Hollywood’s Perfect Storm

Welcome back to the Bulwark goes to Hollywood. My name is Sunny Bunch. I’m culture editor at the Bulwark. And I’m very pleased to be re joined today by the first guest on the bulwark Coast of Hollywood many years ago many, many episodes ago, many moons ago. Richard Rushfield, thanks for being on the show yet again.

I I enjoy the the next week when I can say I was the first and last guest or work goes to Hollywood.

When I when we shut things down here, you I will do that. You will be you’ll be my last guest. We can run through the the When I when I win the powerball and I’m like, I’m gonna go start my own studio who’s who’s coming with me. But the studios, that that’s what we’re talking about today. I wanted to get you on the show to talk about your newsletter from July fourth, which was a a clarion call, independence.

Let’s say we

say Christmas day Absolutely. It was

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it was feeling like there are a lot of threads coming together right now, just suggesting that this whole thing doesn’t work and is headed for something bad. Of which who knows what is it the end of entertainment? Is it the end of studios? Will we be swallowed by TikTok? Or by or by Bollywood or or or who knows what, and it was just a call to we’re going in a direction that isn’t working and to stop it to start doing something doing different things.

And I sort of identify the original sin as going back from even before the streaming wars, the era of big IP when Robert Eiger made these huge purchases of Marvel and Lucasfilms and Pixar, and it seemed before that the idea had been every studio had to release, you’d be released twenty movies a year, you had two hits, you had two flops, the rest were somewhere in between. If the hits did better than the flops, you had a profitable year. And with this big IP strategy, he said, we can make eight movies a year or even less, and they’ll just all be hit and we’ll change the calculus. And for a while, it worked fantastically well for them and there was a year would Disney alone, one studio was more than half of the world’s box office that year. It worked less well for everyone else when they tried to where they tried to copy it, and what it led to was this idea that we no longer have to look to the hits and flops that we can just the machine can be bigger than the individual projects, which is something which is something that the heads of studios that you earn for since the beginning of Hollywood but just had never had the formula to do it, and then came the streaming wars when everything just became content in the fire hose, and I said we need to need to go back to taking pride in movies and programs and what they are and making those the center of our world, not the multiverse or the quarterly earnings call.

Can I alright? So I have I have a theory about all this. That I’ve I’ve mentioned before, I think, elsewhere, and maybe I’ve maybe I’ve mentioned to you before, so stop me if I’m boring you and repeating myself. But My my big theory on the last fifteen years or so of Hollywood is that, you know, everybody likes to cite the William Goldman lie, nobody knows anything. Right?

Nobody nobody in Hollywood knows anything. Nobody knows what will be a hit or not. And what broke what really fundamentally broke the industry to the extent that it that it is, that it does feel like headed towards some sort of catastrophic meltdown, is that for a while, we did know something. We we went from nobody knows anything to we actually know one thing. And that is, Marvel, Star Wars, Disney, remakes, These are things that will make enormous amounts of money.

These are things that will make enormous amounts of money and you can spend as much as you want on them because they will make all of that back plus some. And because somebody knew one thing, everybody else tried to do it, and that is what broke Hollywood. I mean, the idea that nobody knows anything it it was great because it allowed people to make lots of different things at varying price points and when they flopped, you just said, well, nobody knows anything. Nobody nobody knows anything. And when one’s a hit, you’re like, see?

Nobody knows anything. We didn’t know this was gonna be a hit. And that led to not only a healthier landscape in terms of budget levels and all that, but it also led to the creation of real art. Right? This was because you could do lots of different things, you could make lots of different interesting kind of things, and some would hit, someone and you you moved on to the next thing.

And I I I I really think that that one little piece of knowledge has fundamentally destroyed the industry. Am I am I overreaching here?

Yeah. Well, I think that’s absolutely true. They because we did they didn’t know we didn’t know what film would work individually. You could never say this movie would be a hitch and if you cast this person, it’ll it it will make more money or if you give them a sidekick, it’ll make more money. You can you can never really say that.

