In the late '70s, the creation of Orion Pictures gave hope to independent filmmakers by backing edgy projects and signing superstar talent.
The company went on to produce a string of quality films like "Platoon," "Amadeus," "Dances With Wolves" and "Silence of the Lambs," all of which won best-picture Oscars.
But at the end of that incredible run, the studio was more renowned for its dismal box-office performances and disappointing films. Today, it survives only as a 2,200-title film and TV library owned by Metro-Goldwyn-Mayer.
The rise and fall of Orion reveals just how difficult it is to start a new studio from scratch, despite hefty financial backing and a stable of big-name stars.
Orion was founded in 1978 by five former United Artists executives, including Arthur B. Krim and Mike Medavoy. They recruited independent producers to make films that would be distributed by other studios.
Orion signaled its serious intentions by lining up projects featuring some of Hollywood's biggest stars: John Travolta, Barbra Streisand, James Caan and Jon Voight. By the end of its first year, the company had 15 films in production, giving it the appearance of a major contender.
But by April 1980, Orion had only released the hit "10," starring Dudley Moore and Bo Derek, and stumbled with other anticipated releases like "The Great Santini," "A Little Romance" and "Promises in the Dark."
Only 10 of the 18 films made by Orion through 1984 made any money, and investors began to get nervous.
In early 1986, an original investor, E.M. Warburg Pincus & Co., sold its 15 percent interest in the company to Viacom International. Meanwhile, John W. Kluge bought a 6.5 percent share in the studio.
An old friend of Krim, then Orion's chairman, Kluge appeared to be the backer that Orion needed to fend off advances by Viacom for control of the studio. Kluge, a Virginia tycoon, was reported by Forbes to be the richest man in America, with assets of about $6 billion.
In 1988, he bought out Viacom's share of Orion for $78 million and held almost 67 percent of the studio.
But Orion continued its downward spiral at the box office and trailed all the major studios in market share that year because of high-priced flops like "She-Devil," starring Meryl Streep and Roseanne Arnold.
The 1990 release of Kevin Costner's "Dances with Wolves" and the 1991 hit "The Silence of the Lambs" were not enough to save the beleaguered studio, and Orion continued to chalk up losses with bad movie choices and high overhead.
Kluge, who had continued to infuse the studio with money, finally started looking for buyers for his stake in the company.
In December 1991, Orion filed for bankruptcy. New Line Cinema attempted to take over the company but pulled out after a few months of negotiations.
Kluge eventually decided to keep Orion, and from 1992 to 1995, worked on paying back creditors and building its worth in apparent preparation for its sale.
In 1997, Metro-Goldwyn-Mayer bought the assets for $573 million, which provided the MGM with 2,200 film and TV titles making it the owner of the largest collection of post-World War II films in Hollywood.
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