What did Vestron do with its "Dirty Dancing" earnings? -- Part 3

Continued from Part 2

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Frederick Wasser, in his article Vestron Video and Dirty Dancing, tells how the company collapsed just a couple years after the movie became a huge hit.

Despite the hit and despite the [Dirty Dancing] earnings, Vestron had reached its limit and was now in an irreversible downward spiral. ….. no film company had survived with only one hit ….. The tide was turning even faster against small, one-hit operations in the mid-1980s, because the major movie companies had upped the ante and were increasingly financed by bigger media conglomerates. It was ironic that increases in marketing budgets for films (averages were now $6.9 million, which was higher than the production cost of Dirty Dancing) came about because of the very success that Vestron and others had had in creating the video market.

The immediate problem for Vestron was to find more successes, and here is where it became obvious that Dirty Dancing had not broken down barriers. The movie did not lead to a franchise, and no one at Vestron could figure out how to reassemble the audience that came together for this film.

The company’s main step toward exploiting Dirty Dancing was a spin-off television show under the same title. Produced by Vestron Television … and aired on the CBS network, the series failed to match the success of the film and proved short-lived. …. Premiering in late October1988, the show was canceled ten episodes later in January 1989. …

Vestron Video lost money in 1987, its first year of losses. In 1988, on the strength of Dirty Dancing, it returned to profits, and [Vestron’s owner] Austin Furst capitalized on this to negotiate a $100 million line of credit with Security Pacific. Nonetheless, time was running out. It was not just the cost of producing seven or eight movies per year (below their stated target but still a hefty number) but also the higher and higher cost of doing business in the video market. … The market was turning against obscure films that had not had the exposure of a theatrical run. Therefore they continued to seek out films that might receive some critical notice, such as John Huston’s last picture, The Dead (1987), and to pay top dollar for Hollywood ensemble films such as Young Guns (1988).

Vestron’s return to profits was short-lived, and Security Pacific got cold feet (not just with Vestron but also with other mini-majors). The bank refused to honor its commitment to give the credit line, and Furst shut down production and declared bankruptcy. There was no re-organization. Most executives jumped ship, and Vestron went out of business in 1990. Furst pursued a lawsuit against Security Pacific (which was soon bought and bought again). By the time Furst won his lawsuit, it was against Bank of America, and he personally gained as much from the lawsuit as from his half a dozen years of building Vestron.

Vestron became the poster boy for all the mini-majors and independent distributors that were going out of business. DeLaurentiis, Cannon, Carolco, the Samuel Goldwyn Company, Hemdale, and even Orion were all fading out or going bankrupt by 1992.

Miramax was the only rising independent in the early 1990s, and a large part of its success was that it could buy films from the bankrupting companies. ….

One way of looking at the demise of Vestron treats Dirty Dancing as an irrelevant fluke. Vestron had taken advantage of a small window of opportunity: It snapped up available rights and built the video market. When the market hit a critical mass, video rights reverted to those studios that had the power to make films and market them — the major studios. Vestron could then only find less desirable rights and products and would either fade away or go out of business. …. Instead, Vestron Pictures pursued various genre productions from horror to oddball.

Below are a five more movies that Vestron co-produced. (The date after the movie’s title is the movie’s release date.)

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Promised Land -- January 22, 1988

This movie follows two high school acquaintances, Hancock, a basketball star, and Danny, a geek turned drifter, after they graduate. Hancock and his cheerleader girlfriend Mary wander into middle-class mediocrity, which is out of reach for Danny and his psychotic wife Bev.

I did not find the movie's cost. The movie earned about $316,000 at the box office.

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And God Created Woman -- March 4, 1988

A female convict, Robin Shea, marries a charming carpenter, Billy Moran. She escapes from prison and then seduces a politician, James Tiernan, who is running for state governor.

The movie cost about $5 million to make and earned about $720,000 at the box office.

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The Pointsman -- April 8, 1988

A French woman gets off a train by mistake at a remote location. She tries to ask the pointsman for help, but the two do not understand each other's languages. She eventually moves in with the man at the station. Without being able to speak, the two begin to develop a relationship over the next few months.

I did not find cost or earnings information about the movie.

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The Unholy -- April 22, 2988

A Roman Catholic priest in New Orleans who finds himself battling a demonic force after being appointed to a new parish.

I did not find the movie's cost. The movie earned about $6.3 million at the box office.

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Call Me -- May 20, 1988

Anna, a young and energetic journalist, receives an obscene call from an unknown caller whom she mistakes for her boyfriend. As a result of this mistake she agrees to meet with the caller at a local bar. When her boyfriend doesn't show she inadvertently witnesses a murder in the women's bathroom.

I did not find the movie's cost. The movie earned about $250,000 at the box office.

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Continued in Part 4.