The King of Content Page 8
Ironically, that same year, he filed a lawsuit for his father’s company based on those same consent decrees, complaining that they hadn’t been followed enough. The suit built a conspiracy antitrust case around the perennial ozoner’s complaint that the Hollywood studios refused to give drive-ins first-run movies. In theory, the fallout from the Paramount decision had made this kind of discrimination illegal, but in practice, the major studios’ position toward drive-ins was pretty well summed up by Andy Smith, vice president of sales for Twentieth Century Fox, in a 1950 column in Variety: “The proper place for the Drive-In in the distribution system will have to be worked out, but we must always keep in mind our responsibility to the regular theatre, which shows our pictures day in and day out throughout the year. We shall continue to refuse Drive-In theatres first-run showings in any city or town that has adequate conventional first-run outlets.”76 That same year, drive-ins won their most significant court victory, as a U.S. District Court ruled that the major studios had conspired to violate antitrust laws when they refused to allow an Allentown, Pennsylvania, drive-in owner named David Milgram to bid for first-run pictures on equal footing against the indoor theaters in his town. The majors appealed all the way to the Supreme Court, but the Supreme Court refused to hear the case, letting the Third Circuit Court of Appeals decision, which Milgram had won, stand.77 But as Sumner’s case on the same issue eight years later showed, winning in court and changing market behavior are two different things. Ultimately, Sumner’s antitrust suit against the Hollywood studios was settled. Northeast got the improved access to films it was seeking, but there was no broader impact on the drive-in industry. The experience showed the future media mogul just how effectively litigation could be used against business adversaries. It wasn’t a crusade for humanity. It was just business.
Nonetheless, Sumner continued to speak out publicly against the ways that the major studios were stifling exhibitors’ business. In March 1959, while emceeing a wild launch party for fellow Bostonian Joseph Levine’s import of the French-Italian fantasy film Hercules through Warner Bros. at the Waldorf Astoria hotel in New York, complete with Hercules-engraved silver goblets at each table and floor-to-ceiling cutouts of the muscle-bound hero throughout the ballroom, Sumner couldn’t resist veering from the circuslike atmosphere for a moment to complain about the wonky issue of blind bidding. The room was packed with “many top members of the nation’s exhibition fraternity,” Variety noted, and Sumner played well to his audience.78 With this kind of national profile, those exhibitors might have been surprised to pick up a phone book the next time they were in Boston and discover Sumner listed as a mere vice president.
Chapter 5
National Amusements
The president, of course, was Mickey. At fifty-seven, Mickey, still handsome and square-jawed, was enjoying his role as a pillar of his industry and the wealth that came with it. Two years earlier, he had been elected “chief barker” of the Variety Club of New England, the showbiz social club and charity that used its drive-in screens and army of ushers to raise money for the Jimmy Fund for children’s cancer research. He and Belle lived in a forty-two-hundred-square-foot, four-bedroom home, all modern glass and light, at 30 Goddard Circle, amid sprawling lawns in Brookline. His two sons were working for him, and the business was growing. On August 28, 1959, he decided to formalize this arrangement with a maneuver that, though simple enough on the surface, would provide fodder for more than a half century’s worth of lawsuits.
By 1959, the Redstones found that their practice of holding the land, concessions, and operations of their theaters in separate corporations was limiting their ability to borrow to finance further expansion. So as they looked to add another drive-in in Maryland, they decided to consolidate all of the corporations into a single entity named National Amusements based in Maryland. Mickey put in $30,328 worth of stock, along with an extra $3,000 in cash. Sumner put in $17,845 in stock and Eddie put in $18,445 worth. And then, at its first meeting in Norwood, Massachusetts, on September 1, 1959, Mickey doled out 300 Class A shares of voting stock: 100 to himself, 100 to Eddie, and 100 to Sumner. In ownership, the three Redstones were equals, though the articles of incorporation made the hierarchy clear: Mickey was president, Sumner vice president, and Eddie secretary-treasurer.1 Five years after his older brother arrived on the scene, Eddie was officially second fiddle. This tension—the sons’ equality in ownership but inequality in daily operations and management decisions—would very nearly tear the family, and the business, apart.
