Cultural style that wins is one that sells

VIEW FROM WALL STREET

December 02, 1990|By Thomas Easton | Thomas Easton,New York Bureau of The Sun

NEW YORK — Can culture be sold? And if so, is it lost?

AWith the acquisition of MCA Inc. by Matsushita earlier last week, and similar foreign purchases in recent years of U.S. publishing houses, record companies, paintings and even distinctive buildings, America faces the prospect of its most vivid images no longer being American. And this will likely continue so long as a persistent trade deficit pushes dollars abroad that return in exchange for desirable U.S. properties.

On one level, culture -- admittedly a loose, messy term -- is no different than plastic, paper or wheat. Literature, art, movies, style, anything relying heavily on a mental rather than physical component for effect, can be sold as long as at some point they produce revenues. And because cultural assets are often distinctive and hard to replicate, they can be particular valuable.

Curiously, though, when many cultural assets are sold, it is hard to determine if any cultural elements are lost to a society. Take the case of Rockefeller Center, partially purchased last year by a Japanese company in a deal that stimulated a level of outcry similar to the Matsushita-MCA deal. Some of the rents now go abroad, but unlike London Bridge (since 1968 in Arizona), the center can't be shipped abroad and still retain its financial value. So it, and its notable architectural presence, remains anchored in midtown New York.

On the opposite extreme is the 1987 sale of Van Gogh's "Sunflowers" to a Japanese insurance company. The small Maine museum where the painting once hung is now poorer, a Tokyo office building richer, at least artistically -- and the cash still went elsewhere.

A society's loss through the sale of art is hardly isolated. Many countries, particularly in the Third World, now restrict exports.

Where MCA, with its strong presence in records, movies and book publishing, ranks in this scheme is particularly opaque because its businesses aren't obvious.

No one buys a recording because of the label, a book because of the publisher or a movie ticket because of the studio. And the evident talent used in these ventures, from authors to actors to singers, tends to remain the same. Most customers will probably be unaware that some Tom Clancy thrillers starring the U.S. military are now published by a Japanese company, or that Osaka is now E.T.'s real home.

Does it matter? Concern about the MCA deal has focused on the company's largest core division, its movie and television studio, Universal Pictures. While "Jetsons: The Movie," "Child's Play 2" and "K-9" may not be considered culture in the same way as a Van Gogh, Universal also released "Field of Dreams," "Do the Right Thing" and "Born on the 4th of July," all critically acclaimed movies, and all movies that overseas ownership may view as politically unpalatable.

That just won't happen, said MCA President Sidney Sheinberg, noting that contracts assure local management. But his confidence is rare. Most industry analysts in New York suggest Matsushita may at least give some gentle nudges. After all, it is investing $6.1 billion, which even by Hollywood's standards is a lot of money. Most companies that invest a lot tend to exert

some control. They call it management.

"If you look at the history of huge conglomerates, irrespective of nationality, that have acquired studios, they have always exerted influence and they have always said they wouldn't," said Peter Bart, editor of Variety, the leading industry trade publication.

But Universal has some protection, namely the well-documented tendency of non-U.S. producers to flop miserably in the business. "The United States is kind of the Saudi Arabia of television and film," saidAndrew Wallach, a portfolio manager at Cumberland Associates and a former Wall Street media analyst. "We have more reserves and production, and it is going to be that way for some time."

Understanding how a foreign owner could affect this resource is complicated by the subtle role a studio like MCA now plays in the production of movies. Decades ago, it was more clear. Studios closely resembled integrated manufacturing operations. Studios locked up actors, directors and writers in long-term contracts, built sound stages for the actual production, and then purchased theaters to guarantee distribution.

But many of these overt arrangements were pre-empted by the courts. Now, the arrangements are often indirect, if visible at all, though they still exist. Most important, studios still seem to determine whether a film can be seen.

"If there is a town with two theaters, the powerful distributor will get the theaters, not an independent," said Baltimore-based filmmaker John Waters, who chose Universal to distribute his last film, "Cry Baby." "That's the muscle."

Studios also may, but don't always, provide financing. That's critical in an industry where cash is always short, and always critical. "I couldn't do a movie without someone giving me the money," Mr. Waters said.

While the importance of access and capital is hard to understate, it is not enough. In the same way that U.S. culture may be influenced by movies, movies must appeal to U.S. culture or the movie studio itself is changed.

A good example is Columbia Pictures. Previous owner Coca-Cola hired a studio head known for his intellect, David Puttnam, and then another known for her ability to appease stars, Dawn Steele. They shared a common flaw. Their movies didn't sell. The result: Sony now owns the studio.

Sony, in turn, spent hundreds of millions of dollars to bring in as management the producers of "Batman," then working for Time Warner. While "Batman" had a distinct, and grim, social view, the picture Sony probably saw was limited to ticket sales, which were huge.

That's no different from how American studios have typically made decisions. The cultural style that wins is the one that sells. It would be curious if Matsushita were different.

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