Cult Saturdays: Skidoo

Saving Graces: United Artists

When United Artists first formed in 1919 by DW Griffiths, Mary Pickford, Douglas Fairbanks and Charlie Chaplin it was a noble attempt by Hollywood’s biggest talents to control their own destinies. Rather than relying on the industry’s big titans for their livelihoods, these stars were going to be self sufficient. From the beginning, however, United Artists seemed doomed by a lack of operating capital and the talent’s inability to produce the previously agreed upon pictures. The company nobly carried on, however, despite its limitations.

By the 1960’s, United Artists was firmly hanging on. Its lack of operating capital made it a leaner operation than its competitors, a benefit in the television era that was ravaging Hollywood. The studio had even acquired part of Warner Bros.’ Looney Tunes catalog that had been carelessly sold off by Jack Warner. The conglomerization fad that was resulting in Hollywood studios getting snapped up seemingly weekly put United Artists in the sights of Transamerica, an insurance company famous for its pyramid shaped skyscraper in San Francisco.

The relatively small United Artists operation was a good fit for Transamerica, which was mostly known for being an insurance company. Transamerica was expecting its newly purchased studio to produce modestly budgeted base hits rather than lavishly produced home runs. This policy served the studio well; when it did get home runs, they were massively profitable, like Rocky, which was produced for next to nothing yet became a huge hit. The studio even produced the successful James Bond franchise. It would be the company’s deviation from its conservative formula that would be its undoing, however.

The studio made a huge bet on Michael Cimino’s Heaven’s Gate, a sprawling, incomprehensible mess whose production spiraled out of control. Michael Cimino’s career was ruined and United Artists fell out of favor with Transamerica. The studio was sold off to the zombie remains of MGM.

Saving Graces: Paramount Pictures

Paramount Pictures, long a titan of Hollywood, was in dire straits as the 1950’s began. Its longtime collaborators had fled the company, with only Cecil B. DeMille still actively making pictures for the studio. The company had been forced to divest itself of its profitable theater chain and its initial investments in television had not paid off. Even worse, the company sold off its back catalog at a fire sale price. Things seemed very grim by the 1960’s.

What would be Paramount’s saving grace? Conglomerization in general and Gulf+Western in particular. The big fad among businesses at the time was to assemble smaller companies under one large corporate umbrella. Diversifying their businesses would theoretically make them less susceptible to any downturn in any one industry. Gulf+Western, therefore, was in the market for a Hollywood studio along with various other businesses. Paramount was squarely in its sights as a studio that would gain it an entrance into Hollywood that it could buy for a relative pittance.

The combination would prove to be an unlikely success. Paramount entered a renaissance of sorts under Gulf+Western, defying Hollywood’s preconceptions about what types of pictures would be produced by an impersonal conglomerate. Gulf+Western heavily invested in the studio, which led to a juggernaut that produced such acclaimed pictures as The Godfather and Chinatown. The studio even invested in television, producing such hits as Happy Days, Taxi and Mork & Mindy. Things would go so well that in this instance the conquered company would become the conquerer. Gulf+Western would sell of its non-media properties and reorganize itself as Paramount Communications.

Saving Graces: Walt Disney Productions

In the late 1960’s, Walt Disney Productions was the subject of takeover rumors. With the turmoil brought about by television and the death of its visionary founder, many people thought it was a foregone conclusion that the company would be taken over by a conglomerate, who could then take advantage of the company’s valuable trademarks and copyrights.

After Walt Disney’s death, however, his brother was resolute that the company would continue as an independent entity. How was this possible despite all of the upheaval in Hollywood? It was due to the risks taken by Walt Disney himself in the 1950’s. Mr. Disney was the first studio head who saw the emergence of television and embraced it rather than ignore it. Instead of merely selling off the studio’s back catalog, Mr. Disney licensed it and retained ownership.

The biggest saving grace, however, was the biggest risk of them all- DISNEYLAND. Originally, very few people thought that the park would be successful. Many in Hollywood believed that the park would ruin him and take down his studio. In actuality, it was arguably the reason that Walt Disney Productions leapfrogged to become the multi-billion dollar behemoth it is today.

