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The Big Picture

Charlie and the dream factory

November 03, 2009|PATRICK GOLDSTEIN

If you've been reading the gloom and doom stories in the press lately, you know that Hollywood is going through its fair share of belt tightening. Unsure about future profits, studios have been cutting back on everything, including movie production budgets, A-list stars' first-dollar gross deals and perk packages as well as movie premieres, screenwriter salaries and -- oh, yes -- newspaper advertising.

It's all been a big bummer, especially for the town's talent agents, who have had to weather a thousand-and-one grumpy phone calls from top actors and filmmakers unhappy about seeing their once-reliable salary quotes being tossed out the window.

It's nervous time for talent, especially with the studios crowing that most of their biggest hits this year ("The Hangover," "Star Trek," "Transformers") have come without the presence of any big above-the-line names. But guess what? This ain't the first time that Hollywood has tried to get tough and dump all that expensive talent baggage. That's the message that WME boss Ari Emanuel delivered to his troops recently, sending out to all his agents a copy of a 1970 Life magazine that detailed Paramount Pictures' efforts to revamp its business by jettisoning most of its costly star talent.

Even though 1969 was a banner year for movies, seeing the release of such groundbreaking films as "Midnight Cowboy," "Easy Rider," "The Wild Bunch" and "Butch Cassidy and the Sundance Kid," to name just a few, it was a lousy year for the studio bottom line. In fall 1969, Paramount had laid off 150 employees. As Life pointed out in its story, at the same time as Paramount was cutting overhead and writing down its production losses, Warner Bros. had $59 million in losses, MGM had $53 million in losses and Fox had $67 million in losses, all in an era when a million really meant a million.

Paramount's parent company, Gulf + Western, which had acquired the studio in 1966, was run by the mercurial Charles Bluhdorn, a brilliant financier with big, square Chiclet-like teeth who had such large holdings in the Dominican Republic that he had his own private landing strip for his Gulfstream jet. Always willing to push the limits in search of a killer deal -- he was under investigation by the SEC for much of the 1970s -- Bluhdorn had little patience for the vagaries of the movie business. When films would lose money, he'd pound the table, bellowing in a guttural Austrian accent: "While we've been sitting here, I made more [expletive] money on sugar than Paramount made all year!"

You can imagine any number of top GE executives saying the same thing about Universal Pictures this year, if you simply replaced sugar with light bulbs or jet engines. Forty years ago, people were just as frustrated by the excess and unpredictability of the movie business as they are today. Emanuel wouldn't get on the phone with me to explain exactly why he focused on this Life story, but one of his agents, who sent it along to me, said that Ari's point was simple enough: Don't overreact to the current studio cost-cutting frenzy. As this story makes all too clear, the more things change, the more things stay the same. Studios always think they can make the movie business into a more rational enterprise, but that's a bean-counter fantasy. Making movies will always require a leap of faith.

It's almost comical reading Bluhdorn grouse about his economic woes, knowing that he was voicing the same complaints echoed by the overlords of News Corp., Viacom, GE and Time Warner today. All you have to do is add a zero and his beefs are in perfect sync with today's studio's economic grumbling. "This paying stars $1 million against 10% of the gross -- paying directors $500,000 -- that's nothing less than insanity," he told Life. "You see, to recoup you must take in $3 million at the box office for every million up front. And for these expensive movies, the odds against recouping are enormous."

Just as today's studio chiefs think they can now make "Transformers" and "Hangover"-style hits without movie stars, Bluhdorn was convinced that high-priced talent was superfluous. "You get from these big stars a document of conditions of how many hours they'll work, what they'll do and won't do. . . . Well, who needs them? With today's young audiences, names won't sell a picture anymore. A great script and a devoted director -- that's what makes things happen."

Substitute "special effects" for "script" and you could easily slip those words into any of today's studio bosses' mouths. So why didn't cost-cutting formulas take hold? Why did Bluhdorn's resolve weaken? Will the same thing happen today?

The rocky '60s

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