After World War II, as cultural and industry changes were reshaping Hollywood, movie studios shifted some production activities overseas, capitalizing on frozen foreign earnings, cheap labor, and appealing locations. Hollywood unions called the phenomenon “runaway” production to underscore the outsourcing of employment opportunities. Examining this period of transition from the late 1940s to the early 1960s, Runaway Hollywood shows how film companies exported production around the world and the effect this conversion had on industry practices and visual style. In this fascinating account, Daniel Steinhart uses an array of historical materials to trace the industry’s creation of a more international production operation that merged filmmaking practices from Hollywood and abroad to produce movies with a greater global scope.
|Publisher:||University of California Press|
|Edition description:||First Edition|
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About the Author
Daniel Steinhart is Assistant Professor of Cinema Studies at the University of Oregon. His work on film and media has appeared in Cinema Journal, NECSUS: European Journal of Media Studies, InMedia: The French Journal of Media Studies, and various edited collections.
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All the World's a Studio
THE DESIGN AND DEBATES OF POSTWAR "RUNAWAY" PRODUCTIONS
TOWARD THE END OF THE 1940S, articles on Hollywood's international production activities began to appear in US magazines and newspapers, which provided accounts of the growing phenomenon of Hollywood films shot overseas. Using impressive photo layouts, these reports represented stars and moviemakers working in a variety of foreign locales and relying on local film industries. In 1948, Collier's captured director Gregory Ratoff and Orson Welles shooting the US-Italian coproduction Black Magic (1949) on location in Rome: "The Americans have been delighted with Italian artistic perfection. Costumes, sets and wigs have cost a tenth to a hundredth of what they would in America. Italian technicians, despite time out for Chianti, have proved amiable and adaptable." A year later, in 1949, the New York Times Magazine presented a photo spread on Hollywood talent working and relaxing in Italy and its capital, what was then being referred to as "Hollywood-on-the-Tiber" (fig. 4). The piece attempts to explain the reasons for the influx of Hollywood actors and filmmakers: "For producers, part of Italy's lure has been the unblocking of frozen Hollywood funds. But part, too, has been Italy's own resurgence in film production."
By the early 1950s, as international production continued to flourish, the popular press followed Hollywood's foreign activities not just in Western Europe but all over the globe. The Los Angeles Times published a photo essay entitled "Hollywood Now Reigns over Vast International Domain" and depicted Hollywood personnel working in Rome, England, Nicaragua, India, Monaco, and Mexico. In a similar news item, the New York Times printed images of Hollywood talent making films in Rome, England, Paris, Bavaria, Quebec, Israel, and the Fiji Islands, under the pithy title "Hollywood Studio — The World." "In its growing enthusiasm for making movies about faraway places," the commentary notes, "Hollywood, which in the past has recreated all known parts of the world in its studios, is now making one great studio of the world."
As these articles suggest, postwar film production was moving from Hollywood soundstages and back lots to authentic locations around the globe. Film production was becoming unmoored from the Hollywood studio and from Hollywood the place. To be sure, the film industry's international moviemaking was an important part of this phenomenon of production decentralization. Even though these photo spreads touched on some of the factors that motivated Hollywood producers to relocate production operations overseas — factors such as frozen earnings and cheap, skilled labor — these popular press reports masked the intricacies of making thesefilms and the hot-button debates surrounding what unions termed runaway productions.
Behind these popular accounts was a filmmaking trend that was highly contested, with individuals and organizations justifying runaway productions in different ways. The complex discussion involved different stances from unions, studios, independent producers, and industry leaders, whose positions and alignments transformed from the late 1940s to the early 1960s, a period when the industry was redefining itself. For example, shortly after studios such as MGM and Twentieth Century-Fox devised European production plans in 1948 to put frozen funds to use, the Hollywood Film Council of the American Federation of Labor (AFL), which represented the majority of film unions, voiced its complaint about the number of films that were being shot overseas. Created in 1947 to unify the industry's various labor groups associated with the AFL, the Film Council would be a steady and vocal opponent of runaways. Similarly, the Screen Actors Guild (SAG) threatened to protest the use of foreign actors instead of hiring Hollywood talent for the studios' international productions. MGM's Quo Vadis (1951), in particular, rankled SAG because the Italy-based production intended to use so many foreign actors and extras. Despite these protests, Fox production head Darryl Zanuck maintained that his studio would continue to produce films overseas whenever stories necessitated foreign locations.
Even with these articulated positions, it was difficult to pinpoint how these individuals and groups defined runaway productions. Unions coined the term "runaway" to describe films that were shot overseas to avoid paying union wages, hiring cut-rate foreign labor instead. In trade-press articles from September 1949, however, the Hollywood AFL Film Council offered tactics for fighting runaway productions except in the case when a film required foreign locations. From its earliest investigations into these films, unions attempted to distinguish between productions that were made abroad for legitimate reasons (that is, the use of authentic locations) and projects that could be targeted as runaway productions (meaning, those that went overseas for cheap labor). But with producers often backing up their financial motives for making movies abroad with the need for authentic foreign locations, the distinction became debatable. Furthermore, the various industry stakeholders offered different ways of framing international filmmaking. Unions endorsed the pejorative term "runaway production"; the Screen Producers Guild used the more neutral "overseas production"; while MPAA/MPEA president Eric Johnston subscribed to the pro-free-trade "supplemental international productions." As I will show, runaways did not represent one type of production but a mode of production diverse in its financial interests, geographic sites, and story settings.
