1980s success boom
Carolco's first major success was First Blood (1982), an adaptation of David Morrell's novel of the same name. Kassar and Vajna took a great risk buying the film rights to the novel (for $385,000) and used the help of European bank loans to cast Sylvester Stallone as the lead character, Vietnam War veteran John Rambo, after having worked with him on the John Huston film Escape to Victory (1981). The risk paid off after First Blood made $120 million worldwide, and placed Carolco among the major players in Hollywood.[9]
On May 15, 1984, Carolco Pictures signed an agreement with then-up-and-coming film distributor and fledging studio Tri-Star Pictures, with Tri-Star distributing Carolco's films in North America; HBO (a partner in the Tri-Star venture) handled pay cable television rights, and Thorn EMI Video (later, HBO/Cannon Video) handled North American home video distribution rights. The first film to be released under the agreement was Rambo: First Blood Part II (1985).[10]
The First Blood sequel was timed for the 10th anniversary of the United States' exit from the Vietnam War; that event garnered publicity for the new film, which also became a hit.[9] Tri-Star and Carolco quickly renewed their partnership in 1986, which called for Tri-Star to distribute upcoming Carolco productions, including Rambo III, in a new multi-feature agreement.[11] TriStar would release the majority of Carolco's films from that point on in the United States and some other countries until 1994.
The release of the two Rambo sequels were so instrumental to Carolco's financial success that the studio began to focus more on big-budget action films, with major stars such as Stallone (who later signed a ten-picture deal with the studio) and Arnold Schwarzenegger attached. These films, aimed at appealing to a worldwide audience, were financed using a strategy known as "pre-sales", in which domestic and foreign distributors invested in these marketable films in exchange for local releasing rights.[12]
In January 1986, Carolco attempted to acquire troubled studio Orion Pictures—which had distributed First Blood for Carolco—via a corporate raid by Vajna and Kassar for control of their board.[13] The takeover failed by May, when Metromedia acquired a controlling interest in Orion. That same year, Carolco hired tax attorney Peter Hoffman as their newest president and CEO, and he opted to provide financial backing to assist Carolco's growth.[2][14]
Also in the same year, Carolco entered the home video distribution business; they purchased independent video distributor International Video Entertainment (IVE), which was in financial distress and nearly bankrupt, and Carolco intended to reorient the company. The transaction was finalized in 1987.[15] This resulted in Carolco paying $43 million to HBO/Cannon Video (successor to Thorn-EMI Video) in exchange for the video rights to two of Carolco's upcoming releases, Angel Heart and Extreme Prejudice, allowing Carolco to relicense the pictures to IVE.[16] IVE merged with another distributor, Lieberman, and became LIVE Entertainment in 1988.[17] In addition to IVE, Carolco was also rumored to have been interested in acquiring Media Home Entertainment from Heron Communications, but the sale fell through.[18][19]
Throughout the remainder of the 1980s, Carolco expanded into various other business sectors to further capitalize on the Rambo films and their other offerings. This included video retail holdings,[20] licensing of their IP,[21] an international division (which included deals with John Carpenter, Alive Films, and Canada's Alliance Entertainment Corporation),[22][23][24] and television production and distribution via the buyout of independent syndicator Orbis Communications.[25] In addition to its own library, Carolco also held the television rights to the films of Hemdale Film Corporation (including The Terminator and
In 1989, they purchased some assets from the bankrupt De Laurentiis Entertainment Group (DEG), including their production facility in Wilmington, North Carolina.[28][29] In doing so, Carolco also obtained the production rights to Total Recall—an adaptation of Philip K. Dick's novelette, We Can Remember It for You Wholesale—which had been in development limbo for a number of years, and Schwarzenegger convinced Kassar and Vajna to pursue the project while letting him star and obtain creative influence.[30][31][32] The resulting film, directed by Paul Verhoeven, was later released in 1990, grossing $261.4 million on a $48–80 million budget.[33]
By late 1989, disagreements between Vajna and Kassar had grown over the direction of Carolco; Kassar and Hoffman desired to further expand the company into a larger studio, while Vajna felt their expansion had become overly rapid.[2][5] In November, Vajna formed his own studio, Cinergi Pictures, with The Walt Disney Company's Hollywood Pictures as a distribution partner. The following month, Vajna sold his shares of Carolco to Kassar for $106 million, increasing the latter's ownership of Carolco to 62%.[34]
