Part IThe Story
On the afternoon before the Paramount Theatre opened in 1926, the man who had built it stood in the lobby and could not tell whether it was any good. A fountain. Nymphs in ormolu. Chandeliers that The New Yorker would later call Gargantuan. Above him rose a tower at Broadway and 43rd Street, put up on a large plot of ground his own board of directors had objected to buying. He had bought it anyway. By then he had spent more than a decade overruling objections, from partners, rivals, exhibitors, and the Federal Trade Commission, and nearly always at a profit. Now he looked at the fountain the way a furrier looks at a pelt he suspects is dyed.
"Maybe it's not good enough," Adolph Zukor said. "We don't know yet."
Note the we. The doubt was not rhetorical, and it was not modesty. A New Yorker writer reconstructing the scene in 1929 said that when Zukor had to decide a question of taste himself, "he is never confident." The doubt lasted until Otto Kahn walked in and said he liked the decorations. Encouraged, Zukor made one of his rare public speeches, delivered in the compact English he had learned at a fur-cutter's bench. The palace was good because a man of standing had said so.
This was a man who knew, week by week, how many quarts of milk his thoroughbred cattle produced. He could take apart a competitor's distribution contract from memory and reassemble it so the profit fell on his side. He had bought one partner's company by buying the one vote that controlled its board. But he could not judge a chandelier. He trusted his eye on money completely and rented everyone else's eye for beauty: professors to check historical settings, producers to find faces, bankers and financiers to approve the ormolu. The whole career fits in the space between those two kinds of judgment. Out of that arrangement came the modern American film industry, then the near-ruin of the company he made, and then, against every expectation of how such stories go, a long and strange survival. He lived to 103. In his eighties and nineties he was still Paramount's chairman emeritus, still referring to the company's sixty-something president as "the boy."
He was not, it should be said, a boy himself for very long.
By the Numbers
The Zukor Ledger
103Age at death, June 10, 1976, in Los Angeles
$12.5MValue of Famous Players–Lasky at its 1916 formation, the largest film company of its day
24Stars ringing the Paramount mountain, one for each player under contract
~2,000Screens in the Publix theater chain at its height
60Features per year Paramount was turning out by the late 1920s
$21MDebt that pushed Paramount Publix into receivership on January 26, 1933
800Acres of the New City, New York estate, now the Paramount Country Club
Too Small for the Sofa Springs
The facts of the beginning are thin, and they do not all agree. He was born Czukor Adolf on January 7, 1873, in Ricse, a village in the Kingdom of Hungary, then part of the Austro-Hungarian Empire, to an Ashkenazi Jewish family. His father, Jacob, kept a general store and died when Adolph was a toddler. His mother, Hannah Liebermann, died when he was seven. He and his brother Arthur went to live with their uncle, Kalman Liebermann, a rabbi, who expected both nephews to become rabbis.
Adolph did not. He served a three-year apprenticeship in the dry-goods store of family friends. This was his first contact with the simple arithmetic of retail: buying a thing for less than you sell it for, and learning to stand behind a counter while a customer decides. Then he decided to leave.
On March 1, 1891, he sailed from Hamburg on the S.S. Rugia. Fifteen days later, on March 16, he landed in New York under the name Adolf Zuckery. The surname would be trimmed and Americanized later, and the given name would gain a stray h. Here the sources split. The New Yorker's 1929 profile has him landing at fifteen, with forty dollars sewn into his waistcoat, met at the dock by Hungarian cousins then living in Brooklyn. The encyclopedias say he decided to emigrate at sixteen. The passenger list's date puts him, by his recorded birthday, just past eighteen. Perhaps the age shrank with retelling, the way immigrant arrival stories often do. Perhaps the birthday is wrong. The forty dollars in the waistcoat is the detail that survives every version, and maybe that is the point: the money was sewn in, close to the body, where no one could take it.
His first American job was in an upholstery shop on Second Avenue. He quit because, the 1929 profile reported, "he was so small that holding down sofa-springs while he tacked batting over them exhausted him." Hold onto that image. A boy pressing down on coiled steel that keeps pushing back, too light to keep it flat. A friend found him an apprenticeship with a furrier, and the work suited him. Fur is a trade of pieces: small pelts matched, cut, and sewn into a single garment whose seams the wearer never sees. He went to night school to learn English, which The New Yorker noted was especially hard for Hungarians "because of the difference in word-roots." He learned to box and got an ear flattened and puffed, and it stayed that way for the rest of his life. He learned baseball too. One Sunday at the edge of a baseball lot he was introduced to a dark-haired girl named Lottie Kaufman, and he fell in love with her, of all places, at a pinochle game in her family's house.
He stayed two years in New York. At twenty he left as a "contract" worker who sewed fur pieces and sold them himself, by then an accomplished designer. The 1893 Columbian Exposition drew him to Chicago, and there he started a fur business. In its second season, Zukor's Novelty Fur Company expanded to twenty-five men and opened a branch. He married Lottie in 1897 in a synagogue, in front of what The New Yorker described as "a numerous congregation of dark-eyed, able-bodied people." They had two children: Eugene, who would join Paramount as an executive in 1916, and Mildred.
— Neal Gabler, An Empire of Their Own (1988)One of the stubborn fallacies of movie history is that the men who created the film industry were all impoverished young vulgarians...
Gabler's correction matters, because the mythology of the immigrant movie mogul tends to start from the gutter and work up. Zukor's story does not. By 1903, Gabler wrote, he "already looked and lived like a wealthy young burgher," with a commodious apartment at 111th Street and Seventh Avenue in the city's wealthy German-Jewish section. The furs had paid. When he walked into the picture business, he walked in as an investor. He was not a hustler. He came with capital, a bourgeois address, and a furrier's sense of how a thousand small pieces become a coat.
The Arcade and the Rocking Gallery
He got into the movies by lending money to a relative. In 1903 his cousin Max Goldstein asked him for a loan to invest in a chain of theaters started in Buffalo by Mitchell Mark, which hosted an attraction called Edisonia Hall. Mark needed investors to expand. Zukor made the loan and then went further, forming a partnership with Mark and with Morris Kohn, a friend who had also invested. Zukor, Mark, and Kohn opened a penny arcade on 14th Street in Manhattan, operating as the Automatic Vaudeville Company. Branches followed in Boston, Philadelphia, and Newark, financed by a man who would become the most important relationship of Zukor's professional life, and eventually a relative by marriage.
