Merv Adelson, the once powerful producer, whose TV hits (The Waltons, Dallas, Knots Landing) made him hugely wealthy, and who was married to Barbara Walters, finally talks about the greatest mystery of his career—his Mafia ties—as well as the ambition that was his undoing.
Down on the beach alongside the Santa Monica Pier, amid the crowds of toned young skaters and wandering tourists, you can sometimes see an elderly man walking his dog. He is 83 years old, lean and tanned, with a tangle of white hair and rheumy blue eyes. While he scuffles along in worn jeans and sneakers, no one has a clue who he is, much less who he was. He lives in a building just steps off the sand, in a tiny apartment, barely 500 square feet of space in all, with a kitchenette and a battered white futon.
What none of his neighbors realize is that the old man once had walk-in closets the size of this apartment. In fact, he was one of the richest and most powerful figures in Hollywood, with a beach house in Malibu, a ranch in Aspen, and a private jet. He made movies and hit television shows and worked from Louis B. Mayer’s old office on the MGM lot. He was married to Barbara Walters, played golf with President Bill Clinton, stayed overnight at the White House, and counted Israeli prime minister Benjamin Netanyahu among his closest friends. Before he lost it all, he was worth $300 million. His name is Merv Adelson, and as you might imagine, he has quite a story to tell.
“Well, this is it,” Adelson says, extending an arm as he ushers me into his apartment. “Not much, I know, but it’s all I really need.” He sprawls on the futon, kicks off his shoes, and slowly lifts his feet onto a coffee table, toes wiggling in his white athletic socks. We end up talking for hours, and then days. Adelson’s hearing is failing, but he is lucid and strenuously modest, sprinkling our conversations with comments like “Am I boring you?” and “You don’t want to hear this.” He is candid and upbeat throughout, taking full responsibility for his downfall and refusing any bid for sympathy.
“If you asked me back in the day, ‘What do you miss the most?,’ my answer would have been ‘I miss my jet,’ ” Adelson muses. “You know, there was a time I could pick up the phone here, call my pilot, and I could be in Paris the next morning. But not anymore. I won’t be namby-pamby and say I don’t miss all that money. I do. But I’ve learned to do so much on my own. I made my first million at age 24. Since then I’ve always had people do things for me. Now I pay my own bills. The other day I changed to online banking. It’s so great! And easy!”
He cocks his head toward the kitchenette. “Look over there—the dishwasher is on. Who put those dishes in? I did. It’s all me. That’s satisfying to me now.” He pauses a moment, then glances out the window toward the ocean beyond, then manages a wry smile. “But I’d still love a jet. It’s still the biggest thing I miss. It is.”
If this story was just about the fall of a once mighty mogul, it would still be one heckuva tale. Merv Adelson was the popular executive behind some of the most iconic television shows in history: The Waltons, Dallas, Knots Landing, Falcon Crest, Eight Is Enough.The company he founded, Lorimar, was for years the top independent studio in Hollywood; his boardroom decisions were analyzed on the front page of The Wall Street Journal. Lorimar was renowned for cranking out top executives as well; Adelson’s protégés include Peter Chernin, who for years served as Rupert Murdoch’s number-two man; Leslie Moonves, the C.E.O. of CBS; and Brad Grey, the C.E.O. of Paramount Pictures. Adelson was never quite as successful making movies as he was TV shows, however, and when, in 1989, his pal the late Steve Ross, of Warner Communications, offered to buy him out, Adelson gladly accepted. Overnight, Adelson became a Time Warner vice-chairman, a member of its board, and an independent investor, which is where the story should end happily, but doesn’t.
“You could only be a rat not to say something decent about Merv, a totally decent guy who has had a tough last period,” says IAC chairman Barry Diller. “In fact, you never hear anything bad about him, except, obviously, for some really bad judgment. He was a good man.” Les Moonves adds, “Merv will be remembered as a man who started a great television company, one of the greatest in history, one of the most respected Hollywood will ever see. He was a terrific boss, extremely supportive to his people. He treated me like family.” Even Adelson’s ex-wives—well, one at least—regard him warmly. “He was a kind, funny, thoughtful man,” says Barbara Walters, who divorced him in 1992. “Would things have worked out differently for Merv if we had stayed together? I don’t know. Probably not I have no regrets.”
But the sad ending to Adelson’s career is only half the story. What’s truly jaw-dropping is what he now finally acknowledges about his beginnings. It’s the kind of admission one simply doesn’t hear, not from a Hollywood figure of Adelson’s stature, not in the 21st century. But Adelson got his start in the 1950s, in Las Vegas real estate, and for years after he was plagued by rumors, and eventually nasty articles in the press, suggesting that he was too close with some very unsavory characters. For years he denied or downplayed this fact, most notably in a decade-long libel suit against Penthouse magazine.
Sitting in Adelson’s tiny apartment, I was unsure how to broach the subject. To my surprise, he did it first. He talked for hours, in fact, trying hard to make me understand how it was in Vegas back then, how it happened, what he did. Now he admits that for a decade, until he started Lorimar, in 1969, he was essentially a front man for the Mafia. The infamous mobster who served as his key business partner, who went down in history as “the Godfather of Las Vegas,” was not just an acquaintance, or a silent partner, or someone with a murky past Adelson bumped into.
