The Cannon Group, Inc.
The Cannon Group, Inc. was an American group of companies, including Cannon Films, which produced films from 1967 to 1994. The extensive group also owned, amongst others, a large international cinema chain and a video film company that invested heavily in the video market, buying the international video rights to several classic film libraries. The Cannon catalogue encompasses a wide range of different genres. Cannon Films is known for its highly successful 1980s action B movies, such as Missing in Action, American Ninja, and Bloodsport. It also produced the Oscar-nominated films Joe, Runaway Train and Street Smart.
1967–1979: Friedland/Dewey era
Cannon Films was incorporated on October 23, 1967. It was formed by Dennis Friedland and Chris Dewey while they were in their early 20s. They had immediate success producing English-language versions of Swedish soft porn films directed by Joseph W. Sarno: Inga, aka Jag––en oskuld and To Ingrid, My Love, Lisa, aka Kvinnolek. By 1970, they had produced films on a larger production scale than a lot of major distributors, such as Joe, starring Peter Boyle, and The Yum-Yum Girls.They managed this by tightly limiting their budgets to $300,000 per picture—or less, in some cases. The success of Joe brought more attention to the company. As the 1970s moved on, a string of unsuccessful films seriously drained Cannon's capital. This, along with changes to film-production tax laws, led to a drop in Cannon's stock price.
1979–1987: Golan-Globus era
By 1979, Cannon had hit serious financial difficulties, and Friedland and Dewey sold Cannon to Israeli cousins Menahem Golan and Yoram Globus for $500,000, which earned over $40 million on an $8 million budget.Other major hits for Cannon were a series of action movies starring Chuck Norris, including Missing in Action, Invasion U.S.A. and The Delta Force. Missing in Action was criticized heavily as being a preemptive cash-in on the Rambo franchise. James Cameron's story treatment for Rambo: First Blood Part II was floating around Hollywood in 1983, which Golan and Globus reviewed and were "inspired" by. The writers of MIA even gave Cameron credit saying their film was inspired by his script treatment.
The Cannon Group ignited a worldwide ninja craze with "The Ninja Trilogy", a film series which consisted of Enter the Ninja, Revenge of the Ninja, and Ninja III: The Domination, all starring Sho Kosugi, as well as American Ninja and its sequel American Ninja 2: The Confrontation. Other action/adventure films they produced included the 3-D Treasure of the Four Crowns, King Solomon's Mines, and the vigilante thriller sequel Exterminator 2.
The Cannon Group's biggest financial success was with the 1986 action film Cobra, which starred Sylvester Stallone; not a low-budget film, it earned $160 million on a $25 million budget.
Cannon produced musical and comedy films such as Breakin', Breakin’ 2: Electric Boogaloo, The Last American Virgin, and the U.S. release of The Apple ; erotic period drama pictures such as Lady Chatterley's Lover, Bolero, and Mata Hari ; science fiction and fantasy films such as Hercules, Lifeforce, and The Barbarians; and serious pictures such as John Cassavetes' Love Streams, Franco Zeffirelli's Otello, Norman Mailer's Tough Guys Don't Dance, and Andrei Konchalovsky's Runaway Train and Shy People.
During these years, Cannon prominently advertised at the Cannes Film Festival each year. Substantial pre-sales of the next years' films were made based on the strong salesmanship skills of Globus. The deposits made from these sales financed production of the first film in the production line-up, which—when completed and delivered to theatre owners around the world—generated enough money to make the next film in the line-up. in the Netherlands and their principal loan officer, Frans Afman, provided bridge financing until the pre-sales amounts were collected; this role was inherited by Credit Lyonnais after their purchase of Slavenburg's in 1983.
In 1982, The Cannon Group, Inc. entered into a relationship with MGM/UA Entertainment Co. with the latter company serving as Cannon's distributor for North American theatrical and video releases; this would not be the last time Cannon dealt with MGM. In 1984, Cannon expanded further into Europe, signing with UGC for French distribution, and acquiring Kenneth Rive's Gala Films, which was absorbed into Cannon Group's U.K. distribution arm. On June 25, 1985, Cannon bought the rights to produce future films based on the comic book character Superman from the Salkinds, and struck a distribution assignment with Warner Bros. for a 1987 release. Cannon also further expanded their French assets, with the aim of becoming the largest film distributor in France.
