Twentieth Century Fox Film Corporation

10201 West Pico Boulevard
Los Angeles, California 90035
U.S.A.
(213)277-2211

Wholly owned subsidiary of The News Corporation
Incorporated: 1915 as Fox Film Corporation
Employees: 2,200
Sales: $850 million

Twentieth Century Fox has had its up and downs. Over the years, this venerable Hollywood institution has saved itself from bankruptcy twice by producing blockbuster movies (The Sound of Music and Star Wars, two of the biggest box-office hits ever). After a fairly tumultuous 1980s, the company today is owned by Rupert Murdoch’s News Corporation, the Australian media conglomerate.

In 1904 William Fox, a 25-year-old Hungarian immigrant, bought his first nickelodeon in New York City. Within a few years Fox and two partners, B.S. Moss and Sol Brill, had parlayed their success into a chain of 25 nickelodeons.

The partners soon opened the Greater New York Film Rental Company. Then in 1913, concerned that the demand for movies had begun to outstrip supply, they organized the Box Office Attraction Company to begin producing their own movies. In 1915 Fox founded the Fox Film Corporation to produce, distribute, and exhibit movies and moved his operation to California, whose temperate climate was better suited to film production.

In 1925 Fox Films relocated to its fourth California location when Fox purchased the 250 acres of land in Hollywood which was to be the company’s permanent home. In 1929 Fox Films bought 55% of Loew’s Inc., then the parent company of MGM, but was later forced by the government to sell that interest.

After several years of steady growth, the company experienced a series of shake-ups beginning in 1927, and in 1930 a group of stockholders ousted William Fox. Fox was replaced by Sidney R. Kent in 1932, and in 1935, Fox Film Corporation merged with Twentieth Century Pictures.

In 1933 Darryl F. Zanuck, head of production at Warner Brothers, had joined Joseph M. Schenck, head of United Artists, in forming the Twentieth Century Company. With Schenck as the administrator and Zanuck head of production, the Twentieth Century Company made 18 films in 18 months, including The House of Rothschild, The Affairs of Cellini, and Les Miserables. Only one film was unsuccessful. During this time, Twentieth Century began making movies out of current news events, with releases like Little Ceasar and Public Enemy. When the company merged with Fox Film Corporation in 1935, Zanuck became vice president in charge of production of the new Twentieth Century Fox Film Corporation.

Before America entered World War II, Twentieth Century Fox produced two Academy Award-winning films, The Grapes of Wrath in 1940, and How Green Was My Valley in 1941. During the war, Zanuck served as a lieutenant colonel, making training and combat documentary films. He was awarded the Legion of Merit for his wartime services.

After the war, Twentieth Century Fox produced such hits as The Snows of Kilimanjaro, Winged Victory, Twelve O’Clock High, The Razor’s Edge, and All About Eve. Zanuck also attacked controversial issues in several financially successful movies, proving that audiences did not shy away from issues like mental illness, race relations, and anti-Semitism with The Snake Pit, Pinky, and Gentleman ’5 Agreement.

But by the early 1950s Hollywood’s heyday was over. With the advent of television, attendance at movies declined sharply, and film production declined along with it. Studios like Twentieth Century Fox could no longer afford to maintain exclusive contracts with directors and film stars. In 1953 Zanuck began producing all the studio’s films in wide-screen CinemaScope. But the attraction of this system did not compensate for the lack of box office hits. Frustrated, Zanuck left the company in 1956 to become an independent film producer in Paris.

The company replaced Zanuck with Spyros Skouras, a well-known Greek theater owner. Between 1959 and 1961, Twentieth Century Fox lost $48.5 million; in 1962 it lost $39.8 million on revenues of $96.4 million.

The immediate source of trouble was the production of Cleopatra. From an estimated cost of approximately $7 million in 1961, the film’s total expenditures ballooned to $41.5 million. The company poured money into the production, even selling 334 acres of land in Los Angeles’s Fox Hills section to help finance it. But it still wasn’t enough.

In 1962 Zanuck, still one of the company’s largest stockholders, persuaded his fellow-stockholders not to liquidate the business and returned to replace Skouras as president. Zanuck’s stability and professionalism soon bolstered the company’s waning image. More importantly, however, Zanuck brought in quick cash. The Longest Day, made by his own production company in Europe, was released through Twentieth Century Fox. A smash hit, it brought in enough revenue to allow the company to begin making movies again in 1963.