To begin analyzing runaway productions in a systematic way, this chapter categorizes these films based on three distinct factors that shaped their making: funding sources, geographic configurations, and the relationship between where the movies were set and where they were shot. These were critical forces that influenced the design of runaway productions and the industry debates about the runaway trend. Hollywood's ability to capitalize on a diversity of economic and geopolitical ties, as well as foreign film industries that were still recovering from the war, lays bare the calculating ways that the industry justified and sustained global filmmaking. The factors examined in this chapter point to Hollywood's strategies of self-interest, which at times benefited foreign industries. These factors also establish the context that informed how international productions were organized and executed, a topic developed in part II of this book.
ECONOMICS: FINANCING RUNAWAY PRODUCTIONS
While producers, unions, and industry leaders debated various causes for runaway productions, financial reasons were the primary, initial inducements for shooting films overseas. In fact, the origin of the term "runaway production" was predicated on economic changes in the United States. During World War II, at least one mention of runaway production in the automobile industry meant overproduction in connection to the potential risk of glutting postwar markets with cars in anticipation of consumer demands. Other references to runaway production during the immediate postwar period derive from the notion of unchecked costs in the manufacturing sectors and the motion picture industry. With the rise of postwar foreign filmmaking, the "runaway" designation evolved to reflect various unions' resistance to production work moving abroad for financial reasons. For the Hollywood AFL Film Council, "runaway" didn't mean profligate spending but evasive productions and attendant employment opportunities that were leaving the centers of filmmaking in the greater Los Angeles area for new sites that promised economic benefits.
Within about a year of Hollywood studios' push to embark on international production, the "runaway" label entered the lexicon of the film trade press. In February 1949, an early use of the term materializes in a Hollywood Reporter article about the Hollywood Film Council's attempt to persuade the US government to fight "discriminatory trade barriers" that were compelling Hollywood studios to make films abroad. Then in September 1949, the term seems to first appear in the Motion Picture Daily and Daily Variety in news items covering efforts by a special subcommittee of the Film Council to curb "'runaway' foreign production." What's unclear in these early reports is who exactly came up with the name and at what moment. What is clear is that the outsourcing of production work to cheaper labor pools abroad was creating enough anxiety among unions that they needed an expression to anchor a campaign to fight the phenomenon.
In the years to come, the "runaway" moniker gained traction in the industry, eventually defining any production that left the Los Angeles area for financial reasons, but these reasons were never fixed. Just as there wasn't one kind of runaway production, there wasn't one clear financial factor that spurred Hollywood to look for production opportunities abroad. Additionally, the economic factors changed over time and converged, meaning that any production might have been motivated by multiple financial incentives. Even if the economics of runaways are difficult to bring to light, since much of this information was confidential, an analysis of the runaway phenomenon must begin with economic factors. Examining the industry discourse points us to the most probable foreign funding sources beyond production financing that came directly from studios and independent production companies. The following sources of production capital acted as essential causal forces, determining where films were shot and shaping the debates among film industry players.
Above all, the chief initial motive for shooting abroad in the postwar era was Hollywood studios' desire to access frozen foreign box-office earnings. In an effort to control the outflow of US money from their fragile economies, European governments froze the studios' earnings. The hope was that Hollywood studios and production companies would reinvest those blocked funds into film industries and foreign markets that had suffered during the war. Typically, the theatrical profits of Hollywood studios were paid out in local currencies, but due to limits on how much of a studio's earnings could be remitted, portions of the takings were held in foreign bank accounts. To access the blocked money, the studios had to gain government permission. With Hollywood's domestic market suffering as a result of decreasing audience numbers, these studios could not afford to leave their foreign earnings locked up.
One strategy for freeing up frozen currency was to invest in non-filmic activities. The Motion Picture Export Association (MPEA), the trade organization representing the Hollywood major studios in foreign markets, attempted to use frozen funds to buy local commodities and import them to the United States, where they were sold for dollars. For example, the MPEA used frozen French francs to raise an old tanker in Marseilles, refurbish it, and sail it to the East Coast to be sold. The organization also bought whiskey in Chile and shipped it stateside. In a roundabout deal, the MPEA reportedly used frozen yen to build a pair of ships in Japan, which were then sent to Java, where they were traded to the Dutch for Indian rupees. This currency was then converted to pounds and finally to dollars. These business transactions were nothing if not enterprising. They were also "off the record," according to Eric Johnston. The MPEA president didn't want to openly disclose these dealings to Hollywood company stockholders, who might have been concerned that profits were being generated from activities that had nothing to do with motion pictures in countries where only a fraction of film earnings could be directly transferred to the studios.
