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From wondere. I'm Lindsey Graham and this is business movers. In 1948, more than two decades after moving to Hollywood to pursue his goal of becoming a world famous filmmaker, Howard Hughes bought RKO Pictures. It marked a major shift in his strategy for conquering Hollywood. After years of working on the fringes as an independent producer, Howard had officially joined the establishment. He was now the new owner of one of America's big five studios. This was a chance for Howard to elevate his ambitions. But instead, the opposite happened. Rather than Scaling up, Howard scaled down. RKO's output dropped dramatically after Howard took over from 35 films in 1947 to just 12 in 1949. That was the inevitable result of Howard firing hundreds of employees while dozens of senior staff walked out on their own after clashing with their new boss. RKO's only income came from its distribution arm, which released movies on behalf of independent producers. But that alone wasn't enough to break even. The studio's share of box Office revenue plummeted 77% and it recorded a loss of $12.4 million, more than 150 million today. RKO only stayed afloat because Howard could bankroll the losses. His personal accounts were still healthy thanks to his other business interests. The Hughes Aircraft Company and the Hughes Tool Company. Both of those firms were booming in large part because Howard delegated their oversight to others. That was not the case with rko. Even though he was now boss of a major studio, Howard operated like an independent. He wanted to control every aspect of the filmmaking process. He was obsessive about a certain kind of movie. Big budget blockbusters with aggressive promotional campaigns. Howard wanted RKO to be known for thrills and spills on screen and controversy and scandal off screen. His approach generated headlines, but not profits. After two years, RKO was in desperate need of a turnaround from its self inflicted slump. But rather than learn from his mistakes, Howard plunged headlong into a new obsession. One that would bring filmmaking to a grinding halt. This is the last in our four part series on Howard Hughes and Hollywood. THE Red Scare it's close to midnight in April 1951 in Hollywood. A year and a half before Howard Hughes takes the stand in his trial against Paul Jericho. 60 year old Sam Bischoff wakes up with a start. As the phone on his bedside table starts to ring, Sam sits up and rubs his eyes. As production chief at rko, he's just spent a long day on set and he has another early start tomorrow. But he can't ignore the foam because only one person ever calls this late. Howard Hughes. Sam switches on a lamp and picks up the phone. This is Sam Bischoff. Sam, what took you so long? It's almost midnight, Howard. I was asleep. Well, I wouldn't be calling if it wasn't important. Have you heard the news? No, I went straight to bed when I got home. What's going on? One of our writers just got subpoenaed. By who? The House UN American Activities Committee. For years, politicians in Washington D.C. have suspected that Hollywood is crawling with secret communists who use Movies to indoctrinate Americans with radical left wing beliefs. Thanks to the investigations of the House UN American Activities Committee, or huac, several writers and directors have been blacklisted, forcing them out of their jobs. And this probe has set Hollywood on edge, with every high profile figure fearing that they'll be the next one under the spotlight. Sam runs a hand through his hair. Oh, man. Who is it? Paul Jericho. We only brought him in a few months ago for the Las Vegas story. It's still not finished. What do you think we should do? Are you kidding me? Get rid of him. RKO has zero tolerance for Communists. Well, don't you think we should wait and give him a chance to testify? You think I'm calling you at midnight because I want to wait and see? No, he's got to go now. What if he's not actually a Communist? Where there's smoke, there's fire. The committee knows exactly what it's doing. But what are we gonna do with the Las Vegas story? Get someone else to finish it. I don't want Jericho touching another word on that script or anything else at Archaeo. All right. Can him. Sam sighs he can tell that Howard isn't gonna budge. All right, Understood. I'll handle it first thing in the morning. Good. And when you're done throwing him out, make sure everything he wrote ends up in the trash, too. Just days after Howard Hughes fired Paul Jericho, the now unemployed writer went before the House UN American Activities Committee. There he pleaded the Fifth and refused to say whether he was or ever had been a member of the Communist Party. To some, Paul's actions were a brave defiance of federal overreach. But to Howard, it was all the proof he needed that his former writer was guilty. Firing Paul was not the end of Howard's father fight against Communism. It was just the opening scene. The House UN American Activities Committee was created in 1938 to investigate suspected traitors and subversive elements in the federal government. But after World War II came to an end, its remit was expanded. Now it turned its gaze toward American society at large. And it had one group squarely in its sights. Communists. As tensions with the Soviet Union escalated into the Cold War, fears of Communist infiltration had spread rapidly across the United States, and the wave of suspicion became known as the Second Red Scare. Soviet spies were known to be actively seeking the secrets behind America's atomic bombs. But beyond espionage, there was a deeper fear that Communists were waging a war of ideas, using media and culture to indoctrinate Americans with radical leftist Ideology and the powerful cultural engine of Hollywood was an obvious target. In the fall of 1947, Huax appenaed its first witness to investigate whether communist propaganda was being sneaked into movies. The inquiry soon hit the headlines and leading industry figures like Ronald Reagan and Walt Disney fanned the flames, arguing that communists had indeed tried to take over Hollywood. But not everyone backed the inquiry. Ten screenwriters and directors refused to answer the committee's questions and were held in contempt