That same year Zanuck made his son Richard vice president in charge of production. Only 28 years old, the younger Zanuck began making pictures with modest budgets, producing 20 movies in 14 months. Once revenues from these films began to accumulate, the company started more expensive productions.

Unlike other movie makers, the Zanucks continued to produce big, expensive extravaganzas. Forgetting the failure of Cleopatra, the two men planned to release as many big pictures in as short a time as they could, hoping for a hit to keep the company solvent. This “blockbuster” strategy was one most other studios had abandoned because of the risk involved.

But the release of The Sound of Music in 1964 appeared to vindicate the Zanucks’ strategy. The film became one of the top ten box office hits ever, bringing Twentieth Century Fox more than $79 million in revenues. Only a year and a half after its release, the movie had already outgrossed Gone With the Wind, the box office champion for nearly 27 years.

By the mid-1960s, Twentieth Century Fox had also grown into one of the largest TV producers. During the 1966-1967 season, Twentieth Century Fox Television placed 12 shows on network TV. The firm also began to distribute its feature films to television. In one of the largest deals of the time, Fox leased 17 pictures to ABC for $19 million, including Cleopatra, The Longest Day, The Agony and the Ecstasy, and Those Magnificent Men in Their Flying Machines.

With revenues garnered from television and The Sound of Music, the Zanucks went on to produce lavish, big-budget movies like Hello, Dolly!, Dr. Dolittle, and Tora! Tora! Tora! The success of The Sound of Music and less expensive hits like M*A*S*H and Patton fueled the Zanucks’ belief that expensive spectaculars were the best way to make money in the industry. In 1969 Darryl Zanuck appointed his son president of Twentieth Century Fox while he remained CEO.

Dr. Dolittle and Tora! Tora! Tora! were two of the biggest box office losers in the history of Hollywood; in 1969 Twentieth Century Fox’s operating losses amounted to $36 million, and for the first nine months of the following year they came to nearly $21 million.

Following a proxy fight in 1970, in which Richard Zanuck and his mother opposed Darryl Zanuck, Richard was forced to resign. The Zanucks had quarreled over responsibility for the studio’s financial difficulties and over some creative matters. Richard was supported by such prominent shareholders as Broadway director David Merrick. Four months later, Darryl Zanuck himself stepped down as chairman. William T. Gossett, an active boardmember and Detroit lawyer, became chairman. Richard Zanuck went on to produce several blockbuster movies, including Jaws and The Sting, for MCA’s Universal Studios.

In 1971 Dennis C. Stanfill, a Twentieth Century Fox vice president and a former Rhodes scholar, was named chairman and CEO, and later assumed the position of president. With a hands-on approach, Stanfill began a wide-ranging diversification program into the record business, broadcasting, film processing, and theme parks. Twentieth Century Fox’s most important acquisitions during this time included a string of theaters in Australia and New Zealand, along with the addition of one NBC and two ABC affiliates to its chain of television stations across the United States.

In 1973 Stanfill hired Alan Ladd Jr. to head the company’s film division. Under Ladd’s direction, Twentieth Century Fox produced a number of very successful movies, including The Poseidon Adventure, Young Frankenstein, and The Towering Inferno, a joint release with Warner. Ladd also invested $10 million to produce a script that other large studios had turned down. In 1977 Star Wars became the biggest box office hit in film history and made over $200 million by the end of its first year. During the next five years, company profits quadrupled and its movies were nominated for 33 Academy Awards.

With the money from Star Wars, Stanfill accelerated his diversification program, buying Coca-Cola Bottling Midwest for $27 million; Aspen Skiing, the largest ski-resort operator in the United States, for $48 million; and Pebble Beach Corporation, the owner of a resort on the Monterey Peninsula in California, for $72 million. These acquisitions were meant to allow the company to reduce its reliance on film revenues.

Because of differences with Stanfill, Ladd left Twentieth Century Fox in 1979. In January, 1980 Sherry Lansing was hired to replace him, becoming the first female to head the production office of a major motion picture studio. She had previously supervised the production of both The China Syndrome and Kramer vs. Kramer at Columbia Pictures. Two weeks before her appointment, Darryl Zanuck died in Palm Springs, California.

The release of movies like Norma Rae, Breaking Away, Alien, and The Empire Strikes Back made money for the company. But these hits were offset by losers like The Rose and / Ought To Be in Pictures. In 1980 operating income dropped 10% and entertainment profits (which accounted for 56% of operating income) declined by 18%. In late 1980, when outside groups began to purchase large amounts of company stock, Stanfill initiated a management-led leveraged buyout to prevent a hostile takeover attempt.

