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Marc Rich, Marvin Davis, Rupert Murdoch and Hollywood's Slickest Deal
spɹɐʍoɔ snoɯʎuouɐ
☇☇Vocem sine nomine audivit!☇☇
User ID: 350320
02-14-2020 09:27 AM

Posts: 53,637

Post: #1
Marc Rich, Marvin Davis, Rupert Murdoch and Hollywood's Slickest Deal

The recently deceased financier is best known for his last-minute presidential pardon -- but showbiz types will remember his brief co-ownership of 20th Century Fox.

A native New Yorker-turned-Denver oil man, Davis inherited a petroleum business from his father and then built his fortune wildcatting. A 6-foot-4, 300-plus-pound giant of a man, he became a giant in business as well, parlaying his profits into an empire that included vast swaths of real estate. He even bought a Denver movie theater as a plaything; he loved movies, you see, and so did his family. Davis and his wife, Barbara, also became known for their philanthropy, especially the annual Carousel Ball that raised millions for children’s diabetes -- from which their daughter suffered.

One of those who attended that Carousel Ball was Marc Rich, who ran a New York City hedge fund and traded commodities, most notably oil. In the 1970s, after an Arab-led oil embargo shook the global supply chain, Rich pioneered the spot oil market, which allowed buying and selling of any oil that was available. Davis recruited Rich to invest $50 million into some of his oil drilling deals. It was the first of the pair's deals -- but it wouldn't be the last.

In 1981, Davis made a deal to buy the venerable but troubled 20th Century Fox movie studio. At the time, Davis didn't disclose the source of his funding, which included a $550 million loan from the Continental Illinois National Bank. Davis also never noted that he had a silent partner who would own half the studio -- Marc Rich. And although Rich would own half of the studio, Davis retained 100 percent of the voting control.

Nobody was more surprised that Davis had a silent partner than the 20th Century Fox board, which learned about Rich’s involvement shortly before the sale was to close. Even so, on June 8, 1981, in Los Angeles, the Fox board voted to sell the studio and its assets for $722 million.

Davis began running the studio like his personal fiefdom. He quickly spun off or sold noncore assets to raise money that paid down debt and paid dividends to Rich and himself. These assets included the Pebble Beach Golf Club and an Aspen, Colo., ski resort. Davis sold pieces of Pebble Beach and the resort to insurance giant Aetna for $184 million, and nearly a decade later sold the rest of Pebble Beach for $840 million -- more than he paid for the studio and all its assets.

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spɹɐʍoɔ snoɯʎuouɐ
☇☇Vocem sine nomine audivit!☇☇
User ID: 350320
02-17-2020 03:32 AM

Posts: 53,637

Post: #2
RE: Marc Rich, Marvin Davis, Rupert Murdoch and Hollywood's Slickest Deal
Our story begins with two separate studios, Fox Film and 20th Century Pictures. The former was the film studio founded in 1915 by William Fox, a man who had been one of the first to enter the Film Industry via buying a share of a Brooklyn nickelodeon (as they called Theaters back in the early 20th century) and had been a major investor in the industry.

Fox Film had actually become a big player to the point that in 1928, Fox Film had entered into an agreement to buy Loews Inc. which included 200 theaters and the MGM studio. There was one catch, however.

Louis B. Meyer was not in on the Fox-Loews deal and fought back to the point of calling his friends at the Department of Justice anti-trust division to delay the merger. That delay sunk the deal because of 2 tragic misfortunes that fell upon William. The first was William getting involved in a serious car crash in the summer of 1929. The other? Well, you remember what happened in 1929, don't you?

Yes, William Fox was one of those whose fortunes got undermined by the Stock Market crash. He was booted out of his company and then was put in jail for bribery, what William would later call a conspiracy against him in a 1933 book written by the one and only Upton Sinclair.

After William was booted, Fox Film was put into bank receivership but it became clear it couldn't stand up on its own and thus needed to merge with another studio. And here's where 20th Century Pictures comes into the story.
20th Century Pictures was founded in 1933 by former United Artists head Joseph Schenck & super producer Darryl F. Zanuck who had quit Warner Brothers after a pay dispute. Funding came from Joe's younger brother Nicholas who was Pres of Loews &, ironically enough, Louis B. Meyer.
Louis wanted to find a job for his son-in-law, William Goetz. He thus became the VP to Schneck's President.

Studio facilities were provided by Samuel Goldwyn Studios and the pictures were distributed thru UA.20th Century Pictures, by the way, is where the iconic Spotlight ident and fanfare-originally written by Alfred E. Newman-originated from.

20th Century Pictures turned out to be a massive success.
All but one of the first 18 films released by the studio was financially successful. And they had back-to-back Best Picture nominations in 1934's "The House of Rothschild" and their 1935 adaptation of "Les Miserables".
Come Winter of 1936, Darryl Zanuck wanted to acquire for 20th Century United Artists stock and become a member of the UA board. But Mary Pickford, the female among the UA collective, objected believing 20th Century would dilute the holdings of fellow UA member D.W. Griffith.

In response, Joe Schenck resigned from UA and Zanuck immediately began looking to work with other distributors.
This is when he came across the bankrupt Fox Film.
Fox Film, now ran by Stanley Kent, immediately went into talks.
But it was the head of Fox's West Coast theaters, Spyros Skouras, who helped make the merger happen.
Thus, on May 31st, 1935, Fox Film and 20th Century Pictures became 20th Century-Fox.

