Greg Bautzer had worked in small law firms since he opened shop on Hollywood Boulevard in 1936. A small firm allowed him both freedom and power. He could set his hours and choose his clients. When it came to billing practices and his expense account, he could do as he pleased. He didn’t have to answer to a management committee. The disadvantage was that he lacked the manpower to handle really big corporate financing and mergers. He could advise Howard Hughes on such business deals, but other firms with more lawyers were always required in order to verify the other company’s corporate assets. Those bigger firms earned bigger fees from all the work they put into the transaction. Simply put, there was a limit to how much his small firm could handle, and thus a limit to how much money he could make.
Sidney Korshak had an idea to help his friend make a transition to a larger, more lucrative firm. Eugene Wyman was a young lawyer from the same city as Korshak—Chicago. Wyman had been recently named chairman of the California Democratic Party. He was thirty-five and a master fundraiser. He had started his firm in 1952 with partner Marvin Finell, concentrating on humble insurance-defense litigation. Wyman and Finell’s partnership was born out of necessity; in those days, big law firms wouldn’t hire Jewish attorneys. Well-respected litigator Frank Rothman joined the firm a short time later. He described their “we try harder” approach to getting business: “There was a dedication to the practice, born of fear we wouldn’t succeed. If we were going to get AT&T as a client, we had to take it away from a big firm that had represented it for a long time.”
Korshak brought Bautzer and Wyman together, and they agreed to merge their two firms. Wyman’s was larger, but Bautzer’s clientele immediately increased the firm’s cachet. In 1968, Bautzer’s law school friend Thomas Kuchel completed his third term in the US Senate and joined the firm, bringing even more political muscle. After the merger, their business increased so dramatically that both Wyman and Bautzer offered Korshak a finder’s fee, but he refused. He was happy to see Bautzer in a new setting, the firm of Wyman, Bautzer, Rothman, Finell & Kuchel, with offices in the United California Bank Building at 9601 Wilshire Boulevard in Beverly Hills. “Greg evidently needed the back-up of a large organization,” recalled Korshak. “Once he and Wyman teamed up, new business started to roll in.”
The firm underwent a further metamorphosis when Bautzer signed Las Vegas casino owner and financier Kirk Kerkorian as a client. Tall and athletic, with wavy dark hair, Kerkorian was the son of Armenian immigrants, a grammar-school dropout who converted a fascination with flying into tycoon status. His early life reads like fiction: As a teenager, he belonged to Los Angeles street gangs. However, he took responsibility seriously, and to help support his impoverished parents, who had lost the family farm, he worked at any job he could find: golf caddie, steam cleaner, car refurbisher, furnace installer, bouncer in a bowling alley bar. At his older brother’s suggestion, he decided to try boxing, and was successful enough to win the Pacific amateur welterweight championship, earning him the ring name “Rifle Right Kerkorian.”
After taking a flight in a Piper Cub airplane with a friend, Kerkorian fell in love with flying. He began the airline career that would make him rich by taking lessons from the famed female flier Pancho Barnes at her Happy Bottom Riding Club in the Mojave Desert. He paid for lessons by milking her cows and cleaning her barn. Located near Edwards Air Force Base, Pancho Barnes’s club hosted many of the twentieth century’s greatest test pilots and would go on to fame as the backdrop for the novel and motion picture The Right Stuff. With the coming of World War II, Kerkorian went to Canada with a recommendation from Barnes and enlisted in the Royal Air Force, delivering Mosquito bombers to Scotland. After the war, he broke speed records to deliver used warplanes on dangerous flying routes, pocketing enormous fees. In 1947, he established a charter airline to fly gamblers to Las Vegas; it made him rich. In 1968, he sold his airline to the Transamerica Corporation for stock worth $104 million and then purchased the Flamingo Hotel and Casino, the same one for which Bautzer had purchased the land on behalf of Billy Wilkerson twenty years earlier. In 1969, Kerkorian and architect Martin Stern built the International Hotel, which, with fifteen hundred rooms, was the largest in the world, and with both Barbra Streisand and Elvis Presley performing, a Las Vegas phenomenon. Kerkorian next set his sights on a motion picture studio.
