Hollywood's Union-Busting Drive And The Birth Of The Oscars

It all started with a house—a beach house. By the spring of 1926, Louis B Mayer had made it. As the co-founder of Metro Goldwyn Mayer (MGM), he had buried his impoverished childhood in Russia and New Brunswick, where he wheeled a cart that said “Junk Dealer”, to head a film studio that had, according to its motto, “more stars than” those “in heaven”. Coasting on a weekly salary of $2,500 (a recent bump from $1,000), he wanted more: a vacation home for his family on the Santa Monica beach. 

He could have taken the conventional route—hiring architects, carpenters, and electricians from the existing pool of contractual labour—but that’d take time. Mayer was a man of the movies; he owned not just the business of mythmaking but time itself. “When we need a set at the studio, we build it overnight,” his daughter Irene recounts in The Grove Book of Hollywood. “When we need a big village, we build it in weeks. Don’t be at the mercy of those contractors. Don’t start with the architects. I will talk to the people at the studio.” Mayer had decided. The studio labour would build the house—in six weeks. 

But he ran into a problem: film studios’ labourers. Spread across five unions, who had struck in 1918, they were about to ink a contract with nine Hollywood giants—called the Studio Basic Agreement (SBA)—which protected their rights and made them expensive. Mayer, as a result, hired few skilled studio employees and outsourced cheap labour. He did get his mansion in six weeks, but the workers’ unionisation, driving up the costs, had made him worried. What if the contagion of standardised contracts infected his “talent”? The actors, the screenwriters, the directors, the technicians. (In fact, theatre performers, forming the Actors’ Equity Association in 1913, had tried to unite their screen brethren five years ago.) What if they all rallied together for better pay, pensions, health benefits—maybe even profits? 

Mayer had to squash dissent even before it arose. His organisation would both settle labour disputes, between the studios and the talent, and restore Hollywood’s pride, which had been rocked by a series of recent scandals, including Charlie Chaplin impregnating his 16-year-old fellow actor, Lita Grey, and his “perverted sexual desires” leaking into the press. 

So on January 1, 1927—less than five weeks after the SBA—Mayer called three influential figures for a meeting at his Santa Monica mansion. “It was no coincidence that two of them were his minions,” writes Anthony Holden in Behind the Oscar, referring to MGM’s leading actor, Conrad Nigel, and director Fred Niblo, whose latest, Ben Hur (1925), had been a box-office smash. Also present was Fred Beetson, the chief of the Association of Motion Picture Producers, which had formed a trust last year to stretch the studios’ monopoly. Over dinner, Mayer shared his plans of a “mutually beneficial” organisation that would serve the interests of disparate groups in Hollywood. His guests promptly spread the word among their “important friends”. 

Ten days later, led by Mayer, 36 Hollywood professionals assembled at the Ambassador Hotel, in Los Angeles, creating the International Motion Pictures of Arts and Sciences. At the meeting, he “harangued his guests”, writes Nancy Lynn Schwartz in The Hollywood’s Writers’ Wars, “convincing them that an organisation such as the Academy would be far preferable to any craft organisation antagonistic towards the producers.” Its prime criterion for members—anyone who
had “contributed in a distinguished way to the arts and sciences of the Motion Picture Production”—was “vague enough”, she adds, to “assure him that he could keep out whomever he wanted”. 

“Although Mayer stressed the democratic nature of the organisation,” explains Holden, “it didn’t go unnoticed that the room contained a remarkably high percentage of producers”—38.8%. The founding members’ distribution told a neat story of power in the Academy: 14 producers, 6 directors, 6 actors, 6 writers, 3 technicians, and a … lawyer, Mayer’s own, Edwin Loeb (known as the “father of the motion picture contracts”). This was a union, sure, but of corporations. The Academy “reassured the producers”, explains Schwartz, who knew about the vociferous demands of the Actors’ Equity Association and Dramatists Guild in New York, “and they congratulated themselves on the creation of an organisation that would keep the industry free from strong talent unions.” 

On May 11, 1927, a week after the Academy got its charter as a legal corporation, it held an inaugural banquet at the Biltmore Hotel. Out of the 300 attendees, 231 signed up as members, paying $100 to the Academy’s first Treasurer, MC Levee. By then, it had also gotten other prime officers: screenwriter Frank Woods, secretary; Niblo, vice-president; silent cinema legend, Douglas Fairbanks (Sr), president. The Academy published a statement of aims on June 20, 1927, whose fifth paragraph contained a self-congratulatory proposal that would become synonymous with Hollywood: “It will encourage the improvement and advancement of the arts and sciences of the profession by the interchange of constructive ideas and by awards of merits for distinctive achievements.” 

The Academy was tested as soon as it was born. In the same summer, the movie producers, led by Paramount, announced a 10% wage cut for all non-union workers. The Academy supported the move; the writers and actors protested. Even though the Screen Writers’ Guild, formed seven years ago, had become dormant by 1927, it “campaigned against [the salary reduction] with the Actors’ Equity Association and threatened to call a strike of the scenarists,” wrote Murray Ross in his 1947 research paper, Labor Relations in Hollywood. On July 6, 1927, 500 writers, actors, and directors held a meeting to discuss the draconian diktat. 

The producers eventually rescinded the cuts, but someone else profited the most from the scuffle: the Academy. Pushing the Guild to the background, it charged ahead to conduct the actual negotiations and “establish a ‘code of practice’ entitling the writers to adequate screen credits, separation pay in appropriate circumstances, and elimination of speculative writing,” adds Ross. It also smoothened out the “writer-producer relations by conciliating many disputes”. 

Around two years later, on May 16, 1929, the Academy held its first awards. Hosted by Fairbanks, it was a muted event lacking glamour, red carpet, and surprise—the winners had been announced three months ago. Simple Chinese lanterns adorned the Blossom Room of the Roosevelt Hotel; the attendees’ tables had candles and candy replicas of the statuettes. The awards also aimed to advance another motive of the Academy, “defining film jobs as skilled industry rather than labour,” according to Peter Decherney’s Hollywood and the Culture Elite. The first ceremony, he argues, had separate awards for the Best Picture (Wings) and the Best Unique and Artistic Picture (Sunrise), “separating commercial fare from prestige art films”. Similarly, the acting awards recognised a body of work as opposed to one movie—Janet Gaynor won it for Sunrise, Seventh Heaven, and Street Angel—thus separating “‘below the line workers’ from the artists who wrote, directed, and acted in films, effectively distinguishing the unionised labours from artists.”

But the suits could only keep their charade till March 1933. In the era of the Great Depression—leading to massive layoffs, pay cuts, and deep distrust of the Academy—the film professionals did ultimately unionise. The Screen Writers’ Guild revitalised in 1933, and other associations followed: Screen Actors Guild (formed in 1933), the Screen Directors Guild (1936), and the American Federation of Radio Artists (1937). By the late ’30s, the Academy receded from labour arbitration. 

But Mayer’s ‘ingenuity’ had to be admired. He not only created a solution to a problem that didn’t exist but, in the coming years, laced it with layers of segregation and glitz. And, like a true callous capitalist, he exploited the very people enriching him—and boasted about it later. “I found the best way to handle [filmmakers] was to hang medals all over them,” his biographer Scott Eyman quotes him in Lion of Hollywood: The Life and Legend of Louis B. Mayer. “If I got them cups and awards, they’d kill themselves to produce what I wanted. That’s why the Academy Award was created.”