Sony Pictures Entertainment
Columbia TriStar Motion Pictures Companies is part of Sony Pictures Entertainment Inc. (SPE), a global operation involved in motion picture production and distribution, television programming and syndication, home video distribution, and several other areas of the entertainment business. As the motion picture segment of SPE, Columbia TriStar held an average of 17 percent of the domestic box office market between 1990 and 1995, producing such popular films as Sleepless in Seattle, A Few Good Men, Philadelphia, and In the Line of Fire. Under the Sony Corporation corporate umbrella, Columbia TriStar Motion Picture Companies consisted of the popular film companies Columbia Pictures and TriStar Pictures; Sony Pictures Classics, a company specializing in acquiring, marketing, and distributing foreign and independent films; Triumph Films, specializing in films that further diversified SPE's motion picture roster; and Columbia TriStar Film Distributors International, which focused on the distribution of SPE's motion pictures.
The history of Columbia TriStar Motion Pictures may be traced through the founding of Columbia Pictures Entertainment Inc., which was incorporated in 1924 as Columbia Pictures Corporation. Hollywood in the 1920s was a booming entertainment factory. As the film industry began to realize its vast potential, ornate moviehouses were erected throughout American cities and towns, and cinema became the nation's new favorite pastime. Hollywood's production studios grew rapidly and opportunities for filmmakers abounded.
It was in this environment, in 1918, that independent producer Harry Cohn, his brother Jack, and their associate Joe Brandt started the CBC Film Sales Company with a $100,000 loan. By 1924 the little company on Hollywood's "Poverty Row" had made its presence known. The company changed its name to Columbia Pictures Corporation and began a period of growth that would rank it among the major studios within ten years.
Columbia was ruled somewhat autocratically by its brash founder, Harry Cohn, for more than 30 years. Cohn, the son of immigrant parents, began his career in film in 1918 as the secretary to Carl Laemmle, a founder of Universal Studios. By the mid-1920s Cohn had gained a reputation as one of the industry's toughest businessmen. He ran Columbia's Hollywood film production unit while his brother Jack and Joe Brandt handled financial matters in New York. In 1926 Columbia purchased a small lot on Gower Street that had two stages and a small office building; the move improved the company's status among the small motion picture studios.
Cohn slowly built Columbia during the 1920s by enticing talent from other studios to join his operation. He reduced costs in production by refining out-of-sequence shooting, in which scenes with high-priced stars were filmed one after another whether they followed one another in the narrative or not. Under this method, stars were not left idle on the payroll while scenes they were not needed for were shot. By the end of the decade Columbia was considered a major studio, although a lesser one. At the time, Hollywood was dominated by the "big five"--Warner Brothers, RKO, Twentieth Century Fox, MGM, and Paramount--and the "little three--Universal, United Artists, and Columbia.
By the late 1920s a power struggle had begun to develop between the New York and Hollywood operations of the company, culminating in an unsuccessful attempt by Jack Cohn and Joe Brandt to wrest control of the studio from Harry Cohn. In 1932 Joe Brandt resigned as company president and sold his shares in the company, leaving Harry Cohn to become the first executive in Hollywood to serve as production head and president at the same time. Jack Cohn stayed on as vice-president and treasurer, but the feud with his brother was never mended, and gradually Harry became virtually omnipotent at the studio.
In 1929, Columbia produced its first "talkie" feature film, The Donovan Affair. The film was directed by Frank Capra, the man who would prove to be Columbia's most valuable asset in the years to come, and met with both critical acclaim and financial success.
The Great Depression had different effects on different studios. Columbia, which did not have the theater holdings the Big Five had, didn't feel the impact of empty theater seats in the early 1930s. And when theater attendance picked up, Columbia found it had one very special asset--Frank Capra.
