Belly Up! 5 Hollywood Players That Went Famously Bankrupt Before Relativity
From fabled MGM to born-again Marvel, some companies have survived Chapter 11, while others are cautionary tales (Orion) or, worse, completely forgotten (Franchise Pictures?).
This story first appeared in the Aug. 14 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.
The venerable studio that once boasted "more stars than there are in heaven" filed for bankruptcy in 2010 after decades of mismanagement led to $5 billion in debt, though it quickly reorganized with a $500 million credit facility and zero debt (equity stakeholders took a bath). Today, it is run by Spyglass Entertainment co-founder Gary Barber, and its library of 4,100 movies is perhaps its most valuable asset. MGM has partnered with Warner Bros. on The Hobbit movies and the upcoming Creed (based on the Rocky saga), and it retains a stake in the James Bond franchise, which is primed for a lucrative new distribution deal after its Sony pact runs its course with Spectre (Nov. 6).
Franchise Pictures (2004)
Founded by former dry cleaner Elie Samaha and Andrew Stevens in 1998, the studio cranked out about four dozen movies in its seven years, few earning anything near their production budgets. Franchise didn't file for bankruptcy until 2004, but its finale began four years earlier with Battlefield Earth, starring John Travolta and based on an L. Ron Hubbard novel. The movie cost an alleged $44 million, though its budget was in dispute when Intertainment, a German company that financed a portion of the film, successfully sued for fraud.
Marvel Entertainment (1996)
That's right, Hollywood's biggest blockbuster machine once went belly up. Marvel Comics launched in the 1940s, though Marvel Entertainment wasn't incorporated until 1986. Financial woes struck in the 1990s when a bubble in comics and sports cards burst and infighting broke out among investors Ike Perlmutter, Avi Arad, Ronald Perelman and Carl Icahn. The company filed for bankruptcy in 1996, emerged in 1998 and began financing its own movie slate in 2005. In 2009, Disney acquired Marvel for $4.2 billion. Pow!
Carolco Pictures (1995)
In 1976, Hollywood outsiders Mario Kassar and Andrew Vajna purchased a shell company based in Panama called Carolco without even knowing where the name came from. The studio earned a reputation for big paychecks and lavish expenses — it gave Terminator 2: Judgment Day star Arnold Schwarzenegger a $17 million jet as a gift on top of his $14 million salary. Hits Basic Instinct and Total Recall were offset by flops like Showgirls. In 1995, Carolco filed for bankruptcy, and Fox purchased its assets for $50 million. Today, its catalog is owned by StudioCanal.
Orion Pictures (1991)
Founded in 1978 by five United Artist defectors, including Arthur Krim and Mike Medavoy, Orion was a hot commodity in 1987, having released Platoon, Hoosiers and Hannah and Her Sisters. Viacom's Sumner Redstone and John Kluge engaged in a bidding war for it, with Kluge coming out on top just in time for a string of flops. In December 1991, its debt reached $690 million and it filed for bankruptcy protection three months before its Silence of the Lambs swept the Oscars. The studio emerged from bankruptcy in 1996 and was acquired by MGM.