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Orion came into existence in February 1978 when five top executives left United Artists after disagreeing with the executives of Transamerica, the corporate parent of UA, and formed a new company.7 The departure of Arthur Krim, Robert Benjamin, Eric Pleskow, Morris 'Mike' Medavoy and William Bernstein sent shockwaves through Hollywood mainly because of the fact that Krim and Benjamin had been running UA for twenty-seven years but also because of its unprecedented nature. As in UA, Krim became the chairman of the newly founded company with Benjamin acting as co-chairman and Pleskow as president and chief executive officer, whereas Bernstein and Medavoy assumed the positions of executive vice-president of business affairs and of worldwide production respectively.

The industrial reputation of the Orion executives brought in willing investors immediately after the company's formation. Warner Bros quickly established a distribution deal with Orion and helped them raise $90 million in financing.8 The deal saw Orion becoming Warner's first satellite film production company in the same way that Warner's music division had a number of satellite labels (Warner/Reprise, Atlantic, Elektra and Asylum) under its orbit, labels which were autonomous in terms of management and creative decisions, but which had to use Warner's distribution apparatus to put their product in the market. This type of arrangement specified that Warner and Orion were equal partners in a new company called Orion Ventures Inc. Orion would have complete autonomy and control over the 'number and type of films' made and Warner would 'market and distribute the films' even though according to the contract, Orion would be also granted 'the broadest autonomy and control over distribution and advertising.'9

Although the model of Orion Ventures Inc. with its substantial financing and its seemingly favourable terms gave the five executives an excellent opportunity to re-enter the film business at a time when the average negative cost for a film was still relatively low, it nevertheless proved to be problematic for both partners. Questions of authority and control over Orion's projects were raised even within the first six months of the part-nership.10 Marketing and distribution, in particular, became a moot point in the two companies' conduct of business as Warner had the ultimate say in such matters, despite the above-cited contract clause. Thus Orion-produced films with some box office potential such as A Little Romance (G. R. Hill, 1979), a love story that featured Laurence Olivier and, especially, The Great Santini, a gritty drama with Robert Duvall, which was released on three different occasions with modified marketing campaigns, did not manage to find an audience partly because of the way they were handled upon their release by the major.

Furthermore, Warner's foreign distribution offices were empowered to veto the release of Orion's films, if they thought that they would not perform well in specific markets, which could deprive Orion of potential profits.11 Finally, and perhaps more importantly, Orion was not in a position to deliver Warner the stratospheric profits that the expensive, effects-laden, action/adventure-oriented films were bringing to the other majors. With Orion's line of credit set at $90 million, it was obvious that the company could not afford to make such films. As a matter of fact, Orion had to pass on Raiders of the Lost Ark (Spielberg, 1981) due to its high cost and the principal players' demands from the film's gross. As Medavoy put it:

the deal was too one-sided, which was the reason why we passed.. . But basically Lucas, in effect, really was the co-financier, and that becomes the tail that wagged the dog. But at the same time, in effect, really talent is going around saying, 'Hey, we're worth so much and we're willing to throw in our talent in exchange for control and rights.'12

Coupled with Warner's charging Orion a distribution fee which extended from 30 per cent for domestic releases to 40 per cent for worldwide ones, the risks in producing an event film were much higher for Orion in the case of box office flops, as Warner would be the first party to collect money from the film's gross in the form of a distribution fee. In other words, Orion was not in a position to follow the signs of the time in the American film industry, signs that were overwhelmingly pointing towards the direction of blockbuster/high-concept films.

Between 1978 and 1982 Orion produced twenty-three films for Warner. From these only two were hits, 10 (Edwards, 1981) and Arthur (Gordon, 1981), both vehicles for Dudley Moore with rentals of $37 and $42 million respectively,13 six were moderate successes, while fifteen films lost money at the US box office.14 With the above results hardly demonstrating a highflying start for Orion or substantial profits for Warner, both partners in the venture felt that the arrangement was not working out. In fact, shortly after Orion had passed on Raiders of the Lost Ark, Krim had sent a memo to his partners where he explained that the risks in the filmmaking business had become considerably higher for companies that were not in the distribution business, so much so that if a film company did not possess an extensive library of titles, it could not then aspire to remain competitive in the long run.15 Krim's memo essentially mapped Orion's aspirations to become a producer-distributor that would have the power to exploit its films in various ancillary markets, the way the majors had evolved. In other words, Krim wanted to turn Orion into a mini-major.