of Congress. In response, the heads of major studios pledged to bar the so called Hollywood 10 from ever working in movies again. Officially, the studio had supported the anti communist crackdown. But Hollywood was not as united as many were led to believe. Behind closed doors, many studio bosses resented Washington meddling in their business. But in the grip of the Red Scare, they didn't dare object. Defending the accused might risk being labeled a sympathizer themselves. But there was one studio boss who didn't share their misgivings. As the owner of rko, Howard Hughes was fully on board with huac. His strident anti communism wasn't just political, it was personal. Having inherited his father's million dollar tool company at the age of 18, Howard had little patience for ideologies that quoted questioned wealth, power or capitalism. And he saw communism as a direct threat to everything he stood for. So as soon as RKO screenwriter Paul Jericho was subpoenaed by huac, Howard invoked the morals clause in Paul's contract and fired him. Even before Paul had pleaded the fifth in front of the committee. But Howard didn't stop there. He was determined to make a clear statement that communists were not welcome in his studio. Paul had been hired by RKO to help salvage the Las Vegas story, a crime drama that had become stuck in development. But even after Paul's departure and the hiring of other writers to finish it, the bulk of the script remained Paul's work. And according to the rules of the Screenwriters Guild, Paul was still entitled to a writer's credit. Howard, though, had no intention of giving recognition to a suspected communist. And when the Las Vegas story premiered In February of 1950 too, Paul's name was missing from the credits. The Screenwriters Guild protested the omission and threatened to take action against Howard. The guild's options included a boycott of RKO scripts, even an industry wide strike. But the guild was walking a fine line. It had a duty to protect its members. But like everyone else in Hollywood, the guild's leaders feared being viewed as communist sympathizers. So in the end, they offered Jericho private legal support. But stopped short of open confrontation with rko. Howard took advantage of this hesitancy by going on the offensive. He filed a preemptive lawsuit asking a judge to declare that Paul had no right to seek damages. Paul responded with a countersuit seeking damages, claiming that being fired by Howard and RKO had harmed his reputation. And he demanded $350,000 in compensation, the equivalent of 4.2 million today. Still hoping for an amicable settlement, the Screenwriters Guild encouraged the two sides to submit to private arbitration. But Howard had no intention of settling quietly. Instead, he called a press conference and announced that he was fed up with Hollywood dragging its feet in its efforts to root out Communists. Drastic action was needed, he said, and Howard was prepared to take it. RKO was firing 100 employees and they wouldn't be rehired or replaced until Hollywood's communist problem, as he described it, was solved. Outside of the industry, Howard won praise. Senator Richard Nixon applauded his anti communist zeal. The American Legion and other veterans groups awarded him with medals for loyalty and patriotism. But inside Hollywood, some suspected a different motive. From the moment he'd taken over rko, Howard had slashed its workforce. Now he was getting rid of the race arrest. Some thought that Howard's anti communist purge was just phase two of a cost cutting crusade that he'd always intended to carry out. That idea became central to Paul Jericho's case when the lawsuits reached court in November 1952. Under intense questioning, Howard denied that he was using politics to cover up his business decisions. He deflected questions that compared his treatment of Paul to that of actor Robert Mitchum, who may also have run afoul of his morals clause after being busted for drug offenses four years earlier. Then, when it was time to argue their case, Howard's lawyers sought to shine the spotlight back on Paul Jericho. They berated him over his decision to invoke the Fifth Amendment during his testimony to the House on American Activities Committee. And when Paul took the stand, they provoked him into anger. And Paul criticized the committee as an unconstitutional witch hunt. This defiant tone backfired. On November 26, 1952, the judge ruled in favor of Howard Hughes. In the court's eyes, by invoking the Fifth Amendment, Paul was essentially admitting that he was either a former Communist, a current Communist or a communist sympathizer. That meant that Howard was legally justified in invoking the morals clause in Paul's contract to fire him and to ignore his obligation to credit Paul on the Las Vegas story. As a result, Paul Jericho was forced out of Hollywood and he would spend the next two decades making movies in Europe. But he was not the only loser in the case. RKO's chance of making a recovery took a hit too. While Howard had focused all his attention on his anti communist crusade, production at his studio had virtually ground to a halt. And by the time this court case came to an end, RKO had only one film scheduled for release. Blackbeard the Pirate had only only survived the cut because shooting had commenced before Howard announced his studio wide shutdown. RKO finances were already in freefall. Now Howard Hughes self imposed work stoppage had erased any chance of the studio returning to profit. And it seemed that Howard knew it because all the while he was waging a loud public crusade against communism. Behind the scenes, he was on a covert mission to find a buyer for rko. Business Movers is sponsored by prizepix Preseason football is underway and college football is just starting. But you can already make season long More or less picks for the 2025 season on prize picks enter your picks before week one kicks off. I checked in with James, my long suffering sports obsessed employee about his thoughts on the upcoming football season and as expected, he remains Chiefs focused, hoping they can maintain their absurd level of excellence for another year. But there are some players he's watching. 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