Business Movers: “Howard Hughes Blows Up Hollywood | The Red Scare” (Part 4)

Podcast: Business Movers | Host: Lindsay Graham (Wondery)
Episode Title: Howard Hughes Blows Up Hollywood | The Red Scare | 4
Date: August 21, 2025
Duration (main content): ~35 min

Episode Overview

This episode concludes a four-part series chronicling Howard Hughes’ tumultuous reign over RKO Pictures and the impact of his personal obsessions—particularly anti-Communism—on Hollywood during the era of the Red Scare. It explores Hughes’ relentless purges at RKO, his costly legal and business battles, the decline and attempted sale of RKO, and, ultimately, the studio’s demise and legacy. The episode also reflects on the cultural and business shifts in Hollywood during the early age of television and Hughes' lasting mark—for better or worse—on the film industry.

Key Discussion Points and Insights

1. The Red Scare Comes to Hollywood (00:00–06:00)

• Opening courtroom dramatization: Howard Hughes on the stand, defending his firing of screenwriter Paul Jericho due to alleged communist ties.
• Host commentary: Introduces the drastic reduction in RKO's film output and staff after Hughes' takeover.

  “Rather than scaling up, Howard scaled down.” (04:53)

• Fears and Purges: The House Un-American Activities Committee (HUAC) starts targeting Hollywood; writers, actors, and directors are blacklisted.
• Hughes’ hardline stance: Fires Jericho preemptively; invokes the "morals clause" in contracts.

  “RKO has zero tolerance for communists.” – Howard Hughes, reenactment (05:44)

• Backdrop: Widespread paranoia in Hollywood; studio bosses quietly resent government intervention but fear being labeled sympathizers.

  “Hollywood was not as united as many were led to believe. Behind closed doors, many studio bosses resented Washington meddling... But there was one studio boss...fully on board with HUAC.” (08:08)

• Hughes’ personal motivations: Deep suspicion of communism, rooted in his capitalist beliefs and family business inheritance.

2. The Paul Jericho Case and Its Fallout (06:00–16:00)

• Jericho’s blacklisting: Fired before he even testifies; refused his screenwriting credit for “The Las Vegas Story.”
• Screenwriters Guild protests, but fears confrontation:

  “The guild had a duty to protect its members. But like everyone else...feared being viewed as communist sympathizers.” (10:24)

• Escalating conflict: Lawsuit and countersuit between Hughes and Jericho over damages and credit.
• Hughes doubles down: Fires 100 more employees, citing communist infiltration.
• Public perception and Senate praise: Applauded by Senator Richard Nixon, the American Legion; but many in Hollywood believe the firings are just cost-cutting in disguise.
• Courtroom drama:

  Lawyer: “So why the sudden concern about morality when it comes to my client, Mr. Jericho?”
  Hughes: “Because Bob Mitchum isn’t a communist. This is the United States of America. Free enterprise is what makes this country great.” (02:04)

• Verdict against Jericho: The court rules for Hughes, accepting the invocation of the Fifth Amendment as evidence of communist sympathies.

  “[For the judge,] by invoking the Fifth...Paul was essentially admitting he was...a communist sympathizer. That meant Howard was legally justified...” (16:00)

• Aftermath: Jericho “forced out of Hollywood,” moves to Europe for two decades. RKO is on the verge of collapse, barely releasing any films.

3. The Failed Sale and Scandalous Syndicate (19:31–27:00)

• Attempted sale to Ralph Stolkin's syndicate (Sept–Oct 1952): Hughes exaggerates RKO’s prospects to close the deal.

  Hughes: “The returns you’ll get from RKO might make [your previous fortune] look like loose change.” (21:22)

• Syndicate’s background exposed: Wall Street Journal articles reveal ties to organized crime, indictments, fraud, and regulatory warnings.
• Hollywood’s rejection: Industry leaders boycott the syndicate, production pipeline stalls.
• Deal collapses: Within weeks, Stolkin resigns; Hughes buys back RKO for a tidy profit, keeping the down payment.
• RKO now deeper in crisis: Loses contracts with Disney and major independents; lawsuits from shareholders pile up due to mismanagement and self-dealing.

4. The Bitter End—Ownership and Television Sell-Off (27:00–35:00)

• Hughes’ buyout of minority shareholders: Offers nearly double the market price, secures 95% ownership.
• Studio in freefall: Cinema attendance dropping in postwar America; television’s rise further disrupts earnings.

Key Anecdote — The Plane Deal

• Negotiation with Thomas O’Neill (General Teleradio): Hughes offers to sell "the entire RKO operation" while flying (and scaring) O’Neill.

  O’Neill: “I don’t do business based on emotions.”
  Hughes: “This is not about emotion...That’s not sentiment. That’s strategy.” (31:00)

• Landmark deal: RKO is sold for $25 million in 1955—the largest cash transaction in Hollywood history at the time.
• Teleradio recovers investment: By selling TV rights to RKO’s vast film library, O’Neill covers half his purchase price almost instantly.

RKO’s Death and Hughes’ Last Hurrahs

• General Teleradio ends movie production; assets are liquidated and distribution is sold off.
• Hughes buys back two personal projects from RKO:
  • “The Conqueror” (John Wayne as Genghis Khan) – Flops financially.
  • “Jet Pilot” (John Wayne, shot years before) – Released too late, also a flop.
• Irony: Hughes’ trademark strategy—big budgets, spectacle, buzz—rarely paid off.

  “His approach to filmmaking made headlines, but not money.” (36:50)

5. Conclusion and Lasting Legacy (35:00–38:38)

• RKO’s demise: Only one of the original “Big Five” studios to ultimately vanish.
• Hughes’ impact: His approach to filmmaking—spending lavishly, courting controversy, and orchestrating blitzes—has been adopted by studios ever since, for better or worse.

  “Howard Hughes never quite stuck his landing in Hollywood. But his wild stunts and bold maneuvers helped change its trajectory forever.” (37:53)

Notable Quotes and Memorable Moments

| Timestamp | Quote | Speaker/Context | |-----------|-------|-----------------| | 02:01 | “I fired him because I learned that he’s a communist. That’s the sort of thing that might fly at other studios, but commies aren’t welcome at RKO.” | Howard Hughes, courtroom dramatization | | 04:53 | “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.” | Host narration, explaining RKO's decline | | 10:24 | “The guild had a duty to protect its members. But like everyone else...feared being viewed as communist sympathizers.” | Host on the Screenwriters Guild's dilemma | | 15:58 | “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...” | Host summarizing the court's reasoning in favor of Hughes | | 21:22 | “The returns you’ll get from RKO might make that look like loose change.” | Hughes, wooing Ralph Stolkin during sale negotiation | | 31:00 | O’Neill: “I don’t do business based on emotions.” <br> Hughes: “That’s the thing—this is not about emotion. ... That’s not sentiment. That’s strategy.” | Plane negotiation reenactment | | 36:50 | “His approach to filmmaking made headlines, but not money.” | Host, reflecting on Hughes’ legacy | | 37:53 | “Howard Hughes never quite stuck his landing in Hollywood. But his wild stunts and bold maneuvers helped change its trajectory forever.” | Closing narration |

Timeline of Major Events (Timestamps Approximate)

• 00:00–03:26: Courtroom dramatization: Hughes testifies about firing Paul Jericho
• 04:53–12:00: Background on Hughes’ takeover, RKO's decline, Jericho’s firing, and HUAC’s Hollywood inquest
• 12:00–16:00: The Jericho lawsuit, its impact on RKO, and courtroom outcome
• 19:31–27:00: Sale of RKO to Stolkin syndicate, exposes, and deal collapse
• 27:00–29:32: Hughes regains ownership, faces lawsuits, and buys out shareholders
• 30:38–36:00: Sale to General Teleradio, TV’s impact, liquidation of studio, and Hughes’ final movie flops
• 36:50–38:38: Reflection on Hughes’ legacy and RKO’s unique position as the vanished studio giant

Takeaways

• Hughes’ personal politics heavily shaped RKO’s fate—anti-communist zeal, costly purges, and drama sapped the studio’s financial and creative health.
• The Red Scare both mirrored and exacerbated existing divisions in Hollywood; fear and self-preservation dominated decisions across the industry.
• Business blunders disguised as crusades: Hughes’ “anti-Red” mission often masked or enabled drastic cost-cutting and control.
• Rise of television signaled the beginning of the end for old Hollywood’s business models—RKO was the first casualty.
• Modern blockbuster culture owes debt to Hughes, even if he rarely turned a profit: spectacle, controversy, and media blitzes have become the industry norm.

Further Reading and Next Episode

The episode recommends:

• Howard Hughes: His Life and Madness by Donald L. Bartlett & James B. Steele
• Howard Hughes and the Creation of Modern Hollywood by Jeffrey Richardson (next episode’s guest)
• Seduction: Sex, Lies and Stardom in Howard Hughes’ Hollywood by Karina Longworth
• RKO: The Biggest Little Major of Them All by Betty Lasky

Next, look for a special interview episode with Jeffrey Richardson, deeper exploring Hughes’ lasting influence.