The company decided into venture into the distribution business before its contract with Warner expired. As its first priority Orion set out to acquire a film library from an existing independent company. After briefly entertaining the possibility of taking over Embassy Pictures (which by that time had shifted its attention to television production) and Allied Artists (which was deemed too small for Orion's plans) Orion targeted Filmways. Despite a few hits in the early 1980s such as The Amityville Horror (Rosenberg, 1980) and Love at First Bite (Dragoti, 1980) Filmways had been experiencing severe financial difficulties to the extent that it could not afford the marketing costs for a number of completed films that awaited distribution, including Milos Forman's Ragtime and Brian De Palma's Blow Out.16 With its stock at a very attractive price, a partnership of companies fronted by Orion and including Home Box Office (HBO), a then recently formed cable broadcaster, bought out Filmways for $26 million.

Almost immediately the new owners started bringing Filmways around by selling the company's non-media-related subsidiaries. A few months later, on 30 July 1982, the name Orion officially replaced the name Filmways.17 In order to release the two films, especially the eagerly anticipated Ragtime, Orion established the first of a series of deals with HBO, which mainly revolved around the pre-selling of film rights to the cable channel and the subsequent use of the generated revenue to market and distribute the films theatrically.18 However, the most important element in the Filmways takeover was that Orion acquired its extensive library of approximately 950 titles. This meant that Orion could enter the distribution business in both theatrical and ancillary markets, especially at a time when VCRs had started taking the United States market by storm. In addition, Orion demonstrated an appetite for competing directly with the established powers in the arena of theatrical distribution by announcing plans to release at least one picture per month and in the words of Eric Pleskow, '. . . to be as voluminous a supplier of motion pictures to the world as any other company.'19

The New Orion Constellation

Orion entered the theatrical distribution business with one film per month for the second half of 1982: Midsummer Night's Sex Comedy (Woody Allen) in July; Summer Lovers (Kleiser) in August; First Blood (Kotcheff) in October and Split Image (Kotcheff) in November. First Blood, in particular, which starred Sylvester Stallone, became by far the most profitable film in that period, grossing more than $45 million at the US box office.20 Orion had bought the domestic rights from Carolco for $8 million, a substantial price for a company just entering the business, and invested heavily in the marketing of the film. With several millions of pure profit just from First Blood in its first year as a distributor, Orion was this time off to a flying start, even though it failed to secure sequel rights in what was destined to become a significant franchise in the 1980s.21

In 1983 Orion established a new division, Orion Classics, to handle art-house foreign films in the American market. The decision to create the Classics division saw Orion following a new trend in Hollywood, which marked the majors' attempt to control the specialised art-house film market (see Chapter 8). The formation of the Orion Classics became another platform for a second mass departure of executives from United Artists, which by that time did not bear any resemblance to the glorious major company of past decades. Tom Bernard, Donna Gigliotti and Michael Barker, the executive team in United Artist Classics, accepted the invitation to lead the new Orion division and, in a sense, continue the policies which had helped UA Classics dominate that niche market for the past four years. Besides the team's unquestionable savvy in the art-house market, the parent company hoped that they would also lure European talent to Orion at a time when the company enjoyed almost no previously established relations with Hollywood talent.

Distribution of the in-house Orion production slate started in early 1983. The first two films released were Lone Wolf McQuade with the then extremely popular Chuck Norris and the Richard Gere vehicle Breathless, a remake of Godard's A Bout se Souffle. Both films were moderate successes and the same can be said for Carlos Saura's Carmen, which became the first film to be released by the classics division. For the newly formed Orion moderate successes were still successes. As Medavoy stated in Variety: 'if every picture on [t]here broke even I'd be very happy', a surprising statement considering the essentially capitalist nature of the film business but, more importantly, a sign of the somewhat different path Orion was willing to follow.22

Orion's modest business philosophy opens up the debate on the position of the company within the Hollywood industrial landscape in the 1980s and whether a film company with such a mentality could be included in the club of the majors, even as the smallest of them, as Stephen

Prince has suggested.23 As we will see, Orion drifted between this modest approach articulated by its head of production in 1983 and a more piecemeal attempt to expand to the major league (especially after the success of its 1986-7 film output). The obvious lack of coherence in Orion's business strategies turned out to be a costly mistake as the company was left behind at a time when the established majors were in the process of achieving full vertical and horizontal integration and moving entirely into the business of making blockbusters in the 1990s.

