According to the 20 Jul 1983 LAT, director Wim Wenders was visiting Europe in 1981 during a ten-month hiatus from the production of his film Hammett (1983, see entry), and visited Portugal, where several of his friends were involved in the production of a picture titled The Territory (1981). During his visit, Wenders discovered a beachfront hotel that had been badly damaged in a storm two years earlier and thought it would make an excellent location. After inviting the cast and crew of The Territory to join the project, the director flew to New York City and wrote a three-page treatment, which aided his business partner, producer Chris Sievernich, in raising production money from European distributors. Sievernich made cash deliveries to Wenders throughout the shooting schedule, which consisted of seven weeks in Portugal and three weeks in Los Angeles, CA. The total budget was estimated at $700,000. The director described the film as a “metaphor” for his visit to Portugal and his experiences in the Los Angeles entertainment industry.
       The 17 Feb 1982 Var reported that screenwriter Joshua Wallace was suing Wenders for breach of contract. Wallace, who received neither compensation nor credit for his contributions to The State of Things, wrote an article for the German magazine, Tip, recounting his experiences during production. Chris Sievernich intended to sue the magazine for printing Wallace’s story. The outcome of the lawsuits could not be determined from available information. The article, which was reprinted in the 29 Jan 1982 LA Reader, stated that Wenders learned of Wallace through filmmaker Roger Corman, who was invited by associate producer Pierre Cottrell to join Wenders’ latest production in Portugal. On 24 Jan 1981, Wenders telephoned Wallace, at his Paris, France, apartment, and hired him to write the screenplay about “a film within a film” on two days’ notice. Wallace was flown to Portugal the following week with instructions from Cottrell to research the neutron bomb. Upon his arrival, Wallace and fellow screenwriter Robert Kramer were ensconced in a castle called the Quinta de Capella, with instructions from Wenders to develop a screenplay “about artistic destruction and competitiveness,” inspired by the director’s difficulties with the release of Hammett. He added that the plot was to be a riddle, rather than a conventional storyline. Both Wallace and Kramer were expected to act in the film as well. Following negotiations with Sievernich, the writers were guaranteed $10,000 each for their contributions, and with a ten percent advance.
       The production was immediately beset by difficulties: an order of film stock failed to arrive before the start of principal photography, forcing Wenders to purchase an inferior grade of film from a local merchant; actor Patrick Bauchau suffered from a toothache throughout the Portugal shoot; neither typewriters nor stationery had been supplied for Wallace and Kramer, requiring them to write their first drafts of the screenplay on napkins. According to Wallace, the screenplay was not employed during the shooting of several scenes. Kramer reportedly accused Wallace of not understanding Wenders’ vision, causing a rift between the two writers. Wallace suggested they work independently of each other and leave it to the director to decide between them, but Kramer rejected the proposal. Actor-filmmaker Sam Fuller arrived on set, and with his encouragement, Wenders and Sievernich established a discernible storyline that would still allow improvisational elements. Regardless, Kramer ceased work on the screenplay and submitted changes to Wenders through memoranda. Sievernich fired Wallace, but the writer refused to leave until he was paid. Wenders was willing to reconsider the firing until Kramer convinced him that Wallace intended to make the film a commercial “Hollywood” production. At the time of the article, Wallace was suing Wenders for unpaid wages, Pierre Cottrell was suing fellow associate producer Paulo Branco for supplying the production with incomplete rolls of film stock, known as “short ends,” Sievernich had not been reimbursed for his $50,000 investment, and the actors received less than half of their salaries. The article noted that Fuller’s character, “Joe Corby,” was inspired by cameraman Joe Biroc, who was known for imitating Fuller’s speech mannerisms.
       The 4 Aug 1981 HR announced that Wenders was editing the film at Atelier Studios in New York City. Editing was completed the following month, as reported in the 30 Sep 1981 Var. According to the article, Sievernich was able to raise the $800,000 budget within one week, based on Wenders’ original scenario and his reputation as a director.
       Following the picture’s premiere at the 1982 Venice Film Festival, where it won the “Golden Lion” ("Leone d'Oro") award, Wenders and Sievernich were offered distribution by a U.S. company, with no advance or guaranteed payments, according to the 16 Feb 1983 Var. They declined, choosing to distribute through their own company, Gray City, Inc., and recovered the entire budget from sales to European distributors. Additional openings were scheduled for 18 Feb 1983 at the Bleecker Street Cinema in New York City, 21 Jan 1983 in Miami, FL, 18 Jan 1983 in Spain, 12 Feb 1983 in Quebec, Canada, and 21 Feb 1983 in London, England. The film first opened in the former Federal Republic of Germany in early 1983.
       The State of Things opened to mixed reviews, earning $14,000 during its New York City debut, as reported in the May 1983 Box.
      Opening credits include the following statement: "Leone d'Oro nel 50th anniversario del Festival di Venezia." End credits include the following statements: "With many thanks to Peter Przygodda for his help and advice"; "Special thanks to Cinetudes Film Production, New York; Magno Sound, New York; EFX Opticals, New York; Cinema Television Design, New York; Texas Bar, Lisbon; Tiny Naylors, Los Angeles; Fibu, Berlin; and Apple Computers."