While Korshak told Henry Rogers that he brought Kerkorian and Bautzer together, it is more likely that international jeweler Bobby Altman introduced them. Both Kerkorian and Bautzer were close friends of Altman. Michael I. Levy supports the Altman connection. “During the 1970s when I got to know Greg, I used to go to Cannes all the time. He introduced me to one of his best friends, Bobby Altman, who was the jeweler for the Middle East. When he would go to Cannes, he would have this bag filled with diamonds as big as your thumbnail. Bobby Altman was also Kirk Kerkorian’s best friend. We became really close. We talked once a week. Bobby Altman put Kerkorian together with Greg.”
Intensely private, modest, and reserved, Kerkorian warmed to Bautzer. “I like to talk with Greg,” said Kerkorian, “whether it’s about business, politics, or just about anything. We hit it off.” Bautzer entertained the super-trader with stories of the stars he had known, and the magnate had to admire any lawyer who had the bravery to tell Bugsy Siegel to “sit down and shut up.” Kerkorian flew Bautzer to Monte Carlo, Cap d’Antibes, and Paris. They shared an interest in tennis, flying, and women. They were both self-made men who knew what it took to achieve success. Attorney Ernest Del, one of present-day Hollywood’s foremost deal makers, got his start working with Bautzer and saw the friendship firsthand. “Kirk Kerkorian worshiped Greg for two reasons: First, he was Howard Hughes’s lawyer. Second, he enjoyed living Greg’s lifestyle. Kerkorian was a shy guy. Greg knew the moves, and Kirk appreciated it. Greg would make the dates and reservations, and show him how to have a good time.”
Bautzer was a natural choice for the type of work Kerkorian had in mind: he wanted to buy Metro-Goldwyn-Mayer. Bautzer had just represented Elliot Hyman in his 1967 purchase of Warner Bros. for Hyman’s Seven Arts Ltd. The deal was a harbinger of things to come in the industry—a time when the studio ownership would change frequently. The studio system was fading, and had been since 1948, when the Paramount Consent Decree forced film companies to divest themselves of their theaters. The vertical integration begun by Adolph Zukor in the 1920s had finally run afoul of antitrust laws. As the studios surrendered their exhibition arms, they were weakened further by recalcitrant talent. When stars like James Stewart and Burt Lancaster refused to sign seven-year contracts and then formed their own production companies, deal-making agents and lawyers like Lew Wasserman and Greg Bautzer assumed the power previously held by moguls like Louis B. Mayer. Then came television. Americans were buying seven million TVs a year and motion picture attendance dwindled. By 1949, studio revenues had plunged from $87.3 million to $48.5 million. The major studios tried competing with the small screen and independent producers, but it was a losing battle. At MGM, when ticket sales dropped, Nick Schenck fired Mayer and looked to younger talent. By the late 1960s, the family-owned studio system had been replaced by corporate-owned entities. MGM struggled to keep its doors open. It was prime for the picking.
When Bautzer first called MGM about a possible takeover, the board of directors assumed he was acting on behalf of Howard Hughes. The prospect of being owned by the billionaire who had wrecked RKO was not a cheery one. But when the company learned that the interested party was Kerkorian, there was no sigh of relief. On July 22, 1969, he made a tender offer of $35 a share for 1.74 million shares of MGM stock. If successful, Kerkorian would own 30 percent of the company. “This offer is inadequate and not in the best interest of shareholders,” said MGM board chairman Edgar F. Bronfman, who was also patriarch of the Seagram’s liquor empire. MGM sued Kerkorian in US district court, asserting that his European financing violated the Securities and Exchange Act, which required collateral of five times the amount of loan. “It seems to me,” said Bautzer, “that MGM is going to extremes to preclude the rights of its shareholders to determine if they want $35 for a share of stock, stock that was selling at $27 the day the tender offer was made. If stockholders have faith in the MGM management to turn the company around, they should hold onto their stock. If they don’t, they should take their cash and take a walk.” Meanwhile, Bautzer’s partner, Jerald S. Schutzbank, who had previously served as California Commissioner of Corporations, hired former US Supreme Court justice Arthur Goldberg to prepare arguments on Kerkorian’s behalf. Goldberg’s court papers argued that the tender offer would be harmful to no one but MGM management, who might find themselves out of a job.