Immediately after the modest success of its first titles, Orion revealed plans to compete directly with the major studios. For the period between July and December 1983, the company announced plans to release nine motion pictures, with another fourteen features scheduled for 1984. The lion's share of the 1984 production slate was in the last quarter of the year, when The Cotton Club (the new Francis Ford Coppola film), Amadeus (the new Milos Forman film) and The Terminator (a science fiction action/adventure film with Arnold Schwarzenegger) were to be released. Most of the films distributed between 1983 and 1984, however, failed at the box office (only Amadeus, The Terminator and Woman in Red returned profits). Despite this drawback, the company persisted with a record fifteen films for 1985 and yet again aimed to release them at a steady rate (approximately one film per month) in order to prove to exhibitors that it was a reliable supplier of product.

1985 proved to be a very successful year for the company. Films such as Terminator, Woman in Red, Code of Silence and Desperately Seeking Susan performed well at the US box office, whereas Back to School proved to be the biggest hit of all, approaching the $100 million mark.24 This success set the foundations for a record seventeen pictures scheduled for release in 1986, most of which were in-house productions. These seventeen films were to be wholly financed by Orion with funds accumulated through deals with HBO.25 According to Variety, only the 1985 deals with HBO brought Orion funds within the region of $50-75 million, bringing up the level of total revenue that the company generated from its partnership with HBO (since 1982) to in excess of $150 million.26

The Shining Star

The success of Orion's films in 1985 and the deals the company made with HBO convinced American banks that Orion was on its way to 'major

Figure 7.1 Back to School. The Rodney Dangerfield vehicle gave Orion Pictures an unexpected $100 million hit. Only the Oscar-winning Platoon, Dances with Wolves and The Silence of the Lambs proved financially more successful.

status' and for that reason they extended its credit line from $100 million to $200 million. With advances from the above deals and from a major pact with RCA/Columbia, which acquired the foreign home video rights to Orion's theatrical releases, the company accumulated enough capital to finance every major picture that went into production in the second half of 1985 and 1986 (for release in 1987) with an average cost of $7.5-8 million.27 In fact, the only dark moment in Orion's business trajectory at the time was the spectacular failure of The Cotton Club, which cost around $46 million and grossed only $25.9 million. However, despite the disappointing box office figures of Coppola's gangster-musical epic, Orion continued to record healthy profits.28

Towards the end of 1985 the Orion management struck more deals with foreign distributors for the rights of theatrical releases. In addition, and with an eye to ancillary markets, Orion negotiated deals with foreign cable television companies in several western European countries.29 Finally, in December 1985, Orion announced plans to form its own home video apparatus in order to increase its profits from that particularly lucrative ancillary market. Up to that point, the Orion titles had been distributed by independent video companies such as Vestron and Thorn EMI in the United States and by RCA/Columbia in the rest of the world. Since the deals for both the United States and abroad were due to expire at the end of 1987, Orion postponed the launch of its home video division (Orion Home Entertainment) for December 1987.30 Additionally, and in the fashion of a diversified company, Orion had also commanded a large share of the network television profits with the phenomenally successful series Cagney and Lacey, which since 1985 had also started an extremely lucrative career in syndication.

By the end of 1985, Orion seemed to be moving firmly in the same direction the majors had taken since the mid-late1970s, namely horizontal integration with several divisions of a company specialising in different entertainment areas. At the same time, however, Arthur Krim continued to ground the company's production output in the low to mid-budget region, while explicitly refusing to place Orion in the same league with the majors, which were solely in the blockbuster business. For the Orion chairman, the company's future would involve minimum risk investment and more co-financing deals to avoid big financial disasters.31 This incoherent approach to the filmmaking business exemplified Orion's history in the second half of the1980s and, as mentioned earlier, proved fatal for the long-term future of the company.

In the short term, however, Krim's philosophy seemed to pay off handsomely. 1986 was the year of Platoon (Stone), a $5.4 million, independently financed film about the Vietnam war that had previously been rejected by all major studios. Orion, which bought the film's rights from Hemdale, opened the film on a platform release (opening the film in a small number of screens and waiting for word-of-mouth to build up) and watched it do impressive business. It went on to gross $137 million at the US box office and become the highest money-earner in Orion's short history, while also winning four Oscars (including one for Best Picture) in 1987.

The success of Platoon convinced Orion that the market for low-to mid-budget films ($6-10 million) was still lucrative and that the company - in the absence of the majors - was in a position to control it. That market, however, is even less stable than the market for blockbusters, mainly because even blockbusters that have failed at the box office are still in a better position than mid-budget films to recoup part of their cost from the ancillary profit centres, especially those associated with merchandising.

