Mr. Magoo's Christmas Carol

A blog dedicated to the making of the first animated Christmas special, Mr. Magoo's Christmas Carol.

Thursday, October 21, 2010

A New Direction

Second in a four part series
     Henry G. Saperstein, or Hank, as he was commonly known, got his start in the entertainment industry when he inherited a small string of Chicago theaters at the age of twenty five.  At some point, the theaters were sold and Saperstein became involved with fellow Chicagoan, Peter DeMet, whose family owned the DeMet’s Candy Co.  DeMet had created the sports show, Championship Bowling, which Saperstein helped him package for network broadcast.  Hank had been quite successful in Chicago but there was a lot more money to be made in Hollywood, where most of the properties available for packaging and licensing were being produced so he moved west.  By the late 1950s, Saperstein would have a hand in merchandising Elvis Presley, Wyatt Earp, Lassie, The Lone Ranger, Roy Rogers, The Rifleman, The Three Stooges and last but not least, manufacturing and providing the premiums for Kellogg’s Corn Flakes.  It was a diversified portfolio and due in part to tax regulations at the time, Hank Saperstein set up a separate company for each property to administer the licensing or manufacturing.  Ultimately, the companies would number in the dozens.  Those myriad companies would be important to UPA’s fate.

     Saperstein knew Mr. Magoo was a relatively unexploited character and was a good fit for his licensing business.  Sensing an opportunity due to UPA's financial straits, he called up and met with Stephen Bosustow to discuss a proposal for his star property, Mr. Magoo.  Sometime later, on December 31, 1959, an agreement was signed between Bosustow’s UPA and Saperstein’s Television Personalities, Inc. for UPA to produce 130 Mr. Magoo shorts to be distributed by Television Personalities.  Production on the made-for-TV shorts was begun early in 1960, initially under the auspices of Stephen Bosustow.  Shortly after the deal for the Magoo show, Saperstein, making use of his Chicago roots, approached Chester Gould and his syndicate, The Chicago Daily Tribune, with the idea of producing Dick Tracy in animation.  Gould made a visit to the studio and an agreement for 130 Dick Tracy shorts was soon in place.

The studio had been looking into the abyss at the end of 1001 Arabian Nights fearing a lack of production but was now facing a workload larger than anything it had ever seen.  Hank Saperstein had opened the spigot.  In its theatrical heyday, UPA had been turning out a six minute cartoon at the rate of one every five weeks.  Now it would turn out a five minute cartoon every five days.  (It appears that Vice President Herb Klynn, et al., wanted no part of this new direction for the company which would explain why they left before the debut of the feature.  Ironically, their new series, The Alvin Show, had to be produced on an equally time- and budget-constricted basis.)

     As part of their initial business meetings, Saperstein and Bosustow met for lunches, probably at The Smokehouse, the restaurant next door to the studio.  The pressures of running a studio had become overwhelming and Bosustow was looking for a way to get out of it and back into producing.  One day at lunch, he casually mentioned to Saperstein that he was in the process of selling UPA, having signed an agreement on December 22, 1959 for the sale of UPA stock to a group of buyers, Seymour Weintraub & Associates.  Saperstein, seeing the licensing value in the Magoo character, and being a consummate salesman, immediately made him a far more generous offer (iv).  In fact, the first draft of the sales agreement between Saperstein and Bosustow made it clear that Mr. Magoo was “one of the fundamental considerations” in Saperstein’s purchase of the company.  (It also seems likely that Saperstein tendered his offer to protect his distribution agreement for the Magoo TV shorts.)

     Saperstein had cannily sized up his seller’s situation and with only a few pieces of paper, promised to relieve him of all his burdens.  Hank’s offer answered every single one of Bosustow’s concerns, including his liability for backing out of his agreement with Weintraub and Associates (v).  Stephen quickly took him up on it and although there were other stock holders who needed to be bought out, Bosustow was the majority owner and a deal was agreed to.   It was an attractive deal on paper, considering that all that was being sold was a production facility and the rights to two well known characters, Mr. Magoo and Gerald McBoing Boing, in exchange for financial security.  There were no other assets as the film library had long since been sold back to Columbia as each film had gone over budget (vi).

     As part of his distribution plan, Saperstein approached the Kellogg Company, for whom he had been doing cereal premiums, with the prospect of sponsoring a half hour show featuring the new Mr. Magoo cartoons (Left, rough drawing from a Kellogg's Rice Krispies commercial).  Kellogg was already sponsoring the Huckleberry Hound and Woody Woodpecker shows but was eager to advance their dominance in the lucrative cereal market so they directed their advertising agency, Leo Burnett, to move forward.  A Letter of Intent was signed on May 18, 1960 between Burnett and Television Personalities on behalf of UPA.

     With the agreement in place, Hank next tapped his Chicago connections, Peter DeMet, and La Salle National Bank of Chicago to finance the purchase of UPA.  Having Kellogg on board as the sponsor made the sale quite attractive for the bank and they agreed to help finance the deal; Hank claimed in later years that he personally never put any money down (vii).  The terms of the deal had Bosustow selling the company to Henry Saperstein, Peter DeMet and Television Personalities, Inc. and he was paid $15,000 as a down payment for his stock in UPA with the balance ($58,500) to be paid over time.  It allowed him to continue on as an employee with a salary and expenses on an exclusive basis for five years and on a non-exclusive basis for another five.  He was also encouraged to develop new properties for which he would share 5% of the net profits. 

     The agreement was signed on June 27, 1960 and with it, the UPA once seen as an artistic utopia ceased to exist.  In its place was a licensing company with a production arm.

(iv) Stephen Bosustow interview with Michael Barrier, November 30, 1973 
(v) Weintraub & Associates did file suit against Stephen Bosustow on February, 17, 1961 but the case was closed May 11, 1962 so apparently some kind of settlement was reached. 
(vi) Interestingly enough, Saperstein began buying back the UPA shorts in 1960 but it appears that he might have only been buying back the McBoing Boing shorts.  There were plans to make The UPA Cartoon Show, to be distributed on CBS but it was later listed as being abandoned. 
(vii) Interview with Paul Carlson, May 21, 2007

Next Thursday, Bosustow vs. Saperstein

1 comment:

John Musker said...

Darrell: You've become Woodward and Bernstein! Or is it one of the Pulitzer Prize winning financial reporters? Art and commerce do collide all the time in the film biz. Thanks for digging this stuff out!