Marcus Loew was born in New York City on May 7, 1870, to a poor Jewish family that had emigrated from Austria and Germany. He went to work very young and had little formal schooling. He saved a small sum from menial jobs and put it into penny arcades. The New Yorker placed the two men as neighbors in the Bronx after Zukor's marriage, a pair of furriers living across the street from each other, and described Loew's round head, thick eyebrows, and mustache as looking "like a baseball to which twists of horsehair had been glued." Loew would go on to build Loew's Theatres and, in 1924, to assemble Metro-Goldwyn-Mayer by putting Louis B. Mayer in charge of a Culver City studio he had acquired through a controlling interest. When he died in his sleep in 1927, at fifty-seven, Variety called him "the most beloved man of all show business of all time." His estate came to $826,647, The New York Times reported two years later, against estimates that had been much higher. That was Loew: universally loved, less rich than people assumed.
Zukor was neither of those things. The two men played bridge together often, and not always peacefully. At one party the host heard shouting from the bridge room, then the crash of a table going over. Loew came out first, followed by Zukor, who was trembling with rage. The host settled the dispute, which concerned a club lead. The two men, still refusing to speak to each other, picked the table up and finished the rubber. Decades later Zukor's daughter Mildred married Loew's son Arthur, who would rise to become president of MGM. Their son, Arthur Loew Jr., born in 1925, became an actor, producer, and writer, and carried both bloodlines.
The arcade years are less heroic than the legend suggests, and the record is mixed about them. The New Yorker's version has Zukor selling a downtown arcade a few months after buying it, without making any profit, and living for a time mostly on returns from his Loew stock. It also has him investing in a sideshow called Hale's Tours. Customers sat in a gallery that rocked and swayed to imitate an observation car while a crude film of Mont Blanc played in front of them. His partner in Hale's Tours was William A. Brady, already a well-known theatrical producer. The tours made money at first, then went into debt, and did not recover even after Zukor added a film with an actual story: The Great Train Robbery.
The partners sold out. Zukor then spent seven years running a movie theater on Fourteenth Street. It is the least glamorous stretch of his biography, and in some ways the most important. He used his spare time, The New Yorker reported, "to find out how pictures were made." He hung around the studios of the Biograph Company, then one of the leading producers, asking questions and watching how things were done. He was an exhibitor studying production from the outside, a theater owner learning the factory that supplied him. Brady thought the stage was the safer bet. Zukor thought otherwise.
By 1910 he owned a nickelodeon chain and was Loew's partner in a theater circuit. Two years later he sold his shares in Loew's company. He wanted the money for one specific thing: a French film about a queen.
Famous Players in Famous Plays
The film was Les Amours de la reine Élisabeth, starring Sarah Bernhardt, the most famous stage actress in the world, who was then in her late sixties and filming a costume drama. American audiences knew it as Queen Elizabeth. Zukor bought the American rights. In July 1912 he presented it at the Lyceum Theatre, a legitimate Broadway house and not a nickelodeon. The venue was itself part of the argument.
At the time, the American film business was a small but vicious trade war among unstable companies, policed by a "trust" of ten firms that controlled the patents on cameras and film stock. Producers did not advertise their actors and paid them as little as they could get away with. Films were short. The audience was mostly working-class and heavily immigrant, people like the boy who had pressed on the sofa springs. Zukor went into this with, in The New Yorker's inventory, no financial backer, no experience making pictures, and no license from the trust. What he had was a policy, and it had been thought through, the magazine insisted, "with the greatest care and even brilliance." He would hire people famous on the legitimate stage, whatever it cost, and sell films to the middle class.
One night he wrote a slogan on a scratch pad: Famous Players in Famous Plays.
The Famous Players Film Company was founded on May 8, 1912. The date is worth noting, because it returns. By one account, the discussions that created it took place at The Lambs, the theatrical club where the brothers Daniel and Charles Frohman were members. The Frohmans were the most powerful theatrical impresarios in New York, and their names meant Broadway's prestige was lending itself to a medium Broadway considered beneath it. They supplied backing and legitimacy. Zukor supplied the plan, the nerve, and the willingness to lose money in public.
He nearly did, three times in six months. Twice the company came close to bankruptcy on a payday, and both times he found a loan somehow. The third time the studio burned down. The first true Famous Players production was The Count of Monte Cristo, directed by Joseph A. Golden and Edwin S. Porter, starring James O'Neill, the matinee idol who had played Dantès for years and whose son Eugene would one day write Long Day's Journey Into Night partly about him. The Prisoner of Zenda followed in 1913, directed by Hugh Ford. By mid-1913 Famous Players had five films finished.
In 1914 the company bought the former headquarters of the city's Ninth Mounted Cavalry, at 221 West 26th Street: a cavernous brick armory where horses had once been stabled and drilled. It made an excellent stage. It still operates as a studio. The roster came straight from Broadway: Marguerite Clark, William Farnum, Gaby Deslys, Hazel Dawn, H. B. Warner. John Barrymore made his first two features there. There was also Mary Pickford, the biggest star in the medium, a Toronto-born actress who would turn out to understand Zukor's business better than almost anyone he hired.
— Adolph Zukor, recalling Mary Pickford's salary negotiationI could take a hint. She got the $20,000, and before long I was paying her $100,000 a year. Mary was a terrific businessman.
The hint was characteristically sly. "You know," Pickford told him at one point, "for years I've dreamed of making $20,000 a year before I was 20, and I'll be 20 very soon." The way The New Yorker told it, by the time she left for United Artists he had raised her from $20,000 to a quarter of a million a year. The numbers differ depending on the teller, but the direction is the same. In Zukor's world a star was not an expense. A star was the product, and the product was what made everything else saleable. He would soon find a way to make the second half of that sentence literally true.
One Vote in a Utah Man's Company
There is a mountain at the start of every Paramount picture, and it did not originally belong to Adolph Zukor.