“He was maybe my closest friend,” Adelson says today. “If you used the word ‘mentor,’ well, I couldn’t object to that word.”
They don’t make Hollywood moguls like Merv Adelson anymore, men who began in grocery stores, men who made their millions in real estate and then went on to create television series and movies and Internet start-ups. Adelson is in some ways typical of the second generation of Jews who rose to power in Hollywood after the passing of its founders, the Jack Warners and Louis B. Mayers and Adolph Zukors.
His father, Nathan, was a Russian immigrant, but Merv knows nothing of his father’s origins, where he was born or when he emigrated. “It sounds so stupid to me now, but we never had time to talk about any of this,” Adelson says. “He came on a boat—that’s all he said.”
Nathan was a workaholic, but Merv’s mother devoted much of her attention to her son. One of Adelson’s daughters, Ellie Ross, a Santa Monica psychotherapist, traces some of her father’s behavior to his upbringing. “He had a mother who basically worshipped him and never set limits for him,” she says. “Obviously that isn’t healthy. I think what he got from that family environment was a sense of entitlement, that he could do no wrong, that he could have his cake and eat it, too. It’s an impulsive way of being: he always went for the gratification of the moment rather than think about consequences. He still doesn’t understand or think in terms of consequences. He gets an idea how things should turn out and they just will. Which worked for a long time. In an odd way, the very things that made him very successful led to his downfall.”
From the age of eight Merv worked at the family store in Inglewood every day after school, filling bags of sugar at first, then graduating to delivery boy. The Adelsons did well enough to open a second store, at the corner of Santa Monica and Wilshire Boulevards, when Merv was 12 or so; later they added another in Westwood. By 13, Merv was driving deliveries into Beverly Hills, where he met stars such as Cornel Wilde. He and a friend, a handsome soon-to-be actor named Robert “R.J.” Wagner, found the big houses brimming with all manner of willing women. “R.J. fucked all the starlets,” Adelson says. “I fucked all the maids.” Actually, he confides, the woman who taught him the most about sex was a Hollywood heartthrob’s wife, with whom he had an affair that lasted through his teenage years. “She was very up-front that she liked younger guys,” he says with a shrug. “She showed me a lot of things.”
In high school Adelson emerged as a gifted athlete. But he had a temper and was disqualified from a baseball squad after whacking an opposing coach in the shins with a bat. “I was a tough little monkey,” he says. “They said when I got mad I could stare at somebody and they would back off. I don’t know if that is true. But people knew what I could do.”
He was a good enough catcher to be scouted by Stanford, whose coaches suggested he take a year of seasoning at a local college. He did it, but Stanford rejected him anyway; Adelson stalked home to Los Angeles believing, with no real evidence, that he had been a victim of anti-Semitism. His father put him to work managing one of his stores, one in a tough neighborhood. It was being robbed every two or three months; by 21, Adelson was growing used to having pistols shoved in his face. “Calm down, calm down,” he would mutter, then hand over everything in the safe. It wasn’t surprising that, before long, young Merv Adelson was looking for another line of work.
Go East, Young Man
Las Vegas was a dusty desert village when a California hotelier built its first casino-resort, the El Rancho Vegas, in 1941. A second opened the following year and another, the gangster “Bugsy” Siegel’s Flamingo Hotel, in 1946. By 1950 a half-dozen new casinos were under construction on what came to be known as the Strip. Among the city’s most enthusiastic early visitors was Adelson’s father; as it happened, one of Nathan’s cousins, a local impresario named Beldon Katleman, had taken control of El Rancho in 1947. “Dad loved Las Vegas,” Adelson recalls. “He would go every chance he had. I went occasionally.”
It was during one of these visits that it hit him. “I suddenly thought, Everything is open 24 hours, but there’s no place to buy groceries,” Adelson recalls. “I got the idea: a 24-hour supermarket.” He scraped together money to buy a lot at the corner of East Oakey Boulevard and Fifth Place, just off the Strip. His father invested $10,000, their suppliers chipped in a bit more, and, after 18 months of begging, Adelson persuaded a Las Vegas bank to lend him the remaining $40,000 he needed to start construction. When it opened, in 1953, Adelson’s 15,000-square-foot “Market Town” was an instant smash, drawing crowds around the clock; he later opened two more. Within a year, Adelson calculated, he was a millionaire.
He was 24. He worked long hours, drawing up his newspaper advertisements in the hours before dawn. When he wasn’t working, he began sampling the city’s illicit pleasures. Early on, he bunked in an El Rancho dormitory that housed many of the casino’s entertainers. It was there that Adelson discovered the joy of chasing the beautiful young women already flocking to Las Vegas.
“God, the chorus girls!” he exclaims. “I loved it. Just loved it. I remember the first day I walked in, this one black singer came out wearing nearly nothing. I was about in shock.”
Adelson furrows his brow. “What was her name? Shit. She was famous.”
He picks up his cell phone, calls a friend, and asks for the singer’s name.
