Early years

The company was founded through the partnership of two film investors, Mario Kassar and Andrew Vajna.^[1] The two were hailed by Newsweek as some of the most successful independent producers.^[3] By the age of 25, Vajna went from wig-maker to the owner of two Hong Kong theaters. Then, Vajna ventured into the production and distribution of feature films. One of Vajna's early productions was a 1973 martial-arts film entitled The Deadly China Doll which made $3.7 million worldwide from a $100,000 budget.^[4]

Their goal was to focus on film sales, with their first venture being The Sicilian Cross; eventually it went into financing low-budget films.^[5] Their earliest films were produced by American International Pictures and ITC Entertainment with Carolco's financial support, and co-produced with Canadian theater magnate Garth Drabinsky.^[6] The name "Carolco" was purchased from a defunct company based in Panama, and according to Kassar, "it has no meaning."^[7]

Rise

Carolco's first major success was First Blood (1982), an adaptation of David Morrell's novel of the same name. Kassar and Vajna took a great risk buying the film rights to the novel (for $385,000) and used the help of European bank loans to cast Sylvester Stallone as the lead character, Vietnam War veteran John Rambo, after having worked with him on the John Huston film Escape to Victory (1981). The risk paid off after First Blood made $120 million worldwide, and placed Carolco among the major players in Hollywood.^[8]

On May 15, 1984, Carolco Pictures entered into a long-term agreement with then-up-and-coming film distributor and fledging studio Tri-Star Pictures, with Tri-Star distributing Carolco's films in North America; HBO (a partner in the Tri-Star venture) handled pay cable TV rights, and Thorn EMI Video (later, HBO/Cannon Video) handled North American home video distribution rights. The first film under the agreement was Rambo: First Blood Part II.^[9] TriStar released the majority of Carolco's films from that point on in the U.S. and some other countries until 1994.

The sequel Rambo: First Blood Part II (1985), was timed for the 10th anniversary of the United States' exit from the Vietnam War; that event garnered publicity for the new film, which also became a hit.^[8] Tri-Star and Carolco would eventually renew their partnership in 1986, which called for Tri-Star to distribute upcoming Carolco product, including Rambo III, in a new multi-feature agreement.^[10]

The release of the two Rambo films were so instrumental to Carolco's financial success that the studio focused more on big-budget action films, with major stars such as Stallone (who later signed a ten-picture deal with the studio) and Arnold Schwarzenegger attached. These films, aimed at appealing to a worldwide audience, were financed using a strategy known as "pre-sales", in which domestic and foreign distributors invested in these marketable films in exchange for local releasing rights.^[11]

Carolco entered home video distribution as well. Independent video distributor International Video Entertainment (IVE) was going through financial difficulties and was near bankruptcy. In 1986, Carolco purchased IVE in the hopes of "turning the company around." The deal was finalized a year later.^[12] This resulted in Carolco paying $43 million to HBO/Cannon Video (successor to Thorn-EMI Video) in exchange for the video rights to two of Carolco's upcoming releases, Angel Heart and Extreme Prejudice, allowing Carolco to relicense the pictures to IVE.^[13] IVE merged with another distributor, Lieberman, and became LIVE Entertainment in 1988.^[14]

Fueled by the success of Rambo and their other offerings, Carolco expanded into various other business sectors over the next few years. This included video retail holdings, licensing of their IP, an international division (which included deals with John Carpenter and Alive Films, as well as Canada's Alliance Entertainment Corporation), and television production and distribution via the buyout of independent syndicator Orbis Communications.^{[15][16][17][18][19][20]}

Carolco also attempted to buy troubled film distributor Orion Pictures and home video distributor Media Home Entertainment, but these deals failed.^[21][22] They also purchased the former De Laurentiis Entertainment Group production facility in Wilmington, North Carolina.^[23]

Vajna sold his share of Carolco in December 1989 for $106 million to Kassar due to increasing disagreement with Kassar over the direction of the company.^[24][4] That November, Vajna formed Cinergi Pictures, with The Walt Disney Company as a distribution partner. Kassar's ownership of the company increased to 62%.^[24]

1990–1994

In 1990, Pioneer Electric Corporation of Japan acquired a share in Carolco.^[25]

Carolco acquired the rights to make a sequel to The Terminator from Hemdale Film Corporation in 1990 (the company already had the television rights to the original film courtesy of a television distribution deal with Hemdale). The company re-hired Terminator director James Cameron (who had worked as a screenwriter on Rambo II) and Arnold Schwarzenegger to star in a multi-million-dollar budgeted sequel, Terminator 2: Judgment Day (1991). It was the highest-grossing film of the year and the most successful film in Carolco's history.^[26] Halfway through the year, Carolco entered into a joint venture with New Line Cinema to start Seven Arts, a distribution company which primarily released much of Carolco's low-budget output.^[27] In 1991, syndicator Orbis Communications was renamed to Carolco Television, to better emphasize the Carolco connection.^[28] Also around this time, Carolco Home Video was established, with LIVE Entertainment as output partner.