But at the time, the move seemed largely administrative. The company used its newly consolidated heft to secure a $50 million line of credit from the Bank of New England2 and continued its expansion south and west. Meanwhile, across town, their rivals at Midwest Drive-In Theaters were forging a different path, taking their larger chain of drive-ins and indoor theaters public in 1960, listed at $5 million.3 Led by Phil Smith and his Harvard-trained son, Richard, the company bore striking similarities to the Northeast Theatre Corporation. Phil Smith, three years Mickey’s senior, was the son of a Lithuanian Jew named Adolph Sandberg who changed the family name to Smith upon immigrating to the United States in 1885.4 Like Mickey, he opened his first drive-in in 1938,5 after having built a chain of indoor theaters throughout the Northeast and then having lost almost all of it in the Depression. Like Sumner, Phil’s son, Richard, had grown up helping out at the theaters and then raced through Harvard in a little over two years during World War II.6 Like Eddie, Richard went to work for his father after school and was married in 1952.7 And like the Redstones, in 1959, the family consolidated its various holdings under a new name bespeaking its greater ambitions: General Drive-In Corporation.
But the Redstones and Smiths differed in their attitudes toward ownership and control. The Redstones bought the land under their drive-in theaters, which rose in value as America suburbanized and allowed them to transform their drive-ins into indoor theaters in the 1960s and ’70s. By the late 1950s, the Smiths had determined that land values were too high to continue buying and building drive-ins, so they switched to a strategy of leasing land in shopping centers, which provided enough parking for a theater without having to invest in real estate.8 This let the Smiths expand their footprint rapidly, becoming the largest theater operator in the country, under the name General Cinema Corporation by 1973,9 and ultimately diversifying into Harcourt Brace, Neiman Marcus, and Pepsi bottling. But by the time the company went public in 1960, the Smiths owned just 35 percent of General Drive-In,10 maintaining operational control through a long-term contract with Smith Management. “I never felt I had to own all of anything or even the largest or dominant interest in it,” Richard Smith told historian Bettye Pruitt.11 The Redstones, of course, felt differently.
In the Redstones’ first major pitch for financing after forming National Amusements, Sumner drew an explicit contrast with the Smiths’ strategy. “While others were building theaters in shopping centers,” Sumner told the bankers, “where someone else was responsible for the development and planning of the area and might not respond to their particular needs, we were buying and building on our own land. We controlled our environment.”12
This approach would end up making all the difference. By 2000 General Cinema had joined many of its rivals in filing for bankruptcy protection,13 while National Amusements carries on to this day. National Amusements’ decision to keep all ownership within the family would prove a great strength—so long as that family could work together.