DISNEYLAND finally provided the stability that the company needed in a world where it was becoming more difficult to live “picture to picture” as the company had done for many years. DISNEYLAND would provide the funds to purchase the land in Florida that would become Walt Disney World. When Walt Disney World’s Magic Kingdom had disappointing attendance, it was DISNEYLAND that kept the lights on. When EPCOT Center almost bankrupted the company, DISNEYLAND’s profits kept it afloat. What was originally called “Disney’s Folly” became Disney’s profitable secret weapon.

Saving Graces: Warner Brothers

Warner Bros. Pictures could have been the biggest studio in Hollywood. While MGM had a more efficient assembly line process for making pictures, Warner Bros. was always the more well rounded studio. It was the only studio with an animation department that could rival Disney and it was often at the forefront of new technology. Its biggest stumbling blocks were its founders- the Warner Brothers themselves. The four brothers were often at odds with each other and in their later years were seemingly out of touch with what was going on in their own studio. 

When television came on the scene, the living Warner Brothers stubbornly refused to have anything to do with it, entering the business relatively late. Even worse, the studio started selling off its Crown Jewels- its back catalog- to stay afloat. Its Looney Tunes cartoons were a huge hit on television but because the company had sold them off, the lucrative profits went elsewhere.

Unlike Universal Pictures, which benefited from its founder’s decision to build a massive studio lot, Warner Bros. suffered from its founders’ decision to sell off anything not nailed down. Its saving grace would come from an outside company that owned and operated parking lots- Kinney National, which sought to diversify its holdings. Kinney would combine Warner Bros. with its other media holdings like DC Comics. This would re-energize the company, which would successfully buy back its back catalog of films as well as those of MGM. Kinney would divest itself of its non-media holdings and become Warner Communications.

Saving Graces: Universal Pictures

Hollywood went through tough times in the 1950’s and 1960’s. The rise of television upended Hollywood’s established traditions and forced it to adapt and eventually embrace television. It was tough going, however, but luckily for most studios, their founders had made decisions that helped them survive and grow. This week, we’ll be looking at the (arguably) saving graces that allowed each classic studio to survive.

Universal Pictures was considered the weakest of the larger studios. Its founder Carl Laemmle always had dreams that were bigger than the studio’s bank account. When he bought the sprawling ranch north of Hollywood that became “Universal City”, he could barely afford it. The other Hollywood moguls made fun of him behind his back, referring to the studio as “Laemmle’s Folly” and The Chicken Ranch, after its previous tenants. That Laemmle’s shaky finances required him to still operate part of the property as a chicken ranch no doubt added to Hollywood’s scorn. As a matter of fact, early guests to the studio lot could gain access by buying a dozen eggs. (They would pick them up on the way out.)

The decision to buy that large parcel of land, however, would prove to be Universal’s saving grace. In the 1950’s, long after Mr. Laemmle had passed away, his studio was in trouble. It had never really gained steady footing; its famed horror films were seen as lesser productions. Once television came on the scene, Universal Pictures was in deep trouble. At first, the company was loathe to enter the world of television, though the money that could be made by renting out its famed backlot to television networks would prove to be extremely tempting. It would be too far gone, however, and it would end up selling its storied backlot and studio to MCA, who would then lease out parts of it back to Universal while leasing the rest out to the burgeoning television industry. Sensing an opportunity, however, MCA would snap up the entire company within a few years. Universal would be reunited with its backlot and embrace television as part of MCA.

In the 1960’s, Universal would see a huge opportunity to further extend its empire. DISNEYLAND had opened thirty miles south, bringing millions of tourists who were looking for other things to do. It would open up its backlot for the first time in over forty years, transporting guests on glamour trams and charging much more than just a dozen eggs for admission. The tour would further stabilize the studio’s finances. It would finally become the major studio that its founder had dreamed about.

So, while Carl Laemmle would never gain the success he dreamed about in his lifetime, his visionary decision to risk it all on a parcel of land that wasn’t even located in Hollywood would save his company years after his passing. It is doubtful that Universal Pictures would have survived the television era had it not had its own large backlot. The studio tour grew into a full fledged theme park that its current parent company admits is one of its fastest growing sources of revenue today.

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