“The one you had the affair with?” she asks.
“Yeah.” Neither can remember the name. “Oh well,” he says, slapping his forehead. “I’ll remember it. The names … I just can’t remember them anymore.”
By then Adelson had married his high-school sweetheart, Lori Kaufman, and he moved her into a house on the Desert Inn’s golf course; by the late 1950s they were raising three young children. But between long hours at the supermarket and his growing taste for chorus girls, he was rarely at home. “I was out every night,” he says with a sigh. “I was a lousy, lousy husband. I loved my wife, but this was beyond temptation. Looking back, one of the things I regret most is the way I treated her in those days. She did nothing to deserve it. The worst part of it was coming home and lying. I’m a bad liar. But I lied. I couldn’t tell her the truth and keep her and the kids. I tried to be as inconspicuous as I could, but as I became more well known, it became harder and harder.”
Again he furrows his brow.
“Eve? Eva? Yvette? God. What was her name?”
When he wasn’t chasing chorus girls, Adelson was chasing new deals. Las Vegas was exploding all around him with opportunities. He and another newcomer, a real-estate man named Irwin Molasky, were playing golf one day at the Desert Inn when they noticed a number of empty building lots along the fairways. For some reason they weren’t selling. The two up-and-comers pooled their money, bought the lots, and built houses on them; they sold in no time.
“After that, we started building houses all over Vegas,” Adelson recalls. “They sold like hotcakes.” It was the beginning of a partnership that would last five decades. In the next few years Adelson and Molasky formed Paradise Homes, which built hundreds of houses around Las Vegas, selling an average of one a day between 1957 and 1959. Later they branched out, developing the city’s first indoor shopping mall, in addition to the Las Vegas Country Club and the city’s best-known office building, the Bank of America Plaza.
It was an intoxicating time. “Nobody had ever seen a place like Vegas in those days,” Adelson says. “I mean, no matter how many TV shows you see, you will never understand the allure of Las Vegas at the time. It was the most exciting time and place you could ever imagine. You could be at a charity dinner, and the roster would include one or two of the stars from the Strip—Sinatra, Dean Martin, probably the owner of at least one or two of the hotels, famous lawyers, the mayor, millionaire businessmen, and one or two of the really famous mobsters. Nobody talked about anything except Vegas. It was Vegas, Vegas, Vegas. If Vegas was successful, we would all be successful. If the mobsters came in and made money and brought in money, you didn’t even talk about it. It was a very small issue to us. They were legitimate businessmen with gambling licenses issued by the state. They could write books about them; they could say they planted guys out in the desert. None of it mattered. All that mattered was Vegas. All of us, myself included, you came to Vegas to make money, just make money. And that’s what we did. All the rest of it, whatever anyone else said, it just rolled off our backs.”
It was against this background that, one evening in 1955 or 1956, Adelson took his wife to a ballroom-dancing class at an Arthur Murray studio. Two other men were there with their wives, and Adelson started talking with them. One was Allard Roen, né Rosen, the convicted stock swindler who ran the Desert Inn. The other was Roen’s boss, the man who would come to be known as the most influential mobster in Nevada history. In time he would be called “the Godfather of Las Vegas.”
His name was Moe Dalitz.
American gangsters tend to be described as one of two stereotypes: the crass, scheming, ultra-violent mobster personified by the likes of Bugsy Siegel and Sam Giancana, and the quiet, scheming, urbane, behind-the-scenes racketeer personified by the legendary Meyer Lansky. Born a laundryman’s son in 1899, Morris Barney Dalitz, a small, unfailingly polite man in his later years, fell squarely into the Lansky mold; he was a kind of midwestern Meyer Lansky. In Dalitz’s long life he was never convicted of a single crime. But his biographers, not to mention the F.B.I., consider him one of the most successful American mafiosi of the 20th century. Not long before his death, in 1989, Lansky himself told an interviewer that he envied Dalitz as much as any of his criminal peers, for the simple reason, he said, that “Moe got to go legit.”
As a young man in Detroit during the 1920s, Dalitz made his name running illegal alcohol into Ohio from Canada. After Prohibition he became a force behind gambling and other illegal activities, first in Ohio and Kentucky, then in cities from Phoenix all the way to Havana. The turning point in his career came in 1948, when he stepped in to take control of a new casino, the Desert Inn, whose owner had run short of construction funds. Finding that the dry air agreed with him—or maybe it was because of pressure in Cleveland from an anti-Mafia drive led by Eliot Ness of “Untouchables” fame—he moved his operations to Vegas shortly after.
Dalitz emerged as one of the city’s most visible gangster-investors during the 1950s. There were some who believed he orchestrated the all-important “skim” of casino profits that enriched the Mafia families back East. What is certain is that Dalitz became a respected figure in Vegas, a man who knew people, who made few waves.
“I enjoyed a very, very close relationship with Moe Dalitz that is so difficult to explain,” Adelson says. “He was … ” There is a long pause. “Well, we did a deal once. We shook hands and he said, ‘I want you to remember something. You just signed a contract when you shook my hand. I want you to remember that the rest of your life; that handshake is better than any contract a lawyer will have you sign.’ So I know you’re thinking, How do you account, Merv, for the fact that Moe Dalitz was a Mob boss? All I can say is, in all the years I knew Moe, we never discussed anything criminal or illegal. I never asked him about [anything illegal]. I didn’t want to know the answer. There was a line I never wanted to cross, and I didn’t.”