* * *
For a while, the three Redstone men made a formidable team. They opened their first indoor theater in Worcester, Massachusetts, in 1963 after a complete modernizing effort by William Riseman, a prolific movie theater architect who had married Doc Sagansky’s daughter, Marilyn.14 Three generations of Redstones were on hand for the opening of the first-run theater, including Sumner’s eight-year-old daughter, Shari, in her best dress. By 1965, they had opened their forty-second theater and the chain’s c
rown jewel, the thousand-seat Cleveland Circle indoor theater on the border of Boston and Brookline. Built in the 1940s and operated by a subsidiary of Paramount Pictures as a first-and second-run theater, the Circle was the closest the Redstones had come to the world of first-run, downtown theaters that had long been out of reach for independent exhibitors. Riseman, who had designed the Latin Quarter along with many other Redstone theaters over the years, redesigned the old theater into a modern landmark in shades of blue, green, and white with “front row vision from every seat.”15
On a clear, breezy November morning in 1965, Mickey, Sumner, Eddie, and Riseman feted the opening of their splashy new theater in classic Redstone fashion: with a luncheon at the Ritz-Carlton in Boston. There, they boasted that the new theater would “possess the most comfortable seating arrangements of any house in New England,” with rocking chair–style seats and each row six inches higher than the one below. They had a gala opening planned, followed by a head-turning opening with The Great Race, a slapstick Warner Bros. comedy starring Jack Lemmon, Tony Curtis, Natalie Wood, and Keenan Wynn. It wasn’t quite first-run, but it was close, just three months after the film was released. And it had been the most expensive comedy ever produced. At the luncheon, the four men stood in their dark suits around Riseman’s rendering of the theater, smiling and pointing. But Sumner towered above them all.16
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As the ’60s wore on, cracks formed in the Redstones’ professional partnership. Sumner continued his ascent toward becoming the industry’s most forceful and articulate spokesman. In September 1960, he sat on a panel titled “Pay TV: Beating the Menace” at the Theatre Owners of America’s annual convention at the Ambassador Hotel in Los Angeles,17 though his hometown paper embroidered this role somewhat by reporting that he had delivered the keynote speech. The menace they were referring to was represented, not all that menacingly at the time, by Telemeter, an early experimental precursor to HBO and Showtime operated by sliding coins into a box connected to a television set. A lawsuit from a drive-in owner led the studios to cut off its film supply, and the technology limped along in Canada for decades before being shut down. Still, exhibitors were right to be afraid of the technological possibility it represented, and by May 1961, Sumner was holding forth at the Lions Club in Hartford, Connecticut, that “there is the ever present danger that, while pay television will most probably end in financial disaster, experimentation of the character involved in Hartford will deal the motion picture industry another critical blow from which it may or may not recover, without creating a new and enduring medium of entertainment.”18 In 1964, he was elected president of the TOA, just as the organization was on the cusp of merging with its rival organization.19 Under Sumner, the two merged, and Sumner became the chairman of the newly formed National Association of Theatre Owners. Not lacking in grandiosity, they called it NATO.
While Sumner was off giving speeches near beaches and getting his picture taken with the likes of Julie Andrews,20 Eddie was cutting ribbons with local politicians in places like Milford, Connecticut,21 and fighting increasingly tedious battles with localities over the moral content of the movies. As the decade wore on, he was less and less able to mask his sarcasm. “I cannot be held responsible for the moral fiber of this community,” an obviously exasperated Eddie quipped to Variety about a fight over a $1.4 million drive-in in Lansing, Michigan, where residents were raising concerns over “morality” that were identical to the ones that had bedeviled his father three decades earlier.22 Eddie also took on leadership roles in the industry, including president of the National Association of Concessionaires and president of the Theatre Owners of New England, though these roles were always a rung or two below his brother’s.23 By the end of the decade, he was seeking opportunities beyond the family business, investing in real estate projects like a four-hundred-acre industrial park in Worcester, Massachusetts. As with other properties he had developed over the last two decades, it lay at the intersection of two highways.24
Nevertheless, Mickey maintained the dream that he was going to pass his business down to both sons. He had begun to spend winters in Florida and more time playing golf,25 but in 1964 the whole family was given a wake-up call when he collapsed on the golf course of the Equinox Country Club in Vermont and was rushed to the hospital.26 It was a heart attack. Mickey got top-notch care from what the family referred to as “the president’s doctor” and returned to work in such strong form that his longtime secretary noted that he seemed reinvigorated and more engaged in the business. But the need to prepare for the future was clear.
