"Hollywood's like Egypt, full of crumbled pyramids" with Laura Friedman & Ron Falzone | The Movie Racket

0:14 Hello, you. This is the Movie Racket. I'm the host, Michael Phillips, and you're the listener. Your name here. This is program number 11 in our inaugural season. in which we pull apart an unofficial law, motto, guideline, prediction, or secret to movie-making success. Newton had his laws of motion. These are our laws of motion pictures. This week's movie law decrees that Hollywood is dead, or at least dying.

0:43 Producer David O. Selznick decreed it so 75 years ago when he said this, Hollywood's like Egypt, full of crumbled pyramids. It'll never come back. It'll just keep on crumbling until finally the wind blows the last studio prop across the sands. Now this comes secondhand, like so much Hollywood lore, from someone else's book. In Ben Hecht's 1954 autobiography, A Child of the Century, Hecht recounted the day he and Selznick were walking past an eerily quiet studio soundstage. Selznick stopped, looked at it for a while, and listened in. and what he heard was nothing, not the sound of movies being made, and certainly not the sound of money being made. Now, Hollywood's death has been predicted since the silent era, and

1:34 especially since the Great Depression, but today the panic is more insidious and pervasive. Sound stages are often empty, crews are out of work, not just in Hollywood, but in recently bustling filmmaking centers outside Hollywood, like Atlanta, Georgia, New Orleans, and in Chicago. Now, since we recorded this show, the corporate consolidation of Hollywood everyone feared has taken another massive step forward. Paramount and Warner Brothers have officially finalized their $ 111 billion merger into a thing called Skydance. Two guests join us to make sense of this moment. First, Representative Laura Friedman, a Democratic congresswoman from California who represents the geographical epicenter of Hollywood filmmaking. Last month, Friedman, some Democratic colleagues,

2:28 and an array of Republican representatives introduced a bill proposing a national film and TV production tax credit similar to federal incentives in dozens of other countries, especially the nearby Canada. It's truly a freak of nature, a bipartisan effort with support in the House and the Senate, and a strong show of pre-approval from President Donald Trump. I actually met Friedman back in the late 1990s when we were both friends of L.A. film and music writer Eric Lindbaum. He had a roving monthly movie club, followed by drinks at some dive or another, and this was long before Friedman was U.S. Representative Laura Friedman, and also before Friedman's years spent in the 1990s inside the movie industry. We'll also

3:17 get some historical perspective about Hollywood's century-old cycle of persistent existential threat from Chicago film professor, screenwriter, and historian Ron Falzone. But first, we'll start with U.S. Congresswoman Friedman. Let's go. Well, Congresswoman Laura Friedman, thank you very much for jumping on the movie record. Our first Congresswoman.

3:43 Yeah, well, thanks for having me. It's always nice to be the trailblazer.

3:47 Good, good, good. And now for folks who don't live in your district, your district includes Glendale and Burbank and.

3:57 Hollywood, Hollywood, Silver Lake, Los Feliz, West Hollywood. So in terms of the industry, my district also is the home to Paramount, Warner Brothers, Walt Disney Company, DreamWorks, Netflix, Nickelodeon, Universal.

4:13 Studios, all of them.

4:14 Wow.

4:15 Okay.

4:15 So, first of all, thank you for this bipartisan freak of nature that you've put together. I mean, in these days, to see language unapologetically used, just simple descriptors like bipartisan, when we haven't heard much of that, it's great. Even if I weren't into film, you have to notice that.

4:38 Do you know what I mean?

4:39 Am I the only one who's had this reaction about just to see what seems to be a completely sincere across-the-aisle bid to keep movie-making in this country more viable.

4:52 You know, I'll tell you who's been the most happy about this being a bipartisan effort and the road to housing, which was another significant package that passed out of Congress this year being bipartisan. The ones who seem to be the happiest about that are members of Congress. I will tell you that there is a huge desire amongst many members, not all, but many, to bridge some of these divides, to stop the partisan bickering a bit, and to have times when we can show that we can work together and that the country is not as divided as people would want to think. So it seems to me that my colleagues take, and I take, a lot of joy in the fact that we are working on an issue that's important to so much of America, in a bipartisan way.

5:40 Now, one thing, Laura, for folks who are brand new to this issue, they've heard about, you know, like keep movies in this country. They've heard maybe that much, let's say, for some folks. For those folks, what does the Motion Picture Television and Entertainment Revitalization Act do? And just in terms of the basic numbers, who's it helping in addition to all the sort of below the line folks you just mentioned?

6:02 Right.

6:02 So just to be clear, major motion pictures are are produced by film studios. And right now, just to give you an example, I spoke to one major film studio. They're only shooting about 5% of their film productions in the United States.

