Born to a Jewish working-class family in the Flatbush section of Brooklyn, Ross displayed sharp moneymaking instincts from the start. While an employee of his father-in-law’s funeral parlor, he devised the profitable scheme of renting out the business’s limousines at night. He built the operation into Kinney Service Corp., took the company public, paid $400 million for the floundering Warner-Seven Arts studio and turned that into Warner Communications. Ross was a shrewd negotiator who, said media entrepreneur David Geffen, was “happiest when taking your pants down,” and he kept his top managers loyal by doling out generous salaries and perks. A self-proclaimed “dreamer,” he saw the possibilities of cable TV while most couldn’t look beyond the Big Three networks. Ross was among the first to experiment with pay-per-view TV and backed such fledgling networks as MTV.
But Ross’s career was tainted by financial reversals and miscalculation. Until his death, he was shadowed by allegations that he had connections to the mob-run Westchester Premier Theater in the 1970s. (Two top Warner underlings pleaded guilty in a racketeering scheme.) In 1982, Warner’s Atari video-games division collapsed overnight, costing the parent company $1 billion and raising questions about Ross’s hands-off management style. By far his most ambitious deal was the Time Warner merger, which created the world’s largest media empire. It also submerged the new company in more than $11 billion of debt, joined two jarringly different cultures in an awkward union-and so far hasn’t achieved the synergies that Ross envisioned. Moreover, Ross’s huge 1990 compensation-$78.2 million in salary, bonuses and stock sales-came to symbolize the national outrage over executive pay.
After he was diagnosed with prostate cancer, Ross sought treatment around the country, staying in touch by phone with his chosen successor, Time Warner CEO Gerald Levin. Recently, Ross entered a California hospital for radical surgery, and Levin reported to Time Warner’s staff five days before Ross’s death that “his doctors are optimistic.” The new chairman, a far more introspective man than Ross, offers a different style of leadership: less seat-of-the-pants, though equally adept at gamesmanship. Just one day after Ross’s death, Levin consolidated his control, announcing that eight directors, including several Warner insiders who might still challenge his authority, would leave the board. Levin insisted the timing was unrelated, but some called the move unseemly. Whatever the case, it displayed a brash self-assurance that Ross would surely have admired.