If, on the other hand, a $10 million film failed to find an audience in its theatrical outing, it would be extremely difficult for the distributor to get even a small part of its investment back apart from distribution to cable, video and television and provided that the film's failure in its theatrical run has not completely predetermined its performance in those ancillary markets.

The extraordinary financial success of Platoon and of other solid hits such as Hannah and her Sisters (Woody Allen, 1986) pushed Orion for the first three months of 1987 to number one at the US box office.32 Orion was ready to continue its monthly releases with increasingly expensive films (Robocop [Verhoeven] and No Way Out (Donaldson]) scheduled for the summer months in direct competition with the summer blockbusters of the majors. With the classics division also securing record financial results from the distribution of art-house box office champions such as Jean De Florette (Berri, 1986), Orion retained its top position at the box office for the following three months of 1987.

Inevitably, the increased rentals brought about plans for further expansion. With the line-up of films for the following season looking strong (especially the comedy Throw Momma from the Train [De Vito, 1987]) and with the establishment of a home video subsidiary already arranged for the end of 1987, Orion's executives started exploring the possibility of entering the exhibition arena. After Reagan's laissez-faire policies reversed the Paramount Decree of 1948, the majors had started re-acquiring theatres, especially in large metropolitan areas. Even though theatre ownership by a production/distribution company in the 1980s did not automatically indicate the same benefits of the vertical integration of the studio era, it nevertheless meant tighter diversification and further control of all exhibition outlets.33 Although it is debatable whether a company without a corporate parent such as Orion had the financial muscle to expand aggressively in that area, the Orion executives, in theory at least, seemed to be willing to follow the majors' path and invest in theatre acquisition.

Orion's venture into exhibition did not materialise. In recent interviews, both Pleskow and Medavoy admitted that the company could never afford the purchase of theatre chains, while its plans for expansion to exhibition were just rhetoric aiming to demonstrate that Orion was not lagging far behind the majors.34 By the end of 1987, the company had slipped at the box office to fourth position. The rentals from its successful films such as Throw Momma from the Train were offset by the financial failures of films such as Best Seller and House of Games (Mamet, 1987), and the company's financial stability was further threatened when in March 1988 it revealed a long-term debt of 64 per cent of capitalisation.35 Most of the heavy debt had originated from the company's extensive borrowing for the establishment of the home video arm and the executives' belief that once they released films from the company's library for video exploitation, they would be able to record more profits. The ex-AIP library however did not exactly consist of major titles with box office potential.

More importantly, the differences between Orion and the established majors had started to show as Orion did not have a corporate parent to guarantee the flow of capital under difficult circumstances (such as a series of box office failures), and did not own production facilities or possess any real estate that it could use as collateral to raise funds. From that point on, Orion entered a period of decline which could not have been reversed despite record rentals from such successful films as Dances with Wolves (Costner, 1990) and The Silence of the Lambs (Demme, 1991).

The Fading Star

In order to secure the company's independence, Arthur Krim had convinced John Kluge, one of the richest businessmen in the United States, to become the largest shareholder in Orion and thus fend off any takeover suitors, if and when they ever appeared. When Viacom, a large cable television operator, which had diversified into all areas of entertainment, made such a move for Orion, Kluge went to extreme lengths to keep the company independent, eventually acquiring himself a controlling interest as large as 72 per cent.36 This meant that Kluge had made a large investment in Orion and, not surprisingly, expected to see good financial results. If the returns from the late 1987 line-up were disappointing, the 1988 slate looked more promising with star-studded films such as Ron Shelton's Bull Durham (Kevin Costner, Susan Sarandon) and Alan Parker's Oscar-targeted Mississipi Burning (Gene Hackman, Willem Dafoe). Along with the Classics' release of the art-house smash Camille Claudel (Nuytten) with Izabel Adjani and Gerard Depardieu, Orion sought to repeat its 1986-7 triumph.

However, things did not work out this time. Although Bull Durham, Mississipi Burning and other hits such as Dirty Rotten Scoundrels (Oz, 1988) and Colors (Hopper) returned rentals of approximately $20 million each, the company was not able to recoup its investment as the above films' budgets and marketing costs were considerably higher compared to the production and advertising costs of Orion's earlier films. Furthermore, Parker's film with eight Oscar nominations lost to Rain Man in all major categories, while Peter Yates' The House on Carroll Street grossed less than $0.5 million despite positive reviews. Not surprisingly, by the end of 1988, Orion had dropped to last in terms of its percentage at the US box office.