Separate from the efforts of the MPEA, studios carried out investments on their own. MGM bought up apartment complexes in Copenhagen and office buildings in Australia and China. The company also invested in gold nuggets and marble in Italy and wine in Chile. Other US film companies were able to unfreeze a fair amount of their earnings through shipbuilding in Italy. They also invested in construction and real estate in the UK and stock and commercial businesses in France. In some ways, Hollywood's non-filmic foreign investments anticipated the move toward conglomeration in the 1960s, when non–motion picture companies such as Gulf & Western, Transamerica, and Kinney bought up movie studios to diversify their risk across an array of unrelated business ventures.
However, since Hollywood companies were still principally involved in the movie business, they concentrated their investment of frozen funds in film-related activities. In Australia, RKO applied freed-up monies to the purchase of a film lab, and Fox invested in its local newsreel division. Producer Sol Lesser used blocked funds to set up overseas offices to acquire foreign films for distribution in the United States. Lesser's offices also focused on purchasing foreign story properties, a plan that other US film companies pursued to utilize their frozen funds. In England, Fox bought the novel War in Heaven (1930), while MGM picked up the thriller The Case of the Journeying Boy (1949). All of these activities ensured that Hollywood companies operated globally by bolstering their presence overseas.
Hollywood studios also looked to invest frozen earnings in their own overseas production opportunities. One option was to apply this money to improving foreign infrastructure that could then support their filmmaking activities. In preparation for its mega-production of Quo Vadis in Rome, MGM used its reserve of frozen funds to rebuild Cinecittà studios. MGM actually exceeded its balance of frozen lire with this undertaking, but because the Italian government was so eager for Metro's investment and the employment of Italian technicians, the studio struck a deal to apply future frozen earnings to the production. In addition, MGM took an indirect tactic to repatriating frozen currencies from other countries to finance Quo Vadis. With the help of the MPEA, the US studio used some of its blocked kronor in Sweden to purchase Swedish wood pulp and import it to Italy, where it was sold for lire. The studio could then apply this money to the production of Quo Vadis. "It was a general house cleaning of their foreign bank accounts," as one reporter described MGM's commodity maneuvers. These complicated transactions reveal the lengths to which studios were willing to go in order to recoup their profits from around the world. Despite these schemes, much of the focus of studios operating in Western Europe was on applying their frozen funds directly toward production. The industry's regulating bodies were instrumental in facilitating these deals.
Throughout the late 1940s, MPAA/MPEA president Eric Johnston, a dedicated advocate of free trade, took a series of trips to Europe on behalf of the US film industry to confront various countries' foreign protectionist measures such as import taxes, film quotas, and the freezing of earnings. The bilateral agreements that emerged from these negotiations helped set in place the requirements for accessing blocked funds and their application toward production. One of Johnston's biggest diplomatic victories was resolving the conflict over the UK's 75 percent ad valorem tax. As a response to Britain's financial crisis of 1947, this tax imposed a heavy duty on all films imported into the country. Since the UK was Hollywood's most important foreign market, the tax was a major setback for Hollywood, sparking outrage across all segments of the US film industry, from union leaders to movie stars. Independent producers were especially upset because of how reliant they were on the British market, and because they lacked the financial cushion major studios had. Walt Disney, Samuel Goldwyn, Mary Pickford, and other producers cabled President Harry S. Truman and the State Department with pleas for protection. The US industry eventually retaliated by placing an embargo on film exports to the UK while also scaling back production operations in Hollywood studios in anticipation of a protracted fight.
The conflict resulted in the Anglo-American Agreement, signed by Johnston, Society of Independent Motion Picture Producers (SIMPP) representative James A. Mulvey, and president of the British Board of Trade Harold Wilson. Pointing to the diplomatic weight of the deal, additional representatives from the British government and the US State Department took part in the negotiations. The agreement eliminated the ad valorem duty and remitted $17 million of British earnings per year to Hollywood companies instead of freezing that money. By distributing British films in the United States and its territories, US movie companies could also earn additional dollar remittances from the UK. The British Board of Trade stipulated that these payouts were based on the condition that these companies would invest their remaining frozen earnings in real estate, story properties, distribution rights, prints, advertising, and — most importantly for moviemaking implications — film production in England.(Continues…)
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Table of Contents
Acknowledgments Prologue: Movie Ruins Introduction: “Have Talent, Will Travel” part i: foundations 1 • All the World’s a Studio: Th e Design and Debates of Postwar “Runaway” Productions Case Study. Tax Evasion, Red-Baiting, and the White Whale: Moby Dick (1956) part i i: production 2 • London, Rome, Paris: Th e Infrastructure of Hollywood’s Mode of International Production 3 • Lumière, Camera, Azione!: Th e Personnel and Practices of Hollywood’s Mode of International Production Case Study. When in Rome: Roman Holiday (1953) part i i i: style 4 • A Cook’s Tour of the World: Th e Art of International Location Shooting Case Study. Mental Spaces and Cinematic Places: Lust for Life (1956) Epilogue: Sunken Movie Relics Appendix: Hollywood’s International Productions, 1948–1962 Notes Index