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MCA Inc.

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MCA Inc.
Company typeSubsidiary
IndustryEntertainment
Founded1924; 100 years ago (1924) (as Music Corporation of America)
Incorporated as MCA, Inc. on November 10, 1958
FounderJules Stein
William R. Goodheart, Jr.
DefunctDecember 9, 1996; 28 years ago (1996-12-09) (as MCA Inc.)
FateAcquired by Seagram and later reincorporated as Universal Studios, Inc.
SuccessorsUniversal Studios
Headquarters
Chicago, Illinois
,
United States
ParentMatsushita Electric Industrial Co., Ltd. (1990–1995)
Seagram (1995–1996)
DivisionsUniversal Pictures
Universal Television
MCA Records
SubsidiariesDecca Records

MCA Inc. (originally an initialism for Music Corporation of America) was an American media conglomerate founded in 1924. Originally a talent agency with artists in the music business as clients, the company became a major force in the film industry, and later expanded into television production. MCA published music, booked acts, ran the MCA Records music label, represented film, television and radio stars, and eventually produced and sold television programs to the three major television networks, especially NBC.

MCA was the legal predecessor of Vivendi Universal and thereby NBCUniversal. Its other legal successor is Universal Music Group Holding Corp, a holding company owned by Universal Music Group (which has absorbed PolyGram).

History

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Early years

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MCA was formed in 1924 by Jules Stein and William R. Goodheart, Jr., as Music Corporation of America, a music booking agency based in Chicago, Illinois. MCA helped pioneer modern practices of touring bands and name acts. Early on, MCA booked such prominent artists as King Oliver and Jelly Roll Morton for clubs and speakeasies run by legendary notorious Chicago mobsters such as Al Capone and others.

Lew Wasserman joined MCA in 1936 at the age of 23 and rose through the ranks of MCA for more than four decades, with Sonny Werblin as his right-hand man. Wasserman helped create MCA's radio show, Kay Kyser's Kollege of Musical Knowledge, which debuted on NBC Radio that same year. Following that success, Stein installed Wasserman in New York City in 1937, but Wasserman convinced him that Hollywood was the best place for the company's growth.

"The Rules of the Road"

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The company was guided by a codification of Stein's pet policies known as "The Rules of The Road".[1][2] The Rules were passed down from the Prohibition era, Chicago–area MCA (referenced in books like Citizen Cohn and The King and Queen of Hollywood) to the 1940s Los Angeles–area firm, which focused on representing movie actors.

The Rules were next passed to the 1950s generation of MCA talent agents, including Jerry Perenchio, who later owned and headed a number of businesses including Univision from 1992 to 2007. Perenchio was well known for his version of the Rules (up to twenty rules),[2] which varied from year to year and had some internal contradictions (In 2006, Perenchio pointed out that while there was a "no nepotism" rule, he was aware his son was on the company's board of directors at the time).[3]

Move to Hollywood: "The Octopus"

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In 1939, based on Wasserman's recommendation, MCA's headquarters moved from Chicago to Beverly Hills, California, creating a movie division. The company began to acquire talent agencies, representing established actors such as James Stewart, Henry Fonda, Bette Davis, Jane Wyman and Ronald Reagan, whom Wasserman became very close with personally. In later decades, Wasserman became a guiding force in Reagan's political ambition by helping Reagan to win the presidency of the Screen Actors Guild (SAG), then election as Governor of California in 1966, and finally President of the United States in 1980.