6:16 Think about that.

6:17 They are shooting 95% of Hollywood movies in Budapest, in the UK, in Canada, in anywhere but the United States. And that's because those nations are offering tax incentives for productions to locate there. So why are they doing that? Most of these films have an average budget of $ 100 million. That's $ 100 million in economic output that goes directly into jobs, into communities, into small businesses and locales, into the economy of a region. And that's very important to these countries.

6:52 They see the importance of that. to their communities, to good paying aspirational jobs that run across a variety of skill sets, including people who don't even have a college degree. These are jobs that provide a good living. Many of these jobs are union. And that's what we have lost. We are the only major film producing nation that does not offer a tax credit. And to put that in context, we offer tax credits as a nation to many industries that we think are important. We give tax credits to people who manufacture semiconductor chips, to people that make oil and gas, to pharmaceutical companies when they develop new drugs.

7:30 But we don't do it for the industry that provides one of our very largest exports, and that's the entertainment industry. And so we have lost that industry. We've allowed it to go overseas. And that means that my neighbors, my friends aren't working as much as they used to, that they used to wait a couple years between productions, and now those productions just aren't here at all. So in many cases, in some cases, they're offered the chance to go overseas. on these shoots, but more and more we've trained crews overseas. And so those crews aren't even leaving the country. They're just not getting the opportunities anymore. So this bill would level the playing field and offer a national film tax credit so that we are competing on

8:08 an equal footing with all these other countries.

8:10 Gotcha.

8:11 Think about a future where the U.S. isn't producing film content anymore, where we're not telling the stories about what our country is or what our values are to people around the world. I would say we've lost certainly a huge industry that provides a lot of money to this country, but we've also lost the soft power that's enabled us for almost 100 years to tell the world what America is, what our values are, to tell immigrants what it's like. And, you know, the reason why so many people chose to come here fleeing oppression or coming here to have a better life for their children was because they saw the United States through the eyes of a film lens. And that's the future that they wanted for themselves and their families.

8:52 And we are losing our ability to do that.

8:54 Laura, there's no other politician I could talk to about this, especially anybody connected with this bill, because of your film background. And in fact, you're certainly the only one who's produced two, not one, but two Steve Guttenberg movies back in the 90s.

9:07 Right?

9:08 It's true. But nobody has any kind of perspective like you would have on this. The death, truly, the demise of Hollywood has been predicted in since the silent film years from some external and legitimate perceived threat. And the quote we're going to kind of hinge this episode on is from David O. Selznick, the producer, who in 1951 was walking across a studio lot past some unused stages with Ben Hecht, the screenwriter. And according to Hecht in his autobiography, Selznick said, Hollywood's like Egypt, full of crumbled pyramids.

9:46 It'll never come back. It'll just keep on crumbling till finally the wind blows the last studio prop across the sands. Okay, so.

9:55 That is such a dramatic quote. I love it so much.

9:59 It is so.

10:00 cinematic in and of itself. There's been a lot of demises that were overblown. Look, people love to be entertained. And if you provide quality entertainment, they will come. And Hollywood has reinvented itself several times, and streaming certainly is a threat but also a savior in some ways. And now we see big-budget spectacle films making a big comeback, right, with Barbie and Oppenheimer and The Odyssey and Project Hail Mary.

10:29 Please state your name.

10:33 Robin Grace.

10:34 I just woke up from a coma.

10:37 I'm several light years from my apartment.

10:40 And I'm not an astronaut. I'm not an astronaut. I'm not an astronaut.

10:48 If you don't go, you die. Or the rest of us. And people wanting the experience again of going to a dark theater with other people and seeing a huge spectacle on the big screen. I think that there's a lot of reason for optimism, but that doesn't mean that we shouldn't be proactive. We need to be proactive. And we also have to keep in mind that AI provides a lot of threats as well, but also some opportunities. And that means we have to do things like, you know, write this bill and pass this bill, because without it, we're going to continue to see productions leave this country.

11:28 Representative Friedman knows that the film industry has its own malfunctioning doomsday clock. that moves a little faster whenever the latest serious threat to its existence appears on the scene. Fickle audiences, economic gale storms, these have pushed the Hollywood studios to the breaking point more than once before. With that in mind, I reached out to film professor and historian Ron Falzone, who was more than happy to school me on earlier crisis points when Hollywood survived various near-death experiences and lived to freak out another day. So, Ron, the crisis point that this bill is designed to alleviate to some degree and to compete with runaway productions drawn overseas or up to Canada, it's got historical precedents, and

12:20 you and I have talked about them a lot over the years. Oh, yeah. What are the key ones that people should know about that have something to say to what's happening right now?

