Businessweek Archives

`The Last Great Pasha Of American Business'


Books

`THE LAST GREAT PASHA OF AMERICAN BUSINESS'

MASTER OF THE GAME: STEVE ROSS AND THE CREATION OF TIME WARNER

By Connie Bruck

Simon & Schuster x 395pp x $25

Connie Bruck begins at the end in her biography of Steve Ross, with a meticulous description of his 1992 funeral service in East Hampton, N.Y. She closes with a memorial service for him in Hollywood. And in between, she recounts a third tribute to the man who created Time Warner Inc., this one held at Carnegie Hall.

Such a focus might seem odd--even morbid--for a biography that otherwise sizzles with the vitality of its subject. For Bruck, though, the rituals surrounding Ross's death say a lot about his life. Indeed, the memorial services form a sort of triptych: Ross as Brooklyn boy who made good; Ross as Hollywood schmoozer; and Ross as ambassador for American pop culture.

Of course, Ross was more showman than statesman. But Bruck, a staff writer at The New Yorker and author of The Predators' Ball, about Drexel Burnham Lambert Inc. at the height of the junk-bond era, doesn't slight him with a breezy show-biz bio. Her Master of the Game: Steve Ross and the Creation of Time Warner is a marvelously detailed and remorselessly critical portrait of this most complex and contradictory media mogul. Visionary entrepreneur and reckless profiteer, generous friend and remote parent--Steve Ross comes across as all these and more in Bruck's trenchant account.

Showmanship played a role in Ross's life from the very start. When his father, a Jewish builder named Max Rechnitz, changed the family name, it was only the first of many new images Steve would take on as he journeyed from Brooklyn to Park Avenue. Bruck moves through Ross's childhood briskly. But she shows how the hallmarks of his style--his solicitous personality and lavish taste--came from his parents.

Bruck hits her stride in describing Ross's development as a businessman. He got his start working in his father-in-law's funeral parlor, where his velvet-hand-in-velvet-glove manner served him well. Within a few years, Ross had diversified into parking lots with a company called Kinney Service Corp. He further honed his dealmaking skills by taking Kinney public in 1962 and acquiring the ailing Warner Bros. studio in 1969. Soon, he sold off the original businesses and fixed his gaze on Hollywood.

The scent of mob connections has always wafted around Ross's early career, and Bruck does nothing to dispel it. In fact, she directly links Kinney executives to organized crime, taking apparent glee in referring to mobsters by their nicknames, as in Abner "Longie" Zwillman. Ross, though, seems always one step removed from such unsavory characters--a convenient position he was to retain in subsequent scandals involving Warner Communications Inc.

Bruck doesn't drop any bombshells in her retelling of Ross's most notorious brush with the law: the Westchester Premier Theater scandal. But she does draw on court documents to argue persuasively that Ross sold out his best friend, Warner executive Jay Emmett, rather than face indictment for accepting kickbacks from the theater's builders. As for the cash, Bruck speculates that Ross used it to finance his lifestyle.

It was a lifestyle suited to Croesus, and Bruck lays the details out for our delectation: the priceless statues and paintings Ross gave Warner star Barbra Streisand; his commandeering Giorgio's, the Beverly Hills boutique, for a private shopping spree; his purchase of a castle--and the surrounding village--in Todi, Italy. Ross's lawyer and longtime friend Arthur Liman aptly described him as the "last great pasha of American business."

But, as Bruck reasonably points out, pashas shouldn't obtain their luxuries with the proceeds from public companies. Arguably, much of the money Ross threw around belonged to shareholders. Ross also cooked up extravagant contracts for himself, with the help of in-house financier Oded Aboodi. And Bruck argues he could well have been prosecuted for insider trading when he dumped his Warner stock just before the bottom fell out of Atari Corp., a video-game subsidiary. In the book's juiciest disclosure, now widely reported, Bruck says Aboodi's son is under investigation by the Securities & Exchange Commission for alleged insider trading in Time Warner stock.

How did Ross get away with such shenanigans? Partly it was his winning personality and track record. But Bruck notes that he also had an uncanny feel for numbers, which enabled him to structure deals that invariably redounded to Warner's benefit. In 1979, for example, he persuaded American Express Co. to pay $175 million for 50% of Warner's cable operations. When AmEx tired of the partnership in 1985, Ross bought its stake for $400 million. He immediately sold MTV and Showtime to Viacom Inc. for $510 million. Several years later, the remaining cable assets had a market value of about $4 billion.

Bruck uses a number of other examples to demonstrate that Ross the entrepreneur was nonpareil. By granting his division heads virtual autonomy, she says, Ross won their unswerving loyalty and enhanced his own authority. "These executives in a sense became captives of their freedom," Bruck writes. "It became the essential requisite of their professional lives--and it was a freedom that Ross, uniquely, granted."

Ross's wiles were never sharper than when he engineered the merger of Time Inc. and Warner in 1989, and Bruck devotes the major part of the book to this deal. But surprisingly, she doesn't break new ground. Much of her reporting on the merger has already appeared in several lengthy New Yorker articles. And the author's conclusions are familiar: Steve Ross gulled Time Inc. and its feckless executives.

Less surprisingly, Bruck fails to unlock the mysteries of her subject's psyche. She is not sure why Ross was so emotionally giving to friends such as Liman and Steven Spielberg while he remained inaccessible to his children. Nor can Bruck explain why Ross spread small lies about himself, such as the widely repeated canard that he once played football for the Cleveland Browns. The author may well have been hampered, since her access to Ross was cut short when he became ill with cancer.

Still, if Ross's interior life remains opaque, Bruck evokes his public life in all its glitter and glory. And she suggests that his successor at Time Warner, Gerald M. Levin, won't be able to master the Rubik's Cube that Ross created. Disparaging Levin's performance at one of the memorial services for Ross, Bruck declares: "The void had never seemed so large." That's not really fair to the low-key Levin. But to the author's credit, we feel the loss, too.MARK LANDLER


American Apparel's Future
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus