THE DECLINE AND FALL OF WARNER BROTHERS

A WITNESS STATEMENT

“Citizen Kane” - Xanadu

Many writers have worked hard to capture in words the dark magic whereby Los Angeles becomes Hollywood. A metaphysical haze falls over the city when writers in their ‘golden hours’ describe the elusive path Los Angeles the fact travels to fashion its myth, Hollywood. That haze too often falls over the writing, leaving those of us who’ve lived there and fallen prey to it with the persistent, obdurate enigma: nothing could be this empty, without thought or meaning. What’s the secret?

Writing about my time there, I remember the sensation of being blinded by the glare of the cruel sunlight. The shadows offer this spare comfort: in the shadows you can see. In Los Angeles, secrets hide in the shadows. They may migrate into the soul if you look too closely or stare too deeply or for too long.

I once heard Los Angeles described, seen from above, as a “brown, dirty ashtray”. Backyard swimming pools dot the sun-blasted landscape, and reflect the sun but the light has its work cut out to fight through the filthy haze. The flight path from the East does not fly over the posh neighborhoods with palm trees or the hotel painted pink to match the flamingos. You see a dirty, sweaty city, cheap paint peeling off sketchy houses and buildings. You see a thirsty city, hungry for work. It’s a landscape to which a writer might affix the word “desperate”. A little more reading and you learn it has ever been thus.

But still people come to Los Angeles looking for Hollywood. Tourists leave, but many remain. The more they search for glow to find the gold, the more disappointed they become. Some stop looking, discover they’re stuck, and find a job, selling. But there are enough cases, especially now, as everything becomes more expensive, that the desperation turns to violence.

The night seems to spread from the shadows. As it becomes night, the city lights blink on, and you witness a transformation. You no longer see the cheapness of construction. You see only the dazzle of possibilities; you see the dream. Hollywood.

This darkness is the dark matter that brings movies into being. But there’s a deeper darkness that fills Emergency Rooms and the City Morgue. The dazzle fades, the mirror cracks, the illusion crashes into a fist, a knife, a bullet, an aggrieved John Doe.

Crime gives the movies their tang of danger. Police helicopters train searchlights on your backyard. You see the real estate prices rise. People watch “Chinatown” to see where real estate fortunes come from, and the water. Los Angeles is a crime in progress.

Writers who stick with the story discover a deeper secret than Hollywood. They discover there’s a part of us that wants to steal and murder, and get away with it. In movies we can play gangster. In real life, without an expensive lawyer, we get caught and do time. But stick around and you learn something else about Hollywood - crime does pay. You just need that expensive lawyer, some snazzy public relations, and know the Right People.

Dashiell Hammett wrote that “the cheaper the crook, the gaudier the patter.” There’s lots of that in Hollywood.

Look at what’s happening at what was once Warner Brothers Studio. Now it’s chattel owned by something called Warner Brothers Discovery and the debt-holders who own WBD. The people waving the paper grow angrier each minute the market writes lower numbers on that paper.

I’m angry, too. The Studio where I worked made movies that became part of our DNA now looks like it will get stripped and sold for parts. We see what corporations have done to the movies we used to watch regularly over the last years to lift our spirits. Now the movies themselves are in jeopardy.

Watching Warner Brothers decline conjures the prospect of its failure altogether. It’s not inconceivable. MGM once ruled Hollywood and the world with “All the Stars That Glitter”. The Warners lot could become a ruin. Imagine the Capitol Building in Washington or the Houses of Parliment in Westminster converted into casinos by global gambling interests. It could happen.

My name is Ozymandias, King of Kings;

Look on my Works, ye Mighty, and despair!

We are witnesses. I am a witness. Consider this a Witness Statement.

I worked at Warners twice in my career. I left the first time in 1999 with some stock valued at $110 per share. In 2000, Time Warner merged with AOL in a catastrophic merger that resulted in Time Warner dumping the body of AOL alongside the internet superhighway. ATT bought the studio again and damaged it further. There are a couple of very good articles from the NYTimes that report these disasters:

The AOL Debacle here -

https://www.nytimes.com/2010/01/11/business/media/11merger.html

The ATT Mugging here: The NYTimes headlined the article “Was This $100 Billion Deal the Worst Merger Ever?” It’s reported by James B. Stewart, and it hews to his high standard. It’s a corker.

https://www.nytimes.com/2022/11/19/business/media/att-time-warner-deal.html

Now the news reports that WBD is failing and heading for a sale in its distress. It’s another episode in a repetitive and depressing story. It may be the final sequel in this franchise before the inevitable reboot. Consider this: after successive muggings, HBO is barely a tile amidst the tangle of offerings on something called Max which together look like a pirated version of Netflix. To its credit, Netflix induced a hypnotic trance of self-destructive madness in its competitors. That spell proven effective, Netflix has fixed their hypnotic gaze on us, the audience.

