seems beyond doubt is that Sheinberg's passions, however expressed, are gauged to promote the greater good of MCA--a company to which, at the age of 52, he has already devoted 28 years.

Sheinberg's son Jonathan, a 29-year-old Orion Pictures executive, says his father often resorts to an anatomical metaphor in describing his sense of identification with the corporation that Lew Wasserman has increasingly placed in his care.

"If a Universal movie cost $20 million and turns into a total disaster, to (my father) that's like cutting three fingers off," explains Jonathan.

"If Disney decides to build (a competing entertainment complex) in Burbank and he thinks there was some unfair political maneuvering, that's like cutting off a hand."

And, says Jonathan, "If there's a takeover attempt against MCA, God forbid, that is an arm and a hand."

Under Sheinberg's regime, which took hold over the years as he weaned key executives away from day-to-day contact with Wasserman, MCA's record has been marked by soaring accomplishments and troublesome blemishes.

With an expected $2.7 billion in revenue this year, the entertainment giant has more than tripled in size over the last decade while relentlessly expanding into broadcasting, theatrical exhibition, toy-making and book publishing. But MCA's profits have swung sharply with the movie business, and according to insiders the company remains relatively loosely managed, in part because Sheinberg prefers to let hard-charging division heads run their own shows.

Again, Sheinberg has shown good sense in leading the movie and TV industry on a much-needed campaign against skyrocketing production costs. But his own compensation, more than $6 million last year, is among the highest in American business. His company, moreover, has often been frustrated in attacking cost increases on its own shows, and last year suffered an embarrassing $50 million write-off related to soft syndication sales of expensive MCA programs, most notably "Miami Vice."

MCA's record company, meanwhile, has staged a dramatic turnaround--recovering from Sheinberg's self-confessed mistakes in overseeing the division's earlier management. But MCA Records also has been plagued by its involvement, now dissolved, with a figure who has been alleged by federal investigators in various federal court filings to have had ties to organized crime. (Sheinberg says his subordinates weren't "as smart as they should have been" in those dealings, but insists that MCA officers committed no wrongdoing and were ignorant of their business associate's alleged background.)

By the same token, MCA's Universal Pictures unit has enjoyed some of the biggest successes in film history, including "Jaws," "E.T. the Extra-Terrestrial" and "Back to the Future"--which are expected to bring more than $1 billion combined revenue to MCA, and all of which stemmed from Sheinberg's close relationship with superstar director Steven Spielberg.

But Universal also has become known in some quarters of Hollywood's creative community as a "difficult" studio, thanks to a succession of rocky management changes and to a highly public dispute between Sheinberg and director Terry Gilliam over "Brazil." A 1985 Universal release, "Brazil" was acclaimed by some critics, even though Sheinberg had disliked it enough to have the film cut and re-edited without the director's help, but held back from releasing his own version principally from fear of negative publicity.

Sheinberg, immensely proud of his record as a creative executive, maintains that his intervention in "Brazil" was a rare event--and occurred only because of his own passion to save a movie that he believed was too long and "inaccessible" to audiences.

"I can't leave dead soldiers on the battlefield," he says, adding that he has generally been known as a film makers' advocate during 20 years as a producers' representative in triennial negotiations over crucial "creative issues" with the Directors Guild of America.

Elliot Silverstein, chief negotiator for the directors in such talks earlier this year, agrees that Sheinberg has generally shown "statesmanship and sympathetic understanding" of directors' concerns.

Yet Silverstein, who compares Sheinberg to a many-faceted "Picasso painting," also says the MCA executive embodies the "professional schizophrenia" of the movie business precisely because he cares about both art and commerce.

"Sidney faces the same combat every film maker faces when he deals with the front office. Except that he is the front office," says Silverstein.

Compounding those forces, Spielberg's insistence on dealing directly with Sheinberg has reinforced a widespread perception in Hollywood that Universal is really two studios--one run by the reigning movie chief of the hour, the other run by Sheinberg.

In fact, Sheinberg has been deeply involved with not only the Spielberg projects, but also the three "Jaws" sequels (including "Jaws: The Revenge," which gave top billing to Sheinberg's actress wife, Lorraine Gary, and dropped off quickly at the box office), and a few other films such as "Mask," which was produced by Sheinberg's close friend Martin Starger.

Thomas Pollock, a veteran entertainment lawyer who became chairman of Universal Pictures nine months ago, says he is fully in charge of movie decisions, but also makes a policy of "communicating" with Sheinberg. It is something that apparently didn't occur often enough during the months before Frank Price--Sheinberg's ally when they both worked earlier for Universal TV--resigned the movie chairmanship amid conflicts with the MCA president last year.

