Moviemaking is a serious business, and it’s not uncommon for a studio to gamble a ton of cash on a project. Most movies don’t make as much money as people think, and they often result in significant financial losses for a studio.
For example, 2017’s Justice League raked in $657.9 million at the global box office but ended up losing Warner Bros. money, as the break-even point was $750 million.[1]
Fortunately, WB survived the $60 million loss, but several studios throughout Hollywood history haven’t been as lucky. Some have had to sell off assets while others have closed entirely.
Amounts in parenthesis are adjusted for inflation to 2020.
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10 Cutthroat Island (1994)
Carolco Pictures was once best known for creating hits, including Terminator 2: Judgment Day and Basic Instinct, but these days, it’s remembered for something else. In 1994, the studio was in a bit of a financial pickle. It invested around $98 million ($172 million) on a film called Cutthroat Island.
While that’s about what a big tentpole picture costs these days, in the early ’90s, it was a make it or break it amount of money, and for Carolco Pictures, it definitely broke it.
Cutthroat Island was one of the biggest financial flops in film history. The movie had a plethora of problems, requiring the rebuilding of sets, the reshooting of scenes, the replacement of actors, and everything else that can go wrong on a film set.
Cutthroat Island’s theatrical run only made around $10 million ($17.5 million) at the global box office. The financial loss utterly destroyed Carolco Pictures. The studio sold some of its film rights to the foreign market and filed Chapter 11 bankruptcy only weeks after the movie’s release.[2]
9 The Golden Compass (2007)
New Line Cinema was certainly familiar with gambling on a film, as it put everything on the line to make Peter Jackson’s The Lord of the Rings trilogy. That gamble paid off, and it wasn’t long before New Line Cinema was throwing caution to the wind on another project.
The next big film to come the studio’s way was an adaptation of Philip Pullman’s His Dark Materials saga with The Golden Compass. New Line threw $180 million ($225.9 million) at the project, which was meant to be the first of three films.
That was a lot of money, as the studio had only invested $200 million on the three films of The Lord of the Rings, but The Golden Compass was idealized to be bigger and better. Unfortunately, it was neither of those things, and the film flopped upon release.
The Golden Compass made $372 million ($466.9 million), but that was far below the studio’s break-even point. Within a year, New Line was forced to restructure, sell off its foreign rights, and ultimately, it was sold to Warner Bros. Studios.
The studio still exists as a separate media company from Warner Bros., but its films are the property of WB, which also distributes everything with a New Line Cinema logo.[3]
8 Heaven’s Gate (1980)
For years, United Artists was a studio associated with some of the biggest and best pictures, including Raging Bull, Annie Hall, and Apocalypse Now. The company was originally founded by film legend Charlie Chaplin, so it had some history.[4]
Following his critically acclaimed 1978 hit The Deer Hunter, director Michael Cimino began developing Heaven’s Gate. The movie features John Hurt, Jeff Bridges, Christopher Walken, and many more high-profile players, but when the movie was released in 1980, it was a box office bomb.
It was labeled as one of the worst movies ever made upon release but has since been elevated to the point of critical acclaim. Unfortunately, that didn’t help United Artists’ bottom line. The studio spent $44 million ($138.9 million) on Heaven’s Gate, and it only made $3.5 million ($11 million) at the box office.
United Artists was unable to recover its costs, and it filed for bankruptcy. Metro-Goldwyn-Meyer purchased the remnants of the studio in 1981 for $350 million ($1 billion). UA’s TV interests were revived via a media merger in 2014, but it was folded into MGM the following year. By the studios’ 100th anniversary, it was revived by MGM once more as United Artists Releasing.[5]
7 Raise the Titanic (1980)
Raise the Titanic was based on the 1976 book of the same name, and it was an ambitious project, to say the least. The film was released in 1980, which was long before James Cameron made well over a billion on a Titanic film, and it was definitely a gamble for ITC Entertainment.
The film had a massive budget for the time, costing $40 million ($126 million) to produce. That cost put the studio in a bit of a bind, as it was a sink or swim movie, and it sank. Raise the Titanic bombed at the box office, managing to make only $7 million ($22 million) off its budget.
The financial losses were too much for the production company to handle, and the film’s failure resulted in the sale of the film division, Associated Film Distribution, to Universal Pictures.
The film’s producer, Lord Grade, retired from moviemaking following Raise the Titanic’s utter failure. At the time, he remarked that “it would have been cheaper to lower the Atlantic.”
The remaining assets of ITC focused on television, but financial issues and other problems ultimately resulted in the closure of ITC, which became defunct in 1998.[6]
6 Titan: A.E. (2000)
The 1990s saw the rise of several studios’ attempts at creating new animation outfits, and 20th Century Fox was one of them. The studio founded Fox Animation Studios in 1994 to break into the animated film market, and it hired veteran animator Don Bluth and Gary Goldman to oversee it.
The studio’s first film, Anastasia, was a hit. The small profit seen from that venture led Bluth to create the second film in the Fox Animation library, Titan A.E. The film was co-written by Joss Whedon, and it was given a budget of $30 million ($45 million) for pre-production.
The budget was boosted with an additional $55 million ($83 million), and when Titan A.E. hit theaters, it absolutely bombed at the box office. All told, the $85 million movie only made a meager $9.4 million ($14 million) at the box office.
