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This is a year in which very little may be taken for granted at the Oscars. When E.T. opened in June, rapturous critics compared it to The Wizard of Oz and Kipling's Kim. The public was even more enchanted. With $343 million already in the till, E.T., which cost only $11 million, is now the biggest box office film in history. But don't bet on a fairy-tale ending for Steven Spielberg's extraterrestrial. The word in Hollywood is that the movie could be shut out at the Academy Awards. The conspiracy of circumstances that threatens to foil E.T. is just one of the dramas that will be played out before an estimated 485 million TV viewers in more than 70 countries on April 11, in a ceremony that Glenda Jackson once likened to a "public hanging."

Paul Newman, who at 58 has been nominated for the Oscar five times and never won, has to beat out Tootsie's Dustin Hoffman (already a winner at 45) and rookie Ben (Gandhi) Kingsley for Best Actor. As the first actress in 41 years to be nominated in two categories (Best Actress for Frances, Best Supporting Actress for Tootsie), Jessica Lange has two chances to win—or lose. Only Meryl Streep, the favorite as Best Actress for her bravura performance in Sophie's Choice, would appear to be a shoo-in.

E.T.'s trouble apparently began when it turned from a film into a factory. Producer Allan (Grease) Carr says merchandising helped create an "E.T. backlash. Around Christmas time, with all those E.T. products in the stores, people were saying, 'My God, they'll sell anything.' " They would and did: E.T. dolls, video games, bicycles, books, pajamas, lunch boxes, sheets, bubble gum cards, calendars, masks, you name it. Spielberg approved more than 50 spin-off licenses whose products, according to FORTUNE, could earn $1.5 billion (more than four times the pull of the movie). Even Kathleen Kennedy, E.T. co-producer, concedes that the merchandising might have hurt E.T.'s chances for an Oscar. "The money—and the film's success—may have overshadowed its emotional aspects," says Kennedy. "People don't like being manipulated by a doll in a store—it cheapens their own emotional response. Obviously that was never our intention."

For reasons of his own, Spielberg has refused to campaign or defend what he has called his most "personal" film. But his camp believes he will be sorely disappointed if he loses the Oscar again. His previous nominations were for 1977's Close Encounters of the Third Kind and 1981's Raiders of the Lost Ark; the Academy ignored him completely for his first monster hit, 1975's Jaws. "Poor Steven," says a former Academy official. "All he does is make millions, but he gets no respect. He's the Rodney Dangerfield of the movie business."

Spielberg's problem, like that of his pal George (Star Wars) Lucas, is that he has been classified by some as a special effects director, a tag he resents. Special effects in general—and Spielberg in particular—have been tainted by the tragic accident last July on the set of Twilight Zone, which Spielberg co-produced. Actor Vic Morrow and two children were killed while shooting a helicopter stunt for the film. No one holds Spielberg personally responsible, but Film Comment recently raised the question of "whether Academy members will see the tragedy as an all-but-inevitable by-product of young directors who'll try anything for a thrilling effect."

With Spielberg and E.T. losing ground, the race for Best Picture is close. Three other nominees—Tootsie, Missing and The Verdict—are given only a slim chance to win. The real competition is Gandhi, Richard Attenborough's three-hour-plus, $22 million biography of India's prophet of peace. The tide was plainly turning in December, when the prestigious New York Film Critics Circle named Gandhi as Best Picture. Still more significant, the Directors Guild of America two weeks ago honored Attenborough as the year's best director. Only twice in 35 years has the DGA winner failed to capture the Oscar. As if to acknowledge the competition between E.T. and Gandhi, Attenborough embraced Spielberg on the way to the podium.

Why Gandhi? Though the film received glowing reviews for its subject matter and for Ben Kingsley's performance, some critics believe Attenborough is being rewarded less for his "conventional" direction than for his valiant 20-year struggle to put Gandhi's story on film. Scoffed the New Yorker's Pauline Kael: "You have to read about Attenborough's deep commitment to the subject, because you couldn't guess it from what's on the screen." As Allan Carr sees it, Gandhi is just the sort of "official art" that appeals to the Academy's stated purpose: to raise the "cultural, educational and scientific standards" of film. Given those criteria, it's hard to imagine a space creature or Dustin Hoffman in drag topping Gandhi; indeed, no children's fantasy film—including The Wizard of Oz and Star Wars—has ever won a Best Picture Oscar. "The Academy wants to take itself seriously," says Carr. "As flawed as Gandhi is, it may win for just that reason."

