— Ch. 1 · Founding Vision And Partners —
United Artists.
~5 min read · Ch. 1 of 6
On the 5th of February 1919, four Hollywood legends signed a contract to build United Artists. Charlie Chaplin, D.W. Griffith, Mary Pickford, and Douglas Fairbanks stood together as equal partners in this new venture. Each held a 25% stake in preferred shares and a 20% stake in common shares. The remaining 20% of common shares went to lawyer William Gibbs McAdoo. They formed the company because established studios were tightening control over actor salaries and creative decisions. Chaplin could not get his parent company First National Pictures to increase his production budget despite being one of their top producers. Pickford and Fairbanks had contracts due to run out with no clear offers forthcoming. Sydney Chaplin, brother and business manager for Charlie, deduced something was going wrong and contacted Pickford and Fairbanks. Together they hired a private detective who discovered a plan to merge all production companies and lock in exhibition companies to five-year contracts. Richard A. Rowland, head of Metro Pictures, reportedly said "The inmates are taking over the asylum" when he heard about their scheme. The four partners formed their distribution company with advice from McAdoo, who was also son-in-law and former Treasury Secretary of President Woodrow Wilson. Hiram Abrams became its first managing director. The company established headquarters at 729 Seventh Avenue in New York City.
Independent Production Model
United Artists operated without owning a physical studio lot or expensive production staff. Lawyers-turned-producers Arthur B. Krim and Robert Benjamin took over the company on the 15th of February 1951. They created the first studio without an actual studio by primarily acting as bankers offering money to independent producers. UA leased space at the Pickford/Fairbanks Studio but did not own it. This structure meant UA avoided overhead, maintenance costs, and large permanent staff found at other studios. Among their first clients were Sam Spiegel and John Huston whose Horizon Productions gave UA one major hit called The African Queen released in 1951. They also had success with Moulin Rouge in 1952. Besides those films UA also had success with High Noon in their first year earning a profit of $313,000 compared to a loss of $871,000 the previous year. Other clients followed including Stanley Kramer, Otto Preminger, Hecht-Hill-Lancaster Productions, and actors newly freed from studio contracts seeking to produce or direct their own films. By 1958 UA was making annual profits of $3 million a year. Chaplin sold his 25% share during this crisis to Krim and Benjamin for $1.1 million followed a year later by Pickford who sold her share for $3 million.