Normally when people talk about ‘cursed’ films, it’s because of strange things that have happened to the cast and crew during and after filming. For example The Exorcist, Poltergeist and Super-man movies are all rumoured to be ill-fated, because of the unusual deaths and illnesses that have circled the actors and filmmakers.
However it’s starting to seem that the Terminator franchise is cursed, but not for those who starred in the movies, but for the various companies that have owned both the individual films and the rights to the franchise itself. There’s been a litany of bankruptcies and financial collapses for the vast majority of companies involved in making the four movies.
The difficulties surrounding the films have now claimed another victim, with T Asset Acquisition, the Halcyon Company subsidiary that currently owns the rights to the Terminator franchise (and which put together Terminator: Salvation), yesterday filing for Chapter 11 bankruptcy in the US.
In fact cyborgs start to look at bit wimpy when you see the endless meltdowns and traumas that have surrounded the Terminator series.
The Terminator
The first owner of the rights was the Hemdale Film Company, which was behind the original 1985 James Cameron movie, The Terminator (producer Gale Anne Hurd also owned half the franchise, having bought James Cameron’s script for $1, on the condition he got to direct the movie). Hemdale, founded by actor David Hemmings and his business partner John Daly in the mid-1960s, had several big hits in the 1980s, including Platoon, Hoosiers and, indeed, The Terminator itself.
However while it only made seven films in the 1970s (including Tommy), Hemdale massively ramped up production and was involved in well over 30 movies in the 80s, most of which didn’t do particularly well at the box office. As a result by the end of the decade it was having financial difficulties, which led it to sell the Terminator sequel rights to Carolco in 1990 for $10 million (it still owned the original Terminator movie though, as the rights to an individual film and the franchise rights are often treated as separate entities in Hollywood).
Also involved with the first film was the movie’s distributor, Orion Pictures, which spent most of the 1980s being financially unstable, scoring a few big hits and getting critical success but also having a string of flops that ensured it was never profitable. Although all sorts of people bought and sold stock in the company to try and prop it up, nothing seemed to work and in November 1991 it filed for bankruptcy (ironically at that time the company was having its greatest critical success, winning back-to-back Best Picture Oscars for Dances With Wolves and Silence Of The Lambs).
Orion came out of bankruptcy in 1994, but it continued to founder. Then, when Hemdale finally called it quits and shut down in 1995 amid major financial woes, Orion bought up the company’s movies, including The Terminator, in an effort to bolster the value of it film library. However it didn’t help them and the company continued to have major money problems, eventually giving up and selling out to MGM in 1997, where it still exists as an in-name-only subsidiary.
The curse then continued onto MGM, which now owned the distribution right to The Terminator. The purchase of Orion and various other film companies was part of a plan to save the venerable studio, which had fallen on hard times, particularly after it lost most of its back catalogue to Ted Turner, who took the majority of the company’s classic films with him (such as The Wizard Of Oz and Gone With The Wind) when he bought and then quickly sold MGM in 1986. Buying Orion and others companies gave MGM a much bigger back catalogue, including The Terminator, Amadeus, Dirty Rotten Scoundrels and hundreds of other movies, which they hoped they could use as a financial cushion against possible failures with their new films.
However it didn’t really work, and the company has continued to have financial troubles ever since. In 2004 MGM was sold to a consortium including Sony, but this doesn’t seem to have helped as there have been rumours this year that with $4 billion in debt, it may have to file for bankruptcy. Other companies are already said to be circling its assets. Perhaps it just needs to sell the rights to The Terminator, and then things will be okay.
Terminator 2: Judgment Day
After Hemdale sold their part of the Terminator franchise rights in 1990, they were bought by the independent production outfit, Carolco. The company immediately put together the massively successful Terminator 2: Judgment Day, which at the time of its release was one of the highest grossing movies ever made.
