Buzz
Making movies is a high-stakes venture, and it's not unusual for studios to risk large sums of money on a single film. However, many movies don't perform as expected, often leading to major financial losses for the studios.
Take 2017’s Justice League, for instance. It grossed $657.9 million globally, but Warner Bros. still suffered a financial blow because the break-even target was set at $750 million.
Luckily, Warner Bros. managed to recover from the $60 million deficit, but many other studios in Hollywood history haven't been as fortunate. Some were forced to liquidate assets, while others shut down completely.
The figures in parentheses have been adjusted for inflation to 2020 levels.
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.
9. The Golden Compass (2007)
New Line Cinema was no stranger to taking risks with films, having previously wagered everything on Peter Jackson’s The Lord of the Rings trilogy. That risk paid off, and soon after, the studio was ready to throw caution to the wind with another ambitious project.
The next major endeavor was the adaptation of Philip Pullman’s His Dark Materials series, starting with The Golden Compass. New Line bet $180 million ($225.9 million) on the film, which was planned as the first installment of a trilogy.
This was a huge investment, considering the studio had spent only $200 million on the entire Lord of the Rings trilogy, but The Golden Compass was expected to outdo its predecessor in scope and success. Sadly, it failed to live up to those expectations, flopping at the box office.
The Golden Compass earned $372 million ($466.9 million), but that fell far short of the studio’s break-even target. Within a year, New Line had to undergo restructuring, sell off its foreign rights, and was eventually acquired by Warner Bros. Studios.
The studio continues to operate as an independent media entity separate from Warner Bros., though its films are now owned by WB, which also manages distribution under the New Line Cinema brand.
8. Heaven’s Gate (1980)
United Artists was once a prestigious studio known for producing iconic films such as Raging Bull, Annie Hall, and Apocalypse Now. The company was founded by the legendary Charlie Chaplin, giving it a rich legacy.
After the success of The Deer Hunter in 1978, director Michael Cimino set out to create Heaven’s Gate. The film, featuring talents like John Hurt, Jeff Bridges, and Christopher Walken, became infamous for its box office failure upon its 1980 release.
Initially regarded as one of the worst films ever made, Heaven’s Gate has since gained critical respect. However, this critical shift didn’t translate into financial success. United Artists spent $44 million ($138.9 million) producing it, yet it only grossed $ million ($11 million) at the box office.
United Artists was unable to recover its financial losses and ultimately declared bankruptcy. In 1981, Metro-Goldwyn-Mayer acquired the remains of the studio for $350 million ($1 billion). The revival of UA’s television division occurred through a media merger in 2014, but by the following year, it was absorbed into MGM. On the occasion of the studios’ 100th anniversary, MGM brought the brand back to life as United Artists Releasing.
7. Raise the Titanic (1980)
Raise the Titanic, based on the 1976 novel of the same name, was an ambitious endeavor. Released in 1980, long before James Cameron’s billion-dollar Titanic film, it was a risky venture for ITC Entertainment.
The film had an enormous budget for its time, with production costs reaching $40 million ($126 million). This put the studio in a difficult position, as it was a high-stakes gamble, and unfortunately, it failed. Raise the Titanic flopped at the box office, earning just $7 million ($22 million) of its budget back.
The financial setbacks proved too great for the production company to overcome, and the film’s failure led to the sale of its film division, Associated Film Distribution, to Universal Pictures.
Following the complete failure of Raise the Titanic, the film’s producer, Lord Grade, retired from the film industry. He famously remarked, "it would have been cheaper to lower the Atlantic."
ITC’s remaining assets shifted focus to television, but due to ongoing financial struggles and other issues, the company eventually shut down, becoming defunct in 1998.
6. Titan: A.E. (2000)
In the 1990s, several studios sought to launch new animation divisions, with 20th Century Fox being one of the key players. In 1994, the studio established Fox Animation Studios to enter the animated film market and recruited veteran animators Don Bluth and Gary Goldman to lead the effort.
The studio's inaugural film, Anastasia, was a success. The modest profits from the project encouraged Bluth to create the second film under the Fox Animation banner, Titan A.E. Co-written by Joss Whedon, the film received a $30 million ($45 million) budget for its pre-production.
The budget for Titan A.E. was increased by an additional $55 million ($83 million), but when the movie was released in theaters, it was a colossal failure. The film, which cost $85 million to make, earned a mere $9.4 million ($14 million) at the box office.
After all expenses were settled and Fox took stock of its losses, the studio faced a total loss of $100 million ($181 million) from Titan A.E. Just ten days after the film's release, Fox Animation Studios was shut down and eventually replaced by Blue Sky Studios.
5. Cleopatra (1963)
When 20th Century Fox approved the production of Cleopatra, it allocated a record-breaking $44 million ($374 million) for the film, making it the most expensive movie ever at that time. This substantial budget was put to use by the crew and costume department to build massive sets and create lavish costumes.