Capra's view of the world seemed to strike a chord with the average theater-goer during the difficult years of the Depression. His films glorified the common man, the unlikely hero who beat the odds. Films like It Happened One Night, Mr. Deeds Goes to Town, You Can't Take it With You, and Mr. Smith Goes to Washington firmly placed Capra and Columbia Pictures within the Hollywood establishment.
Throughout the late 1930s and the 1940s, Columbia made many "B" movies--lower budget films that often served as the supporting feature at a theater. About 70 percent of Columbia's annual roster of between 50 and 60 pictures were B movies, including the highly successful Blondie, Boston Blackie, and Lone Wolf series. The so-called "srewball comedy" became Columbia's standard fare during the era.
Columbia continued to pump out motion pictures throughout the war years. Between 1940 and 1946 revenues doubled and profits increased sixfold. After the war, however, cinema in the United States was faced with a serious crisis: television. As the number of small screens in American living rooms increased, the number of paid admissions to the big screens plummeted. Columbia was the first studio to react to the new medium. In 1948 the studio launched a TV subsidiary, Screen Gems, which began to produce TV shows in 1952. In addition to producing new programs like "Rin Tin Tin," "Captain Midnight," and "Father Knows Best," the Screen Gems subsidiary sold the rights to old Columbia films for television broadcast. Meanwhile, gimmicks like Cinemascope, which emphasized the largeness of the theater, were undertaken with limited success. Nevertheless, a number of big hits in the 1950s, including From Here to Eternity, The Caine Mutiny, and On the Waterfront, helped Columbia thrive.
In 1958 Harry Cohn died. Some 1,300 people attended his funeral, which was held on a Columbia soundstage. Over the years Cohn had become one of the most despised men in Hollywood, and it was quipped that the large congregation at the funeral had come not to bid farewell but to make sure he was actually dead. Cohn had cultivated his image as a tyrant, keeping a riding whip near his desk and occasionally cracking it for emphasis, and Columbia had the greatest creative turnover of any major studio due largely to Cohn's methods. Yet even Cohn's enemies acknowledged his knack for running a profitable studio.
Cohn was succeeded by Abe Schneider, who had come to Columbia in the late 1920s as an accountant. The company, like other Hollywood studios, struggled to turn a profit in the early 1960s. Theater attendance had dropped drastically since the golden era of the 1930s and 1940s, and without the success of the Screen Gems unit, Columbia would have been in serious trouble. Several box office hits in the early 1960s provided even bigger returns with television broadcast--in 1966 the rights to The Bridge On the River Kwai alone brought $2 million for two showings on ABC. Lawrence of Arabia, Suddenly Last Summer, and The Guns of Navarone promised big payoffs as well.
In 1966 a takeover attempt threatened Columbia's management. Maurice Clairmont, a well-known corporate raider, attempted to gain a controlling interest in the company; when he failed to do so on his own, he combined forces with the Banque de Paris et de Pays-Bas, which owned 20 percent of Columbia, to acquire a majority of shares and snatch control of the company from Abe Schneider. But the Communications Act of 1934 prohibited foreign ownership of more than one-fifth of an American company with broadcasting holdings, and Columbia's Screen Gems unit at the time held a number of TV stations. The Federal Communications Commission allowed the French bank to buy more shares but prohibited it from "any action looking toward an assertion of control by it alone or in concert with any other person over Columbia," effectively thwarting Clairmont's efforts to oust Schneider.
Columbia had a string of film successes in the late 1960s including Oliver!; Guess Who's Coming to Dinner; To Sir, With Love; Divorce American Style; and In Cold Blood. In 1969 Easy Rider, starring Peter Fonda, Dennis Hopper, and Jack Nicholson, was made for $400,000 and grossed $25 million for the studio.
But the early 1970s were devoid of box office successes. By 1973 the company had to impose strict cost-cutting measures after losses of $82 million in three years. In July 1973, Alan J. Hirschfield took over as president and CEO of Columbia. Hirschfield had formerly been with the Wall Street investment-banking firm of Allen & Company, which had gained a substantial interest in Columbia.