And I think that’s part of what William Goldman was was referring to, but you could say collectively, the twenty film strategy that it would mostly pay off unless you hit a really bad unlucky streak. So so we kind of, in the big scale, knew something, and it it it sustained Hollywood for eighty, ninety years there. The big IP strategy was sort of a mirage, the idea that Marvel could produce nothing but hits. And that they would all be successful and they would all generate lots and lots of toys and rides and everything. And and Star Wars or anything.

And it came about by the most sort of fantastic run of execution maybe in Hollywood history. Like, I don’t think any studios had big hits, that biggest string of hits at that level and it was just Kevin Feige did Bulwark off something incredible, but nothing like but nothing lasts forever. And even that wasn’t meant to last forever, but he had this, it was all leading to a big climax and After the climax, they It was not quite the marvel that you knew it would be. And that was with Marvel. Star Wars has had really big ups and downs and it’s it’s it’s reinvention.

Which I don’t think we should undersell what the achievement of that reinvention and how dead it was when Eiger brought it bought it from Lucas there. But these were always none of these were going to last forever, and everybody thought they were going to last forever. And then, and everybody else who said, okay, this is how You do it but didn’t have a Kevin Feige at the helm with an incredible execution that that could turn out it’s hit after hit, and thought they could just get by with doing eight movies a year and all the hits, they were slaughtered by this because they were making huge bets on things that just weren’t up to that, weren’t up to supporting an entire studio on the back of what

So I, you know, again, I loved I loved her newsletter, but I am I’m still I I am I am worried that the idea that, you know, we just make make make the movies, make them good, get behind them, and we’ll we’ll pull out of this thing. I mean, I I don’t know where the audience is at this point. Right? So you look at like look at look at a studio like a twenty four, a twenty four is beloved. They make the best indie stuff.

They’re making movies for adults. They’ve got one out in the theaters right now past lives. They’ve got Nobody goes to see these movies. I love a twenty four. I I love these.

I love them. And they have a very healthy part of the box office curve that is like eight to fourteen million dollars. Okay? So the Go ahead. I’m sorry.

No.

The the the I mean, the indie sector is the biggest question mark. Right now, whether and and part of that is a lot of these theaters have shut down. Here in Los Angeles, there’s no there there’s actually no Indy screens to open a film on the, the landmark, which was the one on the West side, and the sunset five are gone, and the arc light also. So you’re you’re trying to open these independent films at the mall theaters fighting for screens with Mission Impossible, and it’s just it’s not working. It’s very hard.

I mean, so on the flip side of that, there’s there’s a head of a of a of a of a mini major studio who told me this is the best time to be making films ever. That the Pfizer says, it’s the best time for me. He says there are so many ways you can between he says you could open it and if you’re smart you can do. So say you spend fifteen million on a movie, and that’s sort of the range we’re talking about here. You can open it, but if you’re smart, you’ve presold it overseas, there’s so many different venues, So it overseas, and then you’ve got the first run streaming, and then maybe you’ve got a second window streaming.

Sell it again so that by the time you open these movies, you’ve made your money back and whatever you make at the box office is just is just icing on the cake there. It’s it’s you know, it’s a very playing for tiny margins game there, but it But a lot of these films that look like flops at the box office have found ways to stay a lot. The what what was the Jennifer Lawrence one? The the

no hard no

hard feelings. I mean, I I don’t know all I I don’t know all the deals that have been made on that, but I would not be surprised if that had has enough wind with behind with her behind it and so it seems perfect for streaming, everything that will make its money back in all these various channels. It’s not the exciting business of you opened a movie that was a sensation at Sundance and then it’s sweet America and becomes the next little in the sunshine, but it can it can sustain something.

Well, this and this brings me to my my second kind of big theory think piece idea about the industry, which is that it never made sense for the studios to be in the business of making billion dollar movies. Right? The the film business should not be I don’t know, stock market, darling, sort of sort of industry, you’re much better off making Again, a bunch of smaller bets, some of which pay off, some of which don’t, in the twenty to forty million dollar range where you can pre sell, the foreign right where you can, you know, make your money on streaming and and whatever comes in at the box office is just gravy. I I Do we Is is it possible for the industry to pivot to that? Or would that just destroy the movie theaters?