The production of Cleopatra was plagued with issues, causing its initial $30 million budget to grow by an additional $14 million. There were changes in both the director and cast, and the film's locations were switched twice, which resulted in costly set reconstructions.
The production of Cleopatra was surrounded by a scandal involving Elizabeth Taylor and Richard Burton, adding to its notoriety. Although the film became the highest-grossing movie of 1963, its earnings of $57.7 million ($490 million) were minuscule compared to its hefty production and marketing costs.
20th Century Fox came dangerously close to bankruptcy, but managed to survive. To recover, it had to halt all production and sell 300 acres of its lot. The careers of multiple Fox executives were ruined, and the studio nearly shut down. Though it survived, the aftermath of Cleopatra left a deep impact.
4. The Right Stuff (1983)
The Ladd Company, founded by Alan Ladd, Jr., who is famously known for greenlighting Star Wars at 20th Century Fox, was established with the goal of pursuing bold, ambitious projects. This vision materialized in films like The Right Stuff and Twice Upon a Time.
The Right Stuff is a critically acclaimed portrayal of the early days of the American space program. Despite its success with critics, the film failed to attract a large audience at the box office, leading to a financial loss for the company. At the same time, The Ladd Company also released another daring project, Twice Upon a Time.
Twice Upon a Time was an animated feature with George Lucas serving as executive producer. Much like The Right Stuff, it came with a hefty price tag but returned very little in terms of earnings. Both films were released to a limited audience due to the studio’s financial struggles and neither managed to rescue it from its financial troubles.
The Right Stuff and Twice Upon a Time marked the end of The Ladd Company’s existence. The studio effectively closed down in 1985 when Alan Ladd, Jr. took over United Artists. However, its legacy was briefly revived in 1995 in partnership with Paramount for the production of Braveheart, and it also co-produced The Phantom and A Very Brady Sequel.
3. It’s a Wonderful Life (1946)
Today, It’s a Wonderful Life is regarded as one of the greatest films of all time and is a holiday favorite, frequently aired leading up to Christmas. However, when it was first released in 1946, it was considered a colossal failure.
Frank Capra’s iconic film wasn’t a cheap production, costing Liberty Films around $3.2 million ($42.7 million) to make. This was a significant sum for a film that had few special effects, and it was a heavy burden for the studio at the time.
The film’s break-even point was $6.3 million ($84 million), yet it only barely managed to make back its budget at the box office. Despite being considered an American classic, it was a financial failure, and the losses led to the collapse of Liberty Films, the studio founded by Frank Capra and Samuel K. Briskin just a year before the film’s release.
Liberty Films was established primarily to produce It’s a Wonderful Life, but by 1947, the studio had to sell off its assets, including the rights to It’s a Wonderful Life and State of the Union, to Paramount Pictures.
2. Battlefield Earth (2000)
Battlefield Earth was a passion project for John Travolta, based on L. Ron Hubbard’s book of the same name. Travolta even invested $5 million ($7.5 million) of his own money into the film. The movie quickly gained infamy for being one of the worst ever made, widely criticized for poor acting, an absurd storyline, and numerous other flaws.
The film was a disaster. Despite its $73 million ($110 million) budget, it only earned just under $30 million ($45 million) at the box office. However, the financial issues were compounded for Franchise Pictures, as the studio faced legal troubles over accusations of inflating the movie’s budget by $31 million ($46.8 million).
As a result, German distributor Intertainment filed a lawsuit and ultimately won the case. Intertainment was able to prove that Franchise Pictures had essentially pocketed the inflated amount due to their prior agreement to cover the majority of the film’s costs.
The court ordered Franchise Pictures to pay $77 million ($116 million), which led to the company’s bankruptcy. While the film’s poor quality would have already sealed the studio’s fate, the lawsuit made sure the studio would fail, no matter what.
1. One From the Heart (1982)
In the early 1980s, Francis Ford Coppola took a risk by co-writing and directing a musical called One From the Heart. The film was an ambitious venture, and its budget ballooned from $8 million ($21.5 million) to $26 million ($70 million) over the course of production, which was a staggering amount for a musical in 1982.
Calling the movie a box office failure doesn't even begin to describe how poorly it performed. According to Box Office Mojo, One From the Heart earned just $636,796 ($1.7 million) globally. This was its total worldwide revenue, and it was only released in 41 theaters over 46 weeks.
In order to bring the movie to life, Coppola decided to personally purchase the rights after MGM's budget fell short. He took matters into his own hands, producing the film through his company, Zoetrope Studios, and secured funds with a pre-sale loan from Chase Manhattan Bank.
Paramount pulled the movie from distribution, plunging Coppola into a financial crisis. He was forced to file for Chapter 11 bankruptcy due to a personal debt of $71 million ($191.5 million). The film’s aftermath haunted him for a decade, leading to significant financial strain, though he ultimately managed to salvage Zoetrope, albeit at a heavy personal cost.
