Howard Hughes - RKO

RKO

In 1948, Hughes gained control of RKO, a struggling major Hollywood studio, by acquiring 25 percent of the outstanding stock from Floyd Odlum's Atlas Corporation. Within weeks of taking control, he dismissed three-quarters of the work force and production was shut down for six months in 1949 while he undertook the investigation of the politics of all remaining studio employees. Completed pictures would be sent back for re-shooting if he felt his star (especially female) was not properly presented, or if a film's anti-communist politics were not sufficiently clear. In 1952, an abortive sale to a Chicago-based group with no experience in the industry disrupted studio operations even further.

Hughes sold the RKO theaters in 1953 as settlement of the United States v. Paramount Pictures, Inc. antitrust case. With the sale of the profitable theaters, the shaky status of the film studio became increasingly apparent. A steady stream of lawsuits from RKO's minority shareholders, charging him with financial misconduct and corporate mismanagement, became an increasing nuisance, especially because Hughes wanted to focus on his aircraft-manufacturing and TWA holdings during the Korean War years. Eager to be rid of the distraction, Hughes offered to buy out all other stockholders.

By the end of 1954, at a cost of nearly US$24 million, he had gained near total control of RKO, becoming the closest thing to a sole owner of a Hollywood studio seen in three decades. Six months later, Hughes sold the studio to the General Tire and Rubber Company for US$25 million. Hughes retained the rights to pictures he had personally produced, including those made at RKO. He also retained Jane Russell's contract. For Howard Hughes, this was the virtual end of his 25-year involvement in motion pictures; though he had all but destroyed a major Hollywood studio, his reputation as a financial wizard emerged unscathed. He reportedly walked away from RKO having made US$6.5 million in personal profit.

General Tire was interested mainly in exploiting the value of the RKO library for television programming, though it made some attempts to continue producing films. After a year and a half of mixed success, General Tire shut down film production at RKO for good at the end of January 1957. The studio lots in Hollywood and Culver City were sold to Desilu Productions later that year for US$6.15 million.