William Wadsworth Hodkinson came from the Ogden area of Utah and had been a theater owner there. In 1914 he bought and merged five smaller film distributors and, on May 8, 1914, two years to the day after Famous Players began, formed the Paramount Pictures Corporation. The story goes, and it is a story, that during a meeting that year Hodkinson sketched on a napkin a peak from memory, probably Ben Lomond, above his home country, with a border of stars around it. Paramount was the first successful nationwide film distributor. Before it, films were sold state by state or region by region, which was expensive for producers. Hodkinson's idea was to be a single national pipe.
On May 15, 1914, Hodkinson signed five-year distribution contracts with three producers: Zukor's Famous Players, the Jesse L. Lasky Feature Play Company, and Hobart Bosworth's company, which was making a series of Jack London films. The terms were 65/35. The producers kept sixty-five percent, and Paramount took thirty-five percent of the gross for moving the film around the country.
It looked like a good deal for about a year. Then Zukor did the arithmetic that would define the rest of his life. Thirty-five cents of every dollar was going to a middleman whose only asset was the pipe. Lasky saw it too.
Jesse Lasky had come up through vaudeville and opened his feature company in 1913 on money borrowed from his brother-in-law, a glove salesman named Samuel Goldfish who would later rename himself Samuel Goldwyn. Lasky's first employee was a stage director with almost no film experience, Cecil B. DeMille, who found a rented horse barn in a district called Hollywood, at the corner bounded by Vine, Selma, Argyle, and Sunset. They turned it into a studio with an enlarged open-air stage and released The Squaw Man in 1914. Lasky was the more visibly creative of the two men, the vaudeville impresario at ease with directors and writers. Zukor was the one who counted.
Late in 1915 Zukor began buying Paramount stock, as much as he could get, including the shares of a board member named Hiram Abrams. At Paramount's annual meeting on July 13, 1916, Hodkinson found himself voted out of the presidency of the company he had founded and replaced by Abrams, who won by a single vote. Abrams then took the chair and opened the meeting.
— Hiram Abrams, upon taking the presidency of Paramount, July 13, 1916On behalf of Adolph Zukor, who has purchased my shares in Paramount, I call this meeting to order.
It is one of the cleanest coups in American corporate history, and it happened at a board table without raised voices. The man who designed the mountain lost the mountain by one vote. The New York Times headline of June 29, 1916, announcing the related merger, was blunt: "$12,500,000 MERGER OF FILM COMPANIES; Famous Players and Jesse L. Lasky Feature Unite in a New Corporation. ADOLPH ZUKOR, PRESIDENT." Lasky became vice president in charge of production. The combined company promised eighty-four pictures a year, distributed under the name it had just taken from its founder. The fusion was finalized on November 7, 1916.
Famous Players–Lasky began as a holding company over a cluster of subsidiaries: Famous Players, Lasky's Feature Play, Oliver Morosco Photoplay, Bosworth, Cardinal, Paramount, Artcraft, and the George M. Cohan Film Corporation. On December 29, 1917, all of them were folded into a single corporation. Zukor had a furrier's instinct for seams that disappear. Lasky, Goldwyn, and DeMille ran production; Abrams ran distribution; and Zukor, in one historian's phrasing, was "making great plans." The studio manager was Al Kaufman, Zukor's brother-in-law.
The partners who had started with him did not last. The Frohman brothers, Hodkinson, and Goldwyn were all out by 1917. In 1917 Zukor also bought half of Lewis J. Selznick's Select Pictures, and Selznick's publicity soon dropped off noticeably. Selznick later bought the stake back. Zukor kept accumulating, and his partners kept leaving.
The mountain stayed. So did the stars around it, twenty-four of them, said to correspond to the twenty-four players Zukor held under contract. It was an inventory drawn as a constellation. You could count the people you owned by counting the stars.
The Theater Across the Street
The next problem was the theater owners.
Hodkinson had been a middleman between producer and distributor. Downstream there was another middleman, the exhibitor, who owned the building where the money actually changed hands. Production costs were rising: screenplays cost more, and the star system Zukor had largely built meant stars wanted more money. Zukor's answer was to sell films in a way that turned his stars into leverage for everything else.
This was block booking. An exhibitor who wanted Mary Pickford, or later Gloria Swanson, Rudolph Valentino, or Wallace Reid, had to take a year's worth of other Paramount productions as well, often without seeing them. The system had refinements. There was "program distribution," where an exhibitor booked a whole evening's entertainment. There was the "star series," where an exhibitor signed for a fixed number of pictures a year featuring a particular performer. And there was "selective booking," the option to buy a single film, which made up only a small share of what the corporation offered. The weak pictures came packaged with the strong ones. It was a bundle, and Zukor priced the bundle.
In 1919 the exhibitors fought back. The First National Exhibitors Circuit, a group controlling nearly 600 theaters across the country, objected to these practices and boycotted Famous Players–Lasky. Zukor's response was the decision that, more than any other, created the Hollywood studio system. He decided to own the theaters.
He started buying chains. In the Northeast he acquired Alfred Black's New England Theaters. In the South he took over S. A. Lynch's Southern Enterprises, which owned around 200 theaters and was the exclusive Paramount distributor in eleven Southern states. The company bought 135 Southern theaters in 1919, which made it the first production concern that could guarantee its own films would play in its own houses. He then sent Lynch and Black after theaters held by First National members, and accounts of the campaign consistently describe their methods as heavy-handed. By the mid-1920s Famous Players–Lasky held controlling interests in the Rialto, Rivoli, and Criterion theaters and was among the largest theater owners in the world. Production, distribution, exhibition: the whole path from camera to ticket window, sewn into one coat.
Prices followed. By 1920, the encyclopedic record says, Zukor "was in a position to charge what he wished for film rentals," and he pioneered the practice, now standard across the industry, of the distributor taking a percentage of the box office rather than a flat rental fee. Under that arrangement Paramount shared in every ticket sold, not just in the rental.
The government noticed. On August 30, 1921, the Federal Trade Commission formally charged Famous Players–Lasky, Zukor, Lasky, and a list of co-respondents that read like an index of the theater acquisitions (Black, Lynch, Southern Enterprises, the Stanley Company of America, Saenger Amusement) with conspiracy and restraint of trade. The Commission called the company "the largest concern in the motion picture industry and the biggest theater owner in the world." The New York World headline put it more plainly: "Acts to Dissolve Big Lasky Concern as 'Movie Trust.'" The irony was hard to miss. In 1912 Zukor had gone into business without a license from the old patent trust. Nine years later he was being called the new one.