The subliminal command - once spoken aloud in a New Yorker article - is that we consume their servings of premium cheeseburger entertainment, much as the zombified grab their Big Macs, like there’s no tomorrow.

But there is a tomorrow, and their subscription costs more … for what? A Soylent gruel of entertainment mashed together and spat at you by algorithm. Film’s feeble protest against the inevitable, for those of us who love film, resembles nothing so much as the poor human fly begging plaintively from imprisonment in the Web in “The Fly” - “help me!”

Help us! Just give us a proper film; we’ll go to it, in grateful masses.

If HBO survives, it might want to undertake the telling of this story. It’s an American Tragedy. But I’m afraid neither Macbeth nor his author Shakespeare are available to write the show. I would still put them top of the list because their ‘take’ on these stories of hubristic greed and madness resulting in loss of life and treasure sets the standard for all that follow. 

Remember this from “Macbeth”? 

Tomorrow, and tomorrow, and tomorrow,

Creeps in this petty pace from day to day,

To the last syllable of recorded time;

And all our yesterdays have lighted fools

The way to dusty death. Out, out, brief candle!

Life's but a walking shadow, a poor player,

That struts and frets his hour upon the stage,

And then is heard no more. It is a tale

Told by an idiot, full of sound and fury,

Signifying nothing.

I’ll leave aside irony and sarcasm. People are losing their livelihoods, their savings, and their cars, in which some have been sleeping. In just two years this new WBD sacked 3,000 employees. In those same two years, this new thing WBD has lost 70 percent of its value; WBD stock valued at $24 and change on 11th April 2022 - its first day of trading - now costs $6.99 per share. A matter of pennies…

The experts tell the story best. The Financial Times on 20th July 2022 reports to its Premier customers -

It’s all exhausting. Zaslav is famously known for taking home big pay checks - and more recently for offending everyone in sight. Stockholders have seen shares fall nearly 70 percent in those 27 months. Customers do not like content disappearing from their streaming apps. And the talent, including Charles Barkley of professional basketball fame, wonder if his mismanagement is going to cost them their jobs. At some point Zaslav must be accountable.

Last week, WBD announced a $10 billion ‘impairment’ and muttered something about ‘the model’ for TV and cable ‘unbundling’.

Sane heads write what’s obvious. Lucas Shaw for Bloomberg writes:

This was avoidable.

It has become popular to argue that no one could navigate the demise of cable. Let’s consider the recent mistakes of Warner Bros. Discovery, which owns one of the best brands in media (HBO), one of Hollywood’s oldest studios (Warner Bros.), a small video game division and a panoply of cable networks.

Rather than invest in streaming, Bewkes gave up and sold Time Warner to AT&T, a company with no experience in media. While their deal was held up by regulatory delays, other companies were able to execute on their strategies.

AT&T shuffled the leadership, renamed the division WarnerMedia and fired many of the company’s most experienced leaders. To help pay down debt, WarnerMedia sold the anime service Crunchyroll when it had a few million subscribers. Crunchyroll now has 15 million subscribers and is a multibillion-dollar business, the cable network of the future.

The company kept CNN, which could have raised a lot more money to pay down debt, but never really integrated news into its streaming service. WarnerMedia tried to build a news subscription service, shut it down under new leadership and is trying anew.

It has rebranded its streaming service a few times and ultimately abandoned its best brand, HBO. Despite trying to create a mass-market service broader than HBO, the company was late to introduce advertising, still hasn’t figured out streaming sports and has a product that remains sub-standard. It’s also scaled back its ambitions abroad.

Streaming was always going to be hard for legacy media companies; cannibalizing your most profitable operation to benefit a new, unprofitable business is counter-intuitive. Transitioning from one era to another has bedeviled executives forever. But every one of these companies has made decisions that harmed their future prospects.

Better papers write obituaries before the subject dies. Add to that the fact the movies have made wise guys of us all. We’re all proficient in Hollywood’s narrative craft: The ending appears inevitable well before becoming so during the third act climax.

