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overview
This profile covers MCA, Seagram and Universal.
This page covers -
There
are complementary profiles on Vivendi
(which acquired Seagram) and Polygram,
a major component of Universal's music arm.
introduction
Universal's
history is interesting because it brings together Japanese
electronic manufacturing, US East Coast investment in
Hollywood film production, a Canadian cinema chain, the
Bronfman family, the Polygram record and music publishing
giant and talent agency turned media group MCA.
trajectory
Universal Pictures was founded by Carl Laemmle (1867-1939)
in 1912 as the Universal Film Manufacturing Company of
New York. He'd opened a nickelodeon theater in Chicago
during 1906 after migrating from Bavaria, subsequently
building a nickelodeon chain and expanding into distribution.
During 1909, with support from several minor studios opposed
to the Edison monopoly, he established the Independent
Moving Picture Company of America (IMP). In 1911 IMP bought
the Nestor Studio on the West Coast and five years later
founded Universal Studios in Hollywood as the centre of
a large-scale integrated production, distribution and
exhibition operation.
As with most of the Hollywood studios, although Carl Sr
was able to pass operational control to son Carl Laemmle
Jr (1908-1979) in 1929, Universal was funded by 'East
Coast money'. Investors ousted the younger Laemmle during
the Depression, despite the success of classics such as
James Whale's Frankenstein, with the group being
sold to the Standard Capital Company.
For the following two decades Universal had a profile
as a competent but not especially profitable factory for
B grade and C grade films, such as Abbott and Costello
comedies and the Deanna Durbin musicals. In 1946 it merged
with International Pictures (as Universal-International)
under the creative control of William Goetz and Leo Spitz.
Universal International was acquired by the Decca record
company in 1952 as part of ownership changes following
the 1949 ruling by the US Department of Justice about
spin-off of exhibition operations. Five years later MCA
acquired Paramount's pre-1948 film library for US$50 million,
subsequently proven to be a bargain as the new owners
licenced films to US and overseas television stations.
MCA bought Universal's back lot for US$11 million in 1958.
Four years later, amid increased competition and consolidation
in the record industry, Decca sold Universal to MCA. The
sale reflected MCA's interest in using Universal's production
and distribution facilities, particularly for television
production as an extension of its existing Revue Television
Productions operation (responsible for video fodder such
as Alfred Hitchcock Presents, Leave It to
Beaver and Wagon Train. As Universal Television
it established a profile for law & order dramas (Dragnet,
Columbo and Law & Order) and action
series. Feature film involvement included Jaws
and ET.
In 1990 MCA was acquired US$1.6 billion by Japan's Matsushita
group, a counterpart of GE and Westinghouse
(and a competitor of Sony). Matsushita
- centred on Matsushita Electric Industrial Company -
was best known as the parent of Panasonic electronics.
Acquisition reflected Matsushita's large cash flow (particularly
from exporting consumer appliances to North America),
the availability of cheap loans as a consequence of the
1980s Japanese property bubble and received wisdom that
hardware manufacturers such as Sony and Matsushita had
to expand downstream into content production.
Performance by MCA was underwhelming and Matsushita appears
to have faced difficulties coming to grips with the 'creatives'
in Los Angeles. In 1995 it accordingly offloaded a controlling
stake MCA to Seagram for US$5.7 billion.
As a way of gaining cash for Seagram's ambitious expansion
plans (eg acquisition of Polygram
for US$10.4 billion) and building alliances the Universal
Television studios were spun off to Seagram's USA Networks
subsidiary in 1998, being renamed Studios USA. Vivendi
inherited Universal in 2000 when it acquired Seagram,
reflecting that purchase by rebadging itself as Vivendi
Universal. Two years later it bought back the USA Networks
studio and cable television holdings (reinstating the
Universal Television name).
In 2003, as part of the corporate restructuring noted
above, Vivendi Universal spun off Universal's US studios,
distribution, theme parks and cable television operations
to a joint venture with GE-controlled NBC.
That new vehicle - in which Vivendi retained a 20% stake
- was called NBC Universal.
A chronology is here.
the studio
A
history of the Universal Pictures, Studios USA and Review
appears on the following page of the profile.
MCA
[under
development]
Matsushita
[under
development]
Seagram and the Bronfmans
[under
development]
Studies
We have pointed to studies of Universal on the following
page of this profile.