That fact is not lost on Attenborough, who made a point, while picking up his Golden Globe Award in January, of telling his audience that "in honoring me you are honoring Mahatma Gandhi." Some called Attenborough's reminder clever, others dirty pool.

Whatever the truth, such ploys spring from an irresistible logic. The Oscar, a 12-inch, eight-pound statuette made of gold-plated britannium, is valued at only about $100. But getting one can be worth up to $20 million at the box office. Three weeks after winning a surprise Best Picture Oscar, last year's Chariots of Fire added a whopping $14 million in business. Since Gandhi, like Chariots, is a British production, Attenborough has had to campaign aggressively to lessen the odds against two consecutive English wins. He candidly admits that, unlike box office champ E.T., "We need the additional prestige of the Academy Awards to get people to go to see it."

To influence Academy voters, nominees show up frequently on TV and in the press, and the studios budget about $100,000 for promotion and ads in the Hollywood Reporter and Daily Variety. This year in its rules booklet the Academy has come out against such attempts to swing votes, urging its members "to register your displeasure" with those who do so. "No extraneous factors should be allowed to color your consideration of excellence."

In practice, however, special interests are hard to resist. Consider Justin Henry, 11, the youngest member of the Academy, who joined after winning a Best Supporting Oscar nomination for 1979's Kramer vs. Kramer. Justin, who has already mailed off his ballot, picked Dustin Hoffman as Best Actor for Tootsie. Small wonder—Dustin was Justin's dad in Kramer. Anyway, adds Justin, "Dustin was great." Young Henry doesn't remember if he voted for Meryl Streep, the mother who deserted him in Kramer, but then again he didn't see the R-rated Sophie's Choice. He did catch E.T., but he's still picking Tootsie as Best Picture. Perhaps Justin's a mite peeved he wasn't asked to read for Spielberg's film.

On the other end of the voting roll is director George Abbott, the oldest member of the Academy at 95. Relaxing in Miami after the opening of his 120th Broadway show, On Your Toes, the venerable Mr. Abbott refused to say whom he voted for, but was a bit forgetful about some of his favorites. "That girl always impressed me, the one in Sophie's Choice, what's her name...Streep," he said. Abbott also liked "that fellow in The Verdict," but couldn't recall Paul Newman's name. As for the Best Picture candidates, Abbott wouldn't tell the one he picked: "I'm not supposed to." How about Gandhi? "Haven't seen it."

Such reactions render nominee headaches and studio ad campaigns more understandable. Memory jogging clearly can be useful at Oscar time. One casualty this year, however, is the lavish foodfest that studios used to throw before screening their films. "Not in the current economy," says Larry Mark, a Paramount Pictures exec. "And let's face it, you can't buy votes with meat loaf."

Oscar campaigns: Meryl Streep fiddles while Paul Newman burns

In the hurly-burly pre-Oscar self-promotion, Paul Newman's strategy has been enigmatic—he's doing nothing. Fellow nominees Jack (Missing) Lemmon and Peter (My Favorite Year) O'Toole aren't doing much either, but the oddsmakers aren't giving them much of a chance. Meanwhile Hoffman and Kingsley have been fervently making the rounds. Kingsley keeps praising the inspiration of Gandhi and Dustin that of his late mother, the model, he says, for Tootsie. There's no fighting such lump-in-the-throat sentiment, so Newman isn't Instead, he's holed up in Florida directing and acting in Harry and Son, co-starring wife Joanne Woodward. So far Newman is the only nominee who says he might not make the big night. "Paul doesn't need the Oscar," says his friend Gore Vidal.

It sure looked like he was clearing shelf space when The Verdict opened in December and the usually taciturn actor began making himself available for interviews. There were reasons. He liked the picture ("I wasn't Paul Newman playing Paul Newman") and so did the public (it has grossed $50 million to date). Still, when his nomination was announced in February, Newman suddenly clammed up. One studio exec surmised that "Paul was pouting" because the prestigious acting awards in New York and L.A. had already gone to Kingsley and Hoffman. Others claim he was shrewdly relying on Hollywood's goodwill toward old times. Peter O'Toole, for instance, lost out as Best Actor (for Lawrence of Arabia) in 1962 when the Academy voted for its own Gregory Peck, who had failed with four previous nominations.