Adelson’s dog, Teddy, hops up beside him on the futon. “It’s almost too much for people to believe, I know,” he goes on. “Yeah, I heard a lot of stuff. The smaller things I heard in conversation. Skimming. I heard a lot about skimming. That was how the Mob made their money in Vegas. But I didn’t even know who the real owners of the Desert Inn were. I met a lot of them, sure. Guys from back East. And I’ll tell you something: I kind of enjoyed it. It was exciting. That reputation I got, for hanging out with Moe. The bow-downs you would get when I walked into a place with Moe. You began to enjoy that kind of thing—at least I did. It’s the way Vegas was. Whatever business you were in—men’s clothing, a judge—you came into contact with people that, if you were anyplace else, it would be a terrible, terrible thing. But not in Vegas. Not then.”
Suddenly Adelson makes a face and swats his dog’s rump.
“Jesus, Teddy!” he exclaims. “Will you stop farting?”
Married to the Mob
At first Adelson knew Dalitz only as a genial golf partner. Then, in 1958, Adelson and Irwin Molasky were planning construction of a medical building when local doctors told them how badly Las Vegas needed a modern hospital. Despite knowing nothing about hospitals, Adelson and Molasky switched gears and began building one. Everything was going swimmingly until they ran short of money. “That’s when we asked Moe and Allard to come in,” says Adelson. “We had no trepidation. No. None. Zero. They brought in [the New York lawyer] Roy Cohn and others. It was amazing the number of people Moe knew like that. Everyone made money. And I served my purpose. Moe needed a legitimate businessman. I was that. Moe was the best partner I ever had.”
With the completion of Sunrise Hospital—they brought Adelson’s aging father in to run it—Adelson took Dalitz and Allard Roen into Paradise Homes as full partners. (The four-man partnership was sometimes called DRAM, for Dalitz, Roen, Adelson, Molasky.) Adelson became part of Dalitz’s entourage, making the rounds of the casinos at night and befriending scores of stars. “Las Vegas was small then, maybe 50,000 people in the whole county,” Adelson recalls. “I palled around with everybody, especially the comedians. You name it, I knew him, from Sinatra on down. Don Rickles. Bob Newhart. Dick Shawn. I knew Frank, Dean Martin—all of them. Dean was great. Frank was one of the great dichotomies of the world. He could be fantastic, and he could be evil. We all hung out in the steam room at the Sands.”
Of all his friends, though, the one constant was Dalitz. “I had read the same things everyone else had read about Moe,” Adelson goes on. “I knew people would say things about me being his partner. I just didn’t care. My conclusion was that Moe was a rumrunner during Prohibition, which he was. That’s all I thought he was. He appeared before Senate committees and the like, sure. But he had never been arrested, much less convicted. He was a rumrunner. So was Jack Kennedy’s father. In fact, Moe told me they were good friends.”
Adelson sighs. “If I was reading this, I’m not sure I would believe it,” he says. “If I was reading this, I would think, Here’s a guy who wanted to make a lot of money fast, and he did it with Moe, and he didn’t care about anything else. I know that. I’m not blind. It’s easy to come to that conclusion. Look, I knew Moe knew a lot of bad guys. I knew that. But I never saw one moment, in all the time I knew Moe, of him losing his temper or mistreating anyone in any way. It was all just innuendo.”
But then, after five years of building homes and palling around with Dalitz, the laughter abruptly stopped. It happened in 1963, with the publication of The Green Felt Jungle, the first book to chronicle the Mafia’s role in Las Vegas in detail. Dalitz was featured, and, to his horror, Adelson saw his own name in the book’s pages, in a passage describing Dalitz’s role at Sunrise Hospital. The book characterized Adelson and Molasky as Mafia front men, clean young up-and-comers who gave Dalitz an entrée into legitimate businesses.
Adelson was stunned. His friends, Dalitz included, brushed it all off as the work of clueless hacks; Adelson admits he never even considered confronting Dalitz and demanding the truth. “Why didn’t I confront him?” he asks. “I don’t know. I don’t know. He was a good guy.” But the fact was Adelson already knew the truth. And now so did everyone else in Las Vegas. When his wife went to the salon, a hairdresser remarked, “Adelson? You mean like the Mafia Adelson?”
“The question of reputational damage, it never really occurred to me, not really, until The Green Felt Jungle,” Adelson says. “I was like, What the fuck have I done? And I had to realize, I had done it. It was my fault. It might have been O.K. except I could see my kids were beginning to be affected by it. They were being teased at school.” Adelson’s daughter Ellie remembers “an experience where one of my teachers brought it to the attention of the class, and I was humiliated. I’m sure that had an impact on him.” It was the first of several occasions when Adelson was obliged to explain Dalitz to his children. “They came right out and asked me, ‘Dad, are you in the Mafia?’ I said ‘No.’ What else could I say? ‘Moe Dalitz is a friend of mine. I am not a part of the Mafia—don’t you believe it.’ ”
For the first time, Adelson says, he began thinking about getting out of Vegas. No doubt the swarms of F.B.I. and I.R.S. agents who began descending on the city hastened his decision. Adelson remembers one I.R.S. agent who stayed at the Desert Inn so long that, in a bit of black humor, the DRAM partners named one of their many shell corporations after him.
