THE INDUSTRY : TIGHT MONEY WAR ANGST : What it All means to the MOVIES

One Hollywood screenwriter sat down last week to begin a new script, a domestic thriller, but couldn’t focus on the story. “It seemed so trivial juxtaposed against the events in the Persian Gulf,” he says. Another Hollywood writer confesses that she found her anger over the conflict creeping into the dialogue of her characters--even though the script had nothing to do with war. A third says he is considering ways to make the rich people in his script less appealing.

Those mini-dramas are being played out all over Hollywood as the twin traumas of war and recession rush into the psyches of writers and directors--those filmmakers who help define our culture by filtering it through their pens and cameras and onto the big screen.

“It’s hard for this not to affect your mood, and it’s hard for your mood not to be reflected in the work you do,” says screenwriter Nicholas Kazan, whose credits include “Reversal of Fortune.”

For the first time in years, the troubling realities of the world seem to be seeping through the gilded gates of Hollywood. The prospect of direct-broadcast images of a U.S. soldier dying in the desert is unnerving even to a community that had grown complacent in its wealth and sun-drenched lifestyle. And the recession is taking its own toll, even if it means only that some producer’s house plunged $500,000 in value.

“It’s very easy to feel cut off from the realities of life here,” says screenwriter Naomi Foner, who wrote “Running on Empty.” “But now we have to see ourselves in the context of what’s happening in the world.”

The extravagance that is a hallmark of Hollywood culture is suddenly out of sync with the times: Even insiders can see that. They’re still driving their top-of-the-line Mercedeses and jetting to Aspen, but they’re scaling back premieres and canceling parties. Even big-budget movies are out of vogue. “The legacy of excess is becoming clear to people,” insists Foner.

Much of that “legacy of excess” is coming home to roost in Hollywood’s own back yard. Merrill Lynch analyst Harold Vogel says the profit margins of the film studios are down significantly because of big-budget movies that didn’t perform as expected last year. And Disney chief Jeffrey Katzenberg’s message that the recession “will be quite devastating to our industry” was echoed in a less dramatic fashion this week by William F. Kartozian, president of the National Assn. of Theater Owners.

In a letter to those theater owners attending the ShoWest convention in Las Vegas this past week, Kartozian warned against higher prices at the box office and the concession stand: “I still believe that giving people two or three hours of exciting entertainment is a bargain at $5, $6 or $7, but I may be wrong if there is concern--which I have--that people’s discretionary spending will be sharply impacted. . . . The bottom line is that I believe that pricing is now more of a consideration for exhibition than it has ever been.”

Just in case people start staying home more often with their videocassette recorders in these tough economic times, the theater owners are considering an ad campaign extolling the virtues of seeing movies on a big screen.

Artistically, all this bad news could be one of the healthiest things to happen to Hollywood in years. Foner says the events of the world are jolting the creative community into a tighter connection with the emotions and lives of other Americans. When the day comes for Hollywood to turn its camera directly on the war, optimists like Foner say, the tales its churns out won’t be told with fleets of B-52s and tanks.

“Reporters are out there finding small human dramas that are making people think about this,” says Foner. “That’s the kind of movie that will come out of this war. It’s our responsibility to personalize it.”

Still, it’s too early to predict how the war and the economy will shape American culture--in Hollywood or anywhere else.

“The way people work best is not at a conscious level,” Kazan says. “But it takes a while for an artist to digest an event in any intelligent or unconscious way.”

During the Vietnam War, films about the emerging counterculture--like “Easy Rider” and “Alice’s Restaurant”--slowly began appearing in the late 1960s. But for the most part, serious attempts to examine the war itself didn’t appear until well after the fall of Saigon, with films like “Apocalypse Now” and “The Deer Hunter.”

The Persian Gulf War--with its “scheduled” beginning and the early massive deployment of American troops--is likely to affect and even shape American culture much more quickly than Vietnam did. But it will take years for Hollywood to react. Unlike TV programmers, Hollywood studios must contend with two-year lags between idea and execution. Any project that seems topical now could look hopelessly far-fetched or out of date as the war takes on unexpected twists and turns.

With few exceptions, studio executives appear to be going out of their way to avoid topics that have any connection with the conflict. Terrorism--once the fodder of dozens of action pictures--is suddenly verboten as a plot element. Tri-Star, for example, has dropped a project about an arms sale to Libyan leader Moammar Kadafi. And Disney has eliminated the Arab-terrorist element in its project “The Ultimatum.”