By 1986, output reached an apex with 43 films in one year. Golan remained chairman of the board, while Globus served as president. That year, Cannon attempted to produce film adaptations of the stage plays Zorba and American Buffalo, but these films never materialized. Another film project that ultimately never materialized was a live-action film based on Barbie, with a planned plotline concerning the eponymous doll showing her owner that her dreams could come true. Warner Bros. would eventually release a live-action film based on the property in 2023. Other areas of interest included plans for television adaptation of Cannon properties, and following up their adaptation of Rumpelstiltskin with a total of 12 fairy tale films as the Cannon Movie Tales series; Cannon wound up releasing only a few of the fairy tales.
Film critic Roger Ebert said of Golan-Globus in 1987, "no other production organization in the world today—certainly not any of the seven Hollywood 'majors'—has taken more chances with serious, marginal films than Cannon."
That year, Cannon gained its greatest artistic success: its 1986 Dutch production The Assault won the 1987 Academy Award for Best Foreign Language Film and a Golden Globe Award for Best Foreign Language Film. Meanwhile, Otello, based on the opera of the same name, also received a Golden Globe nomination that year.
Golan and Cannon Films tended to over-promote films that did not live up to expectations. For instance, Lifeforce was to be "the cinematic sci-fi event of the '80s" and Masters of the Universe was dubbed "the Star Wars of the '80s." Diversifying from film production, Cannon had begun purchasing film distributors and movie theaters. The purchases ranged from European companies to the sixth-largest chain in the United States, the 425-screen "marginally profitable" Commonwealth Theaters.
In addition, Cannon also owned the film rights to Spider-Man, and planned to produce a Spider-Man film in the mid-1980s. Golan and Globus agreed to pay Marvel Comics $225,000 over the five-year option period, plus a percentage of the film's revenues. The rights would revert to Marvel if a film was not made by April 1990. Marvel and Sony would eventually complete and release a Spider-Man film in 2002 directed by Sam Raimi after the rights had been re-secured, following a lengthy and messy legal battle between Marvel, Sony and several other parties over the film rights.
Cannon's films proved to be much more popular in the United Kingdom than in its native United States, which is why Cannon acquired several British cinema chains during the 1980s, and founded the mail-order video distribution service Videolog as a joint venture with Columbia House Europe, Ltd. in the mid-1980s. From the mid-1980s until the mid-1990s, Cannon Cinemas were a familiar sight in the United Kingdom until Richard Branson's Virgin Group bought the remaining sites and rebranded them as Virgin Cinemas in 1995. Cannon purchased the assets of Thorn EMI Screen Entertainment from businessman Alan Bond in April 1986 for £175 million; the renamed Cannon Screen Entertainment and archrival The Rank Organization jointly signed a $10 million agreement with the BBC that August for the latter to broadcast both companies' films.
1987–1991: Parretti era
By 1988, a cooling in the film market and a series of box office disappointments—including the multimillion-dollar production of Superman IV: The Quest for Peace, whose original $36-million budget was slashed to $17 million—had once again put Cannon in financial woes. Concerns about Cannon's financial future had been expressed as early as 1986; one unidentified film executive called the company a "house of cards", with Golan and Globus – between their splashy wheeling and dealing, reports of "penny-pinching" by the duo in terms of business expenses, and numerous lawsuits incurred by the company – attaining an unwelcome reputation in the Hollywood community. Dustin Hoffman also filed suit against Cannon, after the company purportedly breached a contract signed with the actor by taking out full-page advertisements to promote Hoffman's involvement with Cannon.The company signed a $75 million agreement with Warner Bros. to handle part of their assets; however, the financial loss was staggering. Following the purchase of the Thorn EMI assets, Cannon was severely stretched, and faced bankruptcy; in May 1987, Cannon sold its 2,000-title Thorn-EMI library for $85 million to Weintraub Entertainment Group. Shortly afterwards, Cannon dropped out of the HBO/Cannon Video joint venture with HBO due to Cannon's ongoing financial problems.
