Top 10 Worst Decisions That DESTROYED a Movie Studio

Top 10 Worst Decisions That DESTROYED a Movie Studio

Welcome to WatchMojo, and today we’re looking at the worst choices that spelled the downfall of movie studios. While some of these studios still exist in some capacity, they’re far from the titans they once were.

#10: Trying to Replicate “The Lord of the Rings” with “The Golden Compass”

New Line Cinema

New Line rose to prominence with hits like “A Nightmare on Elm Street” and “Teenage Mutant Ninja Turtles.” The studio hit the big time with “The Lord of the Rings” trilogy, culminating in a Best Picture Oscar. New Line tried making lightning strike twice with “The Golden Compass,” another adaptation of a fantasy novel. Although tonally and thematically different, “Compass” strove to be the next “Rings,” leading to changes that insulted fans of Philip Pullman’s books while newcomers were left confused. New Line had survived flops like “Town and Country,” but the $180 million spent on “Compass” took a toll that ended with the company folding into Warner Bros. While New Line still functions as a subsidiary, it’s like going from Gondor to the Shire.

#9: Gambling on “Gods and Generals”

Ted Turner Pictures

While Ted Turner is a household name, you might not have heard of his eponymous studio. That’s because its library consists of one film: the 2003 war epic, “Gods and Generals.” The media mogul personally financed the film, which was budgeted at $56 million, although Turner reportedly spent $90 million out of pocket. Turner was prompted to bankroll the picture independently after distributor Warner Bros. passed. The theatrical cut, which was trimmed from five hours to three hours and forty minutes, went on to gross $12.8 million. Its box office failure didn’t just dash plans to adapt another book in Jeff Shaara’s American Civil War trilogy. The studio never produced another film, ranking alongside Cable Music Channel as one of Turner’s most misguided investments.

#8: Sinking the Ship with “Cutthroat Island”

Carolco Pictures

Stars like Sylvester Stallone and Arnold Schwarzenegger put Carolco on the map with hits like the original “Rambo” trilogy and “Terminator 2.” Their star power was a two-edged sword, coming with large salaries. Despite several hits, Carolco was losing money. Maybe Carolco could’ve rebounded if their James Cameron-produced “Spider-Man” had come into fruition. As that project failed to materialize, Carolco banked on a swashbuckling spectacle called “Cutthroat Island.” With a budget in the $100 million range, Carolco went for broke. That said, the writing was on the wall. Carolco filed for bankruptcy a month before the film’s release. Only making $16 million, “Cutthroat Island” is still one of cinema’s biggest money losers. It blew up a studio, careers, and, for a period, the pirate genre.

#7: Throwing Away Money on “Million Dollar Mystery”

De Laurentiis Entertainment Group

Although not without a few standout films like “Blue Velvet,” “The Transformers: The Movie,” and “Bill & Ted’s Excellent Adventure.” DEG made several questionable investments throughout its short-lived run in the 80s. Perhaps the most bizarre was 1987’s “Million Dollar Mystery.” The screwball comedy cost $10 million to make, grossing less than $1 million. More memorable than the film itself was a tie-in contest where audiences could win a million bucks if they could guess where it was hidden. Teenager Alesia Lenae Jones won, walking away with more money than the film made at the box office. Two months after this flop, it was reported that DEG was $16.5 million in debt. It never recovered, being acquired by the equally ill-fated Carolco Pictures in 1989.

#6: Selling the Production Rights for “The Sixth Sense”

Hollywood Pictures

“The Sixth Sense” was the highest-grossing film in the Disney-owned Hollywood Pictures’ library. Unfortunately, much of the film’s intake didn’t go to Hollywood Pictures. Disney sold the production rights to Spyglass Entertainment, holding onto 12.5% of the box office and distribution rights. Disney panicked when President David Vogel spent $3 million on the script and allowed a then-unknown M. Night Shyamalan to direct. It led to Vogel’s departure, although the psychological thriller went on to make over $600 million. Leaving millions on the table, Hollywood Pictures only produced a few more films before Disney closed its doors. Aside from “The Sixth Sense” fiasco, Disney was shifting away from mid-budget adult dramas in favor of event pictures, which also spelled the downfall of Touchstone Pictures.