12:28 Well, the big one is the late post-war period in the late 1940s into the early 1950s when Hollywood started doing runaway production. And they did it for a reason. Number one, why recreate Rome in the studio when you can just go to Rome? So let's start with that. Number two, there were huge tax advantages in taking productions overseas.

12:48 Number three, the people who were hired, let's say the Italian or the French or the Swedish technicians were significantly less expensive. Studio space was less expensive. It looked like a great deal all the way around. There was only one problem. which is that because those countries had filmmakers of their own, they wanted to draw the money over to those filmmakers. So Bergman, Fellini, all of those people benefited tremendously. The people who did not benefit were all the American workers who no longer had jobs because their jobs are going overseas. The studios are not taking them overseas.

13:33 They were sitting there in Hollywood with nothing to do.

13:36 So the money that Hollywood Productions funneled to the countries where they shot, for example, what, Ben-Hur in 1958 and 59.

13:47 Or Roman Holiday.

13:49 Okay, great. So the government, the Italian government, the French government, Swedish government, made the decision to redirect the money gained from that to their native filmmakers' projects.

14:00 Is that right? Correct, correct.

14:02 Yeah, yeah.

14:03 And we still have a lot of that going on today. For example, the vast majority of the films that are coming out of Germany are being paid for by money that's coming from the German television funds, which in turn is all money that's coming from the runaway productions that have gone into Germany. There are plenty of things that are shot in Germany that are not set in Germany.

14:24 I see.

14:24 And that's true everywhere. I still remember seeing a movie called The Alphabet Killer, which was about a killer in my hometown of upstate New York, and it was shot in Yugoslavia.

14:38 Got it.

14:39 FBI seems to agree with initial profiles. It feels a good chance the killer's out of state.

14:45 Sloppy, low intelligence.

14:47 Someone with the knowledge of Rochester resides elsewhere.

14:50 Probably a marginal type personality.

14:52 Okay, Megan?

14:54 He's not sloppy. He didn't choose her at random, and we're wasting our time looking for truck drivers and transients. Do you know how many people have the same first and last initial?

15:03 2%.

15:04 So the killer found a way to get Carla Castillo into his car.

15:09 Another crisis point. We're sort of adjacent to that right here. The television, the off-sited existential threat to not the immediate post-war movie industry because that was the peak attendance year for the movies, right? 1946. But then television comes along, right? Television comes along.

15:27 Well, 1946 is the peak year and the low year is 1950. And literally 50% of the audience in that four-year period walked away. Or they didn't walk anywhere, essentially. Actually, no, they just sat at home. They were not interested in paying for their entertainment anymore. And that was, of course, increased by the middle 1950s when you saw places like Universal, Warner Brothers, selling their packages of films to television, so now you could see a movie on TV. Why would you go out to see it? I mean, yes, it was maybe a five-year-old or a ten-year-old movie, but it was still a movie.

16:03 The Late Show, that was the phrase, right?

16:05 Yes, The Late Show.

16:06 So what movies, what specific films turned that one around for Hollywood?

16:12 In terms of television?

16:13 Yeah, mid-50s, you know, the doldrums of the mid-50s.

16:17 Yeah, I mean, what you do is less looking at films than looking at technological advances. So this is Cinerama, started to pull people into the theaters, but it was impossible to actually tell narratives because you needed three projectors and three cameras, and the screen was so big you couldn't do close-ups. But that led, in 1953, to CinemaScope.

16:39 And CinemaScope, almost immediately because 20th Century Fox was charging so much to use it, led to all the other studios creating their own. So Paramount came up with VistaVision, you know, for example. But the result was that now, instead of a little tiny black and white box to watch your movies, for the first time you now had a real competition with larger frame pictures. And then you get to, all the way to Ben Hur, which was a three to one aspect ratio. And literally the width of it was three times greater than the height of it.

17:10 So it was almost Cinerama. It took up most of the vision.

17:14 Citizens, I welcome you to these games in the name of your emperor, the divine Tiberius. We dedicate them to his glory and to the glory of Rome, of which you are all part.

17:29 And that doesn't entirely explain why this movie year, 2026, is the best since 2019, the pre-COVID year. But it certainly has a hell of a lot to do with why The Odyssey and Christopher Nolan's work in general tends to serve the same purpose, yeah?

17:45 Right, right. I think part of what helped The Odyssey was the push on it as being a Christopher Nolan film. Christopher Nolan is that rarest of all things nowadays, which is a director whose name is going to sell a movie. A Christopher Nolan movie is not a movie, it's an event. That used to be true of Spielberg. It's no longer true.