“I have a responsibility,” explains David Hoberman, president of Disney’s Touchstone Pictures. “I don’t want to put ideas in anyone’s head at a time when the world is so volatile.” (Elsewhere in Hollywood, studio sources confess to a concern that they themselves might become targets of terrorism as a result of their movies.)

Topical movies also happen to be bad business right now. Many Hollywood analysts think that Paramount’s big-budget war movie “Flight of the Intruder” was hurt at the box office because audiences were getting their fill of military drama on CNN. The film, which reportedly cost more than $30 million, grossed only $12 million in its first three weeks. MGM/Pathe’s “Not Without My Daughter,” starring Sally Field in a story about an American woman’s escape from Islamic Iran, also sold just $12 million worth of tickets. Moreover, theaters showing the film were the targets of bomb threats.

As to future projects, any film that might be construed as less-than-patriotic is not faring well at the studios in this wartime climate. “My guess is that people will be far more patriotic and proud of America, more idealistic” as a result of the war, says Ricardo Mestres, president of Disney’s Hollywood Pictures.

Producer Patricia Zohn had approached a director to help secure studio financing for the script “Surfacing,” a love story involving a Vietnam-era anti-war activist. But the director decided it wasn’t a good time to shop the script.

“She was concerned that anybody reading it would presume it was an apologia for the anti-war movement,” Zohn recalls.

Likewise, talent agent Robert Stein was about to start selling a story set against a CIA operation in Vietnam. Even though a major director had agreed to do the film, “we decided to hold it back for a bit,” says Stein.

Both the war and the recession throw a new twist into American culture, which just a couple years ago seemed so predictable to Hollywood decision makers. Not surprisingly, studio executives are reacting to the new environment by looking for stories with a high “feel-good” factor--movies that enable audiences to escape from the troubles of their daily lives. “There’s no question that the war is going to influence people toward more escapist fare,” said Columbia Pictures chief Frank Price.

“We’re trying to concentrate on pictures that deal with affirmative themes--courage, triumph and love endures,” said a Paramount official. “It is a reaction (to the war and recession). We all have to anticipate the future needs of our audience.”

That strategy does not mean making more “Top Gun” and “Days of Thunder” escapism, however. For the most part, Hollywood studios are looking for smaller, less-expensive, more human-scale themes--comedies and romance are in, action pictures are out. In part, that is a reaction to the disappointing results of last summer’s big-budget action pictures, and the surprise success of “Pretty Woman,” “Ghost” and “Home Alone.” But studio executives say it is also a sign of the times.

Twentieth Century Fox Chairman Joe Roth believes that the recession will have a bigger impact on audiences than the war because it is likely to last longer. “If you believe that the country is in a downturn that will last longer than three or four months, audiences will clearly be turning to movies that fortify the human spirit,” says Roth.

But Roth, a director himself, acknowledges that studio searches for “feel-good” movies isn’t necessarily a healthy trend. “There’s always an artistic danger in viewing anything outside the material,” he says, adding, “There’s something wrong with making only one kind of movie.”

This summer’s movie schedule is filled with love stories and comedies. The real test of the audience’s war-time taste, however, will be seen in the performances of a handful of big-budget action pictures. Among them: Disney’s “The Rocketeer”; Morgan Creek’s “Robin Hood,” with Kevin Costner; Tri-Star’s “Hudson Hawk,” with Bruce Willis; “Terminator II: Judgment Day,” with Arnold Schwarzenegger, and Orion’s “RoboCop III.” The current assumption in Hollywood is that audiences--tired of watching the violence and hardware in the desert war every night--will turn to fare that’s lighter than something like “Terminator II.” But others argue that these action films offer just as much escape.

At the ShoWest convention in Las Vegas, where theater owners are shopping for their upcoming pictures, Texas theater owner Claude Anderson said he’s “going to try to get comedies (in my theaters) as much as I can. People want to escape. They can stay at home and see war on TV.”

Gene Harvey, who runs the Canyon Theatre in San Dimas, is looking for movies like the kid-flick “Teenage Mutant Ninja Turtles 2: The Secret of the Ooze.” “The violence has been overdone in movies,” Harvey said.

John Steele, who owns 15 screens in South Dakota, said he is looking forward to showing the Billy Crystal comedy “City Slickers” this summer, as well as Columbia’s “Return to the Blue Lagoon.”

Whatever changes the war ultimately brings to the country and Hollywood, says Disney’s Mestres, they will be profound.

“It won’t just be a passing attitude. It’s a remarkable event in everyone’s lives that will affect the way we view our government, the military, the country.” Not to mention the way Hollywood views them.

Staff writer David J. Fox contributed to this story.