Columbia Pictures Entertainment, Inc.

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Columbia Pictures Entertainment, Inc.

711 Fifth Avenue
New York, New York 10022
U.S.A.
(212) 751-4400

Wholly owned subsidiary of Sony USA Inc.
Incorporated: 1924 as Columbia Pictures Corporation
Employees: 7,095
Sales: $453.4 million

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 nations new favorite pastime. Hollywoods 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 Hollywoods 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 industrys toughest businessmen. He ran Columbias 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 companys 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. Hollywood consisted of 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 Columbias most valuable asset in the years to come, and met with both critical acclaim and financial success.

The Depression had different effects on different studios. Columbia, which did not have the theater holdings the Big Five had, therefore didnt feel the impact of empty theater seats in the early 1930s. And when theater attendance picked up, Columbia found it had one very special assetFrank Capra.

Capras view of the world seemed to strike a nerve 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 Cant Take it With You, and Mr. Smith Goes to Washington firmly established Capra and Columbia Pictures within the Hollywood establishment.

Throughout the late 1930s and the 1940s, Columbia made many B movieslower budget films that often played as the supporting feature at a theater. About 70% of Columbias 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 screwball comedy became Columbias 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 bigness of the theater, were undertaken with limited success. A number of big hits in the 1950s, including From Here to Eternity, The Caine Mutiny, and On the Waterfront, helped Columbia survive.

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 Cohns methods. Yet even his enemies acknowledged Cohns 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 in the early 1960s, struggled to turn a profit. 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 broadcastin 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 Columbias 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% 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 Columbias 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 Clairmonts efforts to oust Schneider.

Columbia had a string of successes in the late 1960s including Oliver!; Guess Whos 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 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 apparently 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 Hirschfields desire to merge with the toy manufacturer Mattel, a move which would have diluted the equity of Columbias 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 frowned on the move because Kerkorian owned a controlling interest in MGM and his acquisition of Columbia would violate antitrust statutes.

But 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 Cokes volume discounts on advertising could provide.

Also in 1982 Columbia joined CBS and Home Box Office to launch a new motion picture studio called Tri-Star Pictures. For five years the fledgling studio pumped out hits and expanded its holdings. Tri-Star 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% of Tri-Star 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 Columbias performance. The studio had changed leadership four times since Coca-Cola purchased it, and hadnt 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 Hollywoods well-established star system. As a well-intentioned outsider, Puttnams 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 Tri-Star to form Columbia Pictures Entertainment, Inc. Tri-Stars Victor Kaufman became president and CEO of the new company. Also in 1987, Dawn Steel was brought in from Paramount to replace Puttnam. Steel lured back Hollywoods top talent, but the studio struggled to find a hit. In 1988, Columbias share of domestic box office receipts fell to a dismal 3.5%. In spite of the Columbia Pictures Television and Merv Griffin Enterprises TV subsidiaries relatively solid showing, Columbia registered a $104 million loss for 1988.

In 1989, Columbia released the highly successful When Harry Met Sally.... Prospects looked better, but the company still struggled to find the cash flow to finance more productions.

Also in late 1989 Columbia entered into an agreement with Sony USA, Inc., a subsidiary of Japans Sony Corporation, for the purchase of all Columbias outstanding stock. With the completion of that transaction in November, 1989, Columbia joined the ranks of media and entertainment companies throughout the world that have combined to create huge enterprises. Under the leadership of newly appointed co-chairmen Peter Guber and Jon Peters, Columbia will face the challenges of the global media market of the 1990s on firm footing.

Principal Subsidiaries

Columbia Pictures; Tri-Star Pictures; Triumph Releasing Corporation; Columbia Pictures Television; Merv Griffin Enterprises; Loews Theater Management Corp.

Further Reading

Stanley, Robert. The Celluloid Empire: A History of the American Movie Industry, New York, Hastings House, 1978; McClintick, David. Indecent Exposure, New York, William Morrow, 1982.

NEARBY TERMS

Columbia Pictures Entertainment, Inc.