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The late1960s and early 70s were difficult times for the major studios.   The old studio system had become a thing of the past, its decline hastened by the arrival of the independents.   Television, the old enemy, had proven impossible to subdue and continued to diminish the number of people visiting the cinemas.   Innovations (or gimmicks, depending on your point of view) such as 3D and widescreen had provided only temporary respite from the slump.   The studios had tried to reverse their fortunes by producing epic spectacles during the 60s, but because of their enormous budgets, these films had to be massive box office successes in order for the studios to show a profit – and many of them weren’t.

 MGM had employed James Aubrey Jr, the former president of the CBS TV network (where he was known as the ‘smiling cobra’) in 1969 to cut costs, much of which he had achieved by selling off studio property.   At 20^th Century-Fox, Richard Zanuck, the president and head of production, and David Brown, the executive vice-president in charge of creative operations, resigned from their positions on the 29^th December 1970 at the request of the board as part of a major restructuring.  The company had lost $36.8 million in 1969 before a credit of $11.6 million, and $21.3 million in the first nine months of 1970.   Darryl F. Zanuck, one of the few remaining moguls from Hollywood’s golden age, retained his position as Chairman of the Board and CEO, but rumour and speculation about the security and status of his position following the departure of his son was rife.

In the midst of all this upheaval Aubrey Jr announced he was holding talks with major Fox shareholders, including Davis Factor, brothers Richard and Harry Brandt, and theatrical producer (and chief dissident stockholder with up 200,000 shares) David Merrick about a possible merger.   He indicated that talks had revolved around an exchange of one MGM share for each 2 shares of Fox stock.

 Aubrey Jr’s statement was swiftly and robustly denied by Darryl F. Zanuck.  In a statement issued to the press he said, ‘Mr Aubrey’s statement, which I read for the first time in this morning’s papers, implies that there were merger talks between Fox management and MGM.  Let me categorically state for what I hope will be the last time: There have not been, are not now and not scheduled for the future, any discussions concerning a merger or any other type of ‘combination‘ between our two companies.   Let me restate the facts: My only contact with Mr. Aubrey or any other representative of MGM occurred in the early evening of January 14.  On that occasion he came to my apartment at his urgent request.   I was under the impression that the purpose of his visit was strictly personal.   After a brief stay he left me with what turned out to be a press release which I realised shortly after his departure had already been given to the press.’

Notified of Zanuck’s uncompromising rejection of his overtones, Aubrey Jr also issued a statement calling off the proposed merger which appeared in many trade magazines on the same day as the denial from the 20^th Century-Fox boss.  Aubrey Jr’s statement read, ‘The decision to withdraw from further discussions at present is the result of the failure of Fox management to respond favourably to our initial proposals. Although we were given to understand that the board of directors of Fox was to consider our suggestions they have to date remained silent.  We will, of course, be available should Fox management care to pursue this matter further in the future... Our management believed that the proposed combination of MGM and Fox would uniquely serve the interests of both companies, but only if accomplished with the enthusiastic support of both participants.   If that cannot presently be accomplished we will, for now, continue to direct our primary attention to the other challenges which we have before us.’

Sources: The Bulletin 16^th Jan 1971; New York magazine 1^st Feb 1971; Box Office 1^st Feb 1971.

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