Mayer assumed complete control of MGM after Thalberg's death, managing the studio as well as production through a committee system that swelled rapidly in the late 1930s, adding several levels of bureaucracy to the filmmaking machinery. Where Thalberg had managed production with a "staff" of a half-dozen supervisors, Mayer by 1940–1941 required forty highly paid producers and production executives. This was a disparate lot, including some with no filmmaking experience, although it also included some of Hollywood's premier producers and hyphenates—Joe Mankiewicz (1909–1993) and Dore Schary (1905–1980), who rose through the screenwriting ranks, for instance, or Robert Z. Leonard (1889–1968) and Mervyn LeRoy (1900–1987), who came up as directors (LeRoy at Warner Bros.). Despite the freedom and authority being enjoyed by top directors at other studios, not to mention the growing ranks of independents, MGM remained a producer's studio where even top directors like King Vidor (1894–1982), George Cukor (1899–1983), and Victor Fleming (1889–1949) had very little authority over their pictures. And under Mayer's production-by-committee system, the producers themselves enjoyed little creative leeway as MGM's output became increasingly conservative and predictable. There were occasional exceptions, like LeRoy's first MGM project The Wizard of Oz (1939), an ambitious, innovative, and costly film that was distinctly out of character for MGM at the time. In fact, the studio's only other notable high-risk project was David Selznick's independent production, Gone with the Wind (1939), which MGM partially financed and distributed.
The clearest indication of the conservative turn and risk-averse market strategy under Mayer was MGM's increasing reliance on upbeat film series like the Hardy Family films that rolled off its assembly line at a remarkable rate—one every three to four months from 1938 to 1941—and vaulted Mickey Rooney (b. 1920) to the top position on the Exhibitors Poll of box-office stars, just ahead of MGM's Clark Gable and Spencer Tracy. The Hardy films, along with the Dr. Kildaire, Thin Man, Tarzan, and Maisie series, were produced by Joe Cohn's low-budget unit. Mayer prohibited any use of the term "B film" on the lot, and in fact the casts, budgets, running times, and access to the first-run market of MGM's series films qualified them as "near-A's" by industry standards. Mayer let Dore Schary create a unit to produce high-quality, moderately budgeted films, and its two biggest hits, Journey for Margaret (1942) and Lassie Come Home (1943), developed two new child stars—Margaret O'Brien (b. 1937) and Elizabeth Taylor (b. 1932), respectively—and reinforced the wholesome family values espoused by the Hardy films.
Mayer also favored more wholesome depictions of love, marriage, and motherhood, as seen in the rapid wartime rise of Greer Garson (1904–1996) and her frequent costar, Walter Pidgeon (1897–1984), in Mrs. Miniver (1942), Madame Curie (1943), and Mrs. Parkington (1944). Garson and Pidgeon were among several costarring teams that embodied Mayer's idealized version of on-screen coupling—a far cry from the hard-drinking, wise-cracking Nick and Nora Charles of the early Thin Man films, let alone the openly sexual (and adulterous) Gable and Harlow in films like Red Dust and China Seas . As Rooney began to outgrow his Andy Hardy role, he teamed with Judy Garland (1922–1969) in a cycle of energetic show-musicals— Babes in Arms (1939),
Strike Up the Band (1940), Babes on Broadway (1941), and Girl Crazy (1943)—directed by Busby Berkeley (1895–1976) and produced by Arthur Freed (1894–1973). A more mature and far more credible couple, Katharine Hepburn (1907–2003) and Spencer Tracy (1900–1967), began their long-time partnership in Woman of the Year (1942), the first of six teamings for MGM in the 1940s.