Which are the ones, you know, I mean, if you if you If you take if you chop out the franchise, billion dollar hundred million dollar opening weekend, segment of the industry, can a m c and regal or whatever regal turns into in cinema? Can they all survive? I just I don’t know how that works.

I mean, it’s a question mark whether they can survive right now with everything, and I think I I I think I think a lot of the chains are are are cheetering right now, still carrying debt from from that were shut down for two years. And have big real estate bills and everything to pay there. So I I I think if you if you take something major away from from from them at this point, you’re you’re really risking colony collapse there. And

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but you’re right. It’s like I mean, this was what happened then after. We’ve talked about this a day of Even five, six years ago, quarterly earnings calls, nobody paid attention to that, like, my partner, Jasmine, was the editor of Oliver Berder talks about how it was something that the the the third You had the junior reporter just sort of write up four paragraphs on these earnings calls. And now is the center of the world and what everybody wondering what is gonna come out of it, what is gonna And and and and how the subscriber number’s gonna look this month that is What’s the EBITDA? How’s the EBITDA going?

And it’s We we never paid attention to that. You It was it was You made Angler’s rule number one is this is a business of hits. And if you have hits, you will be profitable, and everybody just assumed, you know, people didn’t know the details of the business and the financing and the bonds and all that, but they had a basic sense if you have hit shows and hit movies, somehow or other will end up to you making money, which generally was true, and if you have a lot of flops, that’s going to cost you a lot of money, and that’s not good for a company. And that worked out, but we lost this sense of hits and flops battering to the point of, you know, you look at these giant movies that they’re making on streaming, you know, the red notices and everything and not to mention the billion dollar shows that they’re making. And we don’t even have a sense of what is the goal of this?

What would make this a hit? Is there like a number of viewers? Is there a number of new subscribers? It’s So we we don’t even know what a hit is anymore.

Yeah. Yeah. I mean, there I sent you I forwarded you that newsletter from Lukashaw over at Bloomberg with this just kind of amazing chart, looking at the decline and profitability of studios. And, you know, look, part of this is pandemic related. Everybody freaked out because they weren’t sure theaters were to survive.

They needed or money into streamers, and streaming is a money losing business. I mean, it’s wild how much money streaming loses. It’s it is just an enormous money pit. How do from set aside set aside the arms dealers who are selling things to the the studios, the movies that they that they have, how how do the studio heads look at streaming and figure out a way forward profitability to real profitability, to to the world that we used to have. Because if they don’t make it there, then the the, you know, the whole industry kinda collapses in on itself.

Right?

I mean, I haven’t seen any model that that that that people are actually talking about that leads to anything resembling profitability in these things. It’s just I mean, I think first of all, their plan is for them for there to be less competition, so other people have to go away or die, is what they what they would like to plan for. And believe it, and I think that was you know, the initial plan on Netflix was always I think that they would be streaming and that to be a monopoly, And at that point, you could raise the prices of consumers and you could cut what you pay your stars and and your big expenses. And so while you’re in a situation where every single project is in a five way bidding war, like there’s no way to keep a lid on your costs so that you can’t possibly race raise money enough to do it. So I think

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when they talk about the future, you just feel like there’s this big thing they’re not saying which is either will be bought or will buy someone else or will be consolidated or These other people will go away and these intangibles. But it, you know, I think part of the effect of the strike and the shutdown here coming after COVID and all that is that the legacy studios will are are now gonna be hit so hard in the probability that they will be cheap enough that consolidation, the moment of consolidation that was foretold and warned of for for a decade here may finally be upon us.

We’ll get we’ll get to the strike here in one second, but the the the the last thing about the summer that I wanted to talk about, I mean, you you your in your newsletter, you kind of opened with a, you know, I don’t I don’t want I don’t like to make big pronouncements based on, you know, a couple bad weeks of box office. But this really does feel like a historically bad summer season in a lot of way. Just in terms of of total losses. I mean, like, the flash is gonna be one of the biggest money losers of all time. You know, Transformers Rise is probably gonna lose about nine figures.