By the end of the 1930s, MCA had become the largest talent agency in the world, with over 700 clients, including movie stars, recording artists, Broadway actors, radio stars, and directors. The company's aggressive acquisition of clientele in all entertainment sectors earned MCA the nickname of "The Octopus".[4] The company's activities led U.S. Department of Justice agents to investigate not only whether MCA was a monopoly breaking antitrust laws, but also its suspected connections to underworld criminal activities. This investigation continued for the next few decades.[5]

Revue Productions and the early days of television

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In 1948, Jules Stein moved up as MCA's first chairman, giving Lew Wasserman charge of day-to-day operations of the company as president. That year, Stein and Wasserman decided to get into a new medium that would soon change the entertainment industry: television. Although many motion picture studios would not touch this new medium, thinking it was just a fad and would fade away, MCA decided to embrace it. First, however, the company needed to get a waiver from the Screen Actors Guild, which ruled at the time that talent agencies such as MCA were prohibited from producing TV shows or films. Thanks to the newly elected SAG president, Ronald Reagan (an MCA client), MCA was granted a waiver to start producing TV shows.[6][7][8]

After the waiver was granted, the company formed MCA Television Limited for syndication. In 1950, Revue Productions, once a live concert promotion division that produced "Stage Door Canteen" live events for the USO during World War II, was re-launched as MCA's television production subsidiary. By 1956, Revue became the top supplier of television for all broadcast networks, spanning three decades of television programs such as Armour Theater, General Electric Theater, The Jane Wyman Show, Leave It to Beaver, Wagon Train, and many others. Prior to 1958, all Revue's shows were filmed at the old Republic Pictures studio lot in Studio City, California.

In February 1958, MCA acquired Paramount Pictures' pre-1950 sound feature film library[9] for $10 million, through a newly created MCA subsidiary, EMKA, Ltd.

In December 1958, MCA bought the 423-acre (1.71 km2) Universal Studios lot from Universal Pictures for $11,250,000 and renamed it, as well as the actual television unit, Revue Studios.[10] As part of the deal, MCA leased the studios back to Universal for $2 million a year, plus unlimited access to MCA's clients such as Jimmy Stewart, Rock Hudson, Doris Day and Alfred Hitchcock to make films for Universal.

Stein, who by this time was the sole owner of MCA, decided to take the company public by giving 51% of his ownership of MCA to his employees, which included a 20% stake for Wasserman. The company went public on the New York Stock Exchange and was incorporated as MCA Inc. on November 10, 1958.[11] A couple of years later, Alfred Hitchcock gave MCA his rights to Psycho and his television anthology in exchange for 150,000 shares, making him the third largest investor in MCA, and his own boss at Universal.[12]

Takeovers of Universal Pictures and Decca records

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On June 18, 1962, Decca Records shareholders agreed to MCA's buyout offer[13] after the record label had entered into talks about a merger that April.[14] Decca at the time owned Coral Records and Brunswick Records, and an 89% stake in Universal Pictures Company, Inc.

On July 13, 1962, the United States Department of Justice filed suit against MCA, charging that its acquisition of Decca's controlling interest in Universal violated antitrust laws.[15] To retain Universal, MCA would have to close its talent agency, which represented most of the industry's biggest names (a select few handled by Wasserman personally). In reality, MCA's talent agency arm became defunct the day the DOJ filed the suit; dissolving it that October was a mere formality.[16]

MCA's now-former agents quickly formed new agencies, many of which are woven into the corporate fabric of today's talent management; Jerry Perenchio's Chartwell Artists represented Elizabeth Taylor and Muhammad Ali. Former MCA agents Freddie Fields and David Begelman formed Creative Management Associates, another important new agency.

By the end of 1962, MCA assumed full ownership of Universal.

In 1964, MCA entered the music publishing business when it acquired Lou Levy's Leeds Music,[17] and formed Universal City Studios the same year in effort to merge under one umbrella both Universal Pictures and its Revue Studios division, which was later reincorporated as Universal Television in 1966.

On July 15, 1964, MCA established the Studio Tour, which provided guests a behind-the-scenes glimpse of film and television production at Universal Studios. This established a footprint of what is now known as Universal Studios Hollywood theme park. Over the next few decades, similar parks were built and expanded under MCA for Universal Orlando Resort in Orlando, Florida and Universal Studios Japan in Osaka.

