Film History: Studio Scandals, 1977–83

Quote of the day:
“Contrary to notions of bland financiers, most important executive positions in the entertainment business today are occupied by high-spirited, entrepreneurial Jews who emigrated to Hollywood from New York and other points in the East and Midwest. Even though the incumbents are better educated and more urbane, they are colorful, creative…and Yiddish remains the second language of Hollywood.”—David McClintock, Indecent Exposure, 1982.

With so much in the news about Harvey Weinstein, I thought it was time to revisit two classic books on how Hollywood deals with scandals in the ranks. The first thing you should know is that Hollywood, in many ways, is the ideal capitalist industry. Though your wheezing local PBS station might be running Salt of the Earth each Mayday, broadly speaking it’s an unsubsidized group of risk-taking companies with far from socialist ideas about wealth accumulation. Hollywood is an American export powerhouse. Like a later California-based business, personal computers, Hollywood was a creation of various forms of venture capital.

it’s been decades since I last picked up either McClintock’s Indecent Exposure or the later best-seller Outrageous Conduct, by Stephen Farber, about the on-set Twilight Zone: The Movie accident in 1982 and its criminal prosecution. It’s a story of human tragedy, not financial disaster, but it came from the same hesitant, confused period when a director was God on the set and studio chiefs were in the distant background, scarcely in charge any more in any real day to day sense. Twilight Zone, like Heaven’s Gate, became shorthand for a dishonored time period of irresponsible recklessness.

That period is when “my people”–baby boomers—were the newest thing in Hollywood. Less cerebral than the Coppola/Scorsese/ Friedkin/Bogdanovich mini-generation of the late Sixties, their immediate predecessors, the main frame of reference for the Seventies Movie Brats (Lucas / Spielberg / Landis / Kasdan / Zemeckis / Demme, etc.) wasn’t the rough and tumble of real life, but their childhood memories of movies and TV shows themselves. I smile ruefully at a time when people who were thirty in 1982 were still regarded as young brats.

That’s part of Farber’s story; the not unreasonable claim that directors who were chosen partly on the basis of their youth were, not surprisingly, not trained to deal with basic adult responsibilities, like on-set safety. There are unique features of those times, of Landis, and of this particular production that make the story worth reading as a museum exhibit on a certain era of filmmaking. But to me the basic flaw, aside from personal ones revealed in many of the film’s executives, was that by then nobody really knew who was in charge. The chain of command for artistic decisions clearly points to the director. But if that person isn’t also the producer or even the owner of the material, is a film director legally responsible for the safe handling of all of the various crafts that go into production? Where is the line drawn? In the Eighties it took this high-profile court case to try to determine where, but by then, five years after the accident, Hollywood itself, sobered up, was drawing the line much more tightly.

One constant running in the background of Indecent Exposure is the anxious betting of the future of the studio on the idea that Close Encounters of the Third Kind, then in post-production, would not only be a hit movie, but as big or bigger a hit than Star Wars, the greatest phenomenon of all time, still going strong seven months after it opened. This was something of a mistake in terms of setting public expectations.

The second extraordinary thing, or at least unusually over-the-top thing that Columbia did was solemnly promoting it as likely to be one of the greatest and most meaningful films of all time. The Close Encounters marketing campaign sought out quotes from religious and intellectual leaders, like the Dalai Lama. Ray Bradbury eagerly helped the film with interviews where he said that CE3K was far more profound, even “soulful” than 2001, although Bradbury was careful to lay the blame on “the cold, dead hand of Kubrick”, of course, not on his alleged friend, Arthur C. Clarke. Not my favorite Bradbury moment, though I’m sure he was sincere.

It all reads strangely now, because we have the advantage of forty years of hindsight. CE3K wasn’t a flop. It was a moderate, though extremely expensive hit. It has some charming magical moments, especially with Richard Dreyfuss and child actors, and the climax still impresses. But it’s pretentious in the most literal way; you can feel it earnestly straining too hard to be more significant and memorable than it really is. Spielberg is noted for having obsessively returned to it again and again, even making changes for the DVD editions twenty years later, but it never achieved the “2001 killer” status confidently predicted for it when it opened. Instead, it was E.T., based on similar images and concepts, but better written with more lovable characters, that would seal Spielberg’s reputation as a box office master of science fiction and fantasy.

Spielberg gets a bit of a bum rap in Outrageous Conduct, because even though it’s certain he had nothing to do with the accident, and almost as certain that he knew nothing about John Landis hiring child actors outside of the system, the author still chimes in along Hollywood skeptics who say, “Why are they hiding Spielberg?” Because he’s innocent; how’s that? But Stephen Farber has a bit of a point: in an investigation that interviewed everyone in sight, no one so much as lifted a finger to even question Steven Spielberg about a film made by his company. To understand why you’d have to remember what he’d become by the mid-Eighties: not only the most astoundingly successful director in history, but a powerful producer as well, with a squeaky-clean image, especially gifted with children’s and family stories. Getting tangled in John Landis’s problems was the last thing he needed.

