RKO Radio Pictures

by Richard B. Jewell

  Thankfully, LeBaron's abilities as a studio head were somewhat superior to his understanding of the pleasures derived from visual entertainment and the psychology of human perception.

  The RCA engineers did not proceed so cautiously. They were making impressive strides toward the perfection of the Photophone equipment. In August 1928 an important breakthrough was announced. David Sarnoff informed the press that “complete interchangeability of sound picture films made by Movietone and Photophone processes had been achieved.”19 This meant that films synchronized with Western Electric's optical sound system would be fully compatible with Photophone's projection and sound reproduction equipment and vice versa. Theater owners would not have to worry about whether their system would work with each individual film.

  At first, there was some skepticism about RCA's claim. But when FBO's first partial “talkie,” The Perfect Crime, opened at the Rivoli in New York, Sarnoff was proven correct. The picture, synchronized by Photophone equipment, was run on a Western Electric projector with no technical difficulties.20

  The fall of 1928 was a time of extraordinary ferment in the film business. Many of the choicest rumors involved Joseph Kennedy and the FBO situation. After several months of speculation about Kennedy assuming the presidency of Pathe, the trade papers reported that he would instead take over First National.21 This seemed to indicate that FBO and perhaps Pathe, as well, would amalgamate with First National. One week later, however, the entire deal had come undone. Disagreement over complete versus partial authority annulled the arrangement. Kennedy wanted complete autonomy, but the First National board of directors refused to give up all its power.22

  If Joe Kennedy had been able to gain control of First National, he would have created his own superstudio by merging it with FBO, Pathe, and K-A-O. Now that this was no longer possible, he began to consider exiting the movie business and, of course, how he might realize significant monetary rewards for his short sojourn in Hollywood. David Sarnoff provided the answer.

  Kennedy had been working with Sarnoff long enough to know that he coveted FBO and K-A-O. Thus, in October 1928 Kennedy began to put together a deal that would deliver the movie studio, its distribution arm, and the K-A-O chain of theaters to RCA. Consummated late in the month, the transaction made Kennedy a rich man and gave David Sarnoff a vertically integrated movie company whose product would demonstrate the quality of RCA sound equipment, as well as complement his growing radio and radio equipment businesses.23 Published reports indicated that Keith-Albee-Orpheum and FBO Pictures would now stand together as one giant, $300 million corporation.24 The stated purpose of the new enterprise was obvious: “to produce, distribute and exhibit perfected synchronized pictures made by RCA's Photophone system.”25

  The merger was confirmed on October 23, 1928—the birthday of RKO. On that day, the venture was officially named the Radio-Keith-Orpheum Corporation, and David Sarnoff became chairman of its board of directors.26 According to an industry trade journal, Radio-Keith-Orpheum appeared to have unlimited potential: “This new organization will be, at its outset, one of the most powerful and potentially most promising in the amusement industry. The consolidation of an established producing unit with a string of theatres and an important synchronizing company, possessed of existing discoveries and equipped for future research, is a matter of outstanding importance to motion picture circles.”27 David Sarnoff stated that “he did not know who would be president of the new company and he did not know when he [the president] would be appointed, or announced.” Employees of the various companies were assured that there would be “a minimum of unsettling of the present personnel.”28

  The new corporation's executive positions were filled in the final month of 1928. Some were surprised when Kennedy did not become the first leader of RKO. Instead, Hiram Brown, whose experience included the public utilities field and the leather industry but nothing remotely related to show business, was named president of the Radio-Keith-Orpheum Corporation. David Sarnoff explained his selection of Brown:

  The Radio-Keith-Orpheum Corporation is building upon a foundation that has no exact parallel in the amusement field. The new company is associated with the Radio Corporation of America and its subsidiary, the RCA Photophone Company; with vaudeville by ownership of the Keith-Albee-Orpheum Corporation; with motion picture production, through acquisition of the FBO Productions Company; and with broadcasting, through the cooperation to be given by the National Broadcasting Company.

