page_title: RKO Pictures
section_title: Kane and Schaefer's troubles
hierarchical_section_title: RKO Pictures / Golden Age studio / Kane and Schaefer's troubles
caption_attribution_description: English: Promotional still for the 1941 film, Citizen Kane
context_page_description: RKO Pictures was an American film production and distribution company. In its original incarnation, as RKO Radio Pictures, Inc. it was one of the Big Five studios of Hollywood's Golden Age. The business was formed after the Keith-Albee-Orpheum theater chain and Joseph P. Kennedy's Film Booking Offices of America studio were brought together under the control of the Radio Corporation of America in October 1928. RCA chief David Sarnoff engineered the merger to create a market for the company's sound-on-film technology, RCA Photophone. By the mid-1940s, the studio was under the control of investor Floyd Odlum.
  RKO has long been renowned for its cycle of musicals starring Fred Astaire and Ginger Rogers in the mid-to-late 1930s. Actors Katharine Hepburn and, later, Robert Mitchum had their first major successes at the studio. Cary Grant was a mainstay for years. The work of producer Val Lewton's low-budget horror unit and RKO's many ventures into the field now known as film noir have been acclaimed, largely after the fact, by film critics and historians. The studio produced two of the most famous films in motion picture history: King Kong and Citizen Kane.
context_section_description: Pan Berman had received his first screen credit in 1925 as a nineteen-year-old assistant director on FBO's Midnight Molly. He departed RKO in December 1939 after policy clashes with studio president George J. Schaefer, handpicked the previous year by the Rockefellers and backed by Sarnoff. With Berman gone, Schaefer became in effect production chief, though other men—including the former head of the industry censorship board, Joseph I. Breen—nominally filled the role. Schaefer, announcing his philosophy with a new studio slogan, "Quality Pictures at a Premium Price", was keen on signing up independent producers whose films RKO would distribute. In 1941, the studio landed one of the most prestigious independents in Hollywood when it arranged to handle Samuel Goldwyn's productions. The first two Goldwyn pictures released by the studio were highly successful: The Little Foxes, directed by William Wyler and starring Bette Davis, garnered four Oscar nominations, while the Howard Hawks–directed Ball of Fire at last brought Barbara Stanwyck a hit under the RKO banner. However, Schaefer agreed to terms so favorable to Goldwyn that it was next to impossible for the studio to make money off his films. David O. Selznick loaned out his leading contracted director for two RKO pictures in 1941: Alfred Hitchcock's Mr. and Mrs. Smith was a modest success and Suspicion a more substantial one, with an Oscar-winning turn by Joan Fontaine.
  That May, having granted twenty-five-year-old star and director Orson Welles virtually complete creative control over the film, RKO released Citizen Kane. While it opened to strong reviews and would go on to be hailed as one of the greatest movies ever made, it lost money at the time and brought down the wrath of the Hearst newspaper chain on RKO. The next year saw the commercial failure of Welles's The Magnificent Ambersons—like Kane, critically lauded and overbudget—and the expensive embarrassment of his aborted documentary It's All True. The three Welles productions combined to drain $2 million from the RKO coffers, major money for a corporation that had reported an overall deficit of $1 million in 1940 and a nominal profit of a bit more than $500,000 in 1941. Many of RKO's other artistically ambitious pictures were also dying at the box office and it was losing its last exclusive deal with a major star as well. Rogers, after winning an Oscar in 1941 for her performance in the previous year's Kitty Foyle, held out for a freelance contract like Grant's; after 1943, she would appear in just one more RKO production, thirteen years later. On June 17, 1942, Schaefer tendered his resignation. He departed a weakened and troubled studio, but RKO was about to turn the corner. Propelled by the box-office boom of World War II and guided by new management, RKO would make a strong comeback over the next half-decade.
caption: Orson Welles in the title role of Citizen Kane (1941), often cited as the greatest film of all time.[80]
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