In August of that year former talent agent David Begelman was brought in to head the motion picture division. Begelman oversaw a number of successful projects, including Funny Lady, Shampoo, Tommy, The Deep, and Close Encounters of the Third Kind. Begelman, however, brought disgrace to himself and embarrassment to Columbia in 1977 when it was discovered that he had misappropriated about $60,000 in corporate funds. His offenses included cashing a $10,000 check made out to actor Cliff Robertson. The board of directors suspended Begelman in July, and then in December reinstated him. Public outcry over his reinstatement compelled him to resign two months later, but not until after he had landed a lucrative three-year contract as an independent producer. Alan Hirschfield temporarily took over as head of the motion picture unit, but it was clear that his talents lay in finance, not motion picture production. By July 1978 Hirschfield was replaced by Francis T. Vincent, an attorney with no experience in film. The decision to replace Hirschfield was less obvious than the one to remove Begelman, but some speculated that some board members felt that Hirschfield had not shown appropriate gratitude to Begelman through public support in his moment of crisis; the company had, after all, jumped in net worth from $4 million to $130 million since Begelman joined Columbia (although at least some of the credit belonged to Hirschfield, who secured new forms of financing). Other speculation centered on Hirschfield's desire to merge with the toy manufacturer Mattel, a move which would have diluted the equity of Columbia's major shareholders.
As Columbia entered the 1980s, changes in the entertainment business provided new opportunities as well as new challenges. The early 1980s saw the significant development of cable TV and home videotape recorders. At first seen as a threat to the movies, these new outlets eventually bolstered demand for product.
In 1981 Columbia narrowly escaped a hostile bid from Las Vegas financier Kirk Kerkorian. The federal government reportedly frowned on the move because Kerkorian owned a controlling interest in MGM at the time, and his acquisition of Columbia would have violated antitrust statutes.
In 1982 Columbia Pictures was purchased by The Coca-Cola Company in a stock and cash deal worth some $700 million. With Coca-Cola as a parent, Columbia changed in a number of ways. The studio used even more market research on film ideas than it had before. Columbia also benefited from the greater efficiencies that Coke's volume discounts on advertising could provide.
Also in 1982 Columbia joined CBS and Home Box Office to launch a new motion picture studio called TriStar Pictures. For five years the fledgling studio pumped out hits and expanded its holdings. TriStar earned hefty sums through the distribution of movies like Rambo: First Blood Part II and The Natural. In 1985 the company offered its shares to the public. Although response was at first lukewarm, 43 percent of TriStar was eventually sold to the public. The company began to branch out in late 1986 when it purchased the Loews theater chain for $295 million. It also took over video cassette distribution of its own films.
Management changes at the studio in the mid-1980s seemed to hinder Columbia's performance. The studio had changed leadership four times since Coca-Cola purchased it and hadn't had a major hit since Ghostbusters earned $200 million in 1984. To make matters worse, as president of the motion picture unit during 1986, British producer David Puttnam (best known for the Academy Award-winning Chariots of Fire) complained of overpriced talent and inflated egos and tried to buck Hollywood's well-established star system. As a well-intentioned outsider, Puttnam's attempt to inject a bit of reality into the glamour capital of the world proved a miserable failure for Columbia.
In 1987 The Coca-Cola Company board decided to merge Columbia with TriStar to form Columbia Pictures Entertainment, Inc. TriStar's Victor Kaufman became president and CEO of the new company. Also in 1987, Dawn Steel was brought in from Paramount to replace Puttnam. While Steel lured back Hollywood's top talent, the studio continued to struggle to find a hit. In 1988, Columbia's share of domestic box office receipts fell to a dismal 3.5 percent. In spite of the relatively solid performance of subsidiaries Columbia Pictures Television and Merv Griffin Enterprises, Columbia registered a $104 million loss for 1988. In 1989, Columbia released the highly successful When Harry Met Sally, but while prospects looked better, the company still struggled to find the cash flow to finance more productions.