He began creating a plan to gradually retire from active involvement in the family business, and on May 6, 1968, he put it into motion by transferring half his stock to a trust set up for his grandchildren. The gift tax return he filed with the Internal Revenue Service valued these 50 shares at $564,075, meaning all of National Amusements was worth a little more than $3 million. In December of that year, Mickey enacted the second stage in his retirement plan, exchanging his remaining 50 shares of common stock for nonvoting preferred stock. By the end of the 1960s, the number of voting shares in National Amusements had shrunk to 250, with Sumner and Eddie each owning 100 shares, and the Grandchildren’s Trust—of which Sumner, Eddie, Mickey, and Belle were the trustees—owning the remaining 50.27 The grandchildren would receive their shares outright when they turned thirty-five.28
* * *
The young cousins had all grown up within walking distance from each other in the pleasant cocoon of Boston’s affluent, heavily Jewish commuter suburb of Newton. Sumner’s son, Brent, born on April 20, 1950,29 was the eldest and heavily doted on by his grandparents, who lived in nearby Brookline. Sumner’s and Eddie’s daughters were nearly twins: Sumner’s second child, Shari Ellin Redstone, was born on April 14, 1954, in the family’s final months in Washington, D.C., while Eddie’s eldest, Ruth Ann Redstone, was born on August 7 of that year. Eddie’s son was the baby, born December 23, 1957. Michael David Redstone was named after his two grandfathers, Michael “Mickey” Redstone and David Warren, though the failure of these two clans to merge much beyond his name would set the stage for his troubled and unhappy life.
The tension had been there from the very beginning of Eddie and Leila’s marriage, which was a multiday affair of the “country club set” that left a bad taste in the mouths of several Redstones. “Returning from Eddie’s wedding, rather than happy and in a celebratory mood, Mickey and Belle felt something heretofore foreign to them—they felt less than,” Gary Snyder said. “Leila presented herself as being from a prominent Westport family, and the Warrens were stepping out in ‘their town’ and in a manner that did not then, and does not today, fit our family well.” She loved the opera, ballet, symphony, art, antiques, and designer clothes, while Eddie and Sumner would proudly shop at the middlebrow Filene’s Basement well into their business careers. “Leila was not ever accepted by Uncle Mickey and Aunt Belle,” Snyder said.
Despite their proximity, the cousins were not as close as one might expect. Sumner and Phyllis sent their children primarily to the Newton public schools, while Eddie and Leila sent theirs to single-sex private schools.
This tension grew worse when Michael began exhibiting serious behavioral problems as a very young child. “From the time he was about five he became very destructive,” Eddie would testify years later. “And it progressively got worse, including such things as just going out and urinating on a sofa, a chair. He made Ruth Ann’s life completely miserable. She couldn’t study, she couldn’t—she would do her homework, and he would run in and destroy it. We had great difficulties controlling him.”
Without Eddie’s knowledge, Leila took the five-year-old Michael to a psychiatrist named Stanley Walzer at the Judge Baker Children’s Center, associated with Harvard Medical School. “She didn’t want to upset me,” Eddie said.30 She had also assumed, correctly, that taking her son to a psychiatrist would be anathema to her husband’s family.
Michael’s
memory of the beginning of his treatment for mental problems is a bit different. “When I was four, I went to Children’s Hospital with a broken collarbone, and my father told the doctor I was crazy, and they couldn’t control me,” Michael testified in the same case in 2004. When the lawyer asked how his collarbone came to be broken, Michael replied: “He kicked me.”31
People who knew Eddie and Michael strongly dispute this version of events. “Eddie would have no more kicked Michael than I would have,” said Madeline Redstone, Eddie’s second wife, who tried to get father and son to reconcile years later. One person close to Michael said he used to describe his earliest memory as being kicked in the face by his mother’s pointy shoe.
According to his medical records, he was first seen by a psychiatrist at age seven for “uncontrollable aggressive behavior.” Michael’s presence in the home was putting a great strain on the family, so in 1967, when he was just nine years old, they sent him to boarding school at Fessenden, one of a small group of “junior boarding schools” that accept boarders before ninth grade. It was prestigious, with several alumni in the Kennedy clan, and located in West Newton, close to his family. But Michael regarded it as a betrayal and as an institutionalization. He was expelled on November 5, 1969.