The complaints were specific. An independent theater owner in Middletown, New York, testified that after he turned down a five-year block-booking deal, he faced threats and goon-squad intimidation reminiscent of the old Edison Trust. When that didn't work, he said, Famous Players–Lasky built a movie house across the street from his and used temporary price cuts and overbuying to drive him out. The Commission collected 17,000 pages of testimony and 15,000 pages of exhibits. Early in 1927 it concluded that block booking was an unfair trade practice. On July 9, 1927, it ordered the company, along with Zukor and Lasky personally, to stop, and gave them sixty days.
The company took the sixty days, and then two extensions. On April 15, 1928, it filed a compliance report that disputed the charges and denied practicing block booking at all. The FTC rejected the report. The press coverage was bad. Paramount kept block booking anyway, and the practice would draw government antitrust pursuit for more than twenty years.
None of this was hidden. It was policy, written down. Zukor did not think of himself as a pirate. The New Yorker noted that he was genuinely surprised when people dismissed his efforts to improve the cinema's social tone as publicity stunts. He believed in order, and he believed the order should be his.
Pop
Paramount's employees called him "Pop." Many of them had never seen him. The New Yorker observed that the nickname fit better than most corporate nicknames, because Zukor's paternalism reached well beyond his own payroll to "the industry at large."
When scandals in Hollywood threatened to bring outside censorship, Zukor came up with the scheme by which the producing companies would censor themselves. It was he, the magazine reported, who persuaded Will Hays to leave the President's Cabinet and become the industry's "Super-Censor." He also started a school for young performers under contract to Paramount, recruited through contests at colleges. They learned to carry themselves on camera, took classes in sociology and English literature, and heard lectures on sobriety and early bedtimes. The man who had arrived with forty dollars in his waistcoat now ran a finishing school.
His temper was also paternal, in its way. He once told the head of his exploitation department that he was renaming a picture about to be released, The Woman Who Needed Killing. The executive objected that a lot of money had already gone into advertising the title. Zukor did what he always did when annoyed: he paced quickly up and down the carpet in front of his desk in a small oak-paneled office on the eleventh floor of the Paramount Building, scratching his head and neck as if they itched. The ads were pulled. The picture came out as A Dangerous Woman. The magazine's explanation was that a title saying a woman needed killing struck Zukor as a slur on womanhood, and so, indirectly, on mothers, which offended "the most important conviction of his character—his respect for the institution of the family."
Family was the organizing principle, and the word fits loosely and literally at once. His son Eugene was "assistant to the President." His brother-in-law managed a studio. His daughter married his oldest friend's son. He sometimes dined with forty relatives, "benign and cordial at the end of a long table." Normally he resented any interruption of his office routine, but he once kept a conference of a thousand branch managers waiting an hour because his daughter had brought his grandson to visit. Then, The New Yorker recorded, "as you would expect, he took the baby into the conference-room and introduced him to the boys."
He cried at the movies, in his own projection room, and was sometimes caught in tears when the lights came up. He sent a private allowance to nearly half the inhabitants of Ricse, the village where he was born, and paid an agent in Budapest to check how the money was spent and to recommend other people who deserved help. On his visits back he asked to hear people's troubles and handed out money freely. He was not an uncomplicated philanthropist. He was something older than that: a patron who wanted to know the names of the people he supported.
The country house in New City, in Rockland County near Nyack, was the tribal house made literal. In 1918 he bought 300 acres from Lawrence Abraham, heir to the A&S department stores, who had already built a large house, a nine-hole golf course, and a swimming pool. Two years later Zukor added 500 more acres. He built a guest house, a movie theater, a locker room, greenhouses, garages, and staff quarters, and hired the golf architect A. W. Tillinghast to lay out an eighteen-hole championship course. The main residence came in two halves: a "day" house with dining rooms and drawing rooms, large but plainly furnished, and a "night" house with nothing but bedrooms. Weekend guests, sometimes twenty or thirty at a time, walked between them on a covered path. He went to work, with Eugene, by yacht.
He ran the estate like a business, and he ran it to win. When one of the Schenck brothers beat him at golf, he hired the professional Leo Diegel as his private instructor at $10,000 a year. He sometimes broke 110. His Irish caretaker caught the spirit of efficiency and rigged shotguns at each cellar window to go off if a burglar tried to get in. "To everyone's surprise," the profile reported, "the thing went off one night and killed a marauder." The magazine moved straight on to the bridge games, which seems about right. It is the kind of detail that is either comic or terrible depending on how long you think about it, and the house itself, with its night half and day half, did not stop to think.
He played bridge well, but only with people who knew him, "having found that strangers do not seem to understand his passionate interest in winning."
A Perfect Face for Pictures
In fall 1928 Zukor turned up at the Hollywood studio without warning. He had been seen there so rarely that rumors said he had retired and left the West Coast to B. P. Schulberg, the production chief. Schulberg had first come to Famous Players as a publicity man and was later valued, the record says, for "an unerring eye for new talent." Every company in town was retooling for talking pictures. Like the other moguls, Zukor knew little about sound beyond suspecting there was enormous money in it, so he went to find out himself. He traveled without the usual entourage of secretaries and publicists, and actors and technicians often failed to recognize the short, rough-skinned man who cornered them on production lots and asked what things cost.
It was not that he lacked presence, The New Yorker said. He looked like hundreds of other men his age and background: "short, well-knit, rough-skinned, with a crafty, energetic face and a cauliflower ear." His eyes were sharp and calculating when he spoke and placid, nearly benevolent, when he didn't. He was fifty-six. He looked taller sitting down than standing up.
His own vocabulary was small and exact. "First-class." "High-class." "Cash on the dot." "Fifty-fifty." In every judgment involving money he trusted himself completely, and in nearly every judgment involving art he deferred. "He did not take the same personal, down-to-the-last-detail interest in the making of his movies that producer-executives such as Samuel Goldwyn and Louis B. Mayer did," The New York Times wrote in his obituary. He was one of the first producers to hire professors to advise directors on historical settings. An English author at a dinner told him the greatest book in the language was The Mayor of Casterbridge and would make a fine picture. Zukor, whose reading was mostly confined to film plots, had a synopsis prepared, read it, decided it would make a "high-class production," commissioned adaptation after adaptation, rejected them all, and in 1929 was still looking for one that worked.
