In 1975, Peter Guber formed its own production company FilmWorks, then in 1976, it became Casablanca Records & FilmWorks after a merger with Casablanca Records, which PolyGram got a 50% by 1977, and by 1980, PolyGram took the other 50% stake in the company and renamed the film unit as PolyGram Pictures.
During the late 1980s and early 1990s, PolyGram continued to invest in a diversified film unit with the purchases of individual production companies. In 1995, PolyGram purchased ITC Entertainment for $156 million.
In May 1998, PolyGram was sold to Seagram, which owned Universal Pictures and Universal Music Group (UMG), for $10 billion. Seagram sold off some of PolyGram's assets while mainly acquiring its music division: the ITC Entertainment library was sold to Carlton Communications for £91 million, the pre-March 1996 PFE library was sold to MGM, and PolyGram's US distribution operation was sold to USA Network.
After many of its assets were sold, the remains of PolyGram's film division were folded into Universal Pictures. When the newly formed entertainment division of Seagram faced financial difficulties, it was sold to Vivendi, and MCA became known as Universal Studios, as Seagram ceased to exist.
Vivendi remained the majority owner of the UMG until 2021, when it sold most of its stake. MGM owns the rights to most of the pre-April 1996 library, and the remaining post-March 1996 film and television library is owned by NBCUniversal.
In 2017, Universal Music Group established a film and television division, resurrecting the PolyGram Entertainment name.[1]
History
FilmWorks, Casablanca Records & FilmWorks and PolyGram Pictures
In 1975, Peter Guber quit Columbia Pictures to start out FilmWorks with a producing deal. A year later, during the production of The Deep, it was merged with Casablanca Records to form Casablanca Records & FilmWorks.[2] The company would enjoy success with The Deep and Midnight Express. The music company PolyGram (owned by Dutch-based Philips and Germany's Siemens) bought out its share of Casablanca Records & FilmWorks in 1977. Two years later, in 1979, Casablanca Record & Filmworks left Columbia Pictures to join Universal Pictures, and gave Casablanca Records & Filmworks creative control over the pictures.[3] A year later, PolyGram took on its stake of the company and it was renamed to PolyGram Pictures in 1980.[4] PolyGram reserved the finances and Guber would run as CEO. Guber would form a partnership with Barbra Streisand's hairdresser Jon Peters, who co-produced his client's A Star Is Born remake. Peters would produce PolyGram's films, and eventually become a stockholder with Guber.[5] He had intended to work with Boardwalk Records, but he was forced to join PolyGram Pictures instead.[6][7][3]
Its first film under the Universal/PolyGram alliance was King of the Mountain (1981), which was a box-office flop. More money-losers followed. Ancillary markets such as home video and pay television were not yet established, and broadcast television networks were paying less for licenses to films. PolyGram's European investors were not happy; they had lost about $80 million on its film division. Not long after, Siemens parted with Philips. Guber and Peters left PolyGram Pictures in 1982, taking their plans for a new Batman movie with them, along with a few other projects. The duo eventually found a home at Warner Bros. A part of their exit proceedings, PolyGram would still own 7.5% of profits from some of its projects, including the 1989 Batman film.[5] Also in 1980, PolyGram launched a syndicated television division PolyGram Television, to be headed by former Columbia Pictures Television syndication executive Norman Horowitz, both the film and TV units eventually closed down by 1983 after a string of first-run syndication strip flops.[8][9]
PolyGram Filmed Entertainment
In the early 1980s, PolyGram Video was launched. PolyGram Video, headed by Michael Kuhn and David Hockman, was created to distribute concert films and feature films acquired from third-parties, as well as long-form music videos, and even had a video label, originally set up as a joint venture with Heron Communications, that was called Channel 5 Video.[10] Kuhn and Hockman were able to parlay PolyGram Video's success into financing feature films. The first film produced by PolyGram's new film division was P.I. Private Investigations in 1987.[11] During the late 1980s and early 1990s, PolyGram continued to invest in a diversified film unit with the purchases of individual production companies.[12] In 1989, PolyGram launched Manifesto Film Sales to handle the licensing of films outside North America.[13] In 1991, PolyGram's Michael Kuhn became the head of PolyGram Filmed Entertainment, with US$200 million pumped in with the intention of developing a European film studio that could produce and distribute films internationally on a scale to match the major Hollywood studios.[12]
Following the style of its music business, the company produced films through a number of creatively semi-autonomous 'labels', such as Working Title Films in the United Kingdom and Propaganda Films and Interscope Communications in the United States; it also built up its own network of distribution companies.
