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Alternative Market Briefing

Other Voices: Why hedge funds should be afraid, very afraid of Hollywood accounting: `They are going to lose their shirts funding movies`

Friday, June 15, 2007

From Richard Stoyeck

Historical Review Until the 1950’s, Hollywood was controlled by seven major motion picture studios. More importantly it was controlled by moguls, all of whom were men they of eastern European descent, who ruled the studio in the same way that the kings of their previous countries ruled the peasants. Creative control belonged to the mogul, while the money was always controlled by the New York bankers, the so-called “Suits”.

This power alignment began with the beginning of Hollywood prior to 1920, and continued for 40 plus years. What held it intact was the caste system, whereby the stars were controlled by individual studios. They were paid on a yearly basis, and had no say whatsoever in the movies they would appear in. In essence they were slaves to the system, not very different from how baseball players were handled until the Supreme Court outlawed career-long captive players.

The Hollywood caste system began to crack in the 1950’s, when Kirk Douglas, the father of Michael Douglas went independent, and formed one of the first independent film companies called Bryna, for his mother. They produced the “Vikings”, “Spartacus”, and “Seven Days in May”. The so called Studio system was now dead. Power shifted to the individual actors, who became BRAND NAMES in their own right.

Two important developments for Hollywood studios Two developments began in the 1960’s. The Hollywood studios would be taken over by corporatio......................

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