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Portrait ofa Vertically Integrated Company 12FORTUNE Metro-Goldwyn-Mayer Metro-Goldwyn-Mayer, largest of 124 subsidiaries owned by Loew's, Inc., is a corporation devoted exclusively to the business and the art of producing moving pictures. Its plant-fifty-three acres, valued at a trifling $2,000,000-is in Culver City, California, on the dusty outskirts of Los Angeles, opposite three gasoline stations and a drugstore. In operation, the plant presents the appearance less of a factory than of a demented university with a campus made out of beaverboard and canvas. It contains twenty-two sound stages, a park that can be photographed as anything from a football field to the gardens at Versailles, $2,000,000 worth of antique furniture, a greenhouse consecrated to the raising offerns, twenty-two projection rooms, a commissary where $6,000-a-week actors can lunch on Long Island oysters for fifty cents, and a Polish immigrant who sometimes makes $500,000 a year and once spent the weekend with the Hoovers at the White House. On MGM's Culver City lot there is room for the practice of 117 professions , but the colored shoeshine boy outside the commissary considers himselfan actor because he frequently earns a day's pay in an African mob scene. When he is neither acting nor powdering the brown suede riding boots ofan Oklahoma cowboy who has just learned how to play polo, the shoeshine boy is likely to be the chauffeur of one of MGM's sixteen company limousines. MGM's weekly payroll is roughly $250,000. On it are such celebrities as Marion Davies ($6,000), Norma Shearer, the three Barrymores, who From vol. 6 (December 1932), pp. 51-58+. 311 312 Part III / A Mature Oligopoly, 1930-1948 get about $2,500 a week each, Clark Gable, Jean Harlow, Joan Crawford , Buster Keaton, Robert Montgomery, Marie Dressler (whose pictures take in more than any of the others'), Helen Hayes, Jimmy Durante , Conrad Nagel, Ramon Novarro, Wallace Beery, small Jackie Cooper, who makes $1,000 a week, John Gilbert and, until very recently , Greta Garbo. Miss Garbo is likely soon to return from Sweden where she recently retired after amassing a fortune of $1,000,000. If she does return, she will doubtless have a chance to make another million. Actors' salaries are only a small part of MGM's outlay. The biggest and most expensive writing staff in Hollywood costs $40,000 a week. Directors cost $25,000. Executives cost slightly less. Budget for equipment is $100,000 a week. MGM makes about forty pictures in a year, every one a feature picture or a special feature. Average cost of Metro-Goldwyn-Mayer pictures runs slightly under $500,000. This is at least $150,000 more per picture than other companies spend. Thus Metro-Goldwyn-Mayer provides $20,000,000 worth of entertainment a year at cost of production, to see which something like a billion people of all races will pay something more than $100,000,000 at the box office. Motion Picture Almanac, studying gross receipts, guesses at a yearly world total movie audience of nine billion. For the past five years, Metro-Goldwyn-Mayer has made the best and most successful moving pictures in the United States. No one in Hollywood would dream of contradicting this flat statement. In Film Daily's annual critical consensus ofthe ten best, MGM scored fourteen times in the past five years (last year A Free Soul, Min and Bill, The Sin of Madelon Claudet) as against ten for United Artists and eight for Paramount. In Motion Picture Almanac's ranking ofthe fifteen box office leaders of 1931, MGM led with five (Trader Horn, Susan Lenox, Politics, Strangers May Kiss, Reducing). MGM bids fair to show the same statistical success in 1932. Very few people know why this is true. It may be luck. It may be the list of MGM stars, vastly the most imposing in what moving picture people describe, significantly, as "the industry." It may be MGM's sixty-two writers and eighteen directors. It may be MGM's technicians, who are more numerous and more highly paid than those of MGM's competitors. It may be Irving Thalberg -Norma Shearer's husband. If no one in Hollywood knows the reason for MGM's producing success, everyone in Hollywood believes the last. Irving Thalberg, a small and fragile young man with a suggestion of anemia, is MGM's vice-president in charge of production...

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