CANNES HAD NEVER seen any­thing quite like it.

It was 12 May 1990, early on in the town’s 43rd Film Fes­ti­val, and on the fa­mous pool ter­race of the Hô­tel du Cap, the swanki­est, most eye-wa­ter­ingly ex­pen­sive of the area’s party venues, a movie bash of block­buster pro­por­tions was in full flow. Ear­lier in the day a planeload of stars and in­dus­try big­wigs had flown in from Hol­ly­wood on a spe­cially char­tered 747. The pas­sen­gers had been met on the air­port Tar­mac by a cav­al­cade of black Mercedes Ben­zes, equipped with mounted flash­ing lights, which ne­go­ti­ated tightly wind­ing streets from the nor­mally quiet Riviera town up to the Cap d’an­tibes. That evening, speed­boats roared in and out of the bay, fer­ry­ing yet more guests to the as­ton­ish­ing blowout, at which the likes of Arnold Sch­warzeneg­ger, Sylvester Stal­lone, Clint East­wood, James Cameron and Oliver Stone schmoozed, the Gipsy Kings sang, and the ti­tles of forth­com­ing movies were spelled out in the sky by fire­works. It was enough to raise the eye­brows of even the most jaded Cannes party-watch­ers.

The shindig, ru­moured to have cost as much as $1 mil­lion, was os­ten­si­bly to an­nounce such Carolco projects as Ter­mi­na­tor 2: Judg­ment Day and Ja­cob’s Lad­der. But in re­al­ity it was de­signed as a way for the com­pany to bask in its own con­sid­er­able suc­cess. In a few short years, Carolco had trans­formed it­self from a shoe­string op­er­a­tion, repack­ag­ing the in­ter­na­tional rights to low-grade Hol­ly­wood dreck, into a ma­jor pro­duc­tion com­pany, one which op­er­ated from a swanky seven-storey of­fice off Sun­set Boule­vard and whose ex­ec­u­tives jet­ted around the world on the com­pany BAC 1-11 jet.

Among the danc­ing crowds, Carolco’s co­founder Mario Kas­sar sur­veyed the scene with sat­is­fac­tion. Ap­pro­pri­ately enough, it had been at Cannes that he and his for­mer part­ner, An­drew Va­jna, had es­tab­lished Carolco 15 years ear­lier. Their suc­cess — First Blood (1982), Rambo: First Blood Part II (1985), To­tal Re­call (1990), and now even big­ger and buzzier projects — was ev­i­dent in the hordes of rev­ellers, glug­ging cham­pagne amid the fa­mous ca­banas. Out on the wa­ter among the lights of the bay was a 203-foot yacht, the Maria Alexan­der, which, it was whis­pered, was the big­gest of any of the moguls’ boats in at­ten­dance.

It was pretty good go­ing for a kid who once slept on the town’s beach, and his part­ner, a for­mer Hun­gar­ian wig­maker. “In the books, it’s the best party ever done,” Kas­sar says now. “Every­body was pick­ing on us and try­ing to de­stroy Carolco. So we threw a party with all of our di­rec­tors and ac­tors and lit up the sky. And then Sly and Arnold came in at the end. There was a big dis­cus­sion about who would come in first and who sec­ond, so I said, ‘Okay, let’s go in now!’ and came in with both of them. That re­solved that prob­lem.”

Over the pre­ced­ing decade and with those twin lodestars — Stal­lone and Sch­warzeneg­ger — Carolco had be­come one of the most ex­cit­ing film com­pa­nies of the age. Its out­put, loved by pop-cin­ema fans across the globe, boasted many of the era’s defin­ing movies — glo­ri­ous ex­cess ex­ploded off the screens. It was the scrappy out­sider that had taken on the ma­jor stu­dios at their own game and won.

Within three years, Carolco would face its own judge­ment day, and the glitzi­est, cra­zi­est, rich­est of the in­de­pen­dent film com­pa­nies would go down in flames as bil­lowy and spec­tac­u­lar as any­thing their star prop­erty, John Rambo, had ever con­jured. But along the way, it was one hell of a ride.

For a gen­er­a­tion of film­go­ers, the Carolco logo — its dart­ing laser beam etch­ing the gleam­ing ti­ta­nium curves of a con­vo­luted

let­ter ‘C’ — promised the most lav­ish, thrilling, over-the-top block­busters cin­ema could pro­vide. “If you go on Youtube and search for the logo, it will re­mind you of a feel­ing,” says an ebul­lient Kas­sar, speak­ing to Em­pire from his Cal­i­for­nian home. “When the au­di­ence saw it, they ex­pected a good movie. They were never dis­ap­pointed.” Carolco’s films were cer­tainly big­ger (Ter­mi­na­tor 2), sex­ier (Ba­sic In­stinct) and ex­plodier (Rambo III) than any of the ma­jor stu­dio pic­tures of the age.

