the “option contract”
The economics of the star system is a necessary prelude to
understanding how the studios safeguarded their most precious asset. The studios devised an ingenious legal document
to control their high-priced talent, the “option contract.” This is how the contract worked. In signing an aspiring actor or actress, the
studio used a contract that progressed in steps over a term of seven
years. Every six months, the studio reviewed
the actor’s progress and decided whether or not to pick up the option. If the studio dropped the option, the actor
was out of work; if the studio picked up the option, the actor continued on the
payroll for another six months and received a predetermined raise in
salary. Note that the studio, not the
star, had the right to drop or pick up the option. The contract did not provide reciprocal
rights, meaning that the actor or actress could not quit to join another
studio, could not stop work, and could not renegotiate for more money. In
short, the contract effectively tied a performer to the studio for seven years.
The option contract did more than that:
it had restrictive clauses that gave the studio total control over the star’s
image and services; it required an actor “to act, sing, pose, speak or perform
in such roles as the producer may designate”; it gave the studio the right to
change the name of the actor at its own discretion and to control the
performer’s image and likeness in advertising and publicity; and it required
the actor to comply with rules covering interviews and public appearances. Another restrictive clause concerned picture
assignments. If the aspiring star
refused an assignment, the “studio could sue for damages and extend the
contract to make up for the stoppage.”
The studios argued that the
option contract was not as inequitable as it seemed because developing talent
was expensive and risky. If
a new player clicked, the studio was
justified in wanting to cash in on its investment. If a new player showed little or no promise, it made no
sense for the producer to carry him or her for seven years. Be that as it may,
stars exercised little control over production. Some stars had story-approval
rights and could refuse to appear in an unsympathetic or unflattering role, but
in that event, the studio simply assigned the role to another performer. And
once into a picture, a star had no say in the interpretation of his or her
role, let alone the script, since that was largely the prerogative of the
director.
from Tino Balio, Grand Design: Hollywood as a Modern Business
Enterprise, 1930-1939 (University of California Press, 1993), p. 145-46