Known as "the picture that broke Grand National". Grand National Pictures, which produced and distributed this film, was a "B" studio known mostly for low-budget westerns and action pictures. It signed James Cagney during one of his frequent disputes with Warner Bros. and saw this picture as its chance to compete with the major studios by doing a lavish musical with a major star. It poured more than $900,000 into this film, not much by MGM or 20th Century Fox standards but a tremendous sum for a small studio like Grand National. Unfortunately the film was a major flop and the studio lost just about all the money put into it. Grand National folded just a few years later, having never recovered from the financial beating it took on this picture.
Grand National Pictures head Edward L. Alperson had previously paid $25,000 for the rights to the perfect James Cagney vehicle, "Angels with Dirty Faces", and was literally begged by staff producer Edward Finney to film that property first. Inexplicably, Alperson went ahead with this film, a pet project of director Victor Schertzinger, which went way over schedule and budget, and flopped big time. Its failure broke the fledgling Grand National studio, which despite its profitable Tex Ritter series of low-budget westerns, went into bankruptcy in early 1940.
Parts of the film are based on James Cagney's own experience. In the film, Cagney's character, Terry Rooney, is a New York band-leader and hoofer who goes to Hollywood to make a "tough guy" movie. When he gets back from his honeymoon cruise, Rooney discovers the movie has made him a star, and he is mobbed by autograph seekers outside a movie theater where his film is showing. Likewise, Cagney himself was a Broadway hoofer who went to Hollywood in 1930 to make movies. After several supporting roles, Cagney filmed his breakout movie, The Public Enemy (1931), in early 1931. When filming was completed, Cagney returned to New York, thinking the movie would be nothing special. A few months later, he was surprised to see a long line of movie-goers outside a New York theater where The Public Enemy (1931) was being shown. Cagney had become a star.