DOWN AND OUT IN DREAMLAND

Hollywood holds a place in the American imagination as a land of endless plenty for those who make the movies. Rolls-Royces, personal stylists and diamonds the size of quail eggs come with the territory. More than in any other industry, conspicuous consumption is not only not frowned upon, it’s admired as a concrete measure of power.

But even a dreamland has its downturns. Studios experience a string of flops, the economy stalls, the Internet steals our attention. When it happens, we witness a rather curious phenomenon: the most decadent industry on earth pleading poverty. Suddenly, the studio suits decide it’s time to cut corners. We’ve been spending too much, they say, and it’s time for a little austerity. It’s a struggle as old as moving pictures themselves. What follows are excerpts from a series of mogul memos and letters, demanding--or begging for--an end to the spiraling madness.

In 1938, David O. Selznick was two years into producing “Gone With the Wind” and not a foot of film had been shot. Concerned that an expensive contract director, George Cukor, was sitting idle, Selznick dispatched the following to the secretary of Selznick International:

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To: Mr. Dan O’Shea

September 21, 1938

Confidential

I have reluctantly, and at long last, come to the conclusion that we have simply got to do something, and promptly, about the Cukor situation. I have thought that George was a great asset to the company, but I am fearful that he is, on the contrary, a very expensive luxury . . . regardless of his great abilities . . . George has been with us now for a long time and we have yet to get a picture out of him. We are in danger actually of winding up paying him about $300,000 for his services on “Gone With the Wind . . .” In any event, I think the biggest black mark against our management to date is the Cukor situation and we can no longer be sentimental about it . . . We are a business concern and not patrons of the arts. . . .

David O. Selznick

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(Cukor went on to begin filming “Gone With the Wind” on Jan. 26, 1939. Less than three weeks later he was gone from the production, citing disagreements with Selznick. Selznick pulled director Victor Fleming off “The Wizard of Oz” and Fleming led “GWTW” to completion. It went on to become, when the totals are adjusted for inflation, the highest-grossing film in history.)

Nothing scares a studio head more than watching costs skyrocket. When he wrote this in 1946, Darryl F. Zanuck, atop 20th Century Fox for more than a decade, was disturbed by the beginning of what would be a long downturn:

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To: Producers, Directors, Executives

June 13, 1946

Confidential

I have just examined a very recent survey made on our present pictures relative to the rising cost of production. It was the most alarming report I have read at any time in the 20 years I have been producing pictures. The cost of the construction of sets, the cost of labor, and the cost of the operating crew on the shooting company has increased to a point where it is simply staggering. . . We know there are certain limitations on grosses. As an example, we know that “Diamond Horseshoe” [1945], which was a hit in every theater in the world and ran up a gross of more than $3,150,000 domestically, will still wind up breaking even or making a very insignificant profit due to the fact that it cost in excess of $2,600,000. Here we have an example of a tremendously successful picture struggling to make even a minor profit. . .

Darryl F. Zanuck

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Despite cautionary memos, big movie companies were in for some tough times. When the studio contract system--which had monopolized talent in long-term deals--started to fall apart, actors, directors and writers suddenly were free agents, better able to capitalize on their fame and past successes. This widened the gulf between the haves and the have-nots. A famous actor or director could get almost anything he or she wanted. Consider the case of “Cleopatra,” which starred Elizabeth Taylor and Richard Burton (1963). It was made for about $40 million; factor in inflation and it probably cost more than “Titanic.” (After $6 million had been spent, there were only 11 minutes of usable film.) It almost destroyed Fox; the original director, Rouben Mamoulian, never made another movie; and it certainly slowed the career of director Joseph Mankiewicz.

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Perhaps Michael Cimino didn’t read his movie history; in 1980, the director put his name on a movie called “Heaven’s Gate,” which became one of Hollywood’s most notorious flops. In an eerily prescient memo to United Artists’ business affairs executive Dean Stolber (included in Steven Bach’s “Final Cut: Art, Money and Ego in the Making of Heaven’s Gate, the Film That Sank United Artists”), production manager Lehman Katz expressed his concerns about the film before shooting even began:

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Dear Dean,

A budget dated 23 February 1979 contemplates 69 shooting days and totals $9,479,831. . . A major concern would be Mr. Cimino’s ability to shoot so complicated a script in the time allotted. The schedule could be 12 to 15 days too few with a shortfall of as much as $700,000 thereby to be foreseen. In sum, this budget may be short in an area just above a million dollars . . . .

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(In fact, “Heaven’s Gate” spun so out of control that by the time it hit theaters, United Artists had shelled out $44 million--and the movie did $1.3 million in box-office receipts. The blow was so devastating to United Artists that its corporate parent, Transamerica, sold the studio to MGM for only $350 million.)

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No one was more famous for conspicuous consumption than the late Don Simpson, producer of such high-concept hits as “Top Gun,” “Flashdance” and “Beverly Hills Cop.” When the budget of “Days of Thunder” (1990) had nearly doubled with little apparent progress on the shoot, Paramount Pictures executive Lance Young was dispatched from Los Angeles to the set in North Carolina. Young recalls his trip in “High Concept” (Doubleday, 1999), a biography of Simpson by Charles Fleming:

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“I was sent down to exercise control [where such expenses as a $400,000 hotel room gym had been expensed to the studio]. But there was nothing to be done. . . The cost of flying in hookers was the least of it. We’re talking about millions of dollars being spent. Don and [partner] Jerry [Bruckheimer] didn’t even try to hide it.”

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(Paramount was so disappointed in the film’s performance that it asked Simpson and Bruckheimer each to return $1 million from their individual $9-million salaries. The producers did not comply.)

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In 1991, Jeffrey Katzenberg was the golden boy at Disney. In a 28-page in-house memo to top Disney brass, titled “The World is Changing: Some Thoughts on Our Business,” Katzenberg decried out-of-control spending at the studio:

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Jan. 11, 1991

Not surprisingly, this box office mania is fostering a frenzy among actors, writers, directors and their agents as they try to claim their share of the big budget pie. If a leading star who received $6 million for his last film reads that another star is getting $10 million for a picture, he immediately calls his agent, insisting on nothing less than $12 million for his next movie. . . . Unreasonable salaries coupled with giant participations comprise a win/win situation for the talent and a lose/lose situation for us. It results in us getting punished in failure and having no upside in success.

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(While nobly defending stockholders from the grasping fingers of the talent, Katzenberg neglected to mention his own movie-star-scale compensation package, which was estimated at $25 million a year plus a 2% gross earnings participation deal that became the centerpiece of his long and bloody lawsuit against Disney after his departure. Katzenberg was at Disney for 10 years; Daily Variety estimated his settlement with Disney to be $275 million, enough to make even the biggest stars blanch with envy.

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Mega-spending has continued unabated in the 1990s. Before she would go to New York to promote “The Scarlet Letter” (1995) on “The Late Show with David Letterman,” Demi Moore insisted on two jets and a helicopter to shuttle her entourage of drivers, nannies, cooks and personal trainers. She got the perks but the movie flopped anyway, earning only a fifth of its $50-million budget.

The latest Hollywood status symbol is your very own Gulfstream V jet. The average price is $38.7 million, yet everyone who is someone has or wants one. There is a waiting list of moguls who have plopped down $2-million deposits just for the chance to buy one. Yet those with an ear to the ground say that this is a period of austerity in Hollywood. No doubt a memo is coming soon.