At least one company executive says there is still occasional "nervousness" among writers and producers who fear that Sheinberg will become aggressively involved with their projects. "Some people want to know, 'Will I have to deal with Sidney?' " says the executive.

Some friends believe Sheinberg's combativeness is rooted in feelings of cultural displacement that go back to his boyhood. Born to immigrant parents in 1935, he has occasionally claimed that he grew up as "the only Jew in Corpus Christi."

In point of fact, according to Sheinberg's son Jonathan, Corpus Christi, Tex., a port city with 250,000 population, has a substantial Jewish community, much of which centers around the extended family of Sidney's mother, nee Tillie Grossman.

As Jonathan tells it, Tillie came to Texas from the Ukraine, while her husband-to-be Harry Sheinberg came from Poland via Argentina, both under pressure from anti-Semitic persecution. They founded a downtown dry goods store catering largely to the Mexican-American community, and Sidney worked there for a time.

Still in his teens, however, Sheinberg made his first foray into the entertainment business--as a professional disc jockey and English/Spanish newscaster for a local radio station. "That job tells you something about what makes Sidney tick," one associate says now. "You have to picture this kid hiding behind a microphone and developing that big, booming voice of his."

After attending Columbia College in New York City, Sheinberg studied law for a year at the University of Texas in Austin, then transferred back to Columbia's law school. While still an undergraduate, he met and soon married Lorraine (nee Gottfried), a Columbia dramatic arts student from Beverly Hills. (Jonathan was born in 1957. William, a recent USC Law School graduate, is two years younger.)

Shortly after graduation, Sheinberg moved his young family to Southern California, where he had accepted a one-year position teaching law at UCLA. Although he had considered a career teaching law, Sheinberg was sidetracked by the offer of a position in the business affairs department of MCA's TV production unit.

In 1959, the year Sheinberg joined MCA, the company still owned the most powerful talent agency in the world and hadn't yet purchased Universal Pictures--although it was already a major force in television through its Revue Productions arm. Sheinberg, far removed from the antitrust battles that would end with MCA disbanding its agency in order to purchase Universal in 1962, first learned the TV business at Revue under production executive Jennings Lang.

Some TV veterans remember Revue for its penny-pinching, rough-and-ready approach to production values. "A rock is a rock. A tree is a tree. Shoot it in Griffith Park," is how one longtime MCA TV producer, quoting an old Hollywood maxim, sums up the unit's credo.

But Sheinberg recalls chiefly the excitement of working in a medium that hadn't yet become bogged down in creative bureaucracy. "Why do we need eight or nine producers on some of these shows today? We used to get by with none of that," he now says, with marked nostalgia for lean but effective productions like "Leave It to Beaver."

As Sheinberg rose through the ranks as a TV production executive in the 1960s, Universal Television, of which he became president in 1971, nonetheless stepped up both the quality and the expense of its shows. The period also was marked by unusual creative verve, thanks in part to a close working relationship under which Universal's strongest buyer, NBC, became the showcase for a series of unorthodox and occasionally brilliant programming concepts developed by an MCA team that included Sheinberg, Lang (later an independent producer) and Frank Price (later to head, successively, Columbia Pictures and Universal Pictures).

Sheinberg and his cohorts claim to have delivered the first-ever made-for-television movies to NBC as part of Universal's "World Premiere" series. The first such film, called "The Killers," featured Lee Marvin and Ronald Reagan. As Sheinberg recalls, it was deemed "too violent for TV," and wound up as a 1964 theatrical release instead.

Sheinberg also fostered a novel system under which alternating one-hour shows--for instance, "Columbo," "McMillan & Wife" and "McCloud"--were rotated through a single time slot. The system, largely abandoned since, improved the quality of episodes by allowing more writing and shooting time, and provided steady work for a mushrooming production and writing staff that helped make MCA a powerhouse for one-hour drama into the 1980s.

Wasserman today is vague about his exact reasons for elevating the then 38-year-old Sheinberg--after a brief stint as executive vice president--to the presidency of MCA in 1973. It was a move many MCA executives at the time found unwise, given Sheinberg's abrasiveness and lack of polish.

But the MCA chairman tells of coaxing his reluctant protege for nearly 18 months to give up his direct involvement with TV operations and take the presidency. "If there's one thing Jules Stein taught me," Wasserman says, "it is to find somebody better than you and put him in charge."