  The existing personnel of the enlarged Radio-Keith-Orpheum Corporation already includes the entertainment, picture production and theatre experience necessary to the successful operations of the company. It is evident, therefore, that the primary requirement for the administrative task involved in such a combined effort…calls for great coordinating and executive ability. The board of directors believe that the company is fortunate in obtaining the services of an administrator whose capacity has been so thoroughly proven in other fields.

  Figure 2. David Sarnoff, president of the RCA Corporation and the true father of RKO. (Courtesy of the Academy of Motion Picture Arts and Sciences)

  Mr. Brown will have the advice, support and aid of all the directors. It is my own expectation to maintain an active interest in the affairs of the company and to work closely with Mr. Brown.29

  Hiram Brown's entry into the entertainment field was not greeted with such unbridled enthusiasm by Martin Quigley, publisher of the Exhibitors Herald and Motion Picture World. While admitting that business executives like Brown could “enrich” the industry, Quigley cautioned Brown to study “the regrettably large number of instances outside executives have come into the industry with little regard and little respect for things as they are, and for the personalities who occupy leading positions in the industry.”30 Quigley's advice was quite sensible. The movie business bore little resemblance to the leather trade or public utilities; indeed, it was a unique industry with demands that rarely cropped up in other professional fields. Hiram Brown needed to do plenty of homework to catch up with the seasoned executives who ran the other Hollywood companies.

  Joseph I. Schnitzer became the president of the film production company, still named FBO at the time. Schnitzer, unlike Brown, was well acquainted with the movies. He had begun his career as manager of the Des Moines branch of the Pittsburgh Calcium Light & Film Company during the early days of American cinema. After serving as general manager of Universal, he was president of Equity Pictures from 1920 to 1922. From there he moved to R-C, then FBO, where he was the ranking vice-president when the merger was announced.31 Although Schnitzer had supervised film production at various points in his career, he would cede this responsibility to William LeBaron, who was retained as production chief. In addition, Lee Marcus was named vice-president of FBO and B. B. Kahane, its secretary-treasurer. Both of these men would play more important roles than Schnitzer in RKO's subsequent history.

  Joseph Kennedy resigned as president and chairman of the board of FBO and also gave up his chairmanship of the K-A-O board. To outsiders, it probably appeared that Kennedy was tiring of the vicissitudes and wacky personalities of the movie business. In the midst of the whirlwind negotiations of 1928, Kennedy had organized a new company around Gloria Swan-son called Gloria Productions, Incorporated. Erich Von Stroheim was engaged by Gloria Productions to direct Swanson in Queen Kelly, resulting in one of “the costliest misadventures of the twenties.”32 The picture, whose budget ultimately ballooned to approximately $800,000, turned out to be unreleasable.

  But the real reason Joe Kennedy would play no active role in RKO's future was that David Sarnoff did not trust him. Sarnoff had spent enough time with Kennedy to recognize that the man from Boston was a profiteer. Kennedy's personal fortune, which the RKO deal had enriched by more than $4 million, was his only concern.33 Sarnoff wanted to work with builders, men with vision determined to make this new company into an out-standing success. He sought executives with values that mirrored his own. Joe Kennedy did n
ot fit the mold.

  The formation of RKO was unique in Hollywood history, but it did not take place in a vacuum. The year 1928 will be remembered as a time of frantic conversion to sound and the beginning of a consolidation trend that led to the dominance of eight major movie companies. The basic thrust of these companies was theater acquisition. Warner Bros., for example, bought the Stanley circuit in September 1928. The deal gave the Warners two hundred theaters and was worth $100 million.34 Paramount, Fox, and MGM (the last through the Loew's organization) also increased the number of outlets for presentation of their product, for the belief at this time seemed to be that no company could control too many houses. The accumulation of theaters continued in 1929 and was not even completely quelled by the stock market crash in October of that year. Many of these corporations (including RKO) would regret their profligate acquisitiveness when the Great Depression finally started to pummel the movie business.