Speaking of “Wise Guys”, Warners’ decline after its purchase by WBD recalls lessons about business and finance I learned from Nick Pileggi’s book with Henry Hill “Wise Guys” and from its adaptation for the screen by Martin Scorsese. It became the 1990 movie “Goodfellas” at Warner Brothers (of course).

In the movie, Henry Hill played by Ray Liotta, explains how gangsters do business: 

The Goodfellas enter into a partnership with the owner of “The Bamboo Lounge”. Here in England, in London, the Kray Brothers would call this maneuver ‘a long firm”: take over a business from the owner under the guise of partnership; sell the assets, fast - $200 in booze goes for $100. The business ‘buys’ stolen goods and sells them on for a loss. They add bank debt secured by the property. Then as Henry Hill explains, when the last dollar is stolen, “you bust the joint out.” Liotta and Pesci set fire to the property. Mission Accomplished. The Joint is ‘busted out’. 

Like WBD: Gangster capitalism, or with the right lawyer, capitalism.

Here’s the scene, also known for its refrain “fuck you, pay me”, a line apropos the huge burden of debt under which WBD labours -

Why bother, right? Because it’s personal, as I said at the start. Now I’ll tell you why.  

Before I went to Warners, I read scripts for Scorsese. He had his offices in the Brill Building, old Tin Pan Alley. Where Carole King, Leiber and Stoller, and the Gershwins laboured over songs, there I went each week to the Scorsese office to pick up scripts or return coverage.

While there, I played voyeur: I gawped at the 70mm film cannisters for the “Lawrence of Arabia” restoration that Scorsese and Spielberg were overseeing for Columbia at that time. My gaze traveled out the 9th floor window to Broadway below where my attention fixed on a faded tiki bar on the block between 50th and 51st Street.

Hawaii Kai. 1638 Broadway to be exact. One of the first Polynesian night spots in Manhattan, Hawaii Kai opened in 1969 and closed in 1989, just when Marty Scorsese was filming “Goodfellas”. I was told he dressed the interior of Hawaii Kai to use for the famous scene at the Bamboo Lounge in which Joe Pesci as Tommy DeVito says “so do I amuse you; is that my purpose in life, to make you laugh?”  The exterior of this once stately pleasure dome was now grotesque from neglect: disconsolate bamboo fronds cried out for an insurance fire.

The triumph of art, right? When I saw the “Goodfellas” the first time at a cast and crew screening in midtown Manhattan in the East Thirties, I saw the grey and decaying Hawaii Kai transformed into the louche and dangerous glamour of “The Bamboo Lounge”. ‘Movie magic’ went from cliche to living embodiment in this moment of transformation.

The crowd at the screening was populated by the extras who posed as gangsters at Pauli’s social club where young Henry Hill gets his start in crime. Also at the screening were the owners of the ‘beauty cars’ that conjure the onscreen illusion of another place, another time - “movie magic,” again, or simple clever production work and a sharp eye? There’s no difference.

A cry went up, “It’s Frank, Frank’s here.” There was Frank Vincent, who plays Billy Batt whom our Goodfellas kick to death in the bar to the juke-box accompaniment of Donovan singing “Atlantis”. Well, not quite to death, as we see at the start of the movie, where Billy pounds on the lid of the trunk, and receives the coup de grace in a tableau that made me certain that I wanted a career in movies, an ambition I could taste. 

My Mother tells a story. When she was eight, she went to see her hero, Gene Autry, in one of his many movies. She was so transported that she left her seat and walked in a trance toward the screen. She wanted to pass through this mere screen to enter movie paradise where she would be with Gene, his horse, those songs. I did something similar. It’s my inheritance; I’m proud of it. 

We write about business and movies. We should talk about movies as religious or otherwise spiritual experiences. They add that ineffable ingredient without which our lives, our culture, or anything, is just dead, inert matter. That spark is soul, spirit, the breath of life which we receive so potently from living pictures in a dark theatre where we’re free to dream who we will become.

It makes me angry to see this sort of movie go away. I’ve seen some good movies lately, not studio movies, though some are. But at least I’m going back to the cinema, after living years under thudding bombardment from studio ‘product’ - remakes, sequels, and prequels, reboots and reinventions. This ‘strategy’ of ‘utilizing IP’ robbed movies of their spark. It strangled originality. It robbed audiences of the refreshing experience of surprise.