Carolco, founded by Mario Kassar and Andrew Vajna, first saw success with the Rambo movies, and gradually expanded with the company taking a risk on numerous big budget projects including Total Recall, The Doors, Basic Instinct, Cliffhanger and Stargate. However the company always had more flops than hits and spent a lot of money developing films that never got made, such as a mooted James Cameron directed Spider-man movie. In 1995 two gigantically expensive flops, Showgirls and Cutthroat Island (still one of the biggest money losers ever), were enough to push the company over the edge and it went bust. (Showgirls later made more than $100 million on video, but by then it was too late for Carolco).
The majority of Carolco's film library, including Terminator 2, was then bought by the French company Studiocanal, a division of Vivendi (however they only purchased T2 itself, not the Terminator sequel and franchise rights). Buying the Carolco library was an early move in Vivendi’s attempt to become one of the world’s pre-eminent entertainment conglomerates. The company, which started out as a water provider, went on a massive buying spree in the late 1990s and early 2000s, which included the purchase of Universal Studios in 2000.
However all this expansion nearly destroyed Vivendi, to the point where in 2003 it had to admit it was massively in debt and had made a loss for the year of $23 billion, the worst in French corporate history. Even before this it was apparent things were getting serious, as the company’s 2002 losses had resulted in CEO Jean Marie Messier (the architect of the expansion) getting fired, and a series of reorganisations and restructurings needing to take place, as well as the disposal of billions in assets, to try and shore things up. The company and Messier were later fined 1m Euros each for misleading the public and shareholders over the state of Vivendi’s finances and using dodgy accounting practices to hide the fact the company was pretty much on the point of collapse.
The company was forced to sell 80% of Universal to NBC in 2006 (although it still owns 20%), and after that Vivendi re-emerged in completely new form and has been trying to recover from its near complete destruction ever since. Despite its financial meltdown, it still owns the rights to Terminator 2 through Studiocanal.
Terminator 3: Rise Of The Machines
Carolco’s Mario Kassar and Andrew Vajna managed to retain and even consolidate the rights to the Terminator franchise itself, even after their company went bankrupt and they lost all their films. Vajna bought half the rights at the Carolco bankruptcy auction for $8 million, and then managed to snap up Gale Anne Hurd’s half for $7 million, which gave them complete control of Terminator’s future for the first time.
Vajna and Kassar then set up C2 Pictures, primarily in order mine the Terminator franchise. They went to work putting 2003’s Terminator 3: Rise Of The Machines together, but while the movie made over $400 million at the box office, it wasn’t the all conquering beast that would have resurrected their fortunes and ensured ever more sequels, especially as it cost $200 million to make. C2’s other attempts to mine the rights they owned, I Spy and Basic Instinct 2, both flopped massively (the latter only grossed $39 million around the world, despite costing $70 million to make).
Terminator: Salvation
In 2007, with C2 losing money and despite them having just put together the deal for the TV series, Terminator: The Sarah Connor Chronicles, the famously always feuding Kassar and Vajna decided to give up and dissolve their business relationship. They then sold their Terminator rights to a holding company set up by the fledgling Halcyon Co. for around $25 million. Halcyon became a co-producer, along with the otherwise defunct C2, on the now cancelled Sarah Connor Chronicles, but spent most of its time and effort developing Terminator 4, which became this year’s Terminator: Salvation. Indeed Halcyon has done relatively little else, with their only other credits being the low-budget, not very successful Cook-Off! in 2006 and Michael Caton-Jones’ upcoming small-scale drama, After The Wedding (they’ve also optioned a couple of other properties which may or may not get made).
However there were already legal ructions stirring before Terminator: Salvation was released. In March 2009, Mortiz Borman sued Halcyon, alleging fraud and breach of contract, saying he hadn’t been paid $2.5 million he was owed for producing fees on Terminator: Salvation. Borman said he was contractually due this after he’d become involved with the movie by helping to arrange the transfer of the Terminator rights from C2 to Halcyon. In April it was announced an ‘amicable resolution’ had been reached. (There was also a feud with MGM in 2007 over the studio’s right of first refusal to distribute Terminator films, but that was settled out of court).
