As is usually in show biz, many a producer and studio head felt that if Carr and Stigwood could make a buck out of this musical revival, so could they. In Hollywood, whenever there's a fad wave rises, more than one will attempt to ride it. After watching Grease rake up a small fortune in box office receipts, virtually every studio rushed their own musicals into development. Even upstart drive-in/action/B-movie studio Cannon Pictures came up with one called The Apple. (#1) It was also this time that plans for a musical featuring a pair of off-beat characters from Saturday Night Live, known as The Blues Brothers, began to see the light.

Both Carr and Stigwood concluded that if they can do it once, lighting can strike again. First to strike was Stigwood with Sgt. Pepper Lonely Hearts Club Band, a Beatles musical staring the Bee Gees, Peter Frampton and George Burns. Some time later, it was Carr's turn with his disco musical Can't Stop The Music, starring The Village People, Steve Guttenberg and Bruce Jenner.
(#2) Needless to say, these two films would end up being better known as spectacular disasters, both financially and critically.
During this time, a couple of producers at Warner Bros. were brewing up their own musical mix. Lawrence Gordon and his cohort Joel Silver had been developing a project called XANADU. At the time, Xanadu was planned to be a roller disco flick, but two other studios had just made announcements of their own roller disco projects (one of them being the gender classic Roller Boogie starring Linda Blair from United Artists).

This caused Gordon and Silver to make major adjustments to the basic concept of
Xanadu, de-emphasizing the roller disco angle and moving more to the traditional romantic fare. Warners soon lost interest in the project and Gordon and Silver were obliged to take the idea elsewhere. It ended up at Universal Studios and was added to the their slate for 1980 along side other releases like 'The Gong Show Movie', '1941', 'The Blues Brothers', 'The Nude Bomb' (a.k.a. The Get Smart Movie), 'The Jerk', 'Somewhere In Time' and 'Flash Gordon' (#3).

With the producers finally settled in the direction of how the project would go conceptually, it was only a matter of time before Olivia's turn would come up for the role of the muse Kira. Soon after the Totally Hot album hit the charts, Olivia agreed to sign on to Xanadu after reading a 20 page treatment of the script. As part of the deal, her manager and then-boyfriend Lee Kramer became the film's executive producer
.

While this was going on, Gordon was trying to court the one and only Gene Kelly, who was 68 at the time, for the roll of Danny McGuire. Obviously, Mr. Kelly needs no introduction here....ah, what the hell....

Gene Kelly's film biography contains countless classics as
An American In Paris, On The Town and his signature film Singing In The Rain. Along with his good friend Fred Astaire, Kelly defined cinematic choreography, and became a standard-bearer in the 40's and 50's against which all other musical (and some non-musicals) of the period were measured. When not dancing, Kelly showed relentless creative energy by producing and directing features like 'Gigot' (the Jackie Gleason movie, not the beach flick) and 'Hello, Dolly' and starring in non-musical films like the controversial classic 'Inherit The Wind' with Spencer Tracy.
However, by the 70's, he had voluntarily slowed his career down when his wife died in 1973 and needed more time to raise his family. When approached by Xanadu's brain trust, Kelly showed interest in the project mainly due to the fact that the production would be shot just a short distance from his Beverly Hills home thus not take too much time away from his home and family life. However, there was one catch: he wouldn't so much as tap one toe on screen (according to the publicity notes, he would later change his mind).

When signed up, Kelly's character was officially named Danny McGuire, which, oddly enough, was the same name as Kelly's role in his 1944 movie '
Cover Girl'.  Such influence (or "borrowing") can be also said about Xanadu's basic plot as it has been widely speculated that it's quite similar to Rita Hayworth's 1947 musical, 'Down To Earth', with Rita playing the central roll as a muse.
For the second male lead of Sonny Malone, Gordon and Silver had no further to look beyond their last film. Michael Beck was the lead in their 1978 film The Warriors, a street gang action flick written and directed by Walter Hill. This film caused a stir when near riots broke out, including a murder, during some screenings in major U.S. cities.

Born Michael Beck Tucker in Memphis, he grew up near Horseshoe Lake, Arkansas and attended acting classes at Millsap Collage. He took up an acting class as a bet but found his acting career taking him to England for five years, which helped him eliminate his "Old Arkansanian" speech accent.  From here, he ended up in the 1978 TV movie '
Holocaust' and 1979 'Mayflower: The Pilgrims Adventure' with Anthony Hopkins. When he got the Sonny Malone part, Michael offered to sing his part, but was turned down.

Picked for director was Robert Greenwald. Greenwald's resume up to this point consisted of theater productions and TV movie projects in both producing and/or directing.
Sharon: Portrait Of a Mistress, Katie: A Portrait of a Centerfold, and Flatbed Annie & Sweetie Pie: Lady Truckdrivers was among his then-recent TV chores. Xanadu would be his major motion picture debut.

Now, all that was left was the music itself. Also in tow behind Olivia was her long-time musical partner from the beginning of her solo career, John Farrar. Farrar produced almost all of her recordings and largely pinned her biggest hits, including
Have You Ever Been Mellow and Don't Stop Believin'. He was also responsible for the two biggest hits from Grease, Hopelessly Devoted To You (which was nominated for Oscar for best song) and You're The One That I Want. In 1979, Farrar's output of hits for Olivia continued with A Little More Love and Deeper Than The Night.
For the other half of the tunes, Jeff Lynne of the Electric Light Orchestra fame was chosen. Originally, Lynne was hired to write and perform the non-Olivia songs and compose the score. He jumped at the chance to partake in this major project as he was obliged to turn down similar opportunities in the past, due to the constant  demands of his ELO producing/songwriting/touring chores. One of these past opportunities was writing the score of the movie Midnight Express, which eventually went to Giorgio Moroder.
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