18:06 You know, that used to be true of Scorsese. That used to be true of a lot of directors. But this generation has developed its own event directors, and Christopher Nolan is number one. So that helps.

18:15 So it's not the quality of a film like The Robe coming out in 53 that sort of helped right the ship a little bit, at least, or get it starting in the right direction. It's the format.

18:26 Right, it's the format. Because, you know, the truth is, you can't look at The Robe and talk about quality.

18:30 From this day on, I'm enlisted in his service. I offer him my sword, my fortune, and my life. And this I pledge you on.

18:41 My honor as a Roman.

18:43 Right.

18:44 You know, look at all of the movies that came out at that point that we can now look back at them and go, oh my God, really? Solomon and Sheba?

18:51 Right, right, right.

18:52 You know, there were a lot of bad movies. People were going because the experience was different from what they were getting at home.

18:59 Yeah.

18:59 Let me jump back to 1932. bad year for film, for the country, for a lot of things. We had not a technological competitor, necessarily. We just had no money as a society. And the ones that turned it around, correct me if I'm missing a biggie, but King Kong certainly got RKO out of receivership, I think. 42nd Street didn't do badly for Warner Brothers, correct?

19:25 No, no, it did very well. I would also throw in the Von Sternberg-Dietrich films. particularly Morocco and Blonde Venus, which were huge box office successes. How much will you take?

19:38 Anything I can get.

19:39 It doesn't matter.

19:40 Now don't tell me you're working just for the love of your art.

19:42 Who's your boyfriend?

19:43 I haven't any.

19:45 Well, you work for $ 25 a week?

19:47 Oh, yes.

19:47 Well, you're in luck, baby. You came to the right place.

19:50 Man.

19:50 I guess maybe I can get you $ 30 or $ 40.

19:53 I might be able to raise it to $ 50.

19:54 I wish we had directors like that saving our asses now.

19:58 No, we don't have that.

20:00 I don't think it's a fallacy. Paramount was in as rough a shape as RKO, but Mae West saved that studio. More than any one person, yeah.

20:08 Oh, honey, how's business?

20:09 Fine.

20:09 You been insulted lately?

20:11 Goodness, what a beautiful diamond.

20:13 Goodness had nothing to do with.

20:14 It, dearie.

20:15 Yeah, hands down. Just like Shirley Temple saved 20th Century Fox.

20:18 Everybody's asking me Who's that bunch of personality I'm presenting you right now Daddy, take a bow Everybody wants to know.

20:39 So explain, what was it about Mae West that saved Paramount? What was it about Shirley Temple that saved Fox?

20:47 I think in the case of Mae West, it was that we were coming towards the end of the pre-code period. And, you know, she's one of the main reasons why we got a production code. Sex sells.

20:58 Ain't having much luck.

20:59 I am.

21:00 Oh, but I'd have a great deal more if Doheny and the others would cooperate.

21:04 Ain't none of them worth saving.

21:05 If you hang around them long enough, you'll get that way yourself. Well, thanks for the kind interest. You know, I always.

21:12 Did like a man in a uniform.

21:15 That one fits you grand. I should come up sometimes.

21:18 See me.

21:19 And she was very different from preceding sort of sex-based stars because she was a woman who had power. She was the one who controlled the relationships. And, you know, that's going to be extremely appealing if all you're used to seeing are little flower-faced girls being saved by the strapping young hero. So I think that helped. It was just so different. And in the case of Shirley Temple, you're sitting there in a depression and you're looking out your front door and everything is horrible. And then all of a sudden you've got this little Moppet. That is pure optimism.

21:58 Next Friday night, you're all invited to dance from eight to five. All the fishes still alive are having a ball.

22:08 She spent all of her movies telling you it was going to be all right. And it was a time when maybe you didn't believe it literally, but you believed it emotionally. And I think when we go through bad periods, we need to be convinced of something emotionally before we start becoming optimistic. And I think she had that advantage.

22:27 Interesting. So 42nd Street always intrigued me about why that caught on with audiences the way it did. No big mystery in a way, but I love how that film, which is a backstage musical, not a comedy really, but more of a musical drama, but both, has one foot in the difficulties of what was outside that movie theater at play. In that chorus line, in that show being put on, it's going to make somebody, that kid from Allentown, a star. They talk about we are one flop away from having to basically work the streets as prostitutes.

23:03 That's exactly right.

23:04 And it's not a laugh line. It's like the wolf is at the door. And then you get the wish fulfillment that has a sort of intriguingly realistic context. And I think that's why that movie actually works as a movie today. I agree.