Indecent Exposure takes its focus to a more rarefied level of management, the board of directors that formally hires and ultimately controls the studio boss. I can see why so many other writers praise the book; it’s detailed without being boring and told from many overlapping accounts that fit together like a puzzle. In simplest terms, it’s a story of Hollywood’s indulgence of crazy or recklessly dishonest behavior as long as everyone’s still making lots of money. It’s a tale of injustice: Alan Hirschfeld, the nice guy executive who exposed David Begelman’s embezzlement and fraud ended up suffering as much or more career damage than Begelman would.

But interestingly, there’s one thing that people who’ve heard of the book might get wrong about it. To author David McClintock, the really harsh Hollywood truth isn’t that studios use corrupt bookkeeping and deceptive loopholes to cheat its employees and partners, because it usually isn’t even necessary: the sad fact is that people signed those contracts knowing they’d be underpaid; they wanted the work, or the deal, so badly they signed away potential profits with their eyes wide open. McClintock reminds us that being part of the silver screen is so attractive, and the number of actual opportunities so limited, that even under the best of circumstances it constitutes a permanent, unavoidable inequality in bargaining rights.

I’ve mentioned that unlike film histories centered on the production process or critical reaction to finished films, Indecent Exposure is a top-down portrait of a board of directors at war with each other, and the super-rich investors who are the highly human, flawed faces behind what’s often thought to be faceless money. A favorite McClintock theme is, “new” (that is, Seventies) Hollywood acts much more like classic era Hollywood did than most people realize.

There was already a popular stereotype that the foul-mouthed old tyrants of the Twenties through the Forties had been superseded by polite nonentities who ran the studios with the aid of IBM machines. Is it really such a different town even forty years after the events chronicled in Indecent Exposure?

What’s striking about “IE” is how early everything is—quite literally “before my time” in terms of any understanding of the industry. Most modern-era books are set a little later, about older baby boomers (and just-barely-pre-baby boomers like Scorsese) as they were rocketing into the sky. That was just beginning in Indecent Exposure. There was only the most rudimentary cable TV market yet, lots of talk but few sales yet of home video equipment, and few multiplex theaters had been built. All of those factors limited the size of the film industry compared to what it would become in the Eighties and Nineties, with tons of screens, tons of channels, and tons of VHS tapes available everywhere.

Other oddities: As I’ve read before, long time celebrity TV entertainment reporter Rona Barrett, forgotten today, was hugely influential in that era before syndicated show biz shows like Entertainment Tonight took hold. On the other hand, the name Rupert Murdoch comes up exactly once, as the owner of a magazine that said something uncomplimentary about Close Encounters. There’s no magic foresight that this man would, within twenty years, take over one sixth or seventh of Hollywood, start an entire family of TV networks, and become a political player.

The Begelman embezzlement affair as meticulously described in Indecent Exposure is reverently described by other writers as “Hollywood’s Watergate”, but it’s not a great analogy. It’s more like Barbara Tuchman’s The Guns of August, describing a rich, legendary world of opulence and privilege that was shortly to be swept up in the winds of inexorable change.

The studios of the Seventies depicted in Indecent Exposure were different from those of the Thirties in some key respects: television departments replaced B pictures as a profitable, if unspectacular way of making a steady income between feature film hits. More of a change: Talent was independent now, so fees were higher and talent agencies became much more powerful within Hollywood than they’d been when most actors were under contract. Freddie Fields and Sue Mengers were famous in the late Seventies in a way they couldn’t have been as “mere” agents in the Sixties.

Columbia would be bought out by the Coca Cola Company, and then by the Japanese. MGM and UA merged. Panasonic bought Universal. As the dust slowly cleared in the Nineties, an incredible number of new outlets seemed to be chasing a finite amount of talent. Deals and opportunities grew richer. That’s what would happen on the highest levels of the largest studios, a time when specialty films, foreign films, and what might broadly be called grown-up films like Gandhi, The Killing Fields, and Out of Africa did exceptionally well. Now the studios all made subcontracting deals, if they could, with reliable suppliers who became, in effect, mini-studios, like old fashioned Ray Stark (Funny Girl, The Main Event) or Amblin (Spielberg).

In turn, smaller production companies here and in the UK could now aspire to rise to mini-studio status themselves, like Goldwyn, Goldcrest, Hemdale or Nelson. And now a newcomer, Miramax. Someone would eventually come along with $60 million or so and grab Miramax, basically to secure the invaluable services of the Weinstein brothers.

It was the Walt Disney Company.

These articles are derived from lectures, talks and web posts. Most have also been posted on