The pay structure showed what he valued. S. R. Kent, whom he had promoted from a modest position to general manager of the combined companies, earned about $150,000 a year. Schulberg earned about $200,000. Walter Wanger, in charge of Eastern production, earned nearly as much. Zukor, for a long time, kept himself to "a pittance of fifty thousand a year so as to save money for the company." Talent was paid. The owner's money stayed in the business.
His eye for faces was his one aesthetic confidence, and it sometimes ran past the edge of what money could buy. When Charles Lindbergh landed in Paris in 1927, Zukor happened to be there too, and showed the newspaper to one of his directors. The director, reading the story, said: "Marvellous." Zukor was looking at the photograph.
"You said it," he exclaimed. "Perfect! He has—natural—a perfect face for pictures."
He made Lindbergh several offers and for a while refused to believe that there was anyone in the world he could not hire for Paramount. When he failed, his conclusion was not that Lindbergh couldn't be bought. It was that he hadn't offered enough.
He backed new technologies the same way, with money and not much attachment. At the public premiere of the Phonofilm sound-on-film system on April 15, 1923, the program was introduced as "Adolph Zukor presents Phonofilm." In 1928 he took a 50 percent interest in the new Columbia Broadcasting System and sold it within a few years. Both were options on the future, bought cheaply and held loosely. CBS would cross Paramount's path again, many decades later, under corporate names Zukor would not have recognized.
Overvalued Paper
The second half of the 1920s was a buying spree.
In 1926 Paramount acquired Balaban & Katz, the Chicago chain that had pioneered the "wonder theater," the extravagantly decorated movie palace first promoted around 1918 with the Chicago Theatre. The acquisition brought Zukor the brothers Barney and A. J. Balaban and their partner Sam Katz, who would run the Paramount-Publix chain from the new tower in Times Square. On January 5, 1926, Lasky agreed to buy the Robert Brunton Studios, a 26-acre lot at 5451 Marathon Street, for $1 million. On May 8, 1926, ten years after the Famous Players–Lasky merger and fourteen years to the day after Famous Players was founded, West Coast production moved from the old barn at Sunset and Vine to the new lot, which remains Paramount's headquarters. On April 1, 1927, the company became the Paramount Famous Lasky Corporation. That September the Astoria studio in Queens closed temporarily to be fitted for sound. On April 24, 1930, in recognition of how central the theater chain had become, the company renamed itself again: Paramount Publix Corporation.
By then Publix controlled nearly 2,000 screens. Paramount was turning out sixty features a year, with block booking pushing other chains to take them. It was, the studio history says without much affection, "a movie factory." The roster was enormous: Swanson, Valentino, Pola Negri, Clara Bow, Gary Cooper, Marlene Dietrich, Mae West, the Marx Brothers, W. C. Fields, Bing Crosby, Claudette Colbert, Cary Grant. Wings came out in 1927 under Zukor's name, Shanghai Express in 1932. Paramount and Loew's divided New York and Chicago between them to avoid building wonder theaters against each other. In 1929 there was talk of a merger with Warner Bros. that would have created a chain of 2,400 theaters, the largest in the country.
Much of it was paid for in stock. The method that built the empire was also what made it fragile: Zukor used Paramount shares, valued at boom-time prices, as currency to buy hard assets. When the Depression arrived, the shares lost their value and the obligations did not.
He tried to bring in outside help. In October 1931 he recruited John D. Hertz, the taxi and rental-car magnate, as chairman of the finance committee, to assist vice president and treasurer Ralph A. Kohn. The New York Times headline of October 31, 1931, captured a confident moment that wouldn't last: "HERTZ AND WRIGLEY TO JOIN PARAMOUNT; Lasker Also to Become a Director of the Movie Corporation, Zukor Announces. TO BE NO REORGANIZATION. Yellow Cab, Chewing Gum and Advertising Officials Buy Heavily Into the Company." A taxi man, a chewing-gum man, and an advertising man were called in to rescue a palace. To be no reorganization.
Lasky was forced out in 1932, blamed for the company's near-collapse. In August 1933 he filed for personal relief under the new bankruptcy law, listing $2,020,024 in liabilities and $134,718 in assets. The vaudeville impresario who had borrowed from his glove-selling brother-in-law to rent a horse barn left the company bearing his name owing two million dollars.
Hertz resigned on January 6, 1933, after his measures failed. Twenty days later, on January 26, Paramount Publix went into receivership. The Times front page contained an absurdity that summarized the whole era: "$29,166 Claim Listed Against $166,000,000 Assets. BOARD DENIES INSOLVENCY." A company with $166 million in assets had been pushed into receivership over a claim of under thirty thousand dollars, because by then the total debt was $21 million and nobody would extend the line. It filed for bankruptcy on March 14, 1933. On April 17, 1933, trustees were appointed, and Zukor lost control of the company he had spent twenty-one years assembling.
The trustees held it for more than a year. A reorganization plan was proposed on December 3, 1934. On April 25, 1935, after long hearings, Federal Judge Alfred C. Coxe Jr. approved the reorganization under Section 77-B of the Bankruptcy Act. On June 4, 1935, John E. Otterson, from Electrical Research Products, became president of the renamed Paramount Pictures Inc. The stock returned to the New York Stock Exchange on August 28, 1935.
And Zukor came back. The encyclopedic accounts use the word "miraculously," and it is not much of an exaggeration. The man whose expansion had caused the collapse was named production chief of the reorganized company, probably because the banks had kept the company intact and needed someone who understood it. On July 2, 1936, Barney Balaban, the Chicago theater man Zukor had acquired along with his chain a decade earlier, was named president. Zukor was soon replaced as production chief by Y. Frank Freeman and given a title the record calls symbolic: chairman of the board.
That same year, Hollywood gave him a dinner for his twenty-five years in the industry. The photograph shows Frank Lloyd, Joseph M. Schenck, George Jessel, Darryl F. Zanuck, Louis B. Mayer, and, at the end of the row, Jesse Lasky. Lasky was there.