In 1966, MCA formed Uni Records in Hollywood, California,[18] and in 1967, MCA bought New York–based Kapp Records.[19] That same year MCA also acquired guitar maker Danelectro[20] and mall retailer Spencer Gifts.[21]

Further expansion

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In 1967, the MCA Records label was established outside the United States and Canada to issue releases by the MCA group of labels. Decca, Kapp, and Uni were merged into MCA Records at Universal City, California in 1971; the three labels maintained their identities for a short time but were soon retired in favor of the MCA label. The first MCA Records release in the US was former Uni artist Elton John's "Crocodile Rock" in 1972. In 1973, the final Decca pop label release, "Drift Away", a No. 5 pop hit by Dobie Gray, was issued.

MCA had two failed mergers in 1969. Initially, it planned a merger with Westinghouse Electric Corporation but that collapsed in April, and in July, they announced a proposed merger with the Firestone Tire and Rubber Company, but this too was called off in September.[22]

In 1973, Stein stepped down from the company he founded and Wasserman took over as chairman and chief executive officer, while Sidney Sheinberg was appointed president and chief operating officer of MCA.[23] Other executives within MCA were Lawrence R. Barnett, who ran the agency's live acts division during its glory agency years in the 1950s and 1960s, and Ned Tanen, head of Universal Pictures. Tanen was behind Universal hits such as Animal House, and John Hughes's Sixteen Candles and The Breakfast Club.

MCA issued soundtrack albums for most films released by Universal Pictures.

In 1975, the company entered the book publishing business with the acquisition of G. P. Putnam's Sons.[24] In 1979, it acquired ABC Records along with its subsidiaries Paramount Records, Impulse! Records, and Dot Records. ABC had acquired the Paramount and Dot labels when it purchased Gulf+Western's record labels in 1974, then the parent company of Paramount Pictures.

From 1983 to 1989, Irving Azoff was chairman of MCA Records and is credited for turning around the fortunes of the label.[25]

The Chess Records catalog was acquired from the remnants of Sugarhill in 1985. Motown Records was bought in 1988 (and sold to PolyGram in 1993).[26] GRP Records (which became for some years MCA's jazz music label and thus began managing the company's jazz catalogue) and Geffen Records (which served as another mainstream music subsidiary) were acquired in 1990.[27]

MCA also acquired other assets outside of the music industry. It became a shareholder in USA Network in 1981, eventually owning 50% of the network (the other half was owned by Paramount).[28] In 1982, its publishing division, G. P. Putnam's Sons, bought Grosset & Dunlap from Filmways.[29] In 1984, MCA bought Walter Lantz Productions and its characters, including Woody Woodpecker. In 1985, MCA bought toy and video game company LJN.[30] It also bought a TV station in New York City, WWOR-TV (renamed from WOR-TV), in 1987, from RKO General subsidiary of GenCorp, which was in the midst of a licensing scandal.

In 1982, MCA decided to start out its video game unit, MCA Video Games, led by technicians of the MCA DiscoVision unit.[31]

In 1983, MCA Videogames, the video game division of MCA itself and video game developer/publisher Atari Inc. entered into a partnership to start out Studio Games, a joint venture that would develop video games based on MCA's film and television properties, most notably from then-sister Universal Pictures, and decided that they would give them access to all motion picture and television properties coming from the unit.[32]

In 1990, MCA hired Hanna-Barbera executive Jeff Segal to start out its MCA Family Entertainment arm (aka Universal Family Entertainment) and had Universal Cartoon Studios as its subsidiary.[33][34]

Sale to Matsushita and Seagram

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On November 26, 1990, Japanese multinational conglomerate Matsushita Electric Industrial Co., Ltd. agreed to acquire MCA for US$6.59 billion.[35][36] MCA was forced to sell WWOR-TV in 1991 to Pinelands, Inc. because of the Federal Communications Commission (FCC) rules that foreign companies could not own over 25% of a U.S. TV station.

