Universal

THE MCA-UNIVERSAL ERA

Within days of the merger, Wasserman began construction on MCA World Headquarters, a.k.a. the Black Tower, a formidable sixteen-story, black glass monolith that soon came to symbolize MCA-Universal's awesome power in Hollywood. Wasserman also reinstituted the Universal Studio Tour, which dated back to the silent era, and whose success eventually would spawn the studio's colossal theme park operation. That was years away, however, as was MCA-Universal's domination of the movie business. What carried the company through the 1960s, which were troubled times for Hollywood at large as well as for Universal Pictures, was the same dual strategy of TV series production and syndication that had been the basis for MCA's rise in the 1950s. Universal Television cranked out one hit series after another in the 1960s, including, ironically enough, movie-length TV shows—both "long-form" (90-minute) TV series like The Virginian (1962–1971) and The Name of the Game (1968–1971), as well as made-for-TV movies, a format that Universal pioneered and steadily refined for NBC. By the early 1970s Universal boasted twice the television output of its closest competitors, Paramount and Warner, and had the world's leading TV syndication operation. Besides top series like Marcus Welby M.D. (1969–1976) and Kojak (1973–1978), Universal successfully melded the series and TV movie formats in the "NBC Mystery Movie" (1971–1977) amalgam of Columbo , McCloud , and McMillan and Wife . The importance of Universal's TV division was underscored in 1973 when MCA's founder, Jules Stein, retired, moving Wasserman up to the position of chairman-CEO, and the MCA presidency was filled by Universal Television head Sidney Sheinberg (b. 1935).

Wasserman and Sheinberg ruled the MCA-Universal empire for the next two decades, thus becoming the most enduring and stable management team in Hollywood. Their longevity was aided immensely by a succession of hits that took Universal Pictures—traditionally dead last among the movie studios in terms of revenues and market share—to the very top of the industry by the early 1980s. The surge began in 1973 with two major hits, American Graffiti and The Sting , continued in 1974 with two hit disaster spectacles, Earthquake and Airport '75 , and then went into high gear with the June 1975 release of Jaws , an industry watershed. Besides putting whiz kid Steven Spielberg (b. 1946) on the industry map (it was his second feature), Jaws provided a prototype for the modern Hollywood blockbuster: a high-cost, high-speed, high-concept entertainment machine propelled by a

nationwide, "saturation" release campaign, which was subsequently milked for every licensing and tie-in dollar possible, including sequels and theme-park rides. Jaws was the first "summer blockbuster" and the first film to return over $100 million in rental receipts to its distributor—still the measure of a blockbuster hit. Universal kept the momentum going after Jaws with Smokey and the Bandit (1977), Animal House , Jaws 2 , and The Deer Hunter (all 1978), The Jerk (1979), The Blues Brothers (1980), and then in 1982 released another Spielberg-directed megahit, E.T. , which, like Jaws —and like Jurassic Park in 1993—would break the existing boxoffice records, becoming the biggest all-time box office hit at the time of its release.

These blockbusters defined the New Hollywood and signaled a certain consistency in terms of product, but Universal was actually anything but consistent in terms of corporate structure, market strategy, and production operations during the 1980s and 1990s. When Jaws was released, Universal was still a factory-oriented studio relying on a dual output of film and television, and no company in Hollywood was better equipped to rule the industry in terms of sheer volume and efficiency. In 1975, employment at the studio surpassed 6,000 (an all-time record), and all thirty-four of its sound stages were active, with an average of twenty separate television and feature film units in production on any given day. Universal sustained that impetus into the early 1980s as it climbed to the top spot in the industry in terms of market share, revenues, and profits—an unthinkable prospect during the classical and postwar eras.

But MCA-Universal steadily declined during the 1980s for a number of reasons. Universal squandered its massive industry lead in television production by shifting its focus to feature films, and, like the rest of the industry, to the development of blockbuster hits and franchises. Universal also relied increasingly on talent agencies—particularly Mike Ovitz's Creative Artists Agency (CAA)—to package its most ambitious pictures, which included a few big hits like Out of Africa (1985) but also costly flops like Howard the Duck (1986). Meanwhile, MCA struggled to keep pace with its major competitors, which were rapidly expanding and diversifying, thanks in most cases to a major merger-and-acquisition wave that began with News Corp-Fox in 1985 and swelled significantly in 1989 with the Time-Warner and Sony-Columbia mergers.

At that point, Wasserman decided to find a deep-pocketed buyer to keep MCA-Universal competitive in the global entertainment marketplace. In 1990 he sold the studio for $6.6 billion to the Japanese industrial giant Matsushita, whose VHS home-video system had vanquished Sony's Betamax, and which, like Sony, was looking to Hollywood for a "hardware-software" alliance. The Matsushita deal actually left MCA-Universal intact with Wasserman and Sheinberg still in control, but the union proved disastrous almost from the start because of the collapse of the Japanese economy and severe conflicts between the Japanese owners and the Hollywood-based management. Despite a run of hits in the early 1990s, including Spielberg's back-to-back 1993 hits, Jurassic Park and Schindler's List , Matsushita sold the studio to the Canadian distillery Seagram in 1995. In the wake of that deal, Seagram CEO Edgar Bronfman, Jr. dissolved MCA, sold off most of Universal's TV and cable assets, and shifted its focus to the music industry. While the latter effort was generally successful, Universal continued to flounder as a film studio, and so in 2000 Bronfman sold out to the French water and power giant Vivendi. This union was another unmitigated disaster, leading to the purchase in 2004 of Vivendi-Universal by General Electric, the parent company of NBC, and the subsequent creation of "NBC Universal." (GE paid roughly $14 billion for an 80-percent interest in Vivendi-Universal's US film and television interests.)

Universal's acquisition by GE and its alliance with NBC might recall the film-and-television colossus created by Wasserman nearly a half-century earlier, but in actuality, the studio and the industry at large have little in common with their postwar antecedents. Rather than creating a media powerhouse, GE's creation of NBC Universal simply gives the studio a fighting chance against the other media conglomerates that now compete in the global entertainment marketplace. And like Paramount, Warner Bros., Columbia, and the other surviving movie studios, Universal is simply one division of a diversified multinational corporation, one component of a vast entertainment machine.