Jules Stein
Career

Jules Stein's professional career started very early because it had to. Even though his father Louis' business was doing well enough so that no Stein was starving or walking around in torn clothes, Jules had bigger expectations.

Understanding that he was way smarter (and sneakier) than most, he set the bar high for himself and decided that he wants to become a doctor. Medical schools produce gigantic bills above the reach of what his father was earning in his dry goods store. The message to Jules was clear: if you want to become a doctor, all the expenses come out of your pocket.

Throughout his early career, Stein did more than just sustain himself. He was awfully good at expanding his corporate reach in the music business, took a lot of pleasure in doing so and probably had a thought from time to time about perhaps dropping out of medical school and concentrating solely on the booking business.

In later years, he switched to passive management, letting his great protegee Lew Wasserman do majority of work, while he concentrated on the strictly financial side of running the company and generally keeping an eye on the whole picture to make sure everything works as expected.

The talented businessman took his first big step at the age of 16. University of West Virginia was out of his financial reach, which was close to non-existent at the time. But he wanted to study there badly.

He came out with a proposition which showed his talent for negotiations: if he is allowed to study free of charge, he will play at the school orchestra for free. Stein was skilled enough with violin for this to be a good piece of bargain and so the university officials agreed.

During the time he spent there, he decided to go beyond these duties and founded his own band. Playing in local hotels gave him a badly needed, albeit still small cash injection. To supplement this income, he also became quite skilled with dancing and started giving lessons in waltz, fox-trot and two-step.

His other piece of early business came when Stein was studying at Winona Lake Academy, whose summer course he chose to speed up his education. There, he organized and promoted weekly dances. Soon, he targetted University of Indiana's summer school for the same activity. And then more summer schools followed.

Booking bands and organizing events came so easily to Stein that he decided to continue in this direction. The next logical step was to join a local agency, learn the ins and outs of the business and perhaps make some powerful connections. In 1919, he chose and joined Local 10, which was one of many branches of the American Federation of Musicians union.

Signed musicians are workers for the union. Unions were very powerful then and majority was signed to one, or another. Agents were expected to give gigs only to those belonging to the union's worker pool. If someone was found disobeying, usually he lost a job, often got fined and sometimes even got a leg broken as a result.

One of the great mysteries of Jules Stein's early career was why such course of action did not apply to him. The first time he sent a non-union musician to a concert, the organization found out instantly. As a result, he got kicked out and fined $1,500. At the time, it was an awful lot of money, and especially for someone like Stein who had to finance his own expensive education.

His superior at the company was James Petrillo, whom Stein visited to try and soften the puhishment. As a result, he got his job back and the fine was reduced to $500.

How exactly did those negotiations look like and what did Jules put on the table is, unfortunately, unknown. There is a possibility that he didn't even need to offer anything, except for his services. By the time, it was probably pretty obvious that the man is a golden goose and Petrillo might have noticed that and decided that it's best to keep that talent to themselves instead of feeding the competition.

The relationship between him and Petrillo continued to flourish and very soon the talented Jew grew in ranks so much so fast that he took control over the union branch.

Still, something must have gone wrong as at one point he left the organization and joined a much weaker American Musicians Union. There, he broke the rules again by booking bands in Chinese joints. The problem was that this was Local 10's turf and entering it was a declaration of war. For a while, bumpy road was stretching in front of Stein (bombs did go off in some of those clubs), but he got through it without a scratch.

By that time, the businessman had already become a qualified ophthalmologist, as he had finished a medical school in Chicago and even went to Vienna to aid with eye research at the University of Vienna under professor Fuchs.

In 1924, Stein made a very serious decision - despite good business perspectives, all the hard work to finance and get through medical school is not to be wasted. He got his certificate from American Board of Ophthalmology and was to become a doctor.

That year, he got hired as Dr. Harry Gredel's assistant. Gredel was a renowned specialist who, together with two others, founded Pan-American Association of Ophthalmology. This experience was clearly an inspiration for the freshly-appointed assistant, as many years later he himself founded an institute in the same department.