Once all the bills were paid, and Fox was left counting its losses, the studio saw a total loss of $100 million ($181 million) from Titan A.E. Ten days after the movie’s release, Fox Animation Studios was shut down, and eventually replaced with Blue Sky Studios.[7]
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5 Cleopatra (1963)
When 20th Century Fox greenlit the production of Cleopatra, it set aside $44 million ($374 million) for the film, which was, at the time, the largest movie budget ever. That’s a massive amount of money, and the crew and costume department used every penny, creating gigantic sets and beautiful costumes.
Cleopatra’s production was fraught with problems, which saw its original $30 million budget increase by $14 million. The director was swapped out, and so were members of the cast. Additionally, the production switched filming locations twice, requiring expensive set reconstruction.
There was also a scandal involving Elizabeth Taylor and Richard Burton, so the film has earned a level of infamy for its problematic production. Cleopatra was actually the highest-grossing movie of 1963. Still, its box office pull of $57.7 million ($490 million) paled in comparison to its production and marketing costs.
20th Century Fox was nearly bankrupt, but the studio survived. To do so, it was forced to cease all production and sell off 300 acres of its lot. Several Fox executives’ careers were destroyed, and the studio was nearly closed. It survived, but it took a lot of damage from Cleopatra.[8]
4 The Right Stuff (1983)
The Ladd Company was founded by Alan Ladd, Jr., a man who is cemented in the history of Hollywood for being the one who greenlit Star Wars while working at 20th Century Fox. The company’s goal was to pursue ambitious projects, which it did with The Right Stuff and Twice Upon a Time.
The Right Stuff is a critically acclaimed film about the earliest days of the American Space program. While its status as a critical success cannot be understated, it failed to find an audience at the box office, resulting in a loss for the company.[9] Around the same time, the Ladd Company released another ambitious project, Twice Upon a Time.
Twice Upon a Time was an animated film with George Lucas on as an executive producer. Still, like The Right Stuff, it cost a lot of money but made very little. Both movies were released to a limited audience due to the studio’s financial problems. Neither helped bring it out of the hole.
The Right Stuff and Twice Upon a Time were the final nails in The Ladd Company’s coffin. The studio effectively died in 1985, when Ladd took over United Artists. Its label was revived in partnership with Paramount in 1995 for Braveheart. It also co-produced The Phantom and A Very Brady Sequel.[10]
3 One From the Heart (1982)
In the early 1980s, Francis Ford Coppola decided to try something new when he co-wrote and directed a musical called One From the Heart. The movie was an ambitious project, and over the course of production, its budget went from $8 million ($21.5 million) to $26 million ($70 million)… for a musical… in 1982.
Describing the movie as a box office failure doesn’t seem harsh enough, considering how badly this movie performed. According to Box Office Mojo, One From the Heart made $636,796 ($1.7 million) at the global box office.[11] That was its worldwide gross, which saw it released in only 41 theaters for 46 weeks.
To make the movie, Coppola bought the rights himself when MGM’s budget was too low for him. He produced it through his company, Zoetrope Studios, and raised money through a pre-sales loan from Chase Manhattan Bank.
Paramount pulled distribution of the movie, and Coppola was in a financial nightmare. He was forced to personally declare Chapter 11 bankruptcy over a $71 million ($191.5 million) debt he personally owed.[12] Coppola suffered a decade of financial problems over the film, and while he did manage to save Zoetrope, it cost him… a lot.
2 Battlefield Earth (2000)
Battlefield Earth was the passion project of John Travolta. It is based on the L. Ron Hubbard book of the same name, and he threw in $5 million ($7.5 million) of his own cash to make it. The film is infamous for being one of the worst movies ever made. It has been criticized for its bad acting, ridiculous premise, and a plethora of other issues.
The movie was terrible. It only managed to make just under $30 million ($45 million) off its $73 million ($110 million) budget, but that was only part of the problem for Franchise Pictures. The studio found itself embroiled in legal issues over claims it had fraudulently padded the movie’s budget by $31 million ($46.8 million).
Because of this, a lawsuit was brought by German distributor, Intertainment, which ultimately won its court case. Intertainment successfully proved that Franchise Pictures had effectively stolen the inflated amount due to its prior agreement to fund most of the film.
The court-ordered payment came to $77 million ($116 million), which resulted in the bankruptcy of Franchise Pictures. The movie was bad, and it would have ended the studio regardless, but the lawsuit made sure that happened, no matter what.[13]
1 It’s a Wonderful Life (1946)
These days, most people think of It’s a Wonderful Life as one of the greatest movies of all time, and it’s shown repeatedly leading up to Christmas. The film may be beloved today, but it was a massive failure when it was released in 1946.
Capra’s signature film wasn’t cheap, as it cost Liberty Films around $3.2 million ($42.7 million) to produce. That’s a lot of money for a movie with little to no special effects, and it amounted to a significant expense for the studio.
The movie’s break-even point was $6.3 million ($84 million), but it only managed to pull in a little more than its budget at the box office. An American classic was a financial failure, and the losses resulted in the demise of Liberty Films, which was founded by Frank Capra and Samuel K. Briskin only a year before the movie’s release.
The studio was founded primarily to produce It’s a Wonderful Like, but it had to sell off its assets (It’s a Wonderful Life and State of the Union) to Paramount Pictures in 1947.[14]
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