Film production within PolyGram differed from traditional Hollywood studios, in that power to make ('green light') a film was not centralised in the hands of a small number of executives, but instead was decided by negotiations between producers, management and marketing. Kuhn claimed that "movies sort of green lit themselves."
In 1993, PolyGram purchased the video arm of Virgin Group from General Electric Capital for $5.6 million and remodeled the label as Vision Video Ltd.
PolyGram also built up a sizable film and television library that could be profitable. In 1995, the company purchased ITC Entertainment for $156 million.[14] Through this purchase, PolyGram acquired 350 feature films, several thousand hours of television programming, and gained further access into the television market.[12] That same year, PolyGram Filmed Entertainment acquired a 75% majority stake in British home video distributor Abbey Home Entertainment. In 1997, PFE agreed to purchase the Epic film library, which included a thousand feature films, from Crédit Lyonnais for $225 million.[15] PolyGram also attempted purchasing MGM and The Samuel Goldwyn Company's library, but to no avail.[16][17] In July 1998, PolyGram was in talks to sell their stake in Abbey Home Entertainment back to Ian and Anne Miles, letting AHE trade independently again. On December 7, 1997, PolyGram and Warner Bros. reached a deal to co-finance films produced by Castle Rock Entertainment.[18]
PFE's film distribution arm was based in the United Kingdom, and invested heavily in British film making — some credit it with reviving the British film industry in the 1990s. Despite a successful production history, Philips decided to sell PolyGram to the beverage conglomerateSeagram in 1998.
Only interested in PolyGram's music operations, Seagram, which at the time controlled Universal Pictures, looked forward to divesting in PFE. After being dissatisfied with offers to buy the studio (including a joint venture between Canal+ and Artisan Entertainment), Seagram opted to sell off individual assets and folded whatever remained into Universal.[19] In October 1998, Metro-Goldwyn-Mayer (MGM) paid $235–250 million to acquire 1,300 films released before March 31, 1996, from PolyGram.[20][21] In 1999, the ITC library was sold to Carlton Communications (later known as ITV Studios) for $150 million.[22] Some of PFE's North American distribution assets were sold to USA Network.[23] Universal would later take over the remaining titles, which included a third of the pre-April 1996 films, as well as PolyGram Television's library. Universal would eventually set up their international arm on the ashes of PFE's international division on February 9, 1999, that included theatrical and video distribution when its contracts with United International Pictures and CIC Video expired.[24] After the box office failure of Mickey Blue Eyes, a title inherited from PolyGram that became one of the few titles that were self-distributed by Universal internationally, all the theatrical assets of Universal Pictures International were merged with United International Pictures, which continued to exist until 2007.[25]
PolyGram Video took over the distribution of Manga Entertainment's titles in Australia and New Zealand in late 1996 after Siren Entertainment's license to the Manga Video catalog expired, but PolyGram lost the license to the Manga Video catalog in 1998 after Madman Entertainment took over the licenses. This was due to Manga Entertainment being moved from Island Records to Palm Pictures.
In 1992, PolyGram partnered with Universal Pictures to create a joint venture called Gramercy Pictures. Gramercy primarily distributed PolyGram films in the United States, and it doubled as a specialty label for Universal. In January 1996, PolyGram bought out Universal[27] and in 1997, PolyGram Films was founded to release PFE's mainstream titles in the United States, while Gramercy became a low-budget/art-house sublabel.[28][29] PolyGram Films' first release was The Game.[29][27] After PolyGram's merger with Universal in 1999, the company merged Gramercy with October Films, which included its subsidiary Rogue Pictures[30] to create USA Films, which eventually became Focus Features. Gramercy was revived in 2015 as a label of Focus Features,[31] but shut down and went dormant the next year.