That seed got planted, but nevertheless Jules quickly realized that even though his youth's goal has been achieved to the letter, he wasn't happy in his supposedly dream job. He got hooked running a business too much he was too good at it to pass it up, too.

Working under someone else was never his thing - Stein was an introvertive perfectionist who had to have things his way. With $3,000, he started his own company called Music Corporation of America.

MCA's early specialty was managing one-night bands. Before his efforts in the department, musicians who were traveling from venue to venue either did all the organization themselves, or had semi-amateurs doing it for them. As the market was expanding and many bands grew in popularity due to their music being played in the radios, there was a great opportunity in absolving the bands from booking and setting every tiny aspect, things such as transport and accommodation included.

Musicians were to be part of an organized and well-oiled machine and wouldn't have to worry about anything except for what many of them wanted to worry about only - performing. In return, booking agency got more control over musicians, and of course more money.

The ability to sign long-term contracts with hotels, canteens and transportation themselves made up for huge savings and enabled MCA to strike much better deals than if when it all would continue to be a de-centralized and chaotically-organized process.

The first time this approach got used by Stein was sending Coon-Sanders Nighthawks on a tour through smaller cities. The musicians, who had been his clients but felt like they don't need him, were adamant to agree, but when given giant financial incentive, ultimately agreed. The tour earned MCA $10.000 and was a clear signal that there's plenty of money to be earned this way.

Soon, unions and other agencies picked up on the idea, but Jules was expanding aggressively and was always one step ahead. He mastered the approach before anyone could even begin to challenge him.

As always, Stein was attacking the subject from all possible angles. Soon after starting MCA, he began efforts to become a delegate to the American Federation of Musicians' national convention. He started by joining smaller ones and slowly he kept building his influence until he was able to play with the big boys.

That process took him a decade and he had Petrillo in his corner to help help him when help was needed. Not even one of his propositions got accepted, but the effort wasn't wasted, as he made many important friends who would aid him in years to come.

One of Stein's trademarks was making package deals. In order to book more bands, he used more famous ones for which there was big demand and told his clients that they can't have them unless they also book few lesser-known ones. Coupled with the fact that all his clients had to sign exclusive contracts, MCA quickly became an unstoppable wave that assimilated everything on its path faster than Borg did.

In the 1930s, the company was already a giant. The tempo with which it has had grown was insane. Each next year, any remaining competition looked paler and paler in comparison.

The year 1936 was huge for Jules as that was when he bought a seat in the New York Stock Exchange (Investopedia). Since childhood, he dreamt about this moment and believed that reaching that goal would be a testament to how far he got in life. The process of obtaining a seat is followed by a rigorous screening procedure to ensure that the person indeed deserves a seat, so in itself it was already a distinction.

When CBS and NBC entered MCA's territory and began booking bands and thus giving them radio exposure, it was a very tough test of Stein's problem solving abilities. As they had giant line infrastructure and direct connection to thousands of hotels around the country, it gave them the possibility to provide an exposure on an unprecedented scale (to that point in time).

Stein had nothing even remotely comparable to what networks could directly offer musicians, so MCA was at a huge disadvantage. His solution to this problem was spectacular though.

The company started cooperating with a smaller Chicago network WGN (known for its interesting, intelligent and highly experimental program) and soon also with the now-defunct Mutual Broadcasting System. As MCA was doing regular business with thousands of hotels themselves, they offered to install network's lines to whichever they could convince and in exchange they got precious air time which they used to play their own bands.

With such enormous combo of a giant company which controlled majority of one-night bands on the market and a capable radio network, CBS and NBC were left speechless. From a sure winner with no chances of anything unfortunate to happen, the situation suddenly turned into an utter failure. This piece of business is probably Jules Stein's single most stunning achievement and a testament to how incredibly creative he was.