23:19 I've shown it in musicals classes. And it's almost... That and Love Me Tonight are the two films which my students, I absolutely guarantee you that they're in love with them by the time they're done. They get it. They get both of those films on some fundamental level.

23:35 Those two musicals from 32 and 33. So, Ron, another crisis point, although it wasn't sudden, but it was a little more cumulative, I think, than maybe the depression hitting. But straight me out on that if that's not right. But You have the massive success of Sound of.

23:50 Music in 1965.

23:51 Let's start at the very beginning. You know, the culture is changing fast, but that one was the one that nearly bankrupt more than one studio in attempts to replicate the success of that musical.

24:08 Do, re, mi.

24:10 Do, re, mi.

24:11 The first three notes just happen to be.

24:16 What happened is, And what did we get out of it a decade later?

24:20 Well, I would think Sound of Music is one of the great ironies of film history. It was a massive success. It should be pointed out that it was the first movie to break Gone with the Wind's record. It was that big a hit. Also, it's an exceptionally well-made film. I think audiences were responding that last gasp of people who wanted the studio films. That was the film that they went to. And the problem with the studios, was that instead of looking at that as the last gasp, they were looking at it as the first breath.

24:52 Right.

24:53 And so, you know, you see the immediacy of it falling apart as soon as Julie Andrews goes from The Sound of Music to the movie Star.

25:01 Right.

25:01 You know, where she goes from everybody's favorite governess to this drunken Broadway star.

25:06 Good to see you again, Miss Lawrence.

25:08 Hmm?

25:09 Richard Aldrich. Oh, yes.

25:14 Yes.

25:14 You're a stockbroker we met in Philadelphia.

25:18 I'm a banker, and we met in London.

25:20 Oh, don't argue.

25:21 I can't stand people who argue.

25:24 Who let him in?

25:25 That failure, the failure of Hello, Dolly!, those are both 20th Century Fox films. And the huge failure of both of those movies put 20th Century Fox into this bizarre position where it just fomented the great family film of all time, The Sound of Music. And by 1969, they were bankrolling softcore porn.

25:44 Oh, God.

25:45 Beyond the Valley of the Dolls, Seven Minutes. Myra Breckenridge, they literally had hit their bottom right after they had hit a bottom after Cleopatra and Sound of Music pulled them out of the bottom. And then they hit the bottom again and they started getting pulled out of the bottom with Patton and MASH the next year in 1970.

26:04 But 69 is like hell year. And it was for all the studios.

26:09 So in 1970, MGM auctions off its props and costumes. Yeah. And that is such a bittersweet echo of what David O. Selznick apparently told Ben Hecht in 51. Hollywood's like Egypt, full of crumbled pyramids. It'll never come back. It'll just keep on crumbling until finally the wind blows the last studio prop across the sands.

26:30 Yeah, you know, it's a very good, truthful statement. Not that I always agree with David O. Selznick, but that's a good one.

26:38 Okay, two quick things. What did all that then lead to of the stuff I was so grateful to grow up with as an adolescent in the 70s? Me too.

26:47 I always said that I came of age with Bonnie and Clyde. The big thing was that the studios were falling apart, but they had to continue to create. And so what they started doing is to throw money at young filmmakers. And what they were telling those young filmmakers to do was not go out and make something experimental and wonderful. They were saying, go out and make something that we can repeat over and over again. because Hollywood has always been about repeating success. And you started to see that happen when The Godfather came out. And The Godfather was immediately followed by all these Hollywood knockoff gangster films.

27:20 That went nowhere.

27:21 The next year, The Exorcist comes out. That led to a lot of horror films, which had a big sort of renaissance that then died a little bit until 1980, till Halloween came out. But the movie that really did it was Jaws. And it was interesting because it wasn't that Jaws was a horror film. It wasn't that Jaws was this, that, or the other thing. It wasn't the movie itself that taught them a lesson. It was how the movie was released that taught them a lesson.

27:49 There is a creature alive today who has survived millions of years of evolution without change, without passion, and without logic.

28:01 And that was the summer, which had always been the dead period. They suddenly looked at us, oh my God, there's all this money in the summer to pick up. And also, if we open the movie on a couple thousand screens, as opposed to the usual two or three hundred screens, we make the money that much faster.

28:17 It is as if God created the devil and gave him Jaws.

28:28 I mean, and Jaws is wonderful. I love Jaws.

28:30 Me too, man.

28:30 I just don't think you could be alive on this planet and not love that movie. But at the same time, it really did lead us to where we are right now. We would not be stuck with the age of Ultron if we hadn't had the age of Jaws.

28:42 To begin with. Which is an exacerbated, I think, tenfold by Star Wars two summers later.