In early 1981 Stanfill’s plan collapsed. In a move that took the film industry by surprise, oil magnate Marvin Davis and silent partner Marc Rich hastily formed a company called TCF Holdings, Inc., which bid $722 million for Twentieth Century Fox. Borrowing heavily, Davis put up only $55 million of his own money. The purchase was completed in June of the same year. Complaining of interference, Stanfill retired in July, and sued Twentieth Century Fox for breach of contract. The $22 million suit was settled for $4 million. Vice chairman Alan Hirschfield replaced Stanfill as chairman.

In the early 1980s Twentieth Century Fox’s financial position deteriorated rapidly. Several movies, including Modern Problems, Six Pack, and Quest for Fire, never recouped their production costs. Davis burdened the company with $650 million in debt to help pay back the loans TCI had secured to buy Twentieth Century Fox. To reduce this debt, Davis sold the soft drink-bottling subsidiary and the Australian theater chain. He also arranged a joint venture with Aetna Life & Casualty to develop Twentieth Century Fox’s real estate properties.

But in 1982, the situation went from bad to worse. Sherry Lansing and a number of other top-level officials left the company, reportedly due to Davis’s interference in the creative process and his abrupt management style. Disagreements between Davis and Hirschfield also began to increase in intensity. Moreover, Aetna terminated its interest in the joint venture and sued Davis after a deal between Davis and Aetna (and unrelated to Twentieth Century Fox) soured.

In October, 1984, Davis bought the other 50% of TCF from Marc Rich, who had fled to Switzerland following his indictment for tax evasion and fraud. Davis paid $116 million for Rich’s share of the company.

Also in late 1984 Davis hired Barry Diller from Paramount to replace Hirschfield as chairman, guaranteeing him $3 million salary and a 25% interest in the company. Diller’s expertise quickly began to turn the company around, despite the trouble the company was in (it was so bad, in fact, that Diller threatened to sue Davis, claiming that he misrepresented the studio’s difficulties to him when he was hired). Nonetheless, Diller mounted a program to increase film production and sought financing from a variety of different sources. Then, in March, 1985, Australian media mogul Rupert Murdoch advanced Twentieth Century Fox $88 million after buying a half interest in the company for $132 million.

Murdoch assumed an active role at the company from the beginning. He acquired seven television stations from Metromedia, Inc. for $2 billion with the intention of drawing on Twentieth Century Fox’s movie library and TV shows. When Davis expressed concerns about the company’s film operation being tied too closely to a television network, Murdoch offered to buy him out. And so, in September 1985, Davis agreed to sell his interest for $325 million, keeping some of Twentieth Century Fox’s valuable real estate.

Murdoch and Diller turned Twentieth Century Fox around. In late 1987 Diller oversaw the release of two big hits— Broadcast News and Wall Street—and his involvement with the studio has lured back top talent which had defected elsewhere during the Davis years. A continuing string of successful films like Big and Working Girl have boosted the company’s earnings by 35%. Now that Twentieth Century Fox, under Diller’s keen eye, has begun to turn a profit again, it appears that the company is back on track and ready for the future.

Principal Subsidiaries

Amcoho Co. (50%); Aspen Skiing Co. (50%); National Wiz. Co. (60%); Studio Properties Co. (50%); Pebble Beach Co. (50%); CinemaScope Products, Inc.; Twentieth Century-Fox Theatre Productions, Inc.; Twentieth Century-Fox Video Inc. (50%); Twentieth Century-Fox Film (East) Ltd. (Singapore); Twentieth Century-Fox Film (S.A.) (Pty.) Ltd. (South Africa); Hispano Fox Films S.A.E. (Spain); Aktiebolaget Fox Film (Sweden); Twentieth Century-Fox Film Corp. S.d. ’E.P. la S. (Switzerland); Twentieth Century-Fox Film del Uruguay, Ltd.; Twentieth Century-Fox Trinidad, Ltd.; Zambia Film Services Ltd.

Further Reading

Dunne, John Gregory. The Studio, New York, Straus & Giroux, 1969; Thomas, Tony, and Solomon, Aubrey. The Films of 20th Century-Fox: A Pictorial History, Secaucus, New Jersey, Citadel Press, 1985.