Kerkorian’s offer was set to expire on midnight on Friday, August 8, 1969. At four that afternoon, federal judge Charles H. Tenney denied MGM’s request to prevent the tender offer, ruling that SEC regulations did not regulate foreign lending institutions. The offer went through, but its tally would take several days. “We’re looking for the time to sit down with MGM management to discuss the future of the company,” said Bautzer. “Mr. Kerkorian’s concern is for the stockholders of MGM. Incidentally, he will now be one—a big one.” On August 12, Kerkorian was declared the winner with 1.325 million shares.
He now owned a large percentage of the stock, but he was not entirely in control. Bronfman still owned 16 percent of the company’s stock. Time Inc. owned 5 percent. Interests sympathetic to MGM had purchased another 100,000 shares. Kerkorian was ahead, with 22 percent, but his margin was slim.
MGM management held out hope of independence as they waited for a call from Kerkorian. The two sides communicated through statements to the press. “Kerkorian hasn’t been in touch with us at all,” said a spokesman. “We don’t know what he has in mind.” Bautzer replied, “We’re willing to sit down with MGM management and we are hopeful of such a meeting, but we have not had any session with anyone at MGM as yet.” In reality, neither side wanted to talk to the other. On September 10, Kerkorian made an offer for 620,000 more shares of MGM common stock at $42 per share. The $26.6 million offer would expire on September 23. When that day arrived, he gained 33 percent of the company, and with it unchallenged control of MGM.
Kerkorian’s first order of business was new management. He knew airlines and casinos, but not filmmaking. He needed a studio head who could inspire confidence in stockholders. Kerkorian met with MGM’s current president, Louis F. “Bo” Polk, whom Bronfman had hired less than a year prior. Polk was a conservative executive given to quoting statistics. Kerkorian nixed him and turned to Herb Jaffe, a former literary agent who was running production at United Artists—and who also happened to be Kerkorian’s tennis partner. Jaffe had been warned about the challenge of reviving MGM and declined the job. When the Los Angeles Times asked Bautzer to comment, he refused.
Bautzer had a replacement for Jaffe waiting in the wings, a client for whom he had been trying to find a job for more than three years: James T. Aubrey, the former president of CBS Television whom Bautzer had tried to include in Howard Hughes’s takeover plans for ABC. During his five years at CBS, the blue-eyed Ivy Leaguer had created a network that dominated the airwaves and arguably popular culture. In the 1963–64 season, for example, CBS had all twelve of the top daytime serials and twelve of the top fifteen primetime series. These included proletarian fare like Gilligan’s Island, The Beverly Hillbillies, Green Acres, and The Munsters; and critical successes like The Smothers Brothers Comedy Hour and The Wild, Wild West. Aubrey ruled with absolute authority, reporting only to founder and chairman William S. Paley. “He was it,” said Hillbillies producer Martin Ransohoff. “People thought Aubrey had a divining rod in the middle of his desk.” Yet the Princeton graduate despised his audience. “The American public is something I fly over,” he once said. He kept his distaste to himself. Lucille Ball called him the “smartest one up there.” Life magazine called him “the world’s No. 1 purveyor of entertainment.” John Houseman, who had coproduced Citizen Kane, called him the “Smiling Cobra” for his spitfire temper.
Paley fired Aubrey without warning on February 27, 1965. Rumors flew about why. Aubrey had been accused of unethical conduct. He let a friend, actor Keefe Brasselle, produce three series without first shooting pilot episodes, and the series were disastrous flops. Aubrey had also been needlessly dismissive, even cruel, to talent he considered expendable, in particular to the beloved veteran comedian Jack Benny, whom he shoved out the door with a remark about his age and obsolescence. Moreover, Aubrey had abused corporate privileges, and worse, mixed business and personal expenses—some very personal expenses. “I don’t pretend to be any saint,” said Aubrey. “If anyone wants to indict me for liking pretty girls, I guess I’m guilty.” Bautzer liked pretty girls, too, but not five at a time. “Aubrey was the fourth president of CBS as Caligula was the fourth of the twelve Caesars,” wrote journalist Murray Kempton. “Each carried the logic of his imperial authority as far as it could go.” Author Jacqueline Susann based the amoral hero of her novel The Love Machine on Aubrey. That was fiction; the facts were epic. “No man made bigger profits—or more enemies,” said the Washington Post.