28:48 Yeah, Star Wars. Star Wars basically, if you think of it this way, Jaws validated it and Star Wars certified it.

28:55 Yeah, yeah.

28:56 20th Century Fox and George Lucas bring you an adventure unlike anything on your planet.

29:04 Star Wars. Stop that ship.

29:10 It's the new Star Wars land speeder.

29:11 Wow, looks like it's floating.

29:14 The sand people are coming.

29:15 It's up to Luke Skywalker and his land speeder to get us out.

29:18 Action figures each sold separately.

29:20 Well, Jaws didn't sell any toys, so I give the prize to Jaws.

29:24 Yeah, no, me too.

29:25 All right, what can we learn, Ron, from the turnarounds or the comebacks of I mean, the death knell is told constantly. And it's a pretty crazy time of, let's call it, anti-anti-trade. right now. I mean, you know, the consolidation is about to eat itself when Paramount eats Warners up and spits out fewer movies as a result overall.

29:50 What can we learn from what happened in those times? crisis points of old when we're trying to vitalize the industry today, besides a promising bipartisan production tax credit bill?

30:02 Well, I think there's a number of things. One of the first things that I think of when I look at this consolidation issue is the golden goose was killed by Disney, all right? Disney killed the golden goose called Star Wars. You know, the excitement of Star Wars used to be that you got one every three years, so you had this long period of anticipation. And then once Disney bought Star Wars, They started knocking out a movie a year, sometimes two movies a year, the TV series.

30:28 Nobody cares about Star Wars anymore. Take a look at how Mandalorian did. Nobody cares anymore. And so they kill that golden goose. And so you would say, okay, maybe the lesson here has to be that we don't keep doing the same thing over and over again and hand it to the audience. You know, don't hand them a Volkswagen and tell them it's a Rolls Royce. And I fear...

30:51 That where we're going to see that lesson play out, either for good or for bad, is with James Bond being purchased by Amazon. But this idea of repetition is something that Hollywood has always, always been drawn to when they're in trouble. They tended in the past to do it as let's repeat genres. When you had a phenomenal success with, let's say, The Ten Commandments, all of a sudden you're getting Ben-Hur and Solomon and Sheba and da-da-da-da-da-da-da.

31:22 You're getting all of these Sin and Sandal epics.

31:24 Right, right, right.

31:25 And I do feel that the lesson that we're going to wind up learning from this is don't keep going back to the same well. And it's taken the death of Star Wars and it may have to take the death of James Bond for them to learn that. But what they really need to start doing is to look and say, where is the audience? Instead of trying to do this mass audience that is everybody on the planet, Do what they started doing in the 50s rather intelligently, which is let's start aiming movies at specific audiences. And the 50s was the first time in which they started making movies that were for the teen audience, for the adult audience, for that. They broke it up finally in the 50s. And I think that's a lesson that they're

32:07 going to have to learn in this new age, which is you can't make a movie for everybody. You have to start breaking these down. They're cheaper to make. Okay, so you can make more of them. And let's just start playing around with what we've got to see where we need to go forward. But right now, what scares me about these consolidations is that they only know one model.

32:30 And now all these studios are getting together into one studio to say, let's just keep replicating that model because that's what's brought us money. What they're not really seem to be paying attention to is diminishing returns.

32:41 Right.

32:42 Fewer return ticket sales, more expensive to make the movie, less money coming in at the door from it. This model of we make five movies of which we know three will fail, one will break even, and the fifth one is going to make enough money to pay us back on all of the losses, that model just doesn't work anymore. But they don't know what to do. They don't know where else to go.

33:01 William Goldman said something about that. I think no one knows anything. Hey, Ron, appreciate the time and the insights, and I hope you're wrong and probably think you're right.

33:13 Well, I know I'm right. Okay.

33:17 All right, be well.

33:17 All right, talk to.

33:21 You later.

33:25 So Ron laid out how Hollywood managed to untie itself from the railroad tracks of certain doom several times across the 20th century and how to survive another crisis another day. The more recent and escalating problem of runaway production, or if you prefer, the economically sensible filmmaking options afforded by Canada and the UK, and other parts of the world, this problem is seriously debilitating to the film crews and actors trying to make a go of things in LA and across the United States. In the 1990s, before entering politics, Laura Friedman worked for Reicher Entertainment, a film production and distribution company. There, she wasn't just reading about runaway production in the trades, she was watching it happen from the inside.

34:18 You mentioned a film that you worked on near the end of your time in the film industry, before you made the move to politics, that was a clear example to you of like, well, this is the runaway production problem right here. I don't know how long ago that was.