Within MCA, there are two views of the Wasserman-Sheinberg relationship. Some high executives say the pair are like father and son: bonded by deep personal warmth, and almost never in fundamental disagreement. Others claim the relationship is strictly business--that Wasserman elevated Sheinberg because he was simply the best of a relatively small pool of top officers, and stuck by him even while signaling occasional exasperation at his protege's passions and tactics.

(Sheinberg speaks almost reverentially of Wasserman, sometimes referring to the chairman as "Mr. Wasserman" rather than "Lew." He also claims to be "frankly amazed" that "we have so often shared the same views about many things.")

Over the years, there have been periodic rumors of a falling out between the two. Perhaps the true measure of Wasserman's loyalty to Sheinberg came in 1985, however, when the MCA chairman broke off advanced merger talks between RCA and MCA, primarily because Sheinberg was bothered by the prospect of a prolonged wrangle with RCA representatives over how the combined companies, including RCA's NBC-TV network, would be governed.

According to one source familiar with the negotiations, Wasserman simply turned to Sheinberg and said: "You know, you're not going to be happy with this." And the multibillion-dollar deal died.

If Sheinberg's control of MCA is nearly complete, it remains far from clear that the MCA president will ever supplant Lew Wasserman as moviedom's principal statesman.

Some close observers of entertainment industry politics maintain that Wasserman's influence over his fellow moguls and his pipeline to politicians as highly placed as Ronald Reagan (once an MCA client) are so extraordinary that even to pose the question of a succession is unfair. "Nobody is going to replace Lew Wasserman," says Jack Valenti, president of the Motion Picture Assn. of America and himself a Wasserman protege.

Still, as Wasserman has scaled back his activities in recent years, Sheinberg has emerged as one of four or five executives--including Fox Chairman Barry Diller and Paramount Chairman Frank Mancuso--who set the industry's agenda in labor negotiations, joint litigation and political initiatives.

Sheinberg is an active Democrat, but he has no close relationships with politicians. ("Unlike (Disney chairman) Michael Eisner, he doesn't think (Sen.) Bill Bradley is God," says one observer of Hollywood politics). And Sheinberg is pragmatic enough to have hosted a fund-raiser for Sen. Orrin Hatch, an influential conservative Republican.

By some accounts, Sheinberg has been far more bellicose than Wasserman in pressing for economic concessions from the Hollywood unions. But at least one source who has dealt with both executives on policy matters says the differences reflect style, not substance.

"If Lew calls, the tone is quiet. Sidney might call screaming. Only the amount of screaming is different, though," says the source.

Sheinberg is further said to have squandered some of his influence by aggressively pursuing, and ultimately losing before the Supreme Court, a lawsuit to block Japan's Sony Corp. from freely selling its pioneering VCRs in the United States on the grounds that they would be used illegally to reproduce copyrighted movies and TV shows. Only Disney joined the suit (although other companies lent peripheral support), and many movie company executives questioned the wisdom of treating the VCR as enemy rather than friend.

Yet Valenti stoutly defends Sheinberg's judgment in the matter. "Many of the Cassandra things Sidney Sheinberg was saying have come true. Wholesale copying is going on," says the MPAA president. (Sheinberg, for his part, puckishly claims that MCA, then partner with IBM in a now-defunct videodisc business, was actually pursuing serious merger negotiations with Sony even while pressing the bitterly fought lawsuit.)

Moreover, there are at least some signs that Sheinberg is relaxing into a more effective public presence as Wasserman steps back. Recently, at any rate, he agreed to a peace-making breakfast with Disney Chairman Eisner--potentially ending a sometimes bitter intercompany feud that began two years ago when Disney began planning a movie studio tour in Florida.

Dubbing Disney's tactics more worthy of a "ravenous rat" than Mickey Mouse, Sheinberg accused Disney officials of unfairly using their influence with Florida officials in an effort to sabotage Universal's plans for its own studio tour nearby.

"From my point of view, there's no tension and hasn't been any," says Eisner, who proposed the recent breakfast. "I am very fond of Sidney Sheinberg. I am amused by his public metaphors, and I admire his highly competitive spirit," he adds. (Even so, MCA continues to press a lawsuit filed last month against the City of Burbank, seeking to invalidate an agreement under which Disney is negotiating to build an entertainment center on property that currently belongs to the city.)

Valenti says he finds Sheinberg "mellowing" lately. "I see Sidney softening over the last several years. I find him easier," says the MPAA chief.

"One of Sidney's problems," Valenti continues, "is that he doesn't suffer fools gladly. And oftentimes you must."

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