As 1930s went on, the market for one-night bands has changed. There were many reasons for the decline, but one thing was becoming clearer every day: that at best it will drastically shrink. Jules Stein and his MCA had an iron grip on that market and was making ridiculous profits, but it wasn't even a consolation as their golden goose was about to suffocate. Something had to be done.

Stein began to look around for a new business to move to. Cinema seemed like an interesting alternative for many reasons. There were very powerful players in this business and it was already a market few decades old, but it was fluid, balance of power was often shifting and the most powerful entities were still far from having monopoly.

One more ace up Jules Stein's sleeve was capitalizing on catastrophes, profiting in tough conditions. At times, he was almost like the kind of man who would wander around the city waiting for the fire to break out and when he'd find it, he'd go inside the building to see if there is anything worth risking his life for while everyone sane would run outside not even thinking on taking their most prized possessions with them.

It wasn't anything new, that tactic is used in business since people started doing business and whole countries have fallen down for greedy people to buy cheap, but Stein definitely belonged to the small group of people that mastered this craft.

One example of such tactics from him was acquiring Paramount stock. Due to the crisis that put the studio on the verge of bankruptcy, its stock could be bought for dirt-cheap. It so happened though that Stein knew people involved and, with restructuring taking process a Paramount, was pretty confident that it will bounce back. As time went on, he acquired more and more stock. So, he was in that business already and that gave him some insight into the daily reality of that world. He decided to move in.

In 1939, a new MCA office was opened in Los Angeles and it became the company's headquarters. All the interiors have been designed by Jules and his wife, both immensely enjoying the process. The office was way overdressed for its purpose, but they just couldn't help it.

Stein pulled the hair out of his head while attempting to lure first stars. A long and exhaustive process ended up with nothing. Just as it was beginning to look like the MCA adventures in Hollywood will be short-lived, Bette Davis signed in!

I don’t live on the golf course. I would rather deal with corporate tax problems and the intricacies of corporate structure. I relax that way.

Jules Stein

Jules knew that this is just the beginning and he has to move fast - Davis got signed because she was switching her representatives left and right. She could be out as quick as she got in and if MCA doesn't use her as a star-magnet to import more high caliber names, all the effort will be worth squat! Fortunately, many famous actors quickly followed. What's more, Davis stayed for long and even became Jules' good friend.

Things suddenly started changing when Lew Wasserman was hired by the company. At first, he just seemed like a good worker, but he quickly rose in ranks, demonstrating outstanding qualities. Many other older and much more experienced employees could only watch with hatred and jealousy as he went past them in a breeze.

Soon, he became Stein's right hand and the owner realized that Wasserman is even more talented than he is. Instead of motivating himself and trying to challenge his co-worker, or split their activities for them to not stand on each other's toes, he decided that the best course of action was to let Wasserman run things as long as he performs amazingly well, and in the meantime Jules will take a backseat and concentrate on what he likes best in the job (taxes, investing).

The result made for a very rare case - the boss was in his prime, and yet he didn't want the steering wheel, while his subordinate was the actual boss. Stein set some rules and was looking over Wasserman's shoulder, but for majority of time Lew was left free to do what he does best.

Stock market was one area Stein enjoyed exploring. Having access to an MCA fortune, he explored various investing methods and put them to practice, enjoying moderate success. Nothing close to how fast he was multiplying his capital in MCA's early years though.

June 5, 1973 marked Jules' department from the chairmanship of the board. At almost 80 years of age, it was about time to take a backseat. Wasserman rose to the occasion and took over that post.

Even then, Stein still came to work to spend some time at his office. Owning 20% of stock, he still had a dominant power had he wanted it, but he was in no rush to execute it. One near-exception was in later years when Wasserman had a period of underperforming. Stein was then close to taking action, but before the line was crossed, Lew came back to good form and the problematic decision went away.

When Stein was long past making any major company decisions and was just making trips to the office for the sake of taking them, Wasserman still came to his office daily to keep him in the loop.