We’ll see what happens with dial of destiny here, but it had a it had a pretty, pretty soft open, and if it doesn’t have strong legs, that’s gonna be another movie that loses probably nine figures. The little mermaid, you know, somehow they spent almost two hundred fifty million dollars on that movie over at Disney, that that’s gonna be another pretty big loss. I mean, I I, like, I look at I look at the box office so far, and I see four or five movies that may lose nine figures. Just out of what’s been released so far, which I I mean, I can’t remember another I cannot remember another season like this.

Yeah, and and and then look on the other side of the ledger and how many streaming projects have? I mean, I don’t know how they how they account, how they configure profitability on these things, but you have to figure that, by whatever accounting there’s could be a dozen shows that have lost nine figures, yeah, in this year alone. Yeah, I would say so the thing about that that’s scary I I I was reading the the totals and total the box office may not be dramatically down or dramatically worse, it’s just you have a bunch of films that were too expensive for what they were gonna make. So in the aggregate it may be all right, but on just the revenue side but that the the cost fixed into certain films will get hit with big losses on those. And that’s kind of the deal.

You have to I mean, you have to be able to not just make money off the movies, but you have to make profits off them too. So if If they need to make, you know, spend four hundred million dollars to make a hundred fifty million dollars that’s not a great business. So one side or the other that has to change.

Yeah, it’s it’s it’s wild. Again, I’m I I for one am pining for the days of more of your your friend at the mid majors making the fifteen to twenty million dollar boo boo because that’s that’s a business model that at least makes sense on some level.

I mean, the the people that are in that business, say that it’s hard and it’s a grind, but but you can

make money on that with the right project and and, you know,

They say nothing happens automatically anymore, that you have to work for everything in those things. But they they they they talk a good game out of being sustainable in that.

Alright. Let’s talk strike for a bit here because we do have I mean, we are still in the midst of a a writer strike. I feel like it has kind of slipped out of the the new cycle. You know, folks have moved on to other things. There’s a real deal with the directors.

Looks like The screen actors are maybe getting closer to a deal. I don’t know. What are what are your sources saying?

I I have sources in the last week, in the last last day even who have told me the actors are very close to a deal, and they’re gonna be signing one, and I sources that say they’re really fire part, it’s not gonna happen, and the actors will go on strike. So I I I can’t say which of my sources I believe more or trust more. I think that you know, Fran Dresscher head of the screen actors go, she put out this very cheery video about a week ago, about we’re getting close. We’re gonna have a historic deal and it’s coming soon. And then they ask for extension to finish to to continue the negotiations and that seemed you know, that that would all be an odd set of affairs if they end up walking away, but actors are kind of at a rage.

Some people say that if the actors walk out it could just sort of force everything to a resolution that it could be that could make the studios just say, okay, this is now we have to get it tied up, we have to we have to truly negotiate, we have to give some more, and that will be a faster conclusion than if factors would make a deal, and the writer’s strike could linger on for God knows how long.

Do you I Have you heard anything from the writers or the producers in terms of negotiations there? My understanding is that they are just not talking. At all at the moment.

The way the producers would describe it is we have one negotiating team and they announced the schedule at the beginning of the year for the team, which was the writers and then the directors and then and then the actors, and the writers walk out on their on on from their negotiation, the writers would say they walk out because what they were being offered wasn’t wasn’t reasonable, but so that it’s the studio’s fault that they walked out, but anyway, those talks concluded and broke off and then they moved on to the directors and then and did that, and now they’re talking to afters. And when that concludes, they can come back to the to the writers, which, you know, the writers have protested that that this is a fictitious narrative and they could talk to them anytime they want, the producer, the studio’s dispute that but in any event it seems to be how whatever the truth of it is that seems to be how it will go that they will deal with the writers after they’re done with they’re done with the done with the actors. And you know, there is determination on the writer’s side and there’s also real hardship.

