Though it often could not compete financially for top star and director contracts, RKO's below-the-line personnel were among the finest, including composer Max Steiner, cinematographer Nicholas Musuraca, and designer Van Nest Polglase.

The industry's two largest companies, Paramount and Loew's/MGM, along with First National Pictures—third of the silent era "Big Three" major studios, but by then in marked decline—and Universal Pictures, were poised to contract with ERPI and its Vitaphone and Movietone systems for sound conversion as well.

Negotiations resulted in RCA acquiring a substantial interest in FBO; Sarnoff had apparently already conceived of a plan for the studio to attain a central position in the film industry, maximizing Photophone revenue.

[4] In September, while Kennedy was traveling in Europe, Sarnoff began negotiations with Walker, whose firm was now heavily invested in KAO, to merge the exhibition circuit with Film Booking Offices under RCA control.

The new administration made clear that Kennedy's services were no longer needed and he stepped down from his board and executive positions in the merged businesses, leaving him with co-ownership and management of Pathé and the PDC assets that it had absorbed.

[27] There was an undeniable plus side to the merger: when Pathé's Constance Bennett, Ann Harding, and Helen Twelvetrees joined the Radio family in early 1931, they were bigger box office draws than anyone on the RKO roster.

[36] To make films under the new system, Selznick recruited prize behind-the-camera personnel, such as director George Cukor and producer/director Merian C. Cooper, and gave producer Pandro S. Berman, aged twenty-six, increasingly important projects.

[42] Hollywood on the Air, an RKO-produced program for NBC radio that promoted films from multiple studios, sparked independent exhibitors' ire at the free access to cinema stars it gave listeners—especially in the middle of prime moviegoing Friday night.

[47] He backed several major successes, including A Bill of Divorcement (1932), with Cukor directing Hepburn's debut, and the monumental King Kong (1933)—largely Merian Cooper's brainchild, brought to life by the astonishing special effects work of Willis O'Brien.

[62] Lacking the financial resources of industry leaders MGM, Paramount, and Fox, RKO turned out many pictures during the era that belied their economies with high style in an Art Deco mode, exemplified by such Astaire–Rogers musicals as The Gay Divorcee (1934), their first pairing as leads, and Top Hat (1935).

[74] In October 1935 the ownership team expanded, with financier Floyd Odlum leading a syndicate that bought 50 percent of RCA's stake in the company; the Rockefeller brothers, also major stockholders, increasingly became involved in the business.

[79] Soon after the appointment of a new production chief, Samuel Briskin, in late 1936, RKO entered into an important distribution deal with animator Walt Disney (Van Beuren consequently folded its cartoon operations).

He left the job before the decade's turn, but his brief tenure resulted in some of the most notable films in studio history, including Gunga Din, with Grant and McLaglen; Love Affair, starring Dunne and Charles Boyer; and The Hunchback of Notre Dame (all 1939).

[93] The studio's technical departments maintained their reputation as industry leaders; Vernon Walker's special effects unit became famous for its sophisticated use of the optical printer and lifelike matte work, an art that reached its apex with 1941's Citizen Kane.

The first two Goldwyn pictures released by the studio did excellent box office: The Little Foxes, directed by William Wyler and starring Bette Davis, and the Howard Hawks–directed Ball of Fire also garnered four Oscar nominations apiece; the latter was Barbara Stanwyck's biggest hit under the RKO banner.

[101] David O. Selznick loaned out his leading contracted director for two RKO pictures in 1941: Alfred Hitchcock's Mr. and Mrs. Smith, the final release of Carole Lombard's lifetime, was a modest success and Suspicion a substantial one, with an Oscar-winning turn by Joan Fontaine.

Announcing a new corporate motto, "Showmanship in Place of Genius: A New Deal at RKO", a snipe at Schaefer's artistic ambitions in general and his sponsorship of Welles in particular,[109] Koerner brought the studio much-needed stability until his death in February 1946.

[117] Lacking in-house stars, Koerner and his successors under Odlum arranged with the other studios to loan out their biggest names or signed one of the growing number of freelance performers to short-term, "pay or play" deals.

[124] In similar fashion, many leading directors made one or more films for RKO during this era, including Alfred Hitchcock once more, with Notorious, and Jean Renoir, with This Land Is Mine (1943), reuniting Laughton and O'Hara, and The Woman on the Beach (1947).

[126] In December 1946, the studio released Frank Capra's It's a Wonderful Life; while it would eventually be recognized as one of the greatest films of Hollywood's Golden Age, at the time it lost more than half a million dollars for RKO.

[151] But the legal status of the industry's reigning business model was increasingly being called into doubt: the U.S. Supreme Court ruled in Bigelow v. RKO that the company was liable for damages under antitrust statutes for having denied an independent movie house access to first-run films—a common practice among all of the Big Five.

[161] In May 1948, eccentric aviation tycoon and occasional movie producer Howard Hughes spent $8.8 million to gain control of the company, beating out British film magnate J. Arthur Rank for Odlum's stake.

[166] Offscreen, Robert Mitchum's arrest and conviction for marijuana possession—he served two months in jail—was widely assumed to mean career death for RKO's most promising young star, but Hughes surprised the industry by announcing that his contract was not endangered.

[167] Of much broader significance, Hughes decided to get the jump on his Big Five competitors by being the first to settle the federal government's antitrust suit against the major studios, which had won a crucial Supreme Court ruling in United States v. Paramount Pictures, Inc.

While Hughes delayed the divorcement procedure until December 1950 and did not actually sell his stock in the theater company for another three years, his decision to acquiesce was one of the crucial steps in the collapse of classical Hollywood's studio system.

Sporting the new title of managing director of production, Hughes quickly became notorious for meddling in minute filmmaking matters and promoting actresses he favored—including two under personal contract to him, Jane Russell and Faith Domergue.

[191] Leery of the studio's mounting problems and sparring with it over the release of the forthcoming nature documentary The Living Desert, the Disney company exited its long-standing arrangement with RKO and set up its own distribution firm, Buena Vista.

[203][204] In September 1954, WOR-TV had launched the Million Dollar Movie program, running a single film for a week, twice every night plus Saturday and Sunday matinees; the format proved hugely successful and non-network-affiliated stations around the country were eager to emulate it.

[232] Films such as the erotic thriller Half Moon Street (1986) and the Vietnam War drama Hamburger Hill (1987) followed, but production ended as GenCorp underwent a massive reorganization following an attempted hostile takeover.

[256] In 2007, Warners' Turner Classic Movies channel obtained the rights to six "lost" RKO films that Merian Cooper acquired in a 1946 legal settlement with his former employer and later transferred to a business associate as a tax shelter.