In August 1965, Hedda Hopper speculated on gossip that Aubrey and Bautzer were going to start a motion picture company together. Bautzer declined to comment. He and Aubrey were well matched, given their penchant for both outdoor and indoor sports, and their overweening self-confidence. However, no film venture occurred. Then in 1968 came Hughes’s attempt to take over ABC; when Hughes pulled out, Aubrey’s hopes of running the network were dashed.
Kerkorian questioned Aubrey’s credentials. It was true that Aubrey lacked experience in feature film production, but Bautzer argued that this was a plus, not a minus. It meant he owed no favors to agents or producers. Aubrey knew product and could deal with talent. He was first, last, and always concerned with the bottom line, which was all Kerkorian cared about. “Jim Aubrey has a real good sense of smell about what the American public wants to buy for entertainment,” Bautzer told Time magazine, recycling one of his oft-used expressions to compliment a client’s abilities. He arranged a meeting between Aubrey and Kerkorian.
Kerkorian was self-made. Aubrey was Ivy League. He was surprised that Kerkorian wanted to engage him without the formality of a contract, but he adjusted to the Las Vegas mode. “I don’t want a contract,” Aubrey told Kerkorian. “If I do a good job on this, the contract will take care of itself. If you don’t like the way I’m doing it, you can say ‘Get lost, Jim’ without any obligations.” On that basis, and with Bautzer’s endorsement, Kerkorian hired Aubrey. His salary would be $208,000 per year plus an option to buy 17,500 shares of MGM preferred. Kerkorian expounded his business philosophy: “Clear out the nonproductive items, keep the productive ones, and you have a successful business.”
Bautzer’s management of the MGM takeover earned him the recognition of the New York Times. The story included a picture of him in mid-laugh, dressed in a dark suit, sitting in a rented Park Avenue penthouse. At fifty-eight, he had changed his hair. It was now completely white, no longer curly, but still thick, parted on the side and combed forward. He looked like a mature movie star, slightly weathered but still striking. He explained why he would not join MGM’s board. “I think that a lawyer is better able to serve a company if he’s not a director,” he said. “There is a place for the lawyer who can use his legal knowledge to be an architect—in the corporate sense. That’s what I hope to do.” The article noted Bautzer’s celebrity status and history of dating starlets, but also praised his legal talent. “Greg is extremely difficult on behalf of his clients” said an unnamed industry source. “You don’t keep people like Hughes and Kerkorian as clients if you can’t deliver.”
Even before Kerkorian bought MGM, the company had been selling off parcels of real estate to raise cash. But the company he purchased was in worse shape than he had imagined. MGM had posted losses of $35 million, was $80 million in debt, and faced write-offs of $75 million because of box-office failures. Kerkorian told Aubrey to slash costs. Drastic measures were necessary to keep the company afloat. The cobra bared his fangs, terminated thirty-five hundred employees—half the studio’s work force—and canceled twelve projects. In fact, Kerkorian authorized Aubrey to sell everything but the film library. “We sold off acreage, European movie houses, whatever we could,” said Aubrey. “Nostalgia runs strong out here, so we were criticized for selling Judy Garland’s red shoes. To us, they have no value. No intrinsic value whatever.” What was not sold became landfill near the San Diego Freeway—furnishings, corporate records, music scores, screen tests, and outtakes. “Jim Aubrey took everything that wasn’t nailed down,” said former executive Sam Marx. “And a lot that was.”
Aubrey’s slash-and-burn policy was not redeemed by creative projects. The films he produced were not successful, and the film-makers he encountered came away bleeding. Four-time Oscar-winning director Fred Zinnemann had Man’s Fate canceled and was then presented with a bill for $3.5 million. Michelangelo Antonioni also lost a project. Sam Peckinpah fought with Aubrey over the editing of Pat Garrett and Billy the Kid. The good news was that Aubrey’s austerity program had reduced MGM’s bank debt from $80 million to $22.5 million. The bad news was that its product was mediocre. And there were still bills to pay. The $72 million in European loans was due in 1970, and the stock market had been falling. Kerkorian attempted to raise money in a secondary public offering of his International Leisure stock, but the SEC blocked the registration, because he had not filed financial statements relating to the Flamingo Hotel purchase. Kerkorian claimed that the sellers had withheld financial information. He was forced to sell half his ownership in International Leisure.