There
has been no major English-language study of Konosuke Matsushita
or his group. Context is provided by Alfred Chandler's
Inventing the Electronic Century: The Epic Story of the
Consumer Electronics and Computer Science Industries
(New York: Free Press 2001). There is more detailed coverage
in Bob Johnstone's We Were Burning: Japanese Entrepreneurs
& The Forging of the Electronic Age (New York:
Basic Books 1999) and Simon Partner's Assembled In
Japan: Electrical Goods & The Making Of The Japanese
Consumer (Berkeley: Uni of California Press 1999).
Toshihiko
Yamashita's The Panasonic Way (New York: Kodansha
1989) is an account by the group's former CEO.
Good Spirits: The Making of A Businessman (New York:
Putnam 1998) is a memoir by Seagram boss Edgar Bronfman
Jr, following up his The Making of A Jew (New York:
Putnam 1996). He was profiled in Ken Auletta's The
Highwaymen - Warriors of the Information Superhighway
(New York: Random House 1997) and in The Icarus Factor:
The Rise and Fall of Edgar Bronfman Jr (Toronto:
Doubleday Canada 2004) by Rod McQueen.
The family has been controversial, with for example allegations
that Seagram's growth was driven by rum-running across
the Canadian border during Prohibition and unfavourable
media coverage of Edper
Brascan, the property and resources conglomerate established
by Edgar Bronfman's cousins after a nastily public feud
between what are often tagged the 'Edgar' (or Edper) Bronfmans
and the 'Seagram' Bronfmans.
Susan Gittins' Behind Closed Doors: The Rise &
Fall of Canada's Edper, Bronfman & Reichman Empires
(Toronto: Prentice-Hall Canada 1995) is breathless. Samuel
Bronfman: The Life & Times of Seagram's Mr Sam
(New York: Brandeis Uni Press 1992) by noted Holocaust
historian Michael Marrus, Graham Taylor's 2006 '"From
Shirtsleeves to Shirtless": The Bronfman Dynasty
and the Seagram Empire' (PDF)
and The Bronfmans: The Rise and Fall of the House
of Seagram (New York: St Martins Press 2006) by Nicholas
Faith have more bite.
Canadian business historian Peter Newman provided an upbeat
and panoramic account of the family in Bronfman Dynasty:
Rothschilds of the New World (New York: Atheneum 1979).
Ronald Weir's The History of the Distillers Company,
1877-1939: Diversification and Growth in Whiskey and Chemicals
(New York: Oxford Uni Press 1995) offers perspective.
Bruce Wasserstein's Big Deal (New York: Warner
1998) is a useful introduction to the business of assembling
and disassembling the US media empires.
Dennis McDougal's The Last Mogul: Lew Wasserman, MCA
& the Hidden History of Hollywood (New York: Random
1998) is a warts and all account of one of the less lovable
movie czars. Shirley Temple's 1988 autobiography Child
Star depicts her firing by Wasserman (1913-2002):
"Why?"
I yelped. "Because you're through." His eyes were unwavering,
inky black. "Washed up." I started to cry. "Here," he
said, pushing a Kleenex box across the desktop. "Have
one on me."
There's
a similar view in Connie Bruck's crisp When Hollywood
Had a King: The Reign of Lew Wasserman, Who Leveraged
Talent into Power and Influence (New York: 2003),
Dan Moldea's Dark Victory: Ronald Reagan, MCA &
The Mob (New York: Viking 1998) and William Knoedelseder's
Stiffed: A True Story of MCA, the Music Business &
the Mafia (New York: Harper 1994). Wasserman also
features in Janet Sharp's Mr & Mrs Hollywood:
How Lew and Edie Wasserman Created a Global Entertainment
Empire (New York: Carroll & Graf 2003).
MCA's competitors William Morris and CAA were profiled
in Frank Rose's The Agency: William Morris & The
Hidden History of Show Business (New York: Harper
1996), Power To Burn: Michael Ovitz & The New Business
of Show Business (New York: Birch Lane 1996) by Stephen
Singular - more warts - and Ovitz: The Inside Story
of Hollywood's Most Controversial Power Broker (New
York: McGraw-Hill 1997) by Robert Slater.
For Motown and other recording companies see Sharon Davis'
Motown, The History (New York: Sterling 1989),
Berry Gordy's Berry, To Be Loved - The Music,
The Magic, the Memories of Motown (New York: Warner
1994) and Rich Cohen's Machers & Rockers: Chess
Records and the Business of Rock & Roll (New
York: Norton 2004). Jory Farr's Moguls & Madmen:
The Pursuit of Power in Popular Music (New York: Simon
& Schuster 1994) is splenetic.
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page (Universal studios)
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