34:31 When I was at Reischer Entertainment in the late 90s, early 2000s, somewhere in that area, Canada began their film tax credit program. And we were doing a slate of lower budget movies. We did larger budgets and then we did lower budgets, straight to video, straight to cable kind of movies. And they really only penciled. We were taking advantage of the Canadian tax credit and allowed us to do a lot more of those smaller films, which we could then bundle and sell in bundles around the world.

35:00 So we were one of the companies, like many, that took advantage of the Canadian film tax credit program when it first started. And so I was there watching while companies like the one that I worked at were starting to send their films up to Canada. And the impact that that had on people here that had to go, but also on the hundreds of people who weren't getting work anymore, because you had to use a certain amount of above-the-line talent that was Canadian, and then the crews were increasingly in Canada. So it was money going directly out of Hollywood and into Vancouver.

35:38 Back in 1995, the production migration to Canada was sparked by its implementation of federal tax credits and other production incentives. Word got around very quickly about the advantages to U.S.-based filmmakers working on a wide range of production budgets. And once lost, film production jobs do not come back easily. Now, to fix that, you can suggest slapping 100% tariffs on any U.S. film production working outside the U.S., as the current president did, or you can work toward bipartisan federal legislation, even if bipartisanship is a peculiar, distant-sounding word in these divided United States. This is what Laura Friedman and other Democrats and other Republicans did. And you know what? The

36:32 president likes the idea.

36:34 So starting back when I, right after I was sworn in, when I jumped into this back January, February of 2025, right after I was sworn in, I started working right away with this very large coalition, you know, a lot of whom are sort of centered in my district or in Los Angeles. So this was the different unions that represent people who work in the industry. So you have IATSE and their many locals, the Teamsters, WGA, SAG, AFTRA and the Writers Guild, as well as the laborers and the independent producers who have their own experience with the industry and their own economics for their films, and with the MPA representing the large studios and Netflix. So working with the independent producers, the large studios, and the unions,

37:15 coming up with something and negotiating what the bill would actually look like to address any concerns and to make sure that we met the needs of all of these different parties took a long time, as well as working across the aisle with the Republicans to make sure that we had an approach. That was going to pass muster with Republicans who are in the majority and with the White House because at the end of the day, Donald Trump's going to have to sign the bill. So that's been taking quite a long time. And once we had all of those pieces to this puzzle put together, we brought the bill into Ways and Means, which is the Committee of Jurisdiction. picked up Ways and Means members as co-authors because they're the ones that are going to have

37:56 to shepherd the bill through that particular committee. And that's where we are today. And introduce the bill.

38:02 Laura, I'm just astonished at this bill coming together the way it did. Because if you had told me, this is just a few months ago, where our current president threatened to levy a 100% tariff on all movies made outside the U.S. just in retaliation. That would have been ruinous for the U.S. production level. It would have been, you know, raising ticket prices for moviegoers. And, you know, the argument, I guess if he had one, was that these other countries, these, what is it, 80 nations that have a federal tax credit program for production, he would just argue that, you know, that's hurting Hollywood and therefore these foreign-made films are a national security and propaganda threat.

38:44 Those are his words, not mine. And then... We have this. One of your bill sponsors, Representative Brian Jack of Georgia, said that, you know, we all saw the evolution of the president's direction on this, he said. And then he said that's because of John Voight. Is that an accurate assessment? And flesh it out for us. What conversations have you had with Mr. Voight?

39:07 Yeah.

39:07 So Donald Trump has been interested in this issue for a while, and I give him credit for that. If it wasn't for that, we wouldn't be where we are right now for sure. Donald Trump comes out of Hollywood. He comes out of television. He understands a lot about the industry and he sees its power and its importance.

39:23 And he took an interest in it. And he did tweet about how awful it is that we're losing this signature industry and this huge export for the U.S. But he did talk about tariffs. You know, that's been his approach on a lot of issues, one that I don't agree with, using it as a blunt tool in general. It's something that has its place but needs to be very carefully considered, and it has to be the right tool at the right time. So he also appointed three Hollywood ambassadors. And There's only one that I ever heard from, and that was Jon Voight. And Jon Voight came to see me a couple of times, and he is incredibly passionate about Hollywood. He's passionate about the people who work behind the camera. He's passionate about the world, the industry

40:03 that created the lore of Hollywood, the energy that he used to experience in the studio system and when we were such a company town. And he sees people having to leave L.A., because of this runaway production. And he wants to help. He loves the industry. And he wants to help. And he's been a great spokesman. And he does have Donald Trump's ear. He's a supporter of Donald Trump.

