TIME - Man of the Year/CompactPublishing-TimeMagazine-TimeManOfTheYear-Win31MSDOS.iso/moy/010493/0104200.000

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                                                                                BUSINESS, Page 51

STEVEN JAY ROSS (1927-1992)

The Merchant of Dreams


    "I'm not a manager," Steve Ross once said. "I'm more of a
dreamer." To his admirers, the chairman and co-chief executive
of Time Warner Inc. was a visionary, a company builder with an
unerring instinct for the art of the deal. To his critics, he
was a symbol of corporate excess: an overpaid wheeler-dealer
with a life-style that was more appropriate to Hollywood than
to corporate America. Both fans and foes, however, agreed that
Ross, who died last week at 65 after a long bout with cancer,
projected an aura that was larger than life.

    Part of that stemmed from his physical presence: he was
tall and robust, with a perpetual tan and immaculately coiffed
white hair. His friend Steven Spielberg, the film director, said
fondly that Ross was like "a 6-ft. 3-in. E.T." Although quick
to anger when crossed, he had an easy, charismatic charm,
especially when playing expansive host. Behind that booming
bonhomie was a calculator-quick mathematical mind: Ross loved
concocting deals of such baffling complexity that he was often
the only one who fully understood them. His favorite pastime,
apart from screening films, was backgammon. Played for stakes,
the game requires cool nerve; Ross, predictably, was a whiz at
it.

    As an executive, he was instinctual rather than cerebral,
farsighted but rarely reflective, freewheeling but not hands-on.
He hired the best talents he could find, put them in charge of
ventures, encouraged them to take risks, rewarded them
generously when their gambles paid off -- and protected them
when they stumbled. His managers enjoyed rare job security in
the revolving-door worlds of movies and music. For those in his
inner circle, working for Ross was akin to being part of an
extended family, with the chairman presiding over sibling spats
like a gregarious paterfamilias. In return, his employees
rewarded him with a loyalty bordering on love. Indeed, Ross
often signed his notes and letters to associates "Love, Steve."

    He was born Steven Rechnitz in the Flatbush section of
Brooklyn, the son of a struggling oil-burner salesman who
changed the family name to Ross when his son was in
kindergarten. The younger Ross was not above embellishing his
past. He sometimes hinted that he broke an arm playing football
at a training camp with the Cleveland Browns. In fact, he played
nothing more bruising than touch football at Paul Smith's
College near Saranac Lake, New York, which he attended for two
years.

    Ross's first jobs were in Manhattan's garment district as
stockboy and later as salesman for a line of children's bathing
suits. In 1954, shortly after marrying Carol Rosenthal, he went
to work for his new father-in-law's funeral parlors. (That
marriage ended in divorce, as did his second, to CBS chairman
William Paley's stepdaughter, Amanda Burden. Ross is survived
by his third wife, Courtney Sale Ross, whom he wed in 1982, and
their daughter. He has two children from his first marriage.)

    It was at the mortuary, Ross later said, encountering
people at an emotional low point in their lives, that he
developed a gift for persuading others that they were utterly
important to him. And it was there, in a drab office at the
Riverside Funeral Home, that he first began to build his empire.
It was a catchall conglomerate, named Kinney Services, whose
businesses included parking garages, cleaning services,
limousine rentals and magazine distribution.

    In 1969 Ross purchased Warner Bros.-Seven Arts, a fading
shadow of the great Hollywood studio it had once been. He soon
sold off Kinney's unglamorous sidelines to concentrate on
movies, pop music and television. Ross reacted to Hollywood
glitz as if born under klieg lights. He became a confidant of
such stars as Clint Eastwood, Barbra Streisand and jazz composer
Quincy Jones, sharing with them his corporate jets and sojourns
at Villa Eden, Warner's retreat in Acapulco. And his enterprise
flourished. From 1961 to 1988 the revenues of Warner
Communications (as the company was renamed) rose from $17
million to $4.2 billion and its market value from $12 million
to $14 billion.

    Ross's career was marred by an incident that trailed him,
as his biographer Connie Bruck wrote in the New Yorker, "like
an unappeased spirit." In 1973 two of his close aides were
convicted in a racketeering scheme involving a Westchester
County, New York, theater in which Warner had invested. Ross was
named an unindicted co-conspirator. His image as a corporate
genius was blotted in 1983 when Warner nearly went under because
of the crash of its previously profitable Atari video-games
division.

    Warner's 1990 acquisition by Time Inc. embroiled Ross and
the new corporation in fresh controversy. Time Inc. directors
voted to consummate the union despite a rival bid from Paramount
Communications, which offered nearly twice what Time Warner
shares are currently worth. The deal paid off handsomely for
Warner executives, most notably Ross: his compensation package
exceeded $78 million in 1990, the cost to Time Inc. of buying
out the stake he had accrued in Warner over 30 years.

    Last May, Ross took a leave of absence to battle prostate
cancer. But behind the scenes, he remained active in corporate
affairs, most notably in a boardroom coup that led to the abrupt
resignation of his co-CEO, Nicholas J. Nicholas. He was replaced
by Gerald Levin, who is now Time Warner's sole CEO.

    History's verdict on Steve Ross is bound to be mixed. He
may have rewarded himself excessively, but under his leadership
Warner did grow from a has-been to an entertainment superpower.
Even Ross's critics concede that he was unrivaled as a
salesman, and friends contend that he would have accomplished
even more with Time Warner's combined resources. But Ross's
global dreams are now for others to fulfill.