While Kerkorian went back to purchasing cruise ships and casinos, Aubrey brought in TV producer Dan Melnick, who then scored hits with Michael Crichton’s Westworld and the thriller Slither. But when Melnick pitched Steven Spielberg’s Jaws, Aubrey turned it down. In 1973, MGM’s owner was not much interested in the movies MGM made. He had another use in mind for the MGM brand. “The studio that brought you Ben-Hur and The Wizard of Oz will now bring you crap,” began a pungent sentence in Fortune magazine. The four-letter word did not refer to the execrable quality of MGM’s films but to the game of chance. Kerkorian was building the largest casino and hotel in the world, the MGM Grand. The studio from which he had acquired the hotel’s name would have to get by on six films a year.
But Aubrey himself would soon feel the squeeze. The turning point came in October 1973, when Kerkorian sold MGM’s domestic theatrical distribution arm to Arthur Krim at United Artists. Then, after a cursory glance at the Bistro’s menu, Kerkorian signed a deal for $20 million at the restaurant and sold all of MGM’s foreign holdings to the Cinema International Corporation, a distribution arm jointly owned by Universal and Paramount. “For propriety’s sake,” wrote Joyce Haber in the Los Angeles Times, “let’s not call it a liquidation, but what was once a major-major is now a mini-minor.”
The news hit Aubrey like a blast of cold air. He told his own associates that if he were an ordinary stockholder, he would file a lawsuit. He then wrote an open letter to Kerkorian, telling him what he thought of the transactions. Kerkorian did not take it well. He consulted with Bautzer, who agreed that his former friend and client had committed grievous transgressions by making the disagreement public. Aubrey owed everything to Kerkorian and Bautzer. Now he was biting the hands that fed him. Of course, there were some who thought that the self-indulgent Aubrey had long since gone out on a limb. His nightlife was notorious. But for all his nocturnal peccadilloes, he had never evinced disrespect for his boss—not, that is, until now. He received an invitation from Bautzer, who had very definite feelings about disloyalty.
On October 30, Aubrey sat in Bautzer’s office, sipping a drink. Without warning, Bautzer looked him in the eye and delivered the axe. “Kirk wants you out,” said Bautzer. “It’s over.”
Aubrey stared at him, then remembered that he had no contract. He asked what kind of settlement Kerkorian was planning. “Kirk doesn’t believe in contracts,” said Bautzer. “And he doesn’t believe in settlements, either.” Aubrey was shocked. He thought he deserved a parting gift. In order to save face, Aubrey gave Time magazine a self-serving statement. “The job I agreed to undertake has been accomplished.” It was his last major job in the entertainment industry.
Kirk Kerkorian can hardly be blamed for his inability to return MGM to its former stature. It is easy to see Kerkorian’s lack of experience in the business as the cause, but reviving MGM’s former glory was an almost impossible task. The studio was drowning in debt, and revenues were dwindling industry-wide. Bautzer’s choice of Aubrey to run the company was likely no worse than many other options. While Aubrey’s talent in television failed to translate to motion pictures, Aubrey had no emotional ties to the business and was willing to do unpopular things to protect the bottom line. It is doubtful any other executive would have been so fiscally responsible. True, a fresh creative genius might have found new projects, like Evans did for Paramount, but lightning seldom strikes twice. Bautzer had gambled and won with Evans. He had lost with Aubrey. By the late 1960s, selecting motion picture projects had become a very high-risk business. Studios were revolving doors, where production heads changed every two or three years. Hardly any succeeded long term. Kerkorian and Bautzer did the best they could. It’s difficult to say someone else would have done better.
Bautzer continued to advise Kerkorian into the 1970s. In this capacity, he dealt with Frank Rosenfelt, the new president of MGM. Their connection went back to the days when Bautzer carried orders from Hughes to Rosenfelt, who was then RKO studio counsel. In 1980, when Rosenfelt urged Kerkorian to replace production chief Richard Shepherd with David Begelman, Bautzer was incredulous. Begelman had been removed from the post of production chief at Columbia Pictures after a major scandal. He had embezzled tens of thousands of dollars. “You can’t go out and hire a convicted felon,” Bautzer argued at the top of his voice in a meeting with Kerkorian and other MGM executives. “This man would be in jail today if he hadn’t hired himself a helluva smart lawyer.” Begelman’s attorney, Frank Rothman, was in the room; he also happened to be Bautzer’s law partner.