40:28 He is a Republican. He's very vocal about this. And he has been a great partner to me and to Brian Jack. And absolutely, he and his producing partners understand the power of a tax credit. They have used it themselves when they've shot in different places. And they know especially on the independent producer side, how price sensitive those projects are. You know, his partner said to me, for us, it's not about going where we're maximizing a profit. It's about the difference between being able to make a movie or not being able to make a movie. And so they were able to go and tell their stories to Donald Trump and to that administration and show them how this is a proven solution, something that has effectively brought

41:07 television productions back into Los Angeles because of our tax credit and showing how this would bring profit productions back to the United States.

41:16 There is an intersection that I'd love to get your insight on. There have been moments in crises in the Hollywood sort of timeline where there have been sort of behind the scenes or maybe out in plain sight political maneuvering to kind of help things come back. I just wonder if, is this moment something that you see as kind of a beginning? If we can get this past, where would you like to see it in 10 years?

41:43 Yeah, I think that this is very important for production, but I also think we do need to look at corporate consolidation of this industry and so many others, because the financial and syndication rules were there to try to break up, you know, a lot of the studio system and sort of monopolistic behavior within the entertainment industry. And that allowed for an ecosystem that provided opportunities for a huge amount of independent producers to And creators.

42:10 And we're going the other way, right?

42:12 We're going the other way. For a while, streaming gave a lot of opportunities, but now we're starting to see a lot of the same sort of shrinkage and conflation. And it's bad for consumers. It's certainly bad for creators. And it's bad for creative content.

42:23 So.

42:24 And by the way, this isn't just about Hollywood. Monopolies and consolidation is bad in every industry. And I would challenge anyone to show me an industry where allowing for more consolidation has provided for better consumer experience, better consumer choice, lower prices, more jobs. It's almost always, or at least I would say always, the other direction. And so this is something that as a nation we should be looking at strengthening our antitrust laws and and making sure that we provide fairness. If you're going to have a capitalist system, it doesn't work if you don't have fairness and points of entry for new businesses and expansion of industries and jobs.

43:01 And conflation does the opposite of all of that. So that would be, to me, something we should look at, whether it's Hollywood or the hospital industry, telecom industry, anything else.

43:11 It is.

43:11 Look, we have just not been, as a nation, we have not been competing. We just haven't been competing. We're just not in the game. And to me, this bill is about America saying we're done losing.

43:24 Laura, thank you for your time. I really appreciate it.

43:26 Well, it's great to see you. Thanks for having me.

43:29 Great to see you.

43:29 I appreciate your interest.

43:31 Goodbye forever. Goodbye forever.

43:35 I'm going west for a long, long time.

43:39 After we talked, I thought about what Representative Laura Friedman told me about what Jon Voight's producing partner said regarding their proposed film production tax credit bill. He explained why using federal money for the movie industry to actually make more movies here in the U.S. is just good business.

43:58 He told Friedman, it's not about filming in a country where we can maximize our profit. It's about the difference between being able to make a movie and or not being able to make a movie. I also thought about Ron Falzone's weirdly comforting list of potential industry-destroying crises, the Great Depression, television, the counterculture of the 1960s, and more recently, corporate takeovers and the political string pullers, plus AI, plus filmmakers having every incentive in the world to film somewhere else in the world because it's more cost-effective than making movies here. All these rushes with extinction and so much evidence for worse problems to come. And yet, look at 2026 and not just the odyssey, though I do love

44:48 it that Christopher Nolan is now the biggest movie star in the world. He just happens to be a writer-director, not an actual actor. You see a low-budget smash like Obsession or Back Rooms take off the way they did in ways that most of traditional hidebound Hollywood couldn't imagine. and it feels like the late 1960s all over again.

45:11 We could fix it all if the money that owns the screen industries now rediscovers the value of more and smaller. Smaller and medium-budget projects mean less uncreative pressure and fewer exhausted rolls of the franchise dice designed simply and only to boost the stock price. I don't know, call me a commie, but no, I don't like that. That's no way to run an industry. Just change the priorities and take different kinds of risk that will actually help your screen industries turn out better work and probably make enough money for any sane form of capitalism. Change the priorities in this damn country, economically, politically, cinematically, every way. That's all.

45:59 That's all I'm asking. The Movie Racket is produced by Joe Disseau and nominally Michael Phillips. Adam Kempinar, Sam Van Halgren are the executive producers. Special thanks to Representative Laura Friedman of California and Professor and Screenwriter Ron Falzone of Chicago, Illinois. Thanks to everyone who's dropped a little something to me and Joe by way of electronic mail, which recently changed its name, by the way, to email. So email us at movieracket at filmspotting.net. Come back next week, why don't you?

46:33 This is a FilmSpotting production.