In 1995, Seagram acquired 80% of MCA from Matsushita.[37][38] On November 26, 1996, MCA announced that it would acquire television syndication company Multimedia Entertainment from Gannett, who acquired its parent company in 1995, for $40 million.[39][40][41]

Later years

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On December 9, 1996, the new owners dropped the MCA name; the company became Universal Studios, Inc.[42] MCA's music division, MCA Music Entertainment Group, was renamed Universal Music Group. MCA Records continued to live on as a label within the Universal Music Group. The following year, G. P. Putnam's Sons was sold to the Penguin Group subsidiary of Pearson PLC.

In the spring of 2003, MCA Records was folded into Geffen Records.[citation needed] Its country music label, MCA Nashville Records, is still in operation. MCA's classical music catalog is managed by Deutsche Grammophon.[citation needed]

See also

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References

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  1. ^ Brautigam, Karl (August 11, 2016). "The Rules of the Road". Medium.com. Retrieved February 4, 2018.
  2. ^ a b "Jerry Perenchio's 20 'Rules of the Road'". The Wall Street Journal. August 13, 1999. Retrieved February 4, 2018.
  3. ^ James, Meg (June 20, 2006). "A Hollywood Player Who Owns the Game". Los Angeles Times. Los Angeles. Retrieved June 19, 2023.
  4. ^ "Public Policy: After the Octopus". Time. July 20, 1962.
  5. ^ Appelo, Tim (April 30, 1993). "Stiffed: A True Story of MCA, The Music Business, and the Mafia". Entertainment Weekly.
  6. ^ AP (Sep 21, 1986). "REAGAN WAS A SUBJECT OF 60's SCREEN INQUIRY". The New York Times. In 1952, when Mr. Reagan was president of the actors' union and MCA was his talent agent, the company got a special waiver from SAG's rules that allowed it to engage in unlimited production of television shows. That let MCA act both as an employer of actors and as their talent agent, supposed to negotiate the best terms for them. MCA, then the largest talent agency in Hollywood, was the only one ever given such a blanket exemption.
  7. ^ Applegate, Jane (November 27, 1990). "The History of MCA". Los Angeles Times. Retrieved April 5, 2024.
  8. ^ "The Monopolist". The New Yorker. April 21, 2003. Retrieved April 5, 2024.
  9. ^ Dick, Bernard F. (2015). City of Dreams: The Making and Remaking of Universal Pictures. University Press of Kentucky. p. 160. ISBN 978-0813158891.
  10. ^ "Los Angeles Times from Los Angeles, California". Los Angeles Times. December 18, 1958. p. 1. Retrieved 2021-05-20.
  11. ^ Search | Universal Music. New.umusic.com. Retrieved on 2013-12-23.
  12. ^ Rebello, Stephen (1990). Alfred Hitchcock and the Making of Psycho. Berkeley: Soft Skull Press. p. 180.
  13. ^ "Holders of Decca Approve MCA Offer". The New York Times. June 19, 1962. Retrieved March 24, 2022.
  14. ^ "Decca Records Holding Talks With MCA on Plan for Merger". The New York Times. April 11, 1962. Retrieved March 24, 2022.
  15. ^ "MCA is Accused in Antitrust Suit of Dominating TV". The New York Times. July 14, 1962. Retrieved March 24, 2022.
  16. ^ "United States v. MCA Inc". United States Department of Justice. October 18, 1962. Retrieved March 24, 2022.