The poor performance of the films sent Orion's debt to new heights and the company found itself in a position that did not allow much room for manoeuvring. Under these circumstances, the decision to stick to a release schedule for fifteen films in 1989-90 was certainly a gamble, one that was destined to have major repercussions in the next two years, especially when the first 1989 releases were extremely disappointing in terms of their box office gross with Woody Allen's critically acclaimed Crimes and Misdemeanors proving only a modest hit (around $18 million) and with Bill and Ted's Excellent Adventure (Herek; approximately $40 million gross) becoming the only solid hit for the company. To make things worse, Valmont, Milos Forman's first feature after the multi-Oscar winner Amadeus, proved also a major financial disaster, recording a petty $1,132,000 gross in its theatrical run. A very important reason for Valmont's cold reception was the fact that less than a year earlier Universal had released the extremely successful and star-studded Dangerous Liaisons (Frears, 1987), which was also based on Choderlos de Laclos' novel. For a second consecutive year Orion occupied the last position at the American box office with 4.2 per cent of the market share.37

Orion's survival depended heavily on the production roster of 1989 scheduled for release in the following year. On paper, the line-up looked very impressive: a Robin Williams vehicle (The Cadillac Man, Donaldson), the new Woody Allen film with Mia Farrow (Alice), Richard Benjamin's Mermaids (with Cher), the sequel to Robocop (Robocop 2, Kershner), an action film with Charlie Sheen (Navy Seals, Teague), a film with ascending star Alec Baldwin (Miami Blues, Armitage), Dennis Hopper's neo-noir The Hot Spot, Phil Joannou's mafia picture State of Grace and, finally, a $20 million gamble, the revisionist western Dances with Wolves, which marked Kevin Costner's directorial debut. Furthermore, the company had some other films mainly as fillers for the a-film-per-month schedule as well as two potentially prestige creations, Alan Rudolph's Love at Large and the Arthur Miller-scripted / Karel Reisz-directed Everybody Wins with Nick Nolte and Debra Winger. Last but not least, the classics division had lined up the incredibly successful, in Europe, Jean Paul Rappenau's Cyrano, which had the potential to surpass the box office record of the previous Orion Classics hit, Pedro Almodovar's Women on the Verge of a Nervous Breakdown (1988), which had grossed $7,179,000.

Just before the first 1990 release, however, Orion was hit by its first restructuring at the top management level. Medavoy left Orion for another newly founded company Tri-Star, a subsidiary of Columbia, HBO and CBS. Medavoy's breaking away from a team of executives who, to that point, had worked closely together for sixteen years and had developed a reputation for being extremely loyal to the company and to each other clearly suggested that there were cracks in the working relationship between the members of the Orion group. His departure, however, coincided with a huge deal that Orion made with Sony Columbia in February 1990 according to which Columbia acquired the foreign theatrical distribution rights for the following fifty Orion productions for the amount of $175 million.38 Although the above deal advanced Orion much-needed cash it also excluded the company from any profits from the lucrative European market. In the very likely event that Orion had a hit, it would be Columbia that would reap the benefits.

The returns from the first films released in 1990 were not particularly encouraging, but they marked a substantial improvement over the previous two years. Cadillac Man, Mermaids, Madhouse and Navy Seals grossed between $20 and $35 million each, proving either modest box office successes (Navy Seals and Madhouse) or modest failures (Mermaids and Cadillac Man). The second instalment of Robocop was a solid hit (returning $22,317,000 in rentals) as was Cyrano, which proved a massive hit in the art-house market, grossing in excess of $15 million and becoming the most successful foreign film in the history of the American box office as well as getting six Academy award nominations. However, the company showed dismal results from a series of films, most of them in-house productions, which did not manage to find an audience and ended up grossing less than $2 million each: The Hot Spot; State of Grace; Everybody Wins; and Love at Large. As a consequence, whatever small profits the company made from its hits were easily offset by the above box office flops. If Dances with Wolves, which was the last film to open in December 1990, also failed Orion would be in extreme financial trouble.

The Last Bonfires

The company's release strategy for Dances with Wolves was similar to the strategy it followed for Platoon. With the latter essentially promoted as the film that depicted 'what really happened in Vietnam', Dances with Wolves was also promoted as a revisionist western that 'speaks the truth' about the Indian genocide by the whites. And as Orion opened Platoon in a only few theatres to build word-of-mouth before expanding it in time for the Oscar nominations, so did it release Dances with Wolves in only fourteen sites, before opening the film wide after an unprecedented public response.39 With the help of twelve Oscar nominations, the film reached its peak in 1,608 screens accumulating an astounding $184,208,842 gross at the American box office ($81,538,000 in rentals) and a stellar $240,000,000 at the foreign box office.

