Decline and Collapse
Though Carolco made several successful films through the 1990s, including Total Recall, Terminator 2: Judgement Day (T2), and Basic Instinct, the studio was gradually losing money as the years went on. Carolco mixed blockbusters with small-budget arthouse films which were not profitable. In addition, the studio was criticized for overspending on films through reliance on star power and far-fetched deals (Schwarzenegger received then-unheard-of $10-14 million for his work on Recall and T2; Stallone also had similar treatment). Losses of partnerships also threatened the studio's stability and sent it teetering towards bankruptcy.
In 1992, Carolco went under a corporate restructuring invested by a parnership of Rizzoli-Corriere della Sera of Italy, Le Studio Canal+ of France, Pioneer Electric Corporation of Japan, and MGM. Each partner helped infuse up to $60 million into the studio's stock and another $50 million for co-financing deals. MGM also agreed to distribute Carolco product domestically after a previous deal with TriStar expired. In 1993, Carolco was forced to sell its shares in Live Entertainment to a group of investors led by Pioneer.
Cutbacks at Carolco also forced the studio to make a deal with TriStar over the funding of the Stallone action film Cliffhanger: Carolco would have to sell full distribution rights in North America, Mexico, Australia, New Zealand, Germany, and France to TriStar in exchange for half of the film's budget. Although a major box-office success, Carolco saw little revenue from Cliffhanger since they ended up becoming a minority owner in the film. Carolco's attempt to make more of its specialties proved to be more strenuous: the studio had to shelve an upcoming Schwarzenegger vehicle in 1994 when the budget exceeded $100 million.
Carolco attempted a comeback with the big-budget swashbuckler Cutthroat Island, with Michael Douglas in the lead. Douglas dropped out early in its production, and was replaced by the less-bankable Matthew Modine. Geena Davis, cast as the female lead through her ties with then-husband, the director Renny Harlin, was already an established A-lister, but was already coming off of a string of flops. MGM hoped to advertise Cuthhroat Island based on spectacle rather than the actors. In an attempt to raise more financing for the projected $90-100 million film, Carolco sold off the rights to several films in production, including Showgirls. In November 1995, Carolco filed for Chapter 11 bankruptcy protection. Carolco agreed to sell its assets to 20th Century Fox for $50 million. Cutthroat Island was released that Christmas, and became a box-office disaster.
Out of the ashes rose a new partnership between Carolco's owner (Mario Kassar) and Cinergi's owner (Andrew G. Vajna) in 1998. The duo formed C2 Pictures and produced Terminator 3: Rise of the Machines and Basic Instinct 2 among other films.
Read more about this topic: Carolco Pictures, History
Famous quotes containing the words decline and, decline and/or collapse:
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—Eric Hoffer (1902–1983)
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