  17. ^ "MCA BUYS LEEDS, MUSIC PUBLISHER; Entertainment Concern Gets Assets and Copyrights". The New York Times. 1964-11-26. ISSN 0362-4331. Retrieved 2018-12-29.
  18. ^ Edwards, Dave; Eyries, Patrice; Callahan, Mike (October 13, 2007). "Universal City Records [UNI] Album Discography". Archived from the original on 2007-10-13.
  19. ^ "MCA Buys Kapp in New Surge to be a Major Record Complex". Billboard. 1967-12-09. p. 7. Retrieved 2013-02-28 – via Internet Archive. uni + decca + kapp.
  20. ^ Brill, James M. (January 30, 2017). "A Brief (Revised) History of Danelectro". Reverb.
  21. ^ Zhito, Lee, ed. (December 23, 1967). "MCA Enters Merger With Spencer Gifts". Billboard. Vol. 79, no. 51. p. 6. ISSN 0006-2510. Retrieved March 15, 2015 – via Google Books.
  22. ^ Pryor, Thomas M. (September 24, 1969). "Firestone and MCA Call Off Merger; Veil of Silence About U's Future". Variety. p. 4.
  23. ^ "Wasserman steps down as MCA chief". UPI. July 11, 1995. Retrieved July 21, 2022.
  24. ^ "MCA Sets Accord In Move to Acquire Shares of Putnam's". The New York Times. September 23, 1975. Retrieved July 14, 2022.
  25. ^ E. Scott Reckard, "Azoff Quits as Chairman of MCA's Music Unit", AP News Archive, September 5, 1989
  26. ^ "Motown Sold to MCA". The New York Times. June 29, 1988. Retrieved July 20, 2022.
  27. ^ "Geffen Records Sold to MCA for Stock Worth $550 Million". The New York Times. March 15, 1990. Retrieved July 20, 2022.
  28. ^ "MCA Buys Third of USA Network". The New York Times. October 16, 1981. Retrieved July 14, 2022.
  29. ^ McDonnell, Edwin (May 22, 1982). "GROSSET & DUNLAP BEING SOLD". The New York Times. Retrieved July 14, 2022.
  30. ^ Harris, Kathryn (March 27, 1985). "MCA Agrees to Acquire L.J.N. Toys : Entertainment Firm to Exchange Up to $39.8 Million in Stock". Los Angeles Times. Retrieved July 14, 2022.
  31. ^ Harmetz, Aljean; Times, Special To the New York (1982-07-01). "VIDEO GAMES TO TO HOLLYWOOD". The New York Times. ISSN 0362-4331. Retrieved 2023-10-02.
  32. ^ "MCA, Atari Set Joint Vidgame Venture Tied to U's Pix & TV". Variety. 1983-05-11. p. 6.
  33. ^ "Universal opens new toon town" (PDF). Broadcasting. May 27, 1991. p. 39. Retrieved October 12, 2023.
  34. ^ "Closed Circuit" (PDF). Broadcasting. December 3, 1990. p. 6. Retrieved October 12, 2023.
  35. ^ "It's a Wrap: MCA Sold: Matsushita to Pay About $6.6 Billion". Los Angeles Times. 26 November 1990. Retrieved 14 April 2013.
  36. ^ "Who Gets What From MCA Deal". The New York Times. 1 December 1990. Retrieved 14 April 2013.
  37. ^ "Seagram heads for Hollywood; Seagram will buy 80% of big studio from Matsushita". The New York Times. 7 April 1995. Retrieved 14 April 2013.
  38. ^ "Matsushita, Freed of MCA, Reports a Profit". The New York Times. 28 August 1996. Retrieved 14 April 2013.
  39. ^ Fabrikant, Geraldine (November 26, 1996). "Unit of MCA is Acquiring Talk Shows". The New York Times. Retrieved July 21, 2022.
  40. ^ "MCA to Buy Syndicator of 'Sally', 'Jerry' Shows". Los Angeles Times. November 26, 1996. Retrieved July 21, 2022.
  41. ^ McClellan, Steve (December 2, 1996). "MCA buys Multimedia shows" (PDF). Broadcasting & Cable. Retrieved July 21, 2022.
  42. ^ Reckard, E. Scott (December 9, 1996). "MCA changes name to Universal Studios Inc". Orlando Business Journal.
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