But Newman isn't Peck. Peck represented (and still does) old Hollywood—he's family. Newman has always been politically liberal and an Easterner. "He wasn't out there to go to the Mogambo and be seen with Sandra Dee," as Vidal puts it. Hollywood noticed. When the New York Film Critics named Newman Best Director in 1968 for Rachel, Rachel, the Academy conveniently forgot even to nominate him. "I'm not going to whine," Newman said. Still, he's not above a few swipes at an industry which equates box office success with robots and sharks. Last June, when E.T. premiered, Vidal recalls Newman saying, "I wonder if we'll live to see any more films about people?"

Meryl Streep, the Best Actress favorite for Sophie's Choice, is also a fiercely private Easterner. But unlike Newman, Streep has done a little tub-thumping for Oscar. Though she is, at 33, five months pregnant, Streep has already advised the Academy she'll be attending the ceremony with sculptor husband Don Gummer. Streep's also been on hand to pick up most of the five national awards she's already won for Sophie's Choice. In her acceptance speech at the New York Critics bash, she even cited several critics by name. But she hasn't exactly been fawning. Says one, "Meryl arrives late, sits with her husband, and flees after dinner. No chitchat." Still, the sight of mama-to-be Meryl has melted many Academy hearts.

A lot of envious actresses would love it if Streep would stay pregnant. If she did, most of her plum roles would probably fall to Jessica Lange, 33, her only competition of consequence in the Best Actress race. As the haunted 1930s actress Frances Farmer, Lange made a monkey of those critics who mocked her starlet debut in 1976's King Kong. As for Tootsie, the actress says, "It was a part I almost turned down." And the Best Supporting Actress nomination is one she plays down, though Lange will be on hand with Mikhail Baryshnikov to pick up that award if it comes her way.

Fellow Best Supporting Actress nominee Teri (Tootsie) Garr might have had a clearer field if leading lady Lange hadn't been relegated to that category at the last minute. Some say Lange's studio submitted her for the supporting award so she could win something—a sort of consolation prize to ease an almost certain loss to Streep. Garr generously sympathizes with Lange's position, and both abhor competition. "It makes me nervous," says Teri. Veteran Robert (Victor/Victoria) Preston, 64, won't even hazard a guess about who'll win his supporting category. "I'm close friends with all those people," he says. So when he ran into his chief opponent, Lou (An Officer and a Gentleman) Gossett, recently, Preston jokingly challenged Gossett to "settle out of court."

Jack Lemmon also takes Preston's relaxed approach to the hubbub. "I'm a middle-aged dinosaur," says Lemmon, who sees his nomination for Missing simply as "a pat on the tushie from your peers. Know what?" he adds benignly. "I ain't gonna get it." Now the only chore is facing those TV cameras that always focus on the losers. Sasses Preston: "I'm still practicing how to smile with a quivering lip."

Oscar families: The folks the nominees phone home to go on the line about handicapping the race

When a mechanical ape garnered more favorable attention than his daughter Jessica's film debut in the megabomb King Kong, Albert Lange was quick to impart some fatherly wisdom. "I told her, 'Don't let it bother you. This is what life is about—a part of the game,' " recalls Lange, 69, a retired railroad man. Seven years later Jessie (as her parents call her) is a hot Oscar contender. But Dad remains unmoved by the razzle-dazzle. "My wife likes that stuff more than I do," he explains. "I don't think it's real—you know, people thinking those movie actors are more important than someone winning the Nobel Peace Prize."

Indeed. But for the nominees' families who have known the delirious highs and demoralizing lows of their showbiz kin, Oscar night should generate considerable fretting, fidgeting and finger-crossing. Even Albert Lange concedes that he is "interested to see if Jessie wins anything, but I won't be disappointed if she doesn't." In fact, he is simply happy her hard times appear over. "I'm proud that she had the perseverance, that she wasn't a quitter." The Langes and assorted family members will view the Oscars at their 40-acre farm in Nickerson, Minn., not far from where Jessica owns a cabin. Already there are rumblings of a split vote. "Jessie was good in Tootsie, but I loved Frances," says mom Dorothy, also 69. "It was sad, but Jessie did a beautiful acting job." Albert has a second opinion. "Tootsie I really enjoyed," he says. "With Frances, I was pretty much distressed. The whole idea of that movie kind of depressed me."