The Boy
He lived forty more years.
They were years of watching his creation being taken apart and reassembled by others. In 1940 Paramount accepted a government consent decree: block booking and "pre-selling," collecting money in advance for films not yet in production, were to end. Production dropped from seventy-one films a year to nineteen during the war years. Wartime attendance was so high that the integrated studios made more money than ever, which brought the Justice Department back. In 1948 the Supreme Court ruled in United States v. Paramount Pictures, Inc. that the studios could not also own theater chains. The decision, the company's history says, "broke up Adolph Zukor's creation." The same year, the Academy gave him an honorary award. Recognition and dismantling arrived in the same year.
On December 31, 1949, the theater chain, by then 1,500 screens, was separated into United Paramount Theatres under Leonard Goldenson, who had run the chain since 1938. Goldenson was cash-rich, owned prime downtown real estate, and was barred from making films, so he looked for something to buy. In February 1953 he bought the struggling ABC television network. Zukor's theaters, cut loose from his studio, became the foundation of a broadcast network. By the mid-1970s, the year Zukor died, ABC was first in the national Nielsen ratings.
The studio did less well. Contract players were released. Production deals went to independents. By the mid-1950s, the company's history says, "all the great names were gone," except Cecil B. DeMille, at Paramount since 1913, the barn days, who remade his own 1923 Ten Commandments in 1956 and gave the studio some breathing room before he died in 1959. In February 1958 Paramount, seeing little value in its old films, sold 764 pre-1950 titles to MCA for distribution on television. Shanghai Express went in that sale. So did She Done Him Wrong, the Marx Brothers pictures, Double Indemnity, and Sullivan's Travels.
Lottie died in 1956, after fifty-nine years of marriage. Zukor retired from Paramount in 1959. In 1964 he stepped down as chairman and became chairman emeritus, a title he held for the rest of his life. By the early 1960s the company's prospects looked doubtful. The theaters were gone. The investments in DuMont and in pay television had come to nothing. Even the flagship building in Times Square, the tower his board had opposed, was sold to raise cash. Zukor, born in 1873, was still around to refer to Balaban, born in 1888 and now in his seventies, as "the boy." The studio history's verdict on this arrangement is harsh: "Such aged leadership was incapable of keeping up with the changing times."
In 1966 Paramount was sold to Charles Bluhdorn's Gulf+Western, an industrial conglomerate that also owned zinc mines and sugar plantations. Bluhdorn installed "a virtually unknown producer" named Robert Evans as head of production, and within a few years Evans had made Rosemary's Baby, Love Story, The Godfather, and Chinatown. Zukor saw all of it. He was in his nineties.
In the late 1960s the logo was redrawn. The stars around the mountain were reduced from twenty-four to twenty-two, and, in the record's phrasing, "their hidden meaning was dropped." Nobody owned twenty-four players anymore. The constellation had become decoration.
He died of natural causes at his home in Los Angeles on June 10, 1976, at 103. He was buried far from Hollywood, at Temple Israel Cemetery in Hastings-on-Hudson, New York, on the river above the city where he had landed as Adolf Zuckery. In 1983 Paramount tore down the Continental Café, the studio commissary, and put up the Zukor Building in its place. In 2017 the studio started a new production label and named it Paramount Players, a nod to the company's origins as Famous Players.
His autobiography appeared in 1953, written with Dale Kramer. Its title comes from a showman's creed he apparently believed, which is rare: The Public Is Never Wrong. When people asked him how he had succeeded, The New Yorker noted, he usually said he had ridden a tide. He also liked to tell young men that there were no large profits in the moving-picture business. The magazine attributed both remarks less to modesty than to "a superstitious unwillingness to analyze what has turned out well."
In Ricse, the village whose inhabitants he paid by the hundreds through an agent in Budapest, there is a shepherd's well, the Juhász-kút, and the composition around it is listed among the sights of the place. He gave it to the village. Of everything he built, the tower in Times Square that he wasn't sure was good enough, the lot on Marathon Street, the night house and the day house and the golf course and the two thousand screens, this is the one that needed no one's approval. There is no ormolu on it, no Otto Kahn standing in front of it to vouch for it, nothing to doubt. Just a well in a Hungarian village, bought and paid for, cash on the dot.
Part IIThe Playbook
What follows is a set of principles drawn from Zukor's sixty years in the business. A few are things to copy, a few are warnings, and several are both, because the same move that built Paramount between 1912 and 1929 nearly destroyed it between 1929 and 1933. Zukor invented much of the modern media business model: star-driven product, bundled distribution, vertical control, and revenue share on the gross. He also invented its characteristic failure, which is buying assets with inflated paper. Each principle below is grounded in the record in Part I and ends with a tactic.
The principles
- 1.Change the customer, not just the product.
- 2.Apprentice yourself to the adjacent trade.
- 3.Write the policy before you write the check.
- 4.Find the vote that controls the room.
- 5.Treat the middleman's margin as a map.
- 6.Let a boycott tell you what to own.
- 7.Sell the hit to move the catalog, and price the legal bill.
- 8.Pay the talent, starve the founder.
- 9.Dictate on cash, defer on taste.
- 10.Regulate yourself before someone else does.
- 11.Never buy hard assets with soft paper.
- 12.Stay useful after you lose control.
Principle 1
Change the customer, not just the product
Zukor's first insight was about audience, not about film. In 1912 movies appealed mainly to working-class immigrants, and the industry priced, produced, and marketed for them: short reels, anonymous actors, low wages. Zukor did not set out to make better nickelodeon films. He set out to sell to the middle class, who already paid Broadway prices for Broadway names. Everything else followed from that: Sarah Bernhardt, the Frohman brothers, the Lyceum Theatre premiere, the slogan.
The product change was a consequence of the customer change. Feature length, stage stars, and prestige venues were what middle-class buyers needed in order to take the medium seriously. A better product for the same customer would have competed on cost against a trust that controlled the patents. A product for a new customer did not have to compete with the trust at all.
Tactic: Before improving your product, ask which customer currently thinks your category is beneath them, and design for that person.