Adelson’s chance to escape came during a summer trip to the racetrack at Del Mar, outside San Diego. He and Molasky were discussing real-estate opportunities with a local broker, who volunteered to show them a tract of several thousand acres in the coastal town of Carlsbad. “I fell in love with it. Irwin too,” Adelson says. “We brought down Moe and Allard. They loved it, too.”
This was the genesis of what would become one of the most notorious resorts in Mafia history, the Rancho La Costa. The great irony, however—and what no one ever knew—was that the driving force behind La Costa’s development was Adelson’s newfound desire to distance himself from organized crime. “That was the big reason—hell, that was the only reason—I began thinking about leaving Las Vegas,” he says. “I wanted to get away from the Mafia.”
Adelson moved his family and enrolled his teenage children in the Carlsbad school system. When it came time to build the resort, however, he faced a Catch-22. He yearned to break free of the Mafia, but Dalitz was their conduit to the same pot of money that had financed Sunrise Hospital: the pension fund of Jimmy Hoffa’s mighty Teamsters union.
“Were the Teamsters mobbed up? Oh God, were they,” Adelson says. “But I didn’t know it at the time, not really. I just wanted the money. I didn’t especially care where it came from.” Had he known the extent the Teamsters were involved with the Mafia, I ask, would he have taken their money? He thinks for a long moment. “No, I wouldn’t have done it. Because that became the big grief, that was what eventually drew us into court, with all the publicity … ”
He sighs. “And Hoffa. And all that crap.”
The Rancho La Costa resort opened its doors to the public in 1965. From the outset Adelson could tell his dreams of escaping the Mafia had been dashed. “The first guests, they were all Teamsters!” he exclaims. And then Detroit and Chicago Mob bosses, all the way up to Meyer Lansky himself. “There were hundreds of them!” Adelson adds. “I couldn’t get rid of them! The Teamsters treated it like their country club. It got a real reputation. I didn’t like it at all. But I couldn’t stop it. We owed them money! What could I do?” His children were soon being teased with the same taunts they had heard in Las Vegas. He was trapped. A very rich trap, but a trap nevertheless.
The resort was thriving; vacationing mobsters were soon joined by celebrity regulars such as Sinatra, Dean Martin, Bing Crosby, Desi Arnaz, and Sandy Koufax, to name but a few. But despite its success, Adelson insists he wanted out—out of a hotel business he knew little about, and especially out of his marriage to the Teamsters and the Mob. His opportunity, oddly, came in 1967, after the billionaire Howard Hughes took up residence at the Desert Inn, in Las Vegas. Hughes was in his crazy-hermit phase, taking up an entire floor of the hotel. When Moe Dalitz tried to evict him, Hughes responded with an offer to buy the hotel, which Dalitz accepted. All of a sudden Allard Roen was without a job, so Adelson brought him in to run La Costa.
Though still titular president of La Costa, Adelson wanted a new start, preferably one without the Mafia anywhere in sight. “That was important, yeah,” Adelson confirms. “But the fact is I got bored. I wanted something new.”
And once again he sensed just what it was: Hollywood.
Made for TV
Despite his lifelong fascination with entertainers, Adelson knew as much about making television shows as he had known about real estate and hospitals. But he saw an opening. Two studios, Columbia and Universal, dominated television production in those days, and Adelson’s comedian friends, who now included Tim Conway, Dick Van Dyke, and Dan Rowan and Dick Martin, complained incessantly about the studios’ micro-management. “My idea was to bring in the best people and let them do as they pleased,” Adelson remembers. “They would be completely free.”
But he needed a partner, “an Irwin in the television business,” as Adelson puts it. A mutual friend suggested a savvy producer named Lee Rich, who was trying to make his way in Hollywood after a career representing advertisers in the days when companies like Procter & Gamble sponsored major shows. Rich agreed to come on board, and Adelson put up $400,000 to start the new company, which they called “Lorimar”—“Lori” for Merv’s wife, “mar” for Palomar airport, which Merv and guests of La Costa would fly in and out of.
Taking offices on the Warner Bros. lot in Burbank, they began signing television writers. Luck was with them. One of their first recruits, Earl Hamner Jr., cranked out what became Lorimar’s first major production, a made-for-television movie called The Homecoming: A Christmas Story. The movie, a folksy family drama set in rural Virginia during the Depression, aired on CBS in December 1971. It drew strong ratings, so Adelson and Rich went to the network’s programming chief, Fred Silverman, and pitched it as a series. Silverman demurred.