Even these highly unexpected returns from the film were not substantial enough to reverse the situation. By the time Dances with Wolves was at the peak of its popularity, almost three weeks before the 1990-1 Academy awards, Orion recorded a $63 million net loss for the same fiscal year.40 One very important reason behind Orion's inability to capitalise on the success of Dances with Wolves was the fact that the producers of the film had pre-sold foreign theatrical rights to various European distributors to raise funds for the $20 million budget of the film. This of course meant that Orion did not see a single cent from the $240 million gross outside the United States.41 Still, Orion could at least count on its share from the $81.5 million rentals from the US market, which would help distribute its 1991 films, especially what turned out to be the company's last hot property, Jonathan Demme's The Silence of the Lambs. Released during the least commercial end-of-the-winter season (13 February 1991) in 1,497 screens and as Dances with Wolves was still running high, the film reached blockbuster levels grossing $130,726,716 at the US box office ($59,883,000 in rentals) and recording about an equal gross outside the United States. This time Orion had not made the mistake of selling the ancillary rights for the film and consequently benefited from its unexpected financial success.42

Although both Dances with Wolves and The Silence of the Lambs dominated the box office for most of 1991, the profits were not enough to reverse the financial results of the company. It was pretty obvious then that by the end of 1991 Orion was well on its way to bankruptcy unless it was sold to a company which had enough capital to guarantee a debt of $500 million.43 Unfortunately, the rest of Orion's history had a lot more to do with its attempt to resolve the financial crisis than with its contributions to American cinema. The Silence of the Lambs, which became only the third film in the history of American cinema to win all five major Academy awards, stood as Orion's swan song.

The Fall

In many respects, Orion's decline and eventual bankruptcy in 1991 was precipitated by its persistence in operating independently, especially after it seemed that it had established itself in the theatrical market and had made the decision to compete with the majors. As the majors continued their involvement in mergers and takeovers to maximise their exploitation of synergies and to control every possible distribution window, Orion's policy of independence was seen as an anachronism. For industry observers the consensus was that, by the late 1980s/early 1990s, the entertainment industry game had become far too advanced for a company with clear financial limitations like Orion. Having missed the 'opportunity' to merge in the late 1980s, Orion had no other option but to try to survive on its own, mostly through a series of irregular manoeuvres, which each time provided the company with the necessary means to stay in the game for a short period of time but never for the long run.

As the company started losing money in 1988, its main shareholder John Kluge tried to sell it to a number of interested parties under the condition that the new owner would respect Krim's management regime. This particular stipulation, however, kept buyers away as they did not agree with the mid-budget, low-risk philosophy that Krim and his executives had initiated in the early 1980s. When two years later Kluge saw that the company's debt was increasing, he removed the stipulation. By that time, however, nobody wanted to touch the company. Despite the fact that the price of Orion's share had become extremely attractive for a company with a 1,000-strong library of film titles, buyers kept away. The most significant problem with the Orion library, the only real asset of the company, valued at around $300 million, was that most of the titles were cheap exploitation features inherited from AIP, made before 1982, and with little potential in the ancillary markets. Additionally, all the deals the company had made with cable and video companies to raise funds for the short run had resulted in a long-term mortgaging of its films and the devaluation of its library by at least $200-300 million.44

With the company's debt reaching the $1 billion mark and after a major reshuffle at the top level where 81-year-old Arthur Krim was removed from his position as chairman,45 it was obvious that Orion needed desperately a debt-restructuring plan to become operational again. Proposals by the new management, however, fell through and Orion eventually filed for bankruptcy on 11 December 1991. New efforts for the company's acquisition by New Line Cinema, Savoy Pictures and even Republic Pictures Corporation (which by that time had become a successful television producer) also failed. Finally, almost a year after filing for bankruptcy and after the remaining original Orion executives (Eric Pleskow and William Bernstein) had resigned, the court approved a restructuring plan. The plan made Orion a distribution company which could only exploit its library of titles and could enter the production business only when fully funded by third parties.46 Since then the company had operated in the margins of the industry until 1997, when it became one more part of Kirk Kerkorian's media empire as MGM bought Kluge's film holdings, which included Orion Pictures Entertainment, for $578 million.47

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