Principle 2
Apprentice yourself to the adjacent trade
The seven years Zukor spent running a theater on Fourteenth Street look, on paper, like a stall: a successful furrier spending his thirties managing a small exhibition house after the arcade and Hale's Tours didn't pay off. In practice it was an apprenticeship. He used the spare hours to hang around Biograph's studios, asking questions and watching how pictures were made. He was a downstream operator studying the upstream factory, and when he built his own factory he already knew what exhibitors needed because he had been one.
This pattern repeats throughout his career. He knew retail from the Ricse dry-goods store, assembly from fur, and exhibition from the theater, and each prior trade became a lens on the next. The vertical integration he built in 1919 was, in a sense, his résumé turned into a corporate structure.
Tactic: Spend real time working inside the business immediately downstream of the one you plan to disrupt, because that is where the next one's real requirements are visible.
Principle 3
Write the policy before you write the check
The New Yorker was emphatic that Famous Players succeeded because it rested on "a policy that had been thought out beforehand with the greatest care and even brilliance." The scratch-pad slogan, Famous Players in Famous Plays, was a strategy compressed into five words. It told every future decision what to do: whom to hire (stage stars), what to buy (famous plays), where to premiere (legitimate houses), and whom to court (the middle class).
The policy got the company through three near-bankruptcies in six months, two paydays and a studio fire, because it gave lenders and partners something to believe in apart from the current balance sheet. The Frohmans did not back a cash position. They backed a thesis.
Tactic: Reduce your strategy to a slogan specific enough that a new hire could make a correct decision from it alone, then fund only what the slogan implies.
Principle 4
Find the vote that controls the room
Zukor did not have to buy Paramount. He had to buy enough of Paramount to change one board vote. By acquiring Hiram Abrams's shares and turning Abrams into his agent, he removed W. W. Hodkinson by a single vote on July 13, 1916, and then folded the distributor into his merger with Lasky within weeks. The total cost was far below a full acquisition. The speed was faster than any negotiation could have been.
The lesson cuts both ways. Hodkinson had built the first successful nationwide distributor and designed the mountain logo that is still used, and he lost everything because his control rested on a margin of one. Founders who give away governance in increments rarely notice the moment the increments add up.
Tactic: Map every decision-making body that matters to your company down to the individual vote, both the ones you could win and the ones you could lose.
Principle 5
Treat the middleman's margin as a map
Hodkinson's contract gave Paramount thirty-five percent of the gross for distribution. Within a year Zukor and Lasky had concluded they could keep that money by owning the pipe. Then the exhibitors' share became the next margin to capture. Finally, by 1920, Zukor shifted rentals from flat fees to a percentage of box office receipts, so that he shared in every ticket sold.
Each step followed the money to where someone else was collecting it for a service Zukor thought he could absorb. The 65/35 split worked as a map: it showed which link in the chain was taking value, and therefore which link to acquire next.
Z
Capturing the Chain
How Zukor absorbed each margin between camera and ticket window.
| Link | Who held it | Zukor's move | Phase |
|---|---|---|---|
| Production | Famous Players, Lasky | 1916 merger into Famous Players–Lasky | Build |
| National distribution | Hodkinson's Paramount (35% of gross) | Bought the swing vote; absorbed Paramount | Integrate |
| Exhibition | First National's ~600 theaters | 1919 purchases of Black, Lynch, 135 Southern houses | Integrate |
| Pricing | Flat rental fees | Percentage of box office receipts | Scale |
| Financing growth | Boom-era stock | Paid for acquisitions in Paramount shares | Risk |
Tactic: List every party that takes a percentage between your product and your customer, and rank them by how easily you could do their job yourself.
Principle 6
Let a boycott tell you what to own
The First National boycott of 1919 could have been a crisis. Nearly 600 theaters refused Famous Players–Lasky films in protest against block booking. Zukor read it as information. If exhibitors could collectively shut him out, then exhibition was the chokepoint, and whoever owned the chokepoint set the terms. Within the year he was buying theater chains in New England and the South, and sending his new theater partners after First National's own members.
The boycott clarified a strategic dependency that prosperity had hidden. Without it he might have gone on supplying other people's theaters for years. With it, he became the first producer able to guarantee exhibition of his own films in his own houses.
Tactic: When customers or partners organize against you, identify exactly what leverage they used, and make acquiring or neutralizing that leverage your next priority.
Principle 7
Sell the hit to move the catalog, and price the legal bill
Block booking was the commercial engine of the 1920s Paramount. An exhibitor who wanted Pickford or Valentino took a year of other Paramount productions along with them. It turned stars into leverage for the whole slate and let the studio plan sixty features a year against guaranteed demand. Bundling of this kind is now common across media.
It also produced more than twenty years of antitrust pursuit: the 1921 FTC complaint, the 1927 cease-and-desist order, the rejected 1928 compliance report, the 1940 consent decree, and finally the 1948 Supreme Court decision that broke up the whole structure. Zukor's company treated regulators as a delay to be managed, taking extensions and filing denials. That bought decades, but it also built what the FCC would later call Paramount's "checkered antitrust history," and that reputation cost the company in television.
Tactic: When you bundle strong products with weak ones, estimate the regulatory timeline as carefully as the revenue, and decide in advance what you will do when the bill comes due.
Principle 8
Pay the talent, starve the founder
Zukor paid Schulberg about $200,000 a year, Kent about $150,000, and Wanger nearly as much, while for a long time he kept his own salary at $50,000 "so as to save money for the company." He raised Pickford from $20,000 to six figures and beyond, and remembered her request with admiration rather than resentment: "Mary was a terrific businessman."
This was not asceticism. The estate in New City, with its night house and its Tillinghast course, makes that clear. It was a view about where cash should sit: with the people who made the product saleable, and in the company itself, not drawn out as the owner's salary. His wealth came from equity and control. A small salary signaled to everyone working for him that the owner's money and the company's money were the same.
Tactic: Pay above market for the people your customers actually come for, and take your own reward in ownership rather than salary.
Principle 9
Dictate on cash, defer on taste
The opening scene of Part I sums up the most distinctive thing about Zukor as a manager. He knew milk yields and film rentals exactly and imposed his judgment on both without hesitation. He was never confident about decoration, literature, or style, so he outsourced those judgments: professors for historical accuracy, Schulberg for new talent, an English author's recommendation for The Mayor of Casterbridge, Otto Kahn's approval for the Paramount Theatre lobby. The New York Times noted in its obituary that he never took Goldwyn's or Mayer's detailed interest in the films themselves.