  Initially, FBO's subpar production history appeared to be of little concern to David Sarnoff. He understood the company had always made movies on the cheap, and he was prepared to give LeBaron a budget sufficient to create better product and upgrade its reputation. Indeed, Sarnoff had big plans. Although he had created RKO primarily to make RCA a player in the sound equipment business, he believed that someday a giant entertainment octopus would emerge from the arrangement, combining talking pictures, vaudeville shows, radio broadcasts (RCA controlled NBC), and television (then in the experimental stage at RCA) into a mutually symbiotic package. A man of extraordinary vision, David Sarnoff could foresee the world of show business conglomerates that dominate public entertainment today. Unfortunately, he could not foresee the economic cataclysm that would soon bring the bullish business environment of late-1920s America to a shocking conclusion; the stock market crashed during the week in which RKO was celebrating its first birthday. Soon afterward, Sarnoff found himself working day and night to lead RCA through difficult times, able to pay only cursory attention to RKO. Lesser men would pilot the new movie concern through the Depression.

  2. “It's RKO—Let's Go”

  The Brown-Schnitzer-LeBaron Regime (1929-1931)

  On January 25, 1929, FBO ceased to exist. The film production enterprise was renamed RKO Productions, Incorporated. “Officials of the old FBO company,” the Exhibitors Herald-World reported, “were elated at the change in name, feeling that the new title carries with it some of the glory and prestige of the gigantic Radio-Keith-Orpheum organization, of which RKO Productions is such a prominent part.”1 Three weeks later, it was announced that the studio's product would be trade-named “Radio Pictures.” RCA's determination to foster the new enterprise and to remind people that it had brought the company into existence was implicit in both the name and the logograph adopted. The logo at the beginning of each RKO release showed a giant radio tower bestriding the world and beeping out its Morse code signal of “A Radio Picture.”

  On February 9, 1929, the Exhibitor's Herald-World ran a slick four-page advertisement for the new “production machine.”2 It was one of the most hyperbolic ads ever created by an industry that has always wallowed in hyperbole. The graphics depicted a bare-chested, godlike figure towering over a modern metropolis and pointing his index finger at “RADIO PICTURES” on the adjoining page. The text proclaimed: “A TITAN IS BORN…eclipsing in its staggering magnitude and far-reaching interests any enterprise in the History of Show Business.”3 The superlatives continued: “one mammoth unit of showmanship…fulfillment of daring dreams…colossus of modern art and science.” Rio Rita, “Florenz Ziegfeld's gorgeous smash hit,” was accorded a full page in the ad as the company's preeminent production of the 1929-1930 season. The spread was charmingly inflated, meant to convince the world that RKO's auspicious future was practically guaranteed.

  Now that his titanic company was up and running, David Sarnoff began his crusade to forge a close relationship between radio and the movies. “Radio has traveled far afield since its establishment as a wireless telegraphic service,” he said. “It is on the ocean, aboard ship, in the home; it is now entering the theatre through the development of talking motion pictures. Electrical science has finally synchronized sound and motion on the screen.”4

  In his weekly trade paper column, Martin Quigley echoed the enthusiasm of Sarnoff and his associates: “Great results may be expected from the active entrance into motion picture affairs of the tremendously successful Radio Corporation of America. This vast organization will contribute much to the motion picture industry. In the linking together of the great forces of radio and the principal radio company, with the motion picture, there will be common advantages to both parties, with especial advantages to the public.”5

  The ballyhoo about the new “Titan” glossed over one fact that would cause controversy for years to come. Radio and the movies could never be total allies. Both were primarily mediums of entertainment and both competed, and would continue to compete, for the time the public could devote to leisure activities. The American family that stayed at home to listen to its favorite programs on one of NBC's two networks (the “Red” and the “Blue”) instead of venturing out to the local movie house cost film companies significant revenues. And what would happen, some movie insiders wondered, if television became a commercial reality? RCA engineers were actively developing “radio with pictures” for the home. Sarnoff, via RCA, NBC, and RKO, kicked off an aggressive program to join radio and the movies in 1929, but the link wedding these two enterprises would not be easy to forge.