Carolco struggled for some years to secure the rights to Spider-Man, a property that Cameron was keen to produce as a film. Plans fell through, though Columbia Pictures would eventually produce several Spider-Man films. Toward the end of shooting True Lies, Variety carried the announcement that Carolco had received a completed screenplay from Cameron.^[29] This script bore the names of Cameron, John Brancato, Ted Newsom, Barry [sic] Cohen and "Joseph Goldmari", a typographical scrambling of Menahem Golan's pen name, "Joseph Goldman", with Marvel executive Joseph Calimari.^[30] (Golan had previously, and unsuccessfully, tried to produce a Spider-Man film for his own studio, Cannon Films.) The script's text was identical to what Golan had submitted to Columbia the previous year, with the addition of a new 1993 date. Cameron stalwart Arnold Schwarzenegger was frequently linked to the project as the director's choice for Doctor Octopus.^[31][32] As late as 1995, Internet industry sources such as Baseline Hollywood still listed both Neil Ruttenberg (author of one of the 1990 "Doc Ock" variations submitted to Columbia) and Cameron as co-writers.^[33]

Carolco also attempted to make Bartholomew vs. Neff, a comedy film that was to have been written and directed by John Hughes and would have starred Sylvester Stallone and John Candy.^[34]

Decline and collapse

Though Carolco made several successful films through the 1990s, including Total Recall, Terminator 2: Judgment Day, and Basic Instinct, the studio was gradually losing money as the years went on. Carolco mixed blockbusters with small-budget arthouse films which were not profitable. In addition, the studio was criticized for overspending on films through reliance on star power and far-fetched deals (Schwarzenegger received a then-unheard-of $10–14 million for his work on Total Recall and Terminator 2: Judgment Day; Stallone also had similar treatment). Losses of partnerships also threatened the studio's stability and drove it towards bankruptcy.^[35]

In 1992, Carolco went under a corporate restructuring, invested in by a partnership of Rizzoli-Corriere della Sera of Italy, Le Studio Canal+ of France, Pioneer, and Metro-Goldwyn-Mayer (MGM). Each partner helped infuse up to $60 million into the studio's stock and another $50 million for co-financing deals.^[4] MGM also agreed to distribute Carolco products domestically after a previous deal with TriStar expired.^[36] In 1993, Carolco was forced to sell its shares in LIVE Entertainment to a group of investors led by Pioneer; it was later renamed Artisan Entertainment, which was bought by Lions Gate Entertainment.^[37]

Cutbacks at Carolco also forced the studio to make a deal with TriStar over the funding of the Stallone action film Cliffhanger: Carolco would have to sell full distribution rights in North America, Mexico, Australia, New Zealand, Germany, and France to TriStar in exchange for half of the film's budget.^[38] Although a major box-office success, Carolco saw little revenue from Cliffhanger since it ended up becoming a minority owner in the film.^[39] Before plans to produce their own Spider-Man film with James Cameron fell through, the studio filed a lawsuit against Columbia Pictures and Viacom in an attempt to gain the home video and television rights to Spider-Man, but the suit backfired when Columbia and Viacom counter-sued Carolco, and the studio also became sued by MGM.^[40][41] Since court did not rule in their favor, these lawsuits caused Carolco to lose an additional amount of money, along with the film rights to Spider-Man.^[41] Carolco's attempt to make more of its specialties proved to be more strenuous: the studio had to shelve Crusade, an upcoming Schwarzenegger vehicle based on a script by Walon Green and with Paul Verhoeven attached as director, in 1994 when the budget exceeded $100 million.^[38] However, Carolco was able to complete a merger with The Vista Organization in late October 1993.^[42]

Carolco attempted a comeback with the big-budget swashbuckler Cutthroat Island, with Michael Douglas in the lead. Douglas dropped out early in its production and was replaced by the less-bankable Matthew Modine. Geena Davis, cast as the female lead through her ties with then-husband, the director Renny Harlin, was already an established A-lister but was coming off a string of flops. MGM hoped to advertise Cutthroat Island based on spectacle rather than cast. In an attempt to raise more financing for the projected $90–100 million film, Carolco sold off the rights to several films in production, including Last of the Dogmen, Stargate and Showgirls.^{[43][44][45][46][47]} In October 1994, Carolco ran out of funds and Pioneer invested another $8 million.^[25] In April 1995, Carolco announced that it was unable to make interest payments on $55 million of debt.^[48] In November 1995, Carolco filed for Chapter 11 bankruptcy protection. Cutthroat Island was released that Christmas and became a box-office disaster.^[49] Carolco agreed to sell its assets to 20th Century Fox for $50 million.^[50] But when Canal+ made a $58 million bid for the library in January 1996, Fox, which by then lowered their purchase price to $47.5 million, dropped their deal.^[51]

A new partnership was formed between Carolco's owner (Mario Kassar) and Cinergi's owner (Andrew G. Vajna) in 1998. The duo formed C2 Pictures and produced Terminator 3: Rise of the Machines and Basic Instinct 2, among other films.

2015–2017: Resurrection of Carolco brand

Film producer Alexander Bafer purchased the Carolco name and logo years later. On January 20, 2015, Bafer renamed his production company Carolco Pictures, formerly known as Brick Top Productions. Bafer then recruited Mario Kassar as the chief development executive of the new Carolco.^[52][53] However, on April 7, 2016, it was announced that both Bafer and Kassar had left the company, Kassar taking with him one of Carolco's planned projects, a remake of the 1999 Japanese horror film Audition which he was producing. Investor Tarek Kirschen was then inducted as Carolco's CEO.^[54] In 2017, StudioCanal and Carolco reached an agreement whereby StudioCanal would have sole control of the Carolco name and logo and the Carolco Pictures company would be renamed Recall Studios. That agreement settled a legal dispute over the Carolco mark brought by StudioCanal.^[55][56] The arrangement took effect on November 29 of that year.

1970s

1980s

1990s

Seven Arts Pictures