That division of labor let him run a creative business without pretending to be an artist. It also had a cost. When the studio's creative reputation declined after the theaters were gone, the company had no instinct of its own to fall back on. His domain stayed precise, and the domains he had delegated drifted.
⚖
The Two Ledgers
Where Zukor trusted himself, and where he rented judgment.
| Conventional mogul | Zukor's approach |
|---|---|
| Shape every picture personally. | Hire producers with an "unerring eye" and stay out of the cutting room. |
| Trust your own aesthetic. | Wait for Otto Kahn to approve the lobby. |
| Delegate the books. | Run policy through the treasurers' reports, personally and daily. |
| Pick projects by instinct. | Commission synopses, then reject adaptations until one is "high-class." |
Tactic: Write down the decisions where your judgment is genuinely superior and the ones where it is merely confident, and formally delegate the second list to people whose judgment is better than yours.
Principle 10
Regulate yourself before someone else does
When Hollywood scandals threatened outside censorship, Zukor designed the system by which producers would censor themselves and persuaded Will Hays to leave the Cabinet to run it. He started a school where contract players learned decorum, sociology, sobriety, and early bedtimes. He renamed The Woman Who Needed Killing at the cost of a finished advertising campaign. People called these publicity stunts. They were also preemptive, keeping the rules inside the industry and under its control.
The approach worked on morality and failed on market structure. The same company that brought in Hays ignored the FTC. Self-regulation earns trust only if it extends to the areas where the regulator is actually looking.
Tactic: Identify the issue most likely to bring outside rules to your industry and build a credible internal standard for it before anyone forces one on you.
Principle 11
Never buy hard assets with soft paper
The collapse is the most expensive lesson Zukor left behind. The buying spree of 1926 to 1930 (Balaban & Katz, the Brunton lot, the Times Square tower, Publix's nearly 2,000 screens) was paid for largely with Paramount stock valued at boom prices. When the Depression wiped out the stock price, the obligations stayed. Result: $21 million in debt, receivership on January 26, 1933, triggered by a $29,166 claim against $166 million in assets, bankruptcy on March 14, and trustees on April 17.
The October 1931 headline, "TO BE NO REORGANIZATION," is a reminder of how firmly leaders believe in their own capital structure right up until it fails. Bringing in a taxi magnate and a chewing-gum magnate did not change the arithmetic. Even assets that were truly valuable could not save a company whose liabilities were fixed while the currency it had paid with was not.
⏳
From Peak to Trustees
The thirty months that cost Zukor control of Paramount.
1926
Balaban & Katz acquired; Brunton lot bought for $1 million; Paramount Theatre opens.
1930
Company renamed Paramount Publix on April 24; nearly 2,000 screens.
1931
John D. Hertz recruited to the finance committee; "TO BE NO REORGANIZATION."
1932
Jesse Lasky forced out, blamed for the near-collapse.
1933
Hertz resigns January 6; receivership January 26; bankruptcy March 14; trustees take control April 17.
1935
Judge Coxe approves reorganization April 25; Otterson president June 4; stock relisted August 28.
1936
Barney Balaban named president July 2; Zukor becomes chairman.
Tactic: For every acquisition paid in stock, model what happens to your obligations if your share price falls by two-thirds, and do not proceed if the answer is receivership.
Principle 12
Stay useful after you lose control
Most founders who preside over a bankruptcy do not return. Zukor did, as production chief of the reorganized company in 1935 and then as chairman for nearly three decades, followed by twelve years as chairman emeritus. The reason seems to be that the banks needed what he knew more than they needed to punish him. A bank-mandated reorganization kept the company intact, and Zukor was the person who understood how its pieces fit together.
There is a darker side, and the record says so plainly. By the 1960s, with Zukor calling Balaban "the boy," Paramount's leadership was judged "incapable of keeping up with the changing times," and the company was sold to Gulf+Western in 1966. Staying useful is a strategy for a decade. Staying for half a century is something else. The library sale of 1958, which disposed of 764 pre-1950 films because their value wasn't recognized, happened under an old guard that had not seen what television would do to the worth of old film.
Tactic: After losing control, make yourself indispensable for a defined period, then set a date to hand over what you know to people who can see the next medium better than you.
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Part IIIQuotes and Maxims
In their words
— Adolph Zukor, in the lobby of the Paramount Theatre, the afternoon before its 1926 openingMaybe it's not good enough; we don't know yet.
— Mary Pickford, to Adolph ZukorYou know, for years I've dreamed of making $20,000 a year before I was 20, and I'll be 20 very soon.
— Adolph Zukor, on seeing Charles Lindbergh's photograph in Paris, 1927You said it. Perfect! He has—natural—a perfect face for pictures.
— The New York Times, obituary of Adolph Zukor, June 11, 1976He did not take the same personal, down-to-the-last-detail interest in the making of his movies that producer-executives such as Samuel Goldwyn and Louis B. Mayer did.
For the long view of what happened to Zukor's company after him, Bernard F. Dick's Engulfed: The Death of Paramount Pictures and the Birth of Corporate Hollywood picks up the story where the founder's control ends.
Maxims
- Sell up-market first. Build for the customer who currently looks down on your category, and the product decisions will follow.
- Learn the trade next door. Seven years running a theater taught Zukor what a studio had to deliver.
- Put the strategy on a scratch pad. A slogan specific enough to decide hires and purchases is worth more than a forecast.
- Count the votes, not the shares. One purchased board seat removed a founder and delivered a national distributor.
- Follow the percentage. Every middleman's cut shows you what to own next.
- Read the boycott. When partners organize against you, they are showing you the chokepoint.
- Bundle, but budget for the courtroom. Block booking built an empire and then took twenty years of antitrust litigation to undo.
- Pay for faces, not for founders. Put salary into the talent and take the owner's reward in equity.
- Trust your eye only where it has earned trust. Rule on cash; hire out taste.
- Inflated stock is a loan against your own optimism. Buying hard assets with it is how a $166 million company goes into receivership over $29,166.