  A schizophrenic production climate prevailed in Hollywood at the end of the 1920s. While most studios rushed ahead with sound films, silents remained important because the majority of the world's theaters were not yet “wired.” In its first year, Radio released pictures that were 100 percent talking, pictures that were 100 percent silent, talking pictures in silent versions, and silent pictures with music and sound effects added. By the end of 1929, the studio reported it had distributed thirty “dialog” films and fifteen “silents,” although some of the “dialog” pictures and some of the “silents” were the hybrids mentioned above.6

  Without question, however, the studio was committed to sound pictures. And the most spectacular type of sound film in 1929 was the musical. The opening of Broadway Melody, MGM's “all-talking, all-singing and all-dancing drama” early in the year at New York's Astor and Hollywood's Grauman's Chinese Theaters broke all house records.7 This confirmed industry-wide speculation that moviegoers would be captivated by lavish examples of this new genre. Broadway Melody was based on an original screenplay, but most of the musicals that followed were adaptations of Broadway hits: Universal's Show Boat, Paramount's The Cocoa-nuts, and RKO's first important feature, Rio Rita.8

  RKO's belief in the musical was expressed by Joseph Schnitzer in February. After mentioning Rio Rita, Syncopation, Hit the Deck, and Dance Hall as examples of RKO attractions soon to be available, he boasted: “We've given William LeBaron carte blanche to make the biggest film musical shows that the public has ever been called upon to witness. They'll get there first and they'll clean up for exhibitors.”9 A sum of $10 million was earmarked for the 1929-1930 production program, signaling “the beginning of the great strides which Radio Pictures will take.”10

  Schnitzer must have felt fortunate to have Bill LeBaron running production at the studio. LeBaron had written several musical plays, including the Broadway hit The Echo. But LeBaron couldn't give his undivided attention to the film musicals. He had other responsibilities, such as overseeing the expansion taking place at the studio. On January 29 he informed the press that a new soundproof stage would be built and all the standing stages on the lot soundproofed. In addition, three new projection rooms would be constructed, resulting in a total expenditure of $250,000.11 In March, another quarter-million dollars was appropriated for the new music department building and the wardrobe and property units. The RKO “Ranch” became a reality later in the year. The studio leased five hundred acres in t
he San Fernando Valley near Encino to be used for the construction of large standing sets and for filming exterior scenes in action pictures such as Westerns. Later, it would purchase this property. When the expansion program concluded, the company had spent $2 million.12 The studio lot now contained ten production stages, an administration building, an office building, a dressing room building, an editing and projection building, plus four other buildings and a restaurant.

  LeBaron and his fellow executives also had to contend with rumors of further mergers involving RKO in 1929. In February, Hiram Brown stated emphatically that RKO was “in business to stay.” He continued, “There is no truth to rumors we are to submerge our corporate identities with those of other companies.”13 In June, RKO and Paramount announced that they would form Radio-Keith-Orpheum (Canada) Ltd. The new company was purely an exhibition venture, set up to handle the theater operations of the two entities in Canada. But the deal sparked a new round of conjecture regarding an alliance of the two companies in the United States and around the world. After all, their Hollywood properties made them next-door neighbors. Again, the rumors were denied by RKO executives.14

  Figure 3. William LeBaron, the first production chief of RKO. (Courtesy of the Academy of Motion Picture Arts and Sciences)

  To strengthen its theater position, RKO purchased the Proctor chain of vaudeville houses—eleven theaters in New York and New Jersey.15 Later in the year, six Pantages theaters on the West Coast became affiliated with RKO exhibition. Several of the other companies were even more acquisitive. By November, Paramount had added more than 250 theaters to its holdings during the year, Fox had acquired more than 400, and Warner Bros. had gained a substantial number.16

  The first RKO sales convention was held in June 1929 at the Drake Hotel in Chicago. The executives, declaring that the company “in less than four months [had] assembled an impressive array of stories and authors,” listed thirty productions for the 1929-1930 season, with each “to be of major importance.”17 Besides the musical “specials” Rio Rita, Hit the Deck, and Vagabond Lover, featuring radio star Rudy Vallee, a number of specific titles were announced that would never be produced. For instance, Upperworld, to be written by Ben Hecht, author of the profitable Underworld for Paramount in 1927, did not become a 1929-1930 release, nor would it show up in subsequent seasons.18 Failure to deliver on these kinds of commitments upset many company salesmen who promised their theater customers that the titles would be forthcoming. But nothing could be done about it; the production process was hardly an exact science and some projects simply didn't pan out.