The entertainment industry lost one of its entrepreneurial visionaries yesterday when Steven J. Ross, chairman and co-chief executive of Time Warner Inc., succumbed to prostate cancer. He was 65.

Over the past year, since beginning chemotherapy treatment for the cancer, the charismatic, tireless, seemingly invincible Ross had been forced to relinquish day-to-day supervision of the world’s largest media and entertainment company. In June, he announced that he was taking an indefinite leave of absence to continue treatment.

Gerald M. Levin, who had been co-chief executive since the forced resignation of Nicholas J. Nicholas Jr. in February, took over sole control of the company following Ross’ leave.

In his career, Ross gained a reputation as a world-class dealmaker, whose crowning achievement was the 1989 purchase of his Warner Communications Inc. by Time Inc. Ross emerged as co-chairman and the dominant figure of the new company , Time Warner Inc.

“Steve Ross’ clarity of vision, exceptional intellect and personal magnetism were the driving force in creating Time Warner and in securing its leadership in global media and entertainment,” Levin said in a statement.

“He was one of a kind,” said Robert Daly, chairman of Warner Bros., “a visionary, an unbelievably brilliant strategist and negotiator. Most importantly , he was a great friend and always thought about the people in the company. The record of our company’s longevity of management was a philosophy that came from Steve. He set the tone for the rest of us to follow.”

Born Steven Rechnitz on Sept. 19, 1927, in Brooklyn, Ross was a true American success story. He began his career selling trousers in New York’s garment district.

His reputation as a consummate dealmaker, however, began in 1954 upon his marriage to Carol Rosenthal. He joined his father-in-law Eddie Rosenthal’s funeral home business and for three years was director of the Riverside Memorial Chapel.

What began as a scheme to rent out the funeral chain’s 100 limousines during off-hours led to the creation of Abbey Rent-a-Car and, subsequently, Kinney Service Co., which operated parking lots and garages.

After taking the company public in 1962, Ross expanded into building maintenance, as well as other areas such as printing with the acquisition of National Periodical Publications, a distributor of magazines, comics and paperbacks.

Ross’ first tango with the entertainment business came in 1967, when he purchased the Ashley Famous talent agency. Agency founder Ted Ashley introduced Ross to the industry.

And he was a quick study. Two years later, after a protracted battle with financier Bernie Cornfield and Commonwealth United, Ross bought the ailing Warner Bros.-Seven Arts for $ 400 million in stock.

Warners was not exactly in its heyday in 1969. But Ross saw the potential of the company’s 40-year-old film library, its valuable real estate and its growing music division, which included the Warner Bros., Elektra and Atlantic labels. Consolidating the company’s operations, Ross brought the same far-sighted strengths to the entertainment industry as he had to limousines and parking lots.

While other studios were struggling with the status quo, Ross was expanding. Partnered with American Express, he tapped into the emerging cable business, launching Warner-Amex Cable Communications–he later bought out American Express.

Ross’ personal fortunes grew along with that of his company, subsequently renamed Warner Communications Inc. From having overseen a company that produced $ 17 million in revenue in 1961, he was overlord of a $ 4.7 billion operation by 1988. In 1991, Time Warner revenue topped $ 12.1 billion.

He was not infallible, though, and was caught short by the changing fortunes of the company’s 1976 acquisition of electronic games manufacturer Atari. The craze for electronic games that began in 1979 at one point led Atari to a $ 2 billion sales year. But by 1982, electronic games market had plummeted. Ross held on to the company until 1984, incurring a reported $ 875 million in losses by the time it was sold.

Even more damaging, Ross became enmeshed in a scandal involving a stock fraud and bribery-kickback scheme in the purchase of stock in the Westchester Premier Theatre, a business that was associated with organized-crime figures such as Carlo Gambino. It ultimately led to the conviction of Ross’ closest adviser, Jay Emmett, and accountant Solomon Weiss.

But Ross’ own participation was never proven. His delegating style left plenty of room for doubt as to whether he’d been aware that he was in business with organized crime.

In the midst of the investigation, Ross suffered a heart attack. This signal of mortality, and the twin debacles of the Westchester Premier Theater and Atari , prompted Ross to fortify the ramparts. And just in time, too, for soon after, Rupert Murdoch launched a hostile-takeover bid on Warners. He was thwarted when Ross allied with Chris-Craft Industries chairman Herbert Siegel in a stock swap.

The move turned out to be at best a mixed blessing. Ross’ luxurious lifestyle and Warners’ reputation for extravagance came under fire from Siegel, who continued to buy stock in Warners and, eventually, became its largest single shareholder.

What Siegel didn’t factor in was Ross’ ability to create fierce loyalty in creative talent and executives. After a protracted battle, during which Siegel threatened to resurrect the Westchester Premier Theatre scandal, Ross marshalled Warner’s talent roster and stockholders behind him and Siegel quietly backed down.

Over the years, under the stewardship of the longest-running studio executive team, Robert Daly and Terry Semel (15 years), Ross had built Warners’ film division into Hollywood’s most consistent revenue-generating studio, producing such blockbusters as “Batman,” the “Lethal Weapon” series, a host of Clint Eastwood action films and several Spielberg hits.

Warners’ record division under Mo Ostin (20 years) includes an enviable roster of top talent such as Madonna and Prince. Warner television was fortified by the acquisition of Lorimar-Telepictures and also produces “Murphy Brown.”

Ross’ biggest coup, however, was the merger of his film/cable/record company with the Time Inc. publishing and media empire in 1989. Ross became co-chairman and co-chief executive with Time’s J. Richard Munro in July 1989. When Munro retired in May 1990, Ross became sole chairman and Nicholas became his co-chief executive. Nicholas was slated to become sole chief executive in 1994. In 1991, Time-Warner produced more than $ 12.1 billion in revenues. However, the crushing debt of the $ 14 billion transaction forced Ross to look for capital. After one unsuccessful and controversial offering, he managed to secure $ 6.2 billion in refinancing from its banks and paved the way for a $ 1 billion investment in the Time-Warner entertainment division by Japan’s Toshiba Corp. and C. Itoh & Co.

Even as his health was failing, Ross was arranging for his replacement. In February 1992 he maneuvered the forced resignation of Nicholas, his co-chief exec and longtime heir.

Levin, whose long-term vision of Time-Warner as a global operation was more closely aligned with Ross’ way of thinking, was tabbed to replace Nicholas.

Ross is survived by his third wife, Courtney Sale Ross, two daughters, Toni and Nicole, and a son, Mark. Funeral services will be private and a memorial service will be held in January for family and friends.

The family has asked that in lieu of flowers, contributions be made to the Police Athletic League and the Children’s Health Fund.

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