Harry Warner, Jack Warner, Al Jolson, Darryl Zanuck and Al Warner on the Warners lot in 1927.
Studio takeovers have been the talk of the town in Hollywood for some time. It’s been less a discussion of if control will be ceded to new companies and more a conversation about who is buying, and why. Will it be studios taking over other studios, or, perhaps, tech giants elbowing further into the industry?
This week the megadeal fever was kickstarted again as it was floated that Warner Bros. Discovery has expressed interest in a tie-up with Paramount Global, following a meeting between Warners CEO David Zaslav and Paramount CEO Bob Bakish in New York last Tuesday. Such a merger would be historic, especially since the rolling back of the 1948 consent decrees that ended in major studios divesting in their theater chains.
Given that such a merger would (once again) reshape the Hollywood landscape, it’s worth remembering the first time Warner Bros. was involved in a mega sale: 1956, a deal that saw no shortage of drama.
As noted in my new book, The Warner Brothers, that sale was as consequential for the industry as it was for the Warner family. Having been in the film business since 1905, the Warner brothers fought and survived in many battles ranging from Thomas Edison’s patent trolling to naysayers about synchronized sound, to the Great Depression, rise of Nazism, the Red Scare, and of course, the epic and nasty rivalry between Jack and Harry Warner. The battles between the Warners set the stage for the fierce fights seen in recent decades with the Redstone family (still connected to Paramount via heir Shari Redstone, whose National Amusements holds control over the studio).
For Harry, the eldest and most traditional brother, and Jack, the younger brother and most eager to buck tradition, the explosion of 1956 had been on its way for five decades. Jack spent his life pushing back on the rules, something that served the studio well, especially when it came to battling the Production Code, a series of morality clauses that Hollywood producers agreed to in the 1930s. Harry had a loving relationship with his children, while Jack had a tumultuous relationship with his son, Jack Jr., eventually kicking him out of the family business.
Ben and Pearl Warner, who brought their family from a life fearing pogrom in Poland to one of opportunity in the United States, taught the children that the family would always prevail if they stuck together. The lesson proved useful in action time and again, when a family business would fail, they would pool their resources to begin again.
The sentiment was always close to Harry’s heart and when the brothers were nearing retirement age, he insisted that they all retire together. It would be a great way to honor their parents. The legendary story is that the brothers agreed to sell their shares and bow out. Harry, Albert, and Jack (Sam died in 1927) signed the paperwork not knowing that Jack was angling for himself to take over the company along with Harry’s job as president. The move is known as one of the coldest in the history of Hollywood. Upon hearing the news, Harry had a heart attack from which he never fully recovered. At Harry’s funeral in 1958, his wife Rea reportedly said “Jack killed him.”
The May 1956 sale was, in part, brokered by Serge Semenenko who ran the First National Bank in Boston, who was teamed with banker Charles Allen (Allen & Company) and Simon Fabian, president of the Stanley Warner theater chain, which was created when Warner Bros. shed its theaters to remain compliant with the 1948 consent decrees. The first problem occurred when those same decrees determined that Fabian could not purchase a large part of Warner Bros. while remaining in a key exhibition role at Stanley. Jack Warner told The Hollywood Reporter founder Billy Wilkerson on May 14 that he was going to remain as head of production. Wilkerson noted that the buyers would benefit greatly from Jack’s expertise but wrote “we don’t believe it … we had an idea he was selling TO GET OUT.” Wilkerson didn’t think Jack would want to continue with the headaches of modern filmmaking, and was ready to “compliment him on the good judgement to scram.”
Back in February, the board of directors elected Harry to serve one year as board president. As a result, THR predicted that when Harry takes the new post that Jack would claim the company presidency. Instead, the Warner Bros. board elected Harry, once again, as president of the company, while Jack remained as vice president and head of production. On May 11, 1956, THR covered the sale, writing that the Semenenko group paid Harry, Jack, and Albert Warner $22 Million for 800,000 shares at $27.50 per share. The brothers would remain active in the company while still owning about 10 percent of the empire they founded.