Robert and Ruth Winger, parents of Best Actress nominee Debra Winger (An Officer and a Gentleman), may deserve a special Oscar of their own: Best Performance by Parents While Watching Their Daughter in an R-rated Film. "It was not the easiest picture for a parent to sit through," observes Ruth, 57, who is recovering from heart surgery. "In those scenes in Urban Cowboy when she danced with John Travolta, it was sexy as hell. But the nude scenes in An Officer and a Gentleman were a bit cringy—more for my husband than for me." Nevertheless, the doting Wingers (Debra's father, 59, is a general manager of a frozen foods firm) will be watching the Oscars from their home in the San Fernando Valley, even if Debra can't get time off from her movie, Terms of Endearment, currently shooting in Texas. "The nomination thrilled us and was a wonderful tribute to Debra, but all three of us feel Meryl Streep deserves it," says Mrs. Winger, a periodontist's office manager. "Debra's career is new—she has time yet."

Unlike the stay-at-home Langes and Wingers, Dr. William Close and his wife, Bettine, both 58, will load their three dogs into a mobile home and leave their place in Big Piney, Wyo. to join daughter Glenn, a Best Supporting Actress nominee (The World According to Garp), for the Awards. "I forgot it was Glennie," says Mrs. Close of her daughter's performance in Garp. "She was sitting right there beside me but I was so engrossed I forgot." Like other parents, the Closes will not be crushed if their daughter doesn't win. "In a profession that traditionally is supposed to have so much glamour and glitter—and Glennie's had her share of that—what means so much to us is that her success has been based on hard, really profound work," says Dr. Close, who runs a medical clinic in Big Piney, 90 miles from the closest hospital.

Like her son, Steven Spielberg, Leah Adler, 63, prefers not to discuss her Oscar picks. But Dustin Hoffman's older brother Ronald, 51, an economist in Washington, D.C., doesn't shy away from a "biased" opinion. "I would imagine Dustin's stiffest competition would come from Gandhi [Ben Kingsley]," says Hoffman. "I haven't seen that movie but I have seen The Verdict [Newman] and My Favorite Year [O'Toole], and in my mind there is a significant difference in the quality of work. Dustin deserves it."

Morgan Mason, 27, is more tentative about his father James' chances for a Supporting Actor award for The Verdict. Mason, a former Reagan White House aide, confesses that his dad thinks "Lou Gossett Jr. has it all sewed up." He found his father's role in The Verdict "a gem" but the movie "a little slow, a little down and slightly predictable."

Phyllis Garr, who has experienced show business as a performer and a wardrobe mistress, is truly getting a kick out of daughter Teri's Best Supporting Actress nomination for Tootsie. Though diplomatically stating that everyone who's been nominated this year is deserving, "I certainly hope Teri wins," says Mrs. Garr, a widow who has an apartment in North Hollywood. Her husband, Eddie, an actor-comedian, died when Teri was 10. "With three children, it was hard at times. But I think God was with me. All of them have done well." She will watch the telecast with her two sons, Edward, a doctor, and Philip, who owns a custom boat store.

Alison Kingsley, 31, a stage director, will join husband Ben and the Gandhi contingent at the Oscars while her parents baby-sit in England with the couple's 9-month-old son, Edmund. Calling the other nominees "great heroes to both of us," she singles out Dustin Hoffman for special praise. "He's my favorite," says Alison—next to her husband, of course.

Satie Gossett, son of Best Supporting Actor nominee Lou Gossett Jr., plans to join his father (in a matching black velvet tuxedo) at the Oscars. Soon to be 9, Satie has a cassette of his dad's R-rated film and has been screening it for his pals in Malibu. He denies making any predictions, but Lou tells a different story. He overheard his son telling friends, "My daddy's going to win. He's the best." Observes Satie's delighted father: "It's nice to eavesdrop on something like that."

  • Contributors:
  • Irene Neves,
  • Ann Guerin,
  • Linda Marx,
  • Lois Armstrong,
  • Susan Deutsch,
  • Mary Fischer,
  • Suzy Jares,
  • Susan Peters,
  • Jerene Jones.