“He told us, ‘Eh, way too soft—it’ll never get a number,’ ” Adelson recalls. “ ‘But if you can get Henry Fonda to play the father, maybe.’ Well, that was never going to happen. It was like ‘Yeah, well, thanks a lot.’ ”
At that point CBS’s controlling shareholder, the legendary Bill Paley, walked into the meeting. Again they made their pitch. Paley thought for a moment. “Then Paley looked at Freddie and said, quote, ‘We’ve taken a lot out of this business—let’s put something back in.’ And he made Freddie put it on the air.” Silverman had little faith in the series, which they decided to call The Waltons. He aired it Thursday at eight, up against television’s No. 2 program, NBC’s The Flip Wilson Show.
“People looked at us like ‘Good-bye, Waltons,’ ” Adelson says with a grin. “But a year later, The Waltons was a hit and Flip Wilson was off the air.”
The Waltons catapulted Lorimar into the forefront of television production, a position it cemented later in the decade, launching Eight Is Enough in 1977, Dallas the next year, then Knots Landing in 1979. Even as Lorimar rose, though, Adelson struggled to escape his past. The Mafia taint was a tar baby. By 1975, articles had begun appearing, including one in Newsweek, that noted the mafiosi flocking to La Costa, where Adelson remained a co-owner; the subtext—that Adelson was a mobster by association—was obvious.
One of La Costa’s visitors was the famed attorney Louis Nizer. “When these things would [be published], I’d show them to Louie. He would talk me out of suing. He said there was just no way to win. Moe and Irwin, I talked to them all the time about this. Moe was understanding. He knew he was the reason this had happened, and he was loyal as a friend and partner. He offered to resign, which we wouldn’t let him do. He hadn’t done anything, nothing to resign for at least.”
Then came the one article Adelson couldn’t ignore: a lavish investigative spread in the March 1975 issue of Penthouse, written by two young reporters who would go on to storied careers, Lowell Bergman and Jeff Gerth. The Penthouse piece came right out and said what everyone else was only hinting at: “La Costa has been controlled by the Moe Dalitz mob,” naming its principal members as the DRAM partners, including Adelson. Adelson was aghast. He sued.
The litigation dragged on for years, churning up unflattering stories in The New York Times, The Wall Street Journal, and elsewhere about Adelson, Dalitz, the Teamsters, and La Costa. Time and again Adelson’s family begged him to give up; he refused. Through it all, Adelson denied he ever knew Dalitz belonged to the Mafia. Eventually, in 1985, Penthouse agreed to settle, issuing a non-apology apology. Adelson actually won without winning: articles about his old Mafia ties began to disappear.
For much of Lorimar’s heyday, during the 1970s and 1980s, Adelson was one of Hollywood’s most eligible bachelors, tanned and prone to seriously unbuttoned shirts, a ladies’ man who squired starlets to premieres and parties. He and Lori had divorced. “She just got tired of me screwing around,” he admits. “I was disgusted by my own behavior. So I made a deal with myself that I wouldn’t ever cheat again.” He was briefly married to Gail Kenaston, a Hollywood hostess and interior decorator. “She was a good-looking busty blonde, and we both liked outdoors stuff,” Adelson says. “But unfortunately those were the days of cocaine, and she got caught up in that. We spent a lot of time in Aspen, and Aspen was the coke capital of the world. You would go to restaurants and they had it out in bowls like sugar. I did my share, sure. But when I couldn’t sleep anymore, I just stopped.”
Then, in 1985, a friend’s wife arranged a blind date with, of all people, Barbara Walters. Both she and Adelson were cautious: they agreed to meet only for a drink, in a crowded New York bar. “I’ll never forget that night,” Adelson recalls. “Things were going well, so we went on to dinner, in this packed restaurant, standing against a wall. I was teasing her: ‘This is the kind of pull you have? You can’t get a table?’ Barbara had such a great sense of humor. ‘What are you talking about? You’re the big Hollywood mogul and you can’t get a table?’ ”
“Years ago my father [nightclub entrepreneur Lou Walters] did shows in Las Vegas,” Walters recalls, “and there were these handsome suntanned men that I used to see with these gorgeous women, and I said, ‘This is one of those men.’ It’s the type, the California man, the open shirt, the blue eyes, the white hair. He was very attractive and, for me, very different.”
Once they found a table, they talked for hours. “I could see we were both interested,” Adelson says. “So I told her, ‘I want to see you again, but before I do, you have to know a few things.’ So I told her about Moe, about the whole Mafia thing. And I think that’s when I fell in love with her. She said, ‘Well, that’s bull.’ It was such a big thing to get out of the way. I’d never done that before.”
They dated for a year, eventually marrying in 1986. From the outset, though, their bi-coastal union was challenging. “I found our marriage difficult, because we were really living on two continents,” Walters recalls. “He was never really comfortable in New York, especially in my world. I used to think sometimes he had to tip three vodkas before he would go to a dinner party with me.”
“We tried to make it work, but it’s not as easy as it sounds,” Adelson says. “Three nights a week out with her journalist friends, doing something you really didn’t want to be doing. I could do it. But I wasn’t happy.”