Zanuck and Schneck were joined by Kent who became President of the Studio.
Zanuck became Production head, replacing Fox's Winfield Sheehan, and immediately hired top talent for the studio. With the emphasis on younger talent and higher attendance during the War years, Fox managed to rise above MGM and RKO Radio to be the 3rd biggest studio in Hollywood. No small feat for a studio built up an upstart studio and a failing old one.

The '40s saw Fox become the studio with the combination of adult films, films of book adaptations, and films based on musicals.
But the 50s would see Fox face its greatest challenge like that of the whole of the movie industry: Television. Firstly, the courts would forcefully divorce Fox from it theaters in 1953. So the "Fox" theaters you see in various cities are the remains of Theaters built by William Fox.

Next, the '50s brought numerous technological gimmicks to keep the uniqueness of the motion picture. Thus, 20th Century decided to gamble its studio's fortunes on an unproven concept: A French anamorphic projection system that gave a 3D-like illusion of depth w/o 3D glasses.

To beat his competitors to the punch, Spyros Skouras (who had become Fox Pres a decade earlier) struck a deal with inventor Henri Chrétien and with the 1953 film "The Rope" introduced the new system, "Cinemascope".

With the new system came a new version of the 20th Century Fox logo designed by Pacific TIle aritst Rocky Longo and a new, extended version of the 20th Century-Fox fanfare composed once again by Alfred E. Newman

[Image: ?;nofb=1]

With the success of the process, other studios quickly signed onto the process with Fox allowing it as it eagerly wanted the process to succeed.
One of those studios that signed up to make films in Cinemascope?

Walt Disney Productions. Cinemascope helped Fox for a while, but eventually problems arose. And in 1956, Darryl Zanuck decided to quit as Film Production head and move to Paris to become an Independent producer.
Zanuck's success was Buddy Adler.
But just one year later, Adler died.

Spyros Skouras then brought in numerous replacements with none living up to Zanuck's level. And then, in 1959, a film was green-lit into production that would bring it all crumbling down. Every studio has that one film that brings it to the depths.
Columbia? Ishtar. Disney? The Black Cauldron.
For 20th Century-Fox, it was an epic about the last Egyptian Pharoah.
In 1958, Fox tapped producer Walter Wanger to remake the 1917 silent classic "Cleopatra" for $2 Million.

Wanger, however, envisioned an epic film and managed to up the budget to $5 Million. Originally, Joan Collins was attached to the project as Cleopatra.
But, as a publicity stunt, Wanger offered an astounding $1 Million to Elizabeth Taylor if she agreed to be Cleopatra. She accepted, and thus the cost instantly began to rise.

Add the fact you had an on-set adulterous affair develop btwn Taylor and Richard Burton, the media frenzy the film created, and Spyros Skouras' micromangement of the film, the budget ballooned to a MINDBLOWING $40 Million. The studio got desperate: It sold off its Century City backlot to raise cash and then rushed a Dean Martin and Marilyn Monroe-starring remake of Cary Grant's "My Favorite Wife" titled "Something's Got to Give' into production.

That film became problematic too via the Marilyn's sinusitis and director George Cukor's filming method. Monroe was fired after rewrites and very little progress. 2 months later, & after she was rehired after it became clear the film couldn't work w/o her, Monroe was found dead.

Then, Skouras would make his fatal mistake: He decided to rush into production "The Longest Day", a loving recreation of the events of D-Day which was a passion project of the one and only Darryl Zanuck.
Zanuck, who happened to still be Fox's largest shareholder, was offended because the project had been a dear one for him and he knew that rushing it would lead to it not living up to his vision. Eventually, "The Longest Day" was released in the way Zanuck was intended and "Something's Got to Give' was shelved and completely remade as "Move Over, Darling" with James Garner and Doris Day becoming the new leads.
Both were hits.

But the damage from "Cleopatra" was done. Zanuck decided to take back the studio and named his son Richard as President. The new management team killed "Movietone News" which dated back to Fox Film, shuttered and re-opened the studio, and released cheap films to get it back on track.

In 1965, the studio roared back to life thx to the Julie Andrews-starring mega-hit "The Sound of Music". Also helping were 2 sci-fi hits in "Planet of the Apes" and "Fantastic Voyage". But in the latter half of the 60s came notable flops and thus by 1971 Zanuck was ousted.

In 1971 came new heads in Gordon T. Stulberg and Alan Ladd, Jr., who helped revive the studio's fortunes including via a revolutionary concept: A joint studio venture in 1974's The Towering Inferno. It was risky, but it paid off and Stulberg began diversifying into other areas. The biggest success by far, though, came in 1977 when Fox released a film by "American Graffiti" Director George Lucas that no other studio wanted: A modern-day Space Opera featuring a cast with the only notable star being Sir Alec Guinness in a role he came to despise.

"Star Wars" brought Fox to unprecedented financial success, and in 1981 the studio was sold to investors Marc Rich and Marvin Davis. But just 3 years later, Marc Rich fled to Switzerland to avoid prosecution on tax evasion, racketeering & trading w/Iran during the hostage crisis. Thus, Davis bought Marc Rich's stake in Fox back for an unreported $116 million.

In March 1985, he sold it off for $250 million to an Australian tycoon who had big plans for America after dominating his native Australia & then England.
You may know him. His name? Rupert Murdoch.
A few months later, TCF Holdings bought 6 stations owned by Metromedia for $2.55Bln. But Marvin decided to back out at this moment and Rupert turned around and assumed full control of Fox after buying his stake out for $325 Million dollars.

The rest, as they say, is history.
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