Then, at the beginning of this week (August 17th, 2009) the now severely cash-strapped Halcyon and its parent company, Dominion, announced they were suing Pacificor, the hedge fund that lent them the cash to buy the Terminator rights. Pacificor recently issued a lien that froze Dominion’s earnings from Salvation, which prevents the company from borrowing against them for further film projects, including their hoped-for Terminator 5. The hedge fund claims they haven’t been paid money they’re due on the nearly $35 million in loans they’ve provided to Halcyon, while the film company says they don’t currently owe any money on the loans and the lien is a "desperate and deliberate attempt to seize ownership and control of the Halcyon entities and of the [Terminator] franchise."
Halcyon is also suing one of Pacificor’s former employees, Kirk Benjamin, for fraud, double-dealing and conspiring with the fund's CEO. Halcyon alleges that while he was helping them secure the Terminator rights, Benjamin was working for Pacificor but telling them he wasn’t, which allowed him to conspire with the fund’s CEO to use their knowledge of Halcyon’s confidential business information to push it into a position where they could threaten to ruin the company if their demands for under the table compensation were not met. Halcyon wants $30 million from both Pacificor and Benjamin.
As a result of this litigation (which does seem like a last-ditch attempt to save the company), the larger than expected financial trauma it sustained making Salvation and the fact it can no longer rely on regular income from The Sarah Connor Chronicles, T Asset Acquisition, the Halcyon subsidiary set up to hold the Terminator rights, has been put into Chapter 11 bankruptcy. In a statement the company said that it has commenced reorganisation proceedings in federal bankruptcy court and is seeking to restructure its financial obligations and emerge from Chapter 11 later this year or early next year. However, if the financially troubled Halcyon doesn’t manage to restructure the massive Terminator-related debt, Pacificor may end up owning the franchise and the company itself could go bust.
Despite Halcyon’s desire to make it, Terminator 5 was already in doubt due to the middling success of Salvation, and even once the bankruptcy and lawsuits are settled, there’s no guarantee anyone will ever want to finance another Terminator movie again.
Is Terminator Genuinely Cursed?
So is there a reason why nearly every company that’s been involved with making or owning the Terminator movies has collapsed, suffered major financial problems or otherwise disappeared completely from the film world shortly afterwards? Well, some of it is just coincidence, but the main reason was hinted at when Halcyon bought the franchise. At that time the company’s co-founder, Victor Kubicek, stated, “The Terminator franchise represents by far the most popular and successful franchise not owned by a major studio. We see this global franchise as a cornerstone of Halcyon's future business plans."
And that’s just it. If you’re a small film company with big ideas, Terminator seems a great option, as it’s the only blockbuster movie franchise that has an in-built audience and global recognition you could possibly purchase (Star Wars isn’t studio controlled, but that’s never been for sale). Buying up Terminator instantly makes you a player in Hollywood, but getting into filmmaking on that scale is an enormous risk. It’s an incredibly expensive business to get into, with hundreds of millions of dollars involved (often necessitating the need for huge amounts of debts just to make the movies, as with Halcyon). With films of that size, unless you’re a multinational studio, just one flop can destroy your company – and at some point it probably will.
Likewise with the individual Terminator films, often the businesses that are in the market to buy up film rights from collapsed movie companies (which is normally how Terminator films have been available), are already having financial troubles themselves. They’re only looking to expand their film library so that they have more assets to borrow against, which is often a very short term solution. Alternatively they’re companies trying to rapidly expand, but again that’s a strategy that fails more often than it succeeds, because of the huge costs and risks of the film business.
As always with these curses, it’s more a case of chance and the realities of Hollywood than anything genuinely supernatural, but there’s little doubt that the Terminator franchise drags an incredibly impressive amount of bankruptcies, financial collapses, lawsuits, corporate disasters and problems in its wake, and its fate isn’t yet secure. Unless Halcyon can sort out its money woes, by this time next year the whole thing could be in the hands of a hedge fund, or sold onto yet another unsuspecting starry-eyed film company, who probably don’t really know what they’re getting themselves into.
When you look back at the history of who’s owned the various Terminator properties, it’s surprising anyone wants to touch it, but the lure of a major franchise outside studio control has ensured that so far, it’s always come back.