Chapter 102: Galaxy Orion

At the end of January 1991, Arthur Smith, with support from Solomon Brothers and Chase Manhattan Bank, successfully took over the heavily indebted and nearly bankrupt Orion Pictures.

After Arthur agreed to repay a $60 million short-term loan in advance, the remaining $100 million debt could be deferred for two years.

At 22, Arthur Smith thus became the owner of a medium-sized Hollywood distributor but also shouldered over $100 million in debt.

It was as if a stone had been thrown into the calm waters of Hollywood.

In the Orion Pictures building, after Arthur and Jack Brady signed the acquisition contract, they were surrounded by reporters. "Arthur, can you tell us what your next plans are?"

"Plans?" Arthur smiled. "Orion Supermarket is opening, recovering funds, and developing new films!"

"Can you tell us about the new films?"

"After The Silence of the Lambs in April, Scream in August, and The Addams Family in November are released, everyone will know!"

Last Christmas, Orion released Woody Allen's new film Alice, which currently grossed only over $5 million.

In January, Eve of Destruction also grossed only over $3 million. Arthur kept Bill & Ted's Bogus Journey, set for release in May.

But Arthur put up for sale all other upcoming films, such as Off and Running, F/X2, Mystery Date, and Little Man Tate to recoup funds!

The Hollywood Reporter: "Orion's creditors put over $100 million in investment into the hands of a 22-year-old."

Empire Magazine: "Arthur Smith is now the youngest owner of a film company in Hollywood."

Los Angeles Times "Does Arthur think running a film company is just a game?"

Rolling Stone Magazine "Sleepless in Seattle and Sleeping with the Enemy have blinded Arthur and his investors."

Susan Smith, Arthur's finance officer at Galaxy Pictures, was tasked with auditing Orion's assets when Arthur expressed interest in the company.

"Except for The Addams Family and Bill & Ted's Bogus Journey, sell all completed or in-production projects to recoup funds," Arthur instructed the head of Orion's distribution department in his office.

"Along with The Silence of the Lambs and Scream, these four films are Orion's focus this year. Is that clear enough?"

The distribution head nodded, "I'll contact other distributors immediately."

After the distribution head left, Arthur leaned back in his chair and sighed. There was so much to do.

"Arthur," Susan Smith knocked and entered.

Arthur rubbed his eyes, "How much is left in Orion's account?"

"$45 million, mainly from Sleeping with the Enemy and Dances with Wolves box office revenue."

After all, Sleeping with the Enemy grossed over $100 million in North America, and Dances with Wolves had also surpassed $90 million.

"The Galaxy account has $40 million. Transfer $15 million under the guise of distributing The Silence of the Lambs to complete the $60 million repayment to the bank. I've ordered the sale of Orion's four film rights, which should recoup over $20 million. Afterward, Galaxy Orion will independently develop films without selling rights for financing!"

Arthur knew the media doubted him, and he needed to make a splash.

"No problem," Susan Smith noted Arthur's condition, reminding him, "Arthur, you should go back and rest."

Arthur smiled, "Don't worry, it's just dealing with bank people lately."

Everyone thought Arthur was under pressure from Orion's debt, but to him, Orion's assets were promising. The Addams Family was no less than Sleeping with the Enemy.

However, most upcoming films were loss-making, increasing debt crisis. A few hits were funded through financing, with profits first going to investors.

Now, Arthur selling films was damage control. Unlike New Line Cinema's lucky hit with Teenage Mutant Ninja Turtles bought from 20th Century Fox, most projects like Alice and Eve of Destruction couldn't cover production costs.

At Columbia TriStar headquarters, Sony Pictures executives Jon Peters and Peter Guber were discussing Arthur Smith with Columbia Pictures President Mike Medavoy.

"He actually took over Orion? He's got guts. Does he really think making blockbuster films is that easy?" Peter Guber sneered.

Jon Peters sighed, "We're even considering strengthening our cooperation with him." He said to Mike Medavoy, "We need to sign an exclusive overseas distribution agreement with Galaxy Orion!"

Mike Medavoy shook his head, "Hard. Arthur now has Wall Street backing of $100 million, enough for independent development."

"He's ambitious and confident in his films. Changing Orion's playbook, getting Orion's overseas rights cheaply is almost impossible."

Sleeping with the Enemy grossed over $100 million domestically, with another $80 million overseas, totaling nearly $200 million globally.

Orion previously sold Sleeping with the Enemy's overseas rights, so most overseas revenue didn't benefit Orion.

But Galaxy was different. They refused to sell The Silence of the Lambs overseas rights, only signing low-cost overseas distribution contracts.

Peter Guber was indifferent, "Can he guarantee his films' success? Investing and distributing independently, one big project failure would hurt. Then investors would withdraw, and debts would be called in, ha!"

Mike Medavoy reminded, "We've collaborated with him several times. Orion lacks overseas distribution channels. Even with partners like PolyGram in the UK and Village Roadshow in Australia, they won't abandon overseas markets. In the future, Columbia TriStar will still need to cooperate with Orion."

Peter Guber nodded, "Mike, you're familiar with him, and you previously managed Orion. You handle this…"

*****

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