People have gone two months without pay now and and I definitely know people that this is getting tough for, so it’s going to be I think it’s going to be a hot, a hot and difficult summer before it’s not coming to an end for another six weeks at the earliest, so you know, I mean, I know people at this point who are looking at medical bills, who are looking at school tuition, and things like that, and approaching some tough choices there. So it’s not a and and then you have all the other All the other people are put out of work because production has been shut down and have been — Yeah. — all over everything. So it’s it’s it’s a tough time and there’s no immediate end insight here.

Yeah. I will say just from my own perspective, again, having talking to a few people, but also we’re kind of watching everything play out on Twitter. One of the biggest Twitter is not real life moments in recent weeks was, there’s lots of buzz that, you know, the directors were gonna reject the deal, lots of, you know, Lot of directors on Twitter were saying, well, I can’t support this because blah blah, and, you know, there is there is groundswell of opposition, and then the director still ends up getting approved by what, eighty three eighty six percent of votes, something like that. It was it was not close in the in the

As as someone who who believes the writers deserve much more, it should get much more and support almost all their demands writer’s Twitter does not do them any favors. It’s writer. Ryder’s Twitter just seems focused on, why doesn’t David Zazloff give us his yacht? Instead of considering it’s very obsessed on on how much David Zazolov makes to the exclusion of almost every other issue it seems when you’re on there some days. And, you know, the studio, it’s also a one-sided art gallery because it’s, you know, the Bob Beiger and Chen Seranos aren’t tweeting back at them all day, so they’re just sort of yelling into a void which seems to make them louder and do each other and it’s it’s not it is not the the truth of how of hours is all going.

Yeah. As a writer who spends a lot of time on Twitter yelling into the void, I empathize with that as well. Wait. You mentioned David’s Azlov. We do have to I I there you know, I I don’t know I don’t know what your relationship with David Zesloff is like, I don’t have one, so I can

I I haven’t been on the on on any yacht yet? I’ll I’ll say that.

But there he It’s it’s it’s kind of interesting to watch what’s happening at Warner Brothers because it does feel like there are there are tough choices that have to be made. There’s a lot of there’s a lot of debt that was accumulated. They they gotta make some some decisions. And then they keep doing really dumb things from my point of view. You know, I like, why poke the hornets by gutting a very cheap, tiny corner of the Empire, Turn of Classic movies.

Like, if you’re worried about your position in the the system with the big names like Stephen spielberg and Mertz and Scorsese, why are you messing with that? Or this thing with GQ, you know, I the this this is a this is a a a it was it’s a huge everyone all of the writers on Twitter are very mad. GQ published a piece by film critic Jason Bailey, that was very critical of David’s Asloth, then an editor went in and gutted the story, and when Bailey asked to have his name taken off it, they pulled the story entirely, and then it got read by a million more people because they found it on, you know, the arc Internet archives. David Zazloff looks petty, and kinda small. GQ looks really bad and foolish here for violating their own.

Principles, turns out the editor, of GQ was involved. The editor the editor in chief of the top editor of GQ was involved with the story. He’s producing a film with Warner Brothers. The whole thing It has been streisand affected to the moon. I I just, like, I what is what are they what are they do?

Is there nobody under there over there who has any idea how PR works?

Well, it’s it’s, you know, they’re I mean, they’re in the British one, you know, when there’s a Chinese brother, when there’s when there’s order under the heavens, That big problems become little problems and little problems disappear. It’s disorder under the heavens. Little problems become big problems and big problems become disasters. And that’s kind of where they are because there’s there So, for starters, Holly, there there always has to be one studio head who’s like behind the eight ball who’s like turn it is in the barrel and it’s like everything that happens will will resound to what an idiot? How can Bob JPEG or whoever be running this place?

And it’s usually someone who’s a newcomer to studio headdom who has not inspired the fanboy devotion, I think Bob Eiger could do another fifteen years of screw ups before each one of them ten times the size of David’s Aslaws before there’d ever be a piece written like that about him. But, you know, it is David Azlov’s turn and he’s made some missteps that have aggregate. The other thing that Hollywood hates that that will get you for. Hollywood is ultimate like Bulwark in the lunch room, just like going around like picking on on the nursery area. Anyone who seems like they want it too much, that they want Hollywood too much, you’re just, you’ve just put a target on your back.