#5: Time Warner Cutting Costs

Warner Independent Pictures

As the name suggests, this division of Warner Bros. was dedicated to smaller films like “Before Sunset” and “Good Night, and Good Luck.” In 2008, Warner Independent Pictures was expected to merge with Picturehouse, which Time Warner acquired along with New Line Cinema. Instead, Time Warner decided to close both independent houses as part of their cost-cutting measures. Although WIP had produced some great films, they weren’t all moneymakers. It seemingly didn’t make financial sense for a giant like Time Warner to invest in indie films that weren’t always profitable. Ironically, WIP was on the verge of releasing what would’ve been its biggest hit: the Best Picture-winning “Slumdog Millionaire,” which WB almost sent straight to video before reaching a distribution deal with Fox Searchlight.

#4: Disney’s Dominance

Blue Sky Studios

Between its eponymous studio and Pixar, Disney already owned two animation powerhouses. With the 21st Century Fox acquisition, Disney gained a third in Blue Sky Studios. In addition to hits like “Rio,” “Robots,” and “The Peanuts Movie,” Blue Sky’s “Ice Age” is among the highest-grossing animated franchises ever. After the COVID-19 pandemic took a toll on the theatrical market, though, Disney felt it had one too many animation studios. Rather than sell Blue Sky, Disney retained the rights to its library and shut the studio down. It was a colossal waste of talent, especially since Blue Sky had almost completed what could’ve been a game-changer for the studio: the Oscar-nominated “Nimona,” which Annapurna Pictures, DNEG Animation, and Netflix brought to the finish line.

#3: Howard Hughes’ Takeover

RKO Pictures

In 1930, Howard Hughes gave us “Hell’s Angels.” Although among the highest-grossing films at the time, “Hell’s Angels” cost too much to turn a profit. This should’ve been a red flag that Hughes wasn’t fit to run a studio. Regardless, in 1948, the eccentric businessman spent nearly $9 million to acquire RKO Pictures, which was responsible for “King Kong,” “The Hunchback of Notre Dame,” and a little movie called “Citizen Kane.” Despite once being a “Big Five” Hollywood studio, RKO was already on shaky ground when Hughes came along. With Hughes in the pilot’s seat, RKO spiraled due to a combination of political paranoia, lawsuits, creative meddling, and costly business practices. Even after Hughes sold RKO in 1955, the studio was on its last leg.

#2: Letting Michael Cimino Make “Heaven’s Gate”

United Artists

Some believe that if you give an auteur full creative control and keep the studio at arm’s length, great cinema will materialize. Then there’s the two-word counterargument: “Heaven’s Gate.” After “The Deer Hunter” won Best Picture, United Artists was eager to work with director Michael Cimino, giving him free rein to make his passion project. With this perfectionist at the helm, “Heaven’s Gate” not only ran over schedule and over budget at $44 million. It was also overly long at more than five hours. Even after being trimmed down multiple times, “Heaven’s Gate” made an abysmal $3.5 million. UA subsequently fell under MGM’s control, marking the end of an era for the studio that released “Rocky,” “Apocalypse Now,” and the early James Bond pictures.

Before we unveil our top pick, here are a few dishonorable mentions.

Francis Ford Coppola Letting Vanity Take Over with “One from the Heart,” Zoetrope Studios

What Was Supposed to Change the Game Only Gave More Power to the Studio System

Ruining “Superman IV,” The Cannon Group, Inc.

A Sequel That Cheaped Out While Still Spending Too Much

Andrew Duncan’s Misconduct Allegations, June Pictures

The Company That Helped Produce “The Florida Project” Closed Amid a Co-Founder’s Scandal

Thinking “Battlefield Earth” Was a Good Idea, Franchise Pictures

A Fraud Investigation Didn’t Help the Studio Either

Spending $137 million on “Final Fantasy: The Spirits Within,” Square Pictures

The Money’s On the Screen, But Not at the Box Office

#1: Harvey Weinstein Being Harvey Weinstein

The Weinstein Company

Upon leaving Miramax, the Weinstein brothers created a new studio that became synonymous with prestige. Perhaps The Weinstein Company would still be producing Oscar darlings if not for one person: Harvey Weinstein. While the studio’s co-founder had a reputation for abusive behavior, it wouldn’t become common knowledge until over 100 women came forward, exposing the extent of his crimes. Weinstein was removed from the studio that bore his name, which filed for bankruptcy several months later. This also led to the end of divisions like Dimension Films. Meanwhile, Weinstein was found guilty on multiple charges, facing over 15 years in prison. Weinstein was the king of Hollywood, but he squandered it all under the impression that his choices didn’t have consequences.

Can you think of any other studios that were destroyed by terrible choices? Let us know in the comments.