And the people who did it - the WBD management is only the lastest in a long lineup of the usual suspects - did so to arbitrage risk and guarantee stock valuations, but also, most important, to secure their insecure jobs.

I’m having none of it. None of us are. Give us something good, so we can laugh, cry, dream. Give us an adventure to a place we would not go otherwise, and while we’re there make us feel like we’re finally someplace where we belong. As audience, we will do our part. The last two summers provide evidence: build something worthwhile, and we will come.

It has been a privilege and honour to work on films most of my life. For example, making scripts. That’s still done, and will be when the newspaper reporting the Fall of Warners blows down the Western Street of its backlot, abandoned, otherwise bankrupt. In fact that’s an image taken from a movie. Movies will live forever, if only as ghosts haunting us. They will never die.

Here’s the Busting Out scene from the script for “Goodfellas”. It’s worth remembering after the smokescreen of business patter that all business starts here, on the page of a script:

INT.  BAMBOO LOUNGE - DAY

           WE SEE HENRY AND TWO HOODS from cabstand checking the cases 

           of liquor being delivered into the lounge. The entire room 

           is filled floor to ceiling with cases of whiskey, wine, 

           crates of lobster, and shrimp, and stacks of table linen 

           and sides of beef. The place looks like a warehouse.

                                 HENRY (V.O.)

                     But now the guy has got to come up 

                     with Paulie 's money every week, 

                     no matter what. Business bad? Fuck 

                     you, pay me. You had a fire?  Fuck 

                     you, pay me.  The place got hit by 

                     lighting? Fuck you, pay me.  Also, 

                     Paulie could do anything. Especially 

                     run up bills on the joint's credit. 

                     Why not? Nobody's gonna pay for it 

                     anyway.

           EXT.  BAMBOO LOUNGE - REAR ALLEYWAY - DAY

           WE SEE cases of liquor, wine, etc., being carried out of 

           the rear door of the lounge by HOODS from the cabstand and 

           loaded onto U-Haul trucks.

                                 HENRY (V.O.)

                     As soon as the deliveries are made 

                     in the front door, you move the 

                     stuff out the back and sell it at 

                     a discount. You take a two hundred 

                     dollar case of booze and sell it 

                     for a hundred. It doesn't matter. 

                     It's all profit.

           INT.  BAMBOO LOUNGE OFFICE

           HENRY, JIMMY and TOMMY are standing around the small 

           workman's table. There is no desk. The office looks denuded 

           of furniture.  A LAWYER is going over papers.

           A terrified, unshaven SONNY BAMBOO is seated behind the 

           desk. The LAWYER is showing him where to sign.

                                 HENRY (V.O.)

                     And, finally, when there's nothing 

                     1 left, when you can't borrow 

                     another buck from the bank or buy 

                     another case of booze, you bust 

                     the joint out.

                                                    CUT DIRECTLY TO:

           LARGE CLOSE UP OF - HANDS

           making rolls of toilet paper being kneaded into long rolls 

           with Sterno.

                                                             CUT TO:

           HENRY AND TOMMY shoving wads of Sterno paper into the 

           ceiling rafters.

                                 HENRY (V.O.)

                     You light a match.

                                                             CUT TO:

           CLOSE UP - MATCH

           Lighting rolls of Sterno paper.

These pages represent hard work. They demonstrate craft, but note the gleeful flourishes of wit and imagination, as in the litany “fuck you, pay me” or “you bust the joint out”. These moments catch the eye of directors who have the vision to see them. But the director, even the greatest, can’t see moments if they aren’t there. To put them there takes that ineffable ‘something’.

To put these moments on the screen, that’s another thing entirely: the director’s vision now turns to guile to elicit perfectly costumed, coiffed, and painted actors to forget they are acting, and instead summon from their depths, in defiance or because of their daemons, what Godard called “truth at 24 frames per second.”

So begins cinema, the diligent practice of making wonder happen, every day. On the day, we are all of us beginners. It’s an endless apprenticeship. Each day, if we are lucky, after all the traps and snares, we get to do our work.

Or you light rolls of Sterno paper and bust the joint out. In our sad tale of the Decline and Fall of Warner Brothers, arrogant vandals - less a Golden Horde than a Gang That Couldn’t Shoot Straight - set money alight then use it to burn down the kingdom four immigrant brothers built, often by laundering Mob money.

As Porky Pig says in all the great Warners cartoons, in conclusion -

“That’s all, folks!”

Warners may burn, but the movies ain’t over. Don’t believe me? Talk to Tommy -