Valenti Finds Good in Hollywood’s Troubled Times : Movies: The president of the Motion Picture Assn. of America says recession is giving the industry a chance to reform its ‘flabby’ ways.

Jack Valenti believes Hollywood is in a funk.

The film community is being buffeted by recession. Studios are slashing costs. Movie stars are being asked to take big salary cuts. Box office revenues in September and October were dismal.

“And if there was a worse word than dismal, I’d use it,” Valenti said.

But the president of the Motion Picture Assn. of America said the “doom and gloom” atmosphere he finds in the film capital today could be a blessing in disguise.

“In my judgment, this adversity may be the best thing that has happened to us in a long time,” Valenti said in an interview.

“We’ve become flabby,” he said. “We’ve made pictures that shouldn’t have been made because we thought that when we beckoned, they would come, as they say in ‘Field of Dreams.’ But guess what? They didn’t come, at least not in September and October.”

“What we have lost is our ability to give customers in the last two months what they expected. We gave them less than they deserved and not as much as we were capable of.”

However, Hollywood has also gained something, Valenti said. Studio executives now realize that production costs--which soared from an average of $9.3 million per picture in 1980 to $26.7 million last year--will have to be controlled if the industry is to remain healthy.

Valenti, who was in town to speak to a Friday luncheon of the Los Angeles Chamber of Commerce, said in prepared remarks that Hollywood today is in “one of its periodic fits of anxious introspection.” He called it Angst.

Ticket sales were so bad in September and October, the industry spokesman quipped, that “in many localities we had to subpoena people to get them to the theaters.”

Although Valenti did not release figures, it has been reported in Daily Variety that box-office ticket sales are projected to be off 12% to 13% for the fall season, which ends around Thanksgiving.

What has become lost in all the hand-wringing over the recent decline in box office revenues, Valenti said, is the success the industry experienced in the first six months of the year. During that period, worldwide revenues for theatrical, home video, television and pay TV grew 13.8%.

“Our growth arena for the next 10 years is international,” he said in the interview. “About 12 years ago, about 23% (of our revenues) came from international markets. Today, it is 41%.”

While September and October were bad, Valenti said he expects domestic box office to drop only “5 or 6 or 7%” over last year--”unless we have a super, super Thanksgiving and Christmas.”

Valenti said he is aware that the number of admissions to movie theaters has remained about 1 billion for the past 15 years, but he said that is not a sign that the business is in trouble.

“Somebody says, ‘You’re in a stagnant business because you haven’t increased the number of admissions to the theaters in America in the last 15 years.’ The answer is, ‘That’s true. But guess what? In that same time, we have built an entire new marketplace that never existed before that is as big as theatrical called home video.’

“Therefore, what I’m saying is, the great surprise is not that theatrical admissions have stayed at 1 billion but they haven’t gone down to 300 million, because we have built side-by-side with theaters a market that didn’t exist before.”

Valenti said the recession has already prompted studios to tighten their belts.

The days when movie stars are paid $5 million or $10 million a picture are virtually over, Valenti conceded, except in the case of a few top stars such as Arnold Schwarzenegger or Michael Douglas who can justify their salaries by bringing in audiences.

“Except for what I call a handful of globally attractive actors--men and women--costs will go down,” Valenti said.

He also said that studios will continue making big-budget films, but the stories have to be compelling. The Steven Spielberg film “Hook,” with a reported price tag of $80 million, only has to be a “good movie” and it will be “sensational,” Valenti said.

But even Valenti concedes that there are movies being released that he cringes at seeing.

“I saw one picture the other night, which I won’t name, and I can’t wait to talk to the guy in the studio about it,” he said. “I’m going to talk to him and say, ‘Will you privately take me through the thought processes that caused this film to be green-lighted?’

“It’s an awful film, from the start to the finish . . . yet, it got made and it promptly went out and died at the box office. But the point is, somebody green-lighted that film.”