Semenenko told THR that Jack could stay head of production “for the time being … and beyond that if he so desires.” The wild card, still, was Fabian, whose inclusion was quickly deemed problematic by the Department of Justice. By July, Fabian backed out and Jack Warner moved in a president of Warner Bros. With Fabian out, the deal could be finalized in July. The new buyers elected Jack Warner as president of Warner Bros. while Ben Kalmenson, longtime Warner distribution executive, was named executive vice president. In this final version of the deal, Jack also retained his controlling shares of the company, which brings us to the heart-attack inducing move that sent Harry on a downward trajectory for two years until his death.
A sealed deal marked in the July 12, 1956 issue of The Hollywood Reporter.
Jack’s reputation often hangs on this deal, something that Jack’s grandson, Greg Orr, takes issue with. Greg is the son of actress Joy Page (whose mother Ann wed Jack) and Warner Bros. producer William T. Orr. Greg recently remastered his documentary title Jack Warner: The Last Mogul for the centennial of the Warner Bros. studio. Not one to defend Jack’s well-documented faults, Greg makes a case in an open letter that he shared with me that the monumental betrayal discussed in many books (including mine) should be viewed less as Jack planning to hurt his brother and more as a savvy business decision. In short, Jack saw an opportunity with Fabian had to back out and acted.
The key to understanding the whole story, according to Orr, is that “Harry and Albert were fooled by their younger brothers, but they were not cheated by him.” The brothers were all paid handsomely above market for their shares. “There was a deal between the brothers to sell,” writes Orr, “The deal went through. Everyone was paid, but Jack wanted something more, and made efforts to get it. It may not have been nice, but it was business, which a younger, more agile Harry Warner might have seen coming.”
Orr reexamined this storied sale through the lens of figuring out who knew what and when. Greg saw a different side of Jack Warner, one that we may often forget existed, which is that Jack was also a human that treated some people well. Where I slightly disagree with Orr, is that I don’t believe Harry simply missed the signs of his brother’s duplicity. Harry’s dedication to family was so deep, that if anything blinded him, it was his belief that even with all of Jack’s faults, he wouldn’t do this. Harry took his father Ben’s one-for-all advice to heart. The idea of going in together and leaving together, was what finally convinced Harry and Albert to sell. It would be the best way to honor their father. What broke Harry wasn’t simply that Jack took Harry’s job, he wasn’t that insecure (after all, someone was taking his job after they sold). What broke Harry was is that Ben Warner’s sacred family tenet was violated in spectacular fashion.
Even when my own research uncovered many positive and human stories about Jack, I couldn’t completely absolve him of actions in 1956. Jack certainly knew taking a backdoor deal would break his brother but didn’t care. Orr’s updated narrative offers us a more nuanced look at what may not have been such a surprising turn of events at the time. That Harry’s family felt Jack killed him is also understandable and easy to sympathize with. That Jack refused to attend Harry’s funeral is telling and lends credibility to his remaining grudge against Harry. However, this still doesn’t give us Jack’s side of the story. It also doesn’t give us the industry side of the story.
What these stories remind us of is that amid all the financial posturing, stock market predictions, box office and streaming reports, are real people impacted by industry decisions.
In this first major sale of Warner Bros., the ripple effects for the family were endless. Harry never forgave Jack. Jack’s son lost contact with his father. Harry’s granddaughter, Cass, found herself on a difficult road towards forgiving Jack. Relatives like Greg are sifting through the tales and has done a great job of it. In November, when I gave a talk at the Burbank Public Library, Jack’s granddaughter, Debbie, was there. She thanked me for defending her father, Jack Jr., for no historians have given him the respect that I did in my book. All these decades later, the emotional baggage caused by the decisions of media moguls could be read all over her face and heard in her voice.
In the end, the first Warner Bros. sale was so epic that we continue to grapple with its legend today.