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When Arthur Krim and Robert Benjamin took over United Artists in 1951, the company was hemorrhaging money, and receivers were almost at the door. United Artists had declined steadily after World War II and chances of a revival were slim. Mary Pickford and Charlie Chaplin, the two remaining owners of the company, hoped a buyer would save the day. Bids for millions came in, but it is doubtful they were made in good faith. Krim and Benjamin bid not a cent. Instead, they offered to take operating control of United Artists for a period of ten years on the condition that if the company turned a profit in any one of the first three years, they would be able to acquire half ownership of the company at a nominal cost. It took a lot of convincing by these two young lawyers to make Pickford and Chaplin realize their company was worthless as it stood. On February 7, 1951, they faced reality and signed the papers. The new management revived a moribund UA by adopting a policy that had been anathema to the majors—the financing of independent productions. Within a year UA turned a profit, and the Krim-Benjamin team acquired half the company. By 1955 the team bought out Chaplin and Pickford’s interests and owned the company outright. In 1957 they took United Artists public, and its stock was traded on the New York Stock Exchange. By 1966 United Artists had grown to become the largest producer-distributor of motion pictures in the world and ushered the industry into a new era. This history analyzes the structure and operations of the company . My approach was suggested by Michael E. Porter’s Competitive Strategy: Techniques for Analyzing Industries and Competitors.1 Porter, a professor at the Harvard Business School, explains the behavior of American business as it shifted from sales growth to dominance over rivals. A blend of industrial organization and business administration, Porter’s analytical techniques are well suited to making sense out of a period of film industry history that underwent radical transformation as a result of changing audience tastes, federal antitrust action, competition from television, and conglomerate takeovers. The twenty-seven-year management of Krim and Benjamin spanned all these changes. Moreover, the management survived three forms of corporate ownership—private company, publicly held corporation, and conglomerate subsidiary. Thus, UA makes an ideal example of a modern, that is, post-1950, motion picture company. The story begins with Krim and Benjamin’s apprenticeship at I N T R O D U C T I O N Introduction Eagle-Lion Films, a company founded in 1946 as an alliance between the American railroad tycoon Robert R. Young and the British film magnate J. Arthur Rank. Young started out in the film business in 1943 by purchasing Producers Releasing Corporation (PRC), a Poverty Row studio that specialized mainly in cheap Westerns. But he had higher aspirations, and his alliance with Rank, who wanted access to U.S. theaters, offered a way to major status. The alliance called for Eagle-Lion to distribute Rank’s pictures in the United States and for Rank to distribute Eagle-Lion’s in Great Britain and other overseas markets. Organizing the company fell to Robert Benjamin , who had been working for Young as legal counsel handling his film business affairs. It was Benjamin who recommended his partner, Arthur Krim, to head the new company as president. Both Krim and Benjamin were partners in Louis Nizer’s law firm in New York, which specialized in the film industry. Chapter 1 vividly illustrates the barriers confronting newcomers to the business. Michael Porter identified these as emanating from economies of scale and product differentiation. Eagle-Lion was forced to produce a series of big-budget pictures that could compete with the best of Hollywood if it wanted to break into the majors. Young spent more than $12 million of his own money to upgrade PRC’s studios and to produce the first season’s roster. To run the studio, Krim hired Bryan Foy, who had formerly headed the “B” film units at Warner Bros. and Fox. Eagle-Lion’s first season’s roster found few takers among exhibitors. As a newcomer with roots in Poverty Row, Eagle-Lion could not borrow stars from the majors and had to make do with aging leading men on their way down and a few unknown young people working their way up. Moreover, Eagle-Lion’s first films arrived on...

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