The U.S. Securities and Exchange Commission began an investigation into Cannon's financial reports, suspecting that Cannon had fraudulently misstated them. On the verge of failure, Cannon Films was taken over by Pathé Communications, a holding company controlled by Italian financier Giancarlo Parretti. Financed by the French bank Crédit Lyonnais, already involved with Cannon for years, Pathé Communications' takeover of Cannon immediately began a corporate restructuring and refinancing of $250 million to pay off Cannon's debt. By 1989, Golan, citing differences with both Parretti and Globus, resigned from his position and left Cannon to start 21st Century Film Corporation, while Globus remained with Pathé.
One of the final films produced by Golan and Globus that received a wide release under the Cannon Films banner was the post-apocalyptic action film Cyborg. This film was conceived to use both the sets and costumes built for a planned but unmade sequel to Masters of the Universe as well as the ill-fated live-action version of Spider-Man. Both projects were planned to shoot simultaneously under the direction of Albert Pyun. Not to let that pre-production work go to waste, Pyun wrote Cyborg, with Chuck Norris in mind, suggesting it to Cannon Films. Jean-Claude Van Damme was cast in the lead role.
Following Golan's departure from Cannon, he became the head of 21st Century Film Corporation, an independent company. The Cannon Group was renamed and restructured by Parretti with Globus being made co-president of Pathé Communications and chairman of Cannon International and Alan Ladd Jr. was brought in as chairman of Pathé Entertainment. In 1989, Pathé greenlit three films, The Russia House with Sean Connery and Michelle Pfeiffer, Quigley Down Under starring Tom Selleck and Fires Within with Jimmy Smits. They also announced Shattered directed by Wolfgang Petersen, Not Without My Daughter with Sally Field, Company Business starring Gene Hackman and Mikhail Baryshnikov as well as Ridley Scott's Thelma & Louise. They signed a domestic distribution deal with Warner Bros. for its theatrical product.
Soon after announcing a new slate of films and the distribution deal with Warner Bros., Parretti made a $1.2 billion bid for Metro-Goldwyn-Mayer, backed by Crédit Lyonnais. The bid was accepted and Parretti merged Pathé Communications and MGM to create MGM-Pathé Communications. With the merger, the majority of the former Cannon Group library became part of the MGM library. As MGM-Pathé had a distribution deal with Warner Bros., Parretti axed the MGM/UA Home Video department as one of his first acts in charge, resulting in the loss of eighty jobs.
Crédit Lyonnais foreclosed on Parretti in July 1991 after he defaulted on loan payments and sued for the removal of Paretti, his wife Maria Cecconi, his daughter Valentina Parretti, Yoram Globus, Florio Fiorini, Danny Dimbort, Antonio Pares-Neira and Lewis Horowitz from the board of directors.
Parretti -- pushed out of management control of MGM-Pathé and the board -- proceeded to countersue Crédit Lyonnais, claiming they destroyed his ability to make money at MGM-Pathé, in an attempt to wrestle control back. Parretti was later convicted of perjury and evidence tampering in a Delaware court for statements he made in a 1991 civil case, brought by Credit Lyonnais to validate their removal of Parretti, to the effect that a document he claimed allowed him to retain control of MGM was authentic; he fled the country for Italy before he could be sentenced or extradited to France, where he was wanted on criminal charges related to his use of MGM's French assets.
In 1997, the California Superior Court in Los Angeles entered a final judgement in a separate civil suit against Parretti, ordering him to pay $1.48 billion to Credit Lyonnais. After Federal prosecutors unsealed an indictment against Parretti and Florio Fiorini accusing them of fraud in 1999, Italian authorities arrested both men and held them for extradition to the United States. Parretti was released by the court of appeal in Perugia shortly thereafter, ordered to remain in his home town of Orvieto and report to the police three times a week, even though authorities in Rome had requested he be held pending a decision on the extradition.