By 1990 both sensed it was over. In what might be viewed as a brazen act of self-sabotage, Adelson began an affair with a young lawyer at a Los Angeles firm. “I had never fooled around on Barbara, ever,” he says. “But I did [then]. I took this girl to Aspen. I’ll never forget: we were on a chairlift. All of a sudden there were two photographers on a chairlift beneath us, and they took our pictures. I forgot about it. So the very next day I went back to New York to talk to Barbara. I walk into the apartment and sat down and said, ‘We need to have a serious discussion.’ We had just started talking when the maid comes in, tells Barbara, ‘You are wanted on the phone,’ and it’s [opera diva] Beverly Sills. Beverly told her, while I was sitting in the other room, that my picture is on the cover of the National Enquirer with another woman.”
Adelson leans back and stares at the ceiling. “Well, you can imagine what happened after that.” He sighs. “True story. True story. She never really forgave me, and I don’t blame her.”
Walters counters: “He shouldn’t feel bad—that was late in our marriage. I have no regrets. He was a wonderful man.” They divorced in 1992.
At the dawn of the 1980s, Lorimar was Hollywood’s largest independent studio and was growing quickly. As C.E.O., Adelson took the company public in 1981, making him and Lee Rich very wealthy men; by the mid-1980s, Adelson was worth $80 million or more and was shuttling among homes in Malibu, Bel Air, New York, and a sprawling horse ranch outside Aspen. “Those were the days,” Adelson muses as we reconvene one morning with his dog in the lobby of the Loews hotel in Santa Monica. He tells all his favorite stories: of cutting a deal with a pre-medicated Ted Turner as Turner “bounced off the walls”; of kicking the superagent Michael Ovitz out of his office after Ovitz made some dimly remembered demand; of throwing his back out on a Hawaiian beach only to have a friend, serial MGM purchaser Kirk Kerkorian, provide a 737 jet to fly him home.
Lorimar, with annual revenues approaching $700 million, had begun diversifying, buying a few television stations; a New York advertising agency, Bozell & Jacobs; and even a handful of magazines, including Us. But there was one mountain Adelson, a child of Hollywood, still yearned to climb: movies. “That was my biggest mistake,” Adelson says as he orders a plate of pasta. “We had gotten to the point where we were looked upon as a studio. We had made the odd movie here and there. Why do more? Ego. Pride. I don’t know. We had a dream to be the first independent to make the transformation into a real studio, with a schedule of movies and television and everything. Movies were the last great challenge for me.” Again he sighs. “The fact is I let my ego and pride get away with me.”
Suddenly a smile lights up Adelson’s face.
“The black singer!” he blurts out. “Eartha Kitt!”
He pats Teddy. “I knew I’d remember that.”
Raising the Stakes
Establishing a movie business was expensive, and building the library of films required for a studio to ensure profitability could take years. But Adelson would not be deterred. A few of Lorimar’s early movies, such as An Officer and a Gentleman and the Peter Sellers vehicle Being There, did well enough. But many more were disappointments: The Big Red One, The Fish That Saved Pittsburgh, The Last Starfighter,Cruising. “I don’t think I knew enough about movies,” Adelson admits. “Lee either. It’s not the same as the TV business. The only thing that’s the same is the ability to spot talent.”
After buying the old MGM lot, which allowed Adelson to move into Louis B. Mayer’s famed office, Lorimar certainly looked like a movie studio. But by 1985 the 24 movies it had made had generated a reported total loss of $12 million. The studio had continued making television series, including a few successes, most notably the sitcom Perfect Strangers, but once Lorimar’s early shows started going off the air, its income stream appeared increasingly in doubt. Adelson doubled down, merging with Telepictures, a production outfit known for the syndicated People’s Court.
The Telepictures merger, however, bringing with it a raft of hungry young newcomers, exacerbated growing tensions between Adelson and Lee Rich, who increasingly felt overshadowed. “Lee and I had a great run, 18, 19 years,” Adelson says. “For 15, 16 of those years we had fun. What went wrong?” He heaves a heavy sigh; neither he nor Rich ever discussed their breakup publicly. “Lee got married. A wealthy woman. He moved to a huge home. White-coated help, butlers. That was not Lee, but he was enjoying it. He would tell stories of the day, unloading on his wife. She starts saying, ‘Why is Merv getting all the publicity? Why not you?’ That’s what started it, and it went downhill from there. It changed the dynamic between us. It became a different atmosphere. At the end, he was bitter. It was what happens in a marriage. I really don’t know what happened to Lee. I don’t. He was a good guy.”
Rich resigned in 1986, taking a post at MGM/United Artists; it was an ominous portent. Afterward, Lorimar’s movies only got worse; without Rich’s creative insights, its television shows were beginning to flag as well. For the first time Lorimar began reporting quarterly losses. “The amount of money Dallas, Knots Landing, and Perfect Strangers brought in, it was just huge,” Adelson says. “So why’d I sell? Because I was scared shitless that a couple more series would go off the air. If we made a mistake, we would’ve been in big trouble. [Our stock] was still high, the values were there, so [in 1988] I put out the word I might be interested in selling.”