During the war, MGM reduced its output by about 30 percent and benefited from the surging movie business along with other major studios, but to a lesser extent due to its continued output of high-gloss, high-cost productions and its smaller theater chain. In fact, Loew's/MGM revenues during the war years were not significantly higher than in the peak Depression years, and in 1946, the height of the war boom, MGM's profits of $18 million were dwarfed by Paramount's $39.2 million. MGM continued to spend lavishly, but its dominion over the industry clearly was ending, as its profits lagged far behind Fox and Warners as well as Paramount in the late 1940s, and its critical cachet faded as well. Oscar ® nominations and critical hits became rare, and the MGM house style looked increasingly anachronistic in the postwar era of film noir and social-problem dramas.
One bright spot for MGM was its musical output, which during the postwar decade comprised one-quarter of its releases (81 of 316 films) and more than half of Hollywood's overall musical production. Several staff producers specialized in musicals, including Joe Pasternak (1901–1991) and Jack Cummings (1900–1989), but the individual most responsible for MGM's "musical golden age" was Arthur Freed, who after the Rooney–Garland cycle had a breakthrough with Meet Me in St. Louis (1944), an ambitious Technicolor production starring Garland and directed by Vincente Minnelli (1903–1983). That film's success enabled Freed to assemble his own unit whose distinctive emphasis on dance utilized the talents of choreographers Gene Kelly (1912–1996), Stanley Donen (b. 1924), and Charles Walters (1911–1982), all of whom Freed developed into directors.
The currency of the Freed unit's "dance musicals" was established in late-1940s films like Minnelli's The Pirate (1948), Walters's Easter Parade (1948), and Donen-Kelly's first co-directing effort, On the Town (1949), and the cycle reached a sustained peak in the 1950s with such classics as An American in Paris (Minnelli, 1951), Singin' in the Rain (Donen-Kelly, 1952), The Band Wagon (Minnelli, 1953), It's Always Fair Weather (Donen-Kelly, 1955), and Gigi (Minnelli, 1958). Freed's musicals were critically and commercially successful, but they also were symptomatic of the profligate production operations that were squeezing MGM's profit margins. The studio could scarcely afford not to produce them as its postwar fortunes ebbed, however, and thus the cycle became, in effect, the last bastion of MGM's classical-era operations and house style, the last manifestation of its fading industry rule.
Mayer was a major advocate of Freed and the lavish musical cycle, predictably enough, and one of the acute ironies of MGM's postwar era is that the Freed unit far outlasted the Mayer regime—and subsequent regimes as well. By 1948 Nick Schenck realized that Mayer was fundamentally incapable of adjusting to the rapidly changing postwar conditions. He stubbornly adhered to the studio's entrenched production policies and bloated management setup, he openly criticized the industry trends toward realism and social drama, and he was reluctant to work with the growing ranks of independent filmmaking talent. Schenck was equally concerned about other developments, particularly declining theater attendance, the government's antitrust campaign, and the emergence of television, which threatened the studio system at large. In an effort to cut costs and bring MGM in sync with the changing industry, Schenck demanded that Mayer "find another Thalberg." Thus Dore Schary, the RKO production chief and former MGM writer-producer, was hired in 1948 as MGM's vice president in charge of production.
The Mayer–Schary union was troubled from the start, due to Mayer's adherence to the studio's entrenched operations and the two executives' very different sensibilities. Schary's liberal politics irked the arch-conservative Mayer—no small matter in the age of the House Un-American Activities Committee (HUAC), Senator Joseph McCarthy, and the nascent Cold War—but even worse, in Mayer's view, was Schary's taste in films and his proclivity for freelance talent. The rancor reached a flashpoint over Schary's support of two projects with freelance writer-director John Huston (1906–1987), The Asphalt Jungle (1950) and The Red Badge of Courage (1951). The former was a downbeat, realistic crime thriller with an all-male ensemble cast that Mayer publicly castigated. But the film was a hit, prompting Schary to approve The Red Badge of Courage , an adaptation of Stephen Crane's bleak Civil War novel. Mayer refused to finance production, forcing Schary to go to Schenck for approval, and when the film ran over budget and then died at the box office, Mayer demanded Schary's ouster. Schenck backed Schary, however, and in May 1951 Mayer was forced out of the studio that bore his name.