Boston to Hollywood

One day last February, in his satiny suite high in Manhattan's Hotel Pierre, Boston Banker Serge Semenenko shook hands with Hollywood's Jack and Albert Warner on a deal. Full of enthusiasm, Jack and "Abe" phoned their older brother Harry in Hollywood: Semenenko had agreed to buy a majority of their stock interest in the family studio and take control. What did Harry say to that? Harry said no, and the Semenenko deal seemed as dead as dozens of others that have swirled briefly in Variety headlines in the five years since the Warners first announced that they would sell "if somebody makes the right offer." But Semenenko was not discouraged: he kept his offer open.

Last week the Warners signed a four-page agreement, thus ending a rags-to-riches cycle fabulous even for Hollywood. They had parlayed $150 worth of projection equipment into $68 million worth of assets and $4,000,000 in earnings (in 1955), pioneered the talkies with The Jazz Singer, and last year topped the list of box-office moneymakers with six of the first 15 hits. Now, in return for $22 million, or $27.50 a share ($3.10 above market value), the brothers handed over 800,000 shares, 33% of the outstanding common stock of the company. They still keep 10% of Warners and remain on the board.

"A Personal Venture." The new boss of Warners is probably Hollywood's No. 1 angel. Russian-born and Harvard-educated, Serge Semenenko, senior vice president of the First National Bank of Boston, has funneled more than $2 billion of Boston's money into Hollywood in the past 20 years. A suave, cautious-speaking man of 52, he has helped virtually every major studio with First National loans. But the Warner Brothers deal was not a bank matter, Semenenko said; it was "a personal venture."

He was acting with and for a group--"just a few old friends"--whose identity he kept secret. But at least three were tentatively identified as New York Investment Brokers David Baird and Charles Allen and Theater Tycoon Simon H. (Si) Fabian, president of Stanley Warner Corp., to which Warners sold its theater chain in 1953, in accordance with an antitrust decree separating moviemakers from exhibitors. While Semenenko denied that old friend Fabian, "a wonderful executive." had invested in his new deal, he admitted that he would "like to see the legalities ironed out, so that Fabian could get into the picture. Warners needs a good manager like Mr. Fabian."

A Legal Embarrassment. Insiders insisted, however, that Fabian was already in. Said one of Semenenko's closest associates: "Fabian is behind the whole group." The reason for the hush-hush on Fabian was the federal court order permanently divorcing production and exhibition of Warners movies. The probability was that Fabian was in the deal only on a contingent basis, i.e., stock had been set aside for him, provided that he could figure out how to satisfy the Justice Department and become an open partner. This might be done by dividing Stanley Warner Corp. into two parts, with Si Fabian taking its nontheater holdings, including International Latex, which it bought two years ago.

But whether Fabian could be brought in or not, Serge Semenenko went ahead. Jack Warner, 63, was expected to remain as executive producer, but Semenenko planned to bring in new talent and build a team. Priority, he said, would be given to increasing Warners film output; the studio now turns out about 24 features annually v. double that number prewar. After that, continued Semenenko, Warners might diversify into TV stations, allied entertainments, possibly even expand into electronics.

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