Then, in late 1989, Columbia entered into an agreement with Sony USA, Inc., a subsidiary of Japan's Sony Corporation, for the purchase of all Columbia's outstanding stock. With the completion of that transaction in November 1989, Columbia joined the ranks of media and entertainment companies throughout the world that had combined to create huge enterprises. Under the leadership of newly appointed co-chairmen Peter Guber and Jon Peters, Columbia faced the challenges of the global media market of the 1990s on firmer footing. Sony assumed Columbia's $1 billion debt and by 1991 the studio was earning an operating profit, but continued to post a loss after taxes and other costs were taken into account.
The majority of Columbia's profits came from its television division which generated about $240 million in operating profits in 1992--almost double the amount generated by all the company's other divisions, according to industry analysts. They were quick to note, however, that the majority of this $240 million was earned by syndication of older television programs such as "Married ... With Children" and "Who's the Boss?" From 1988 to 1991, not one of Columbia's new television series was successful; and this was after the company negotiated contracts totalling over $100 million with top name writers and producers. Sensing that the company might be facing an unprofitable future, Alan Levine, president of Sony Pictures Entertainment, stepped in and made some changes.
Levine's first move was to launch a third television production unit through acquiring a large portion of an independent company called New World Entertainment. He also made some executive changes, replacing Gary Liberthal, the president of Columbia Pictures Television, with Mel Harris, an executive with Paramount known for his ability to spice up ailing production companies. Levine also cut the amount paid to writers and producers to about $20 million, 50 percent less than what the company paid in 1991.
But as Columbia's television unit began slipping, both Columbia Pictures and TriStar began to enjoy some box office success. TriStar's Terminator 2: Judgement Day was the highest grossing film of the year in 1991, with over $200 million in box office receipts in the United States alone. The success of other films such as The Prince of Tides, My Girl, and Boyz in the Hood, provided Columbia and TriStar with a combined market share of 20 percent, the highest in the industry.
Sony also formed another subsidiary, Columbia TriStar Home Video, a video distribution operation which gave the company an entry into the lucrative video market. Within two years, Columbia TriStar Home Video captured the top position in the worldwide video market, fueled by the success of Columbia and TriStar's recent releases and supported by Sony's already strong international distribution system.
By 1993, although they remained Sony's leading motion picture companies, Columbia and TriStar had become fully assimilated into Sony Pictures Entertainment. Columbia's one-time subsidiary Merv Griffin Enterprises became an independent branch of Sony Pictures and Columbia Pictures Television Distribution also became an independent arm of Sony Pictures, handling the syndication of Castle Rock's smash television series "Seinfeld," as well as Columbia Television's "Designing Women" and "Married ... With Children." Columbia TriStar International Television was also created in 1993 and began producing German versions of television series such as "Who's the Boss?" and "Married ... With Children" for distribution on the RTL network.
Although Columbia had lost some of its independence with the Sony acquisition, it had gained the capital and the management resources necessary to reignite box office sales. In 1988, Columbia/TriStar posted a $104 million loss. A few years later, the duo held almost 20 percent of the film market and grossed $1.7 billion in box office receipts. Columbia TriStar Television and Columbia TriStar Television Distribution also seemed to profit from Sony's capable management and international marketing expertise.
Nevertheless, in the mid-1990s, Columbia and TriStar again struggled, as their box office share dropped by nearly half in 1994 and film production for 1995 slowed considerably. In addition, Gruber and Peters left the studio in early 1994. In November 1994 Sony, which had invested an estimated $8 billion in its Hollywood studios over the past five years, announced that it would take a loss of $3.2 billion on the value of its Hollywood studios, reducing their book value by $2.7 billion. During this time, industry analysts speculated that Sony might sell an interest in Columbia and TriStar.