A meeting with Disney’s president, his pal Frank Wells, went nowhere: Disney would never pay the price he sought, Adelson says. When Warner Communications’ Steve Ross heard about the meeting, he struck an agreement to buy Lorimar for $1.2 billion. At roughly the same time, Adelson and Irwin Molasky sold La Costa to a Japanese company for $250 million. Adelson was jubilant. With his net worth approaching $300 million, he took a job as Time Warner’s vice-chairman and a seat on its board, and set to work enjoying what remained of the wonderful new life he had built for himself in Hollywood.
The same year, in Las Vegas, Moe Dalitz died at the age of 89. Adelson did not attend his funeral.
When he turned 65, in 1994, Adelson was a man who seemingly had everything: money, power, free time, even a pretty wife 33 years his junior: Thea, the lawyer he had cheated on Barbara Walters with. The couple was soon raising two daughters. They spent much of their time on Adelson’s 40-acre ranch outside Aspen, the Lazy A, which featured three hot tubs, a golf hole, and a horse barn so sumptuous it was featured in Architectural Digest. He still had homes in Malibu and Bel Air, as well as his beloved Citation jet. Plunging into philanthropy, Adelson donated millions to charitable causes, taking seats on the boards of the Aspen Institute, Michael Milken’s CAP Cure foundation, and Jerusalem’s Museum of Tolerance. He was an ardent supporter of Israel’s, befriending Bibi Netanyahu and acting as go-between with Bill Clinton. Adelson had so many friends in the Israeli military that when he and Thea were marooned aboard a yacht after a storm off the coast of Yemen—the boat nearly sank—the Israeli Air Force flew to their rescue.
As for business, his timing seemed perfect. He established a venture-capital fund, called East West Venture Group, which invested heavily in Internet start-ups. He mentored any number of young Internet entrepreneurs, hosting dinners and parties to introduce them to his Hollywood friends, and during the late 1990s a number of his start-ups thrived. But everything began to unravel in 2000, when the Internet bubble famously burst. Adelson stood by almost every one of his new ventures, losing tens of millions in the process.
But the killer was Time Warner. In January 2000, the company agreed to merge with AOL, in what is still the largest merger in U.S. history, and probably the most ill-conceived. When the bubble burst, AOL Time Warner’s stock price began to fall, eventually plunging from a high of $58 all the way to a low of $7. Adelson, amazingly, never sold a single share, a decision that cost him $141 million. Why? One friend says Adelson simply never believed the stock wouldn’t recover. But Adelson insists it’s more complicated. In the 1990s, he says, at a time when other directors were concerned about communication with Time Warner’s C.E.O., Gerald Levin, the board had asked him to cozy up to Levin in an effort to anticipate his next moves. As a result, Adelson says, his lawyers told him it wasn’t safe to sell Time Warner stock, even after he resigned from the board in 2000; being so close to Levin, he risked being charged with insider trading. His daughter Ellie confirms she was given the same advice.
Between 2000 and 2003, Adelson watched as 90 percent of his net worth evaporated. “It was like The Perfect Storm,” he says. “I got hit more than Joe Louis got hit in his entire career. I didn’t know where it was coming from next.” He might have survived, except that he had borrowed heavily to support the lifestyle of his dreams. Worse, he had used AOL Time Warner stock as collateral. By the spring of 2003 his debts approached $112 million, far more than his stock was worth. Thea asked for a divorce.
Everything came to a head on June 8, 2003. That morning Adelson climbed into his Chevy Suburban, strapped his two-year-old daughter, Ava, into the backseat, and drove into Aspen, where at 7:36 he lost control of the vehicle, striking two cars, a street sign, and a pair of trees. After he was taken to the hospital, where no drugs or alcohol were found in his system, he was charged with reckless driving and child endangerment. His lawyer claimed Adelson had suffered a small stroke. The charges were immediately dropped, but it was over. The ranch was sold. Three months later he filed for Chapter 11 bankruptcy.
There was a little publicity, a piece in Fortune, another in Variety, but he was no longer so big a name. At first Adelson refused to accept what had happened. “Even when he filed for bankruptcy, I don’t think he ever thought that was going to last,” says Ellie. “He saw himself coming back, making money again. There was never a question in his mind he would end up old and broke. It’s only been in the last four, five years that he’s come to that conclusion.”
These days he changes addresses frequently; by one count, he has moved 13 times in the last seven years. Thea took the Malibu house. Ten years later she is still suing him for more child support. He has tried in vain to launch a new venture or two, a children’s program in 2004, a television show about the early days of Las Vegas, even a poker-themed show at a Vegas casino—the casino ended up suing him. He won’t say how much money he has left, but it clearly isn’t much, well under a million dollars. One source of income is Time Warner, which gave him a consulting contract in 2010 that requires little of him; it was almost certainly a favor from old friends.
“In the end, I came out with enough money to live,” he says. “I don’t have a lot extra. But I’m living well enough.”
He reaches down and smooths Teddy’s fur.
“And you know, I don’t remember losing a single friend. Everyone’s been nice, you know? How would I like to be remembered? I’d like to be remembered as a nice guy. That’s a pretty good thing.”
http://www.vanityfair.com/hollywood/2013/03/tv-producer-merv-adelson-las-vegas-mob
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