If you do that. And David Azlov seemed like he very much wanted to be a studio head and loved this and love the the red carpets and the premiers that are in you. You’ve got to play it cool about that you’re you’re not even supposed to be on your on the red carpets of your movies. You’re you’re barely supposed to show up at your premiers or or at your Oscar party. It’s you just have to have to play it very cool about all these things On the g q thing, you know, that that article was just kind of a round up of all the complaints about David Sazloft.

I mean, there wasn’t a word in there that hasn’t been written five hundred other places. And people, once again, on Twitter, are going with the wisdom of Twitter, people are saying like, oh, he complained about Zazov put his foot if I come take these he sent his people to complain about this piece. If you work in trade journalism, If if you write a piece about a studio, even a piece saying the studio commissary will be open for lunch at eleven:thirty this afternoon, you can expect furious calls from the publicist. Like you don’t you don’t you don’t mention the name of a studio and not get angry calls like that’s that’s what they do. They sit there, they they say, who’s mentioned us?

Let’s get really mad at them. That’s what you do all day long. And it would be strange if you didn’t get those calls. So that they complained about this little piece is just sort of pro form a a way that that how it would operates. GQ responded to that in a very strange not not journalistically sound way, and and and they deserve it.

But but other than I haven’t seen anything in reporting that there was anything other than they put in a call to an editor there, which is the most, like, happens a thousand times every day at every single studio as a result of Look at an article in the trades that there was a call made to complain about it. I Yeah. It’s just I was done.

Yeah. Yeah. No. I mean, I again, I can’t imagine David SASleff there, you know, looking at the printout that has been put on his desk and, you know, flying into a rage, mean, they he

he he’s he’s new at this, they are all new at this, and they are they are sensitive and and to to the way he’s being portrayed and they’re not. They’re not cavalier about it, but I can’t imagine that this particular piece provoke any extraordinary, like John Malone John Malone calling the head of head of gone and asked and demanding heads are on our platter or anything like that.

Yeah. Yeah. Well, that was that was pretty much everything I wanted to ask. As you know, Richard, I like to I like to close these interviews by asking if there’s anything I should have asked, what should folks know about, the state of the industry? Or or other topics?

Well, you I mean, you you you didn’t ask me how I’m doing a a week after the death at Allen Arket. That’s one thing.

Well, I’m sorry. How did it hit you hard? Was that was that a

big part? It’s been a tough week. It’s our greatest living actor. I mean, they’re there was a man you you you could not just watch, you you could You you would pay to watch him just look at a phone book. When I’ll read a phone book.

I mean, that was to think that the nineteen seventies, the greatest era of filmmaking, someone like like Alan Arkin could be a true star, could get movies made on his name. You just it it it it just takes you back to a better time.

Yeah. Yeah. I I did notice that the Richard Rushfeld background picture, was it half mask?

Yes. That’s — For the

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absolutely. It was a which is a a picture of of Alanark and looking disapproving at the Golden Globes a couple years ago. The was was was was a great man. And you just — you can’t imagine someone like that becoming a star. And in these signs.

That’s the Well, it could happen.

He would just need a barrel of HDH. Yeah. Like an entire gallon drum, like fifty gallon drum of HDH. It can’t say it could still happen. Don’t don’t count don’t count them out.

It’s, you know, in what what about in laws will will be with us always. So Yep. I

I Alright. Anything else?

I I think that was my big concern this week.

Okay. Yeah. Fair. Fair r I p e, Alan Arkin. Yeah.

My friend, Bill Ryan, wrote a nice little appreciation at the Bulwark, so hopefully, folks. Check that out if they have not already. Alright, Richard. Thanks for being on the show. I really appreciate it.

A pleasure as always.

It was a pleasure as your first and last Yes.

That don’t say that. Not yet. Not one day one day in the future. For for The prophecy as the prophecy foretold, it will be Richard Rushfeld, first and final. Alright.

Thanks for being on the show. Again, my name is Sunny Bunch. I’m culture editor. At the Bulwark, and I will be back next week with another episode. We’ll see you guys then.

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