“I feel very strongly on this Begelman issue,” Rosenfelt continued. “If I don’t get Begelman as my production chief, I don’t think I want to remain as president of MGM.”
The Begelman scandal had begun in 1977 with a letter from the Internal Revenue Service to actor Cliff Robertson claiming that he owed tax on a $10,000 payment from Columbia. Robertson had received no such payment. The cashed check was located. Robertson’s endorsement had evidently been forged. A criminal investigation led to Begelman. There were more forgeries, in all a total of $75,000. Rumor had it that Begelman needed the money to cover gambling debts. “On Fridays there was this poker game upstairs at Ma Maison,” recalled producer Andre Morgan. “David wasn’t a very good gambler. It was this floating poker game that took him down.”
Bautzer was a regular at the card game. It is likely he knew even more about Begelman than was already publicly known. Bautzer was furious. How could a publicly held company hire a man who was a thief and a liar? Kerkorian sided with Rosenfelt. “If you feel that strongly about it, Frank,” he said, “then I think we should go with Begelman.” Bautzer stood up and stormed out. He was eventually vindicated: all Begelman’s projects flopped except for one, Steven Spielberg’s Poltergeist.
In May 1981, Kerkorian purchased United Artists from the Transamerica Corporation for $380 million. The purchase was widely viewed as a way of regaining the MGM distribution arm that he had rashly sold in 1973. The company became known as MGM/ UA Entertainment. In February 1982, Bautzer’s partner Frank Rothman was installed as head of MGM/UA. Rosenfelt and Begelman continued in their posts but had to report to Rothman. He was an odd choice for a studio head. “Things are as exciting as they can be. It’s certainly a challenge,” Rothman said in all honesty, since he was primarily a litigator, not a transactional entertainment attorney. One of his first jobs was firing Begelman. In 1986, Kerkorian sold MGM/ UA to television magnate Ted Turner. But Turner couldn’t afford to keep it, and after just seventy-four days, he sold United Artists and the MGM trademark back to Kerkorian, retaining only the MGM film library.
Bautzer and Frank Rosenfelt may not have been the best of friends, but MGM’s president was impressed by the scope of Bautzer’s influence. “He seemed to know everyone in the world,” said Rosenfelt, “and on a personal level, not a superficial one. He could go anywhere, see anyone. I remember there was a time when we were talking a merger deal with CBS. ‘If we keep on talking like this,’ Greg told me, ‘nothing will ever happen. Let’s go see Bill Paley.’ I replied: ‘Will he see us?” and Greg said, not in a boastful tone, ‘Of course he’ll see us.’”
The next thing Rosenfelt knew, he, Kirk Kerkorian, and Bautzer were in CBS founder William Paley’s New York apartment. “We didn’t make a deal,” said Rosenfelt, “but when we got home and told our story, no one believed us. Bill Paley never had business meetings in his home. When he condescended to have a meeting with you, it was in his office in the ‘Black Rock’ on Fifty-Second Street—never in his home.”
Bautzer’s relationship with Kerkorian was also on a personal level. Mark Bautzer saw Kerkorian live vicariously through Bautzer. “Kirk’s a low-key guy and he’s a very gentle soul,” said Mark. “He just wanted to do his deals and go home. I think he wanted to be able to cut loose, but he was bound by his idea of his position in town. He couldn’t cut loose like my dad did. That’s why they used to spend every summer together. They would go to Monte Carlo every summer for two or three weeks.” The trip was made in Kerkorian’s private DC-9. Even Bautzer was impressed. “Talk about comfort!” he said. “The inside is like a living room. He has a telephone that rings up in the air and he can talk to anyone, anywhere. Now that’s the only way to fly!” When Bautzer called his son, Mark couldn’t believe that a jet would have a phone. But he believed in the rapport between his father and the mogul. “Kirk was into my father’s energy and into the fact that when he walked into a room you could feel his presence. There would be a buzz.”