But the com­pany was de­fined as much by its flam­boy­ant, money-burn­ing busi­ness style as its box-of­fice brag­gado­cio. It was em­blem­atic of the go-go ’80s, when cheque­books were prised open as wide as the nos­trils in the bath­rooms at Spago. Joe Eszter­has would be­come the high­est-paid ‘spec’ screen­writer in his­tory when he se­cured a $3 mil­lion deal for his screen­play, ‘Ba­sic In­stinct’, from Carolco. Michael Dou­glas would pocket $15 mil­lion for the same film. Arnold Sch­warzeneg­ger would snaf­fle him­self a $13 mil­lion Gulf­stream jet on top of his $14 mil­lion salary for Ter­mi­na­tor 2. Sylvester Stal­lone would sign a ten-pic­ture deal, un­prece­dented since the days of the old stu­dios, and de­mand not only a pay­cheque of $16 mil­lion for Rambo III but a per­cent­age of the back end. To Hol­ly­wood’s celebrity com­mu­nity, Carolco was a mag­i­cal ATM from which no with­drawal seemed ever to be re­fused. “We knew their value,” ar­gues Kas­sar. “We cre­ated this friend­ship and loy­alty, but we had to break the first wall. Oth­er­wise do you think I would have got ac­cess to any of those ac­tors? Are you kid­ding?”

Kas­sar and Va­jna had orig­i­nally met at Cannes in 1974, and had formed Carolco — the name, of a de­funct Panama com­pany, was bought off the shelf — the year af­ter. Kas­sar, him­self the son of a Le­banese film dis­trib­u­tor, was gre­gar­i­ous and flam­boy­ant, with a lik­ing for os­ten­ta­tious gold jew­ellery and a unique un­der­stand­ing of the fiendishly com­plex deals that could be struck in in­ter­na­tional dis­tri­bu­tion. (One of his first ac­qui­si­tions: a film about a talk­ing vagina ti­tled Chat­ter­box.) His part­ner, a Hun­gar­ian émi­gré, had a qui­eter, more an­a­lyt­i­cal ap­proach. Eas­ily as am­bi­tious as Kas­sar, Va­jna was more fo­cused on the bot­tom line, known dur­ing the com­pany’s hey­day for wan­der­ing the of­fices ask­ing loudly, “Who

are all these peo­ple?” as the work­force, and wages bill, swelled.

“They were very dif­fer­ent char­ac­ters,” says Peter Macdon­ald, who would work with the pair as sec­ond-unit di­rec­tor on Rambo: First Blood Part II and then, af­ter the de­par­ture of orig­i­nal di­rec­tor Rus­sell Mulc­ahy, find him­self di­rect­ing Rambo III. “Andy was this dour Hun­gar­ian and Mario was kind of like a Le­banese play­boy. You won­dered how on earth they got on. But, in an odd way, they com­ple­mented one an­other. It was like one of those strange mar­riages that just works.”

The pair soon tired of play­ing on the fringes of the in­dus­try and saw their chance to break into the big league with David Mor­rell’s novel

First Blood. The story, a down­beat thriller about a Viet­nam vet re­turn­ing to Amer­ica only to find him­self hunted by a big­oted cop, had lan­guished at Warner Bros. for years, the stu­dio un­able to find a way to trans­fer the de­press­ing, po­lit­i­cally charged tale to the big screen. Va­jna and Kas­sar paid Warn­ers $380,000 for the rights and of­fered Sylvester Stal­lone, still rid­ing the wave of Rocky and its se­quels, $3.5 mil­lion to star, al­most dou­ble his usual price. “We had to over­pay; what you call the mem­ber­ship dues,” Kas­sar re­calls. “He changed his mind at one stage, he didn’t want to do it. So we thought a lit­tle, then went to see his busi­ness man­ager, Herb Nanas, and said, ‘Herb, we don’t want him to act, but be­cause he knows the char­ac­ter so well, can he at least pol­ish the script for us?’ He said, ‘Well, for 50k he can.’ And ob­vi­ously when [Stal­lone] starts writ­ing the char­ac­ter, he falls back in love with the char­ac­ter.”

De­spite a vir­tu­ally non-ex­is­tent mar­ket­ing cam­paign, and the doubts of its star, the film was a sur­prise hit. Stal­lone’s charisma and the pa­tri­otic tone of the film — Rambo’s death in the novel was re­placed with a more up­lift­ing con­clu­sion and, even more im­por­tantly, cleared the way for se­quels — hit a nerve with movie­go­ers, and it grossed $125 mil­lion.

With First Blood, Carolco had de­vel­oped its se­cret sauce: mega-pro­file projects star­ring

the big­gest names, with for­eign dis­trib­u­tors ac­tu­ally putting up the money, and thus the bud­get, be­fore the film was ac­tu­ally shot. De­ploy­ing this for­mula, Carolco could com­pete in terms of scale, spec­ta­cle and star power with the big­gest of the stu­dios.

And boy, did they.

As the 1980s turned into the 1990s, the com­pany was on what seemed like an un­stop­pable roll. Rambo: First Blood Part II (1985) had made $300 mil­lion world­wide; To­tal Re­call, Paul Ver­ho­even’s ul­tra-vi­o­lent sci-fi ex­trav­a­ganza, made over $250 mil­lion in 1990. Ter­mi­na­tor 2: Judg­ment Day would jus­tify its bal­loon­ing bud­get with a $520 mil­lion pay­day. Be­tween 1986 and the start of the 1990s, the com­pany’s rev­enue swelled to a re­ported $296 mil­lion.

For Peter Macdon­ald, the Carolco ex­pe­ri­ence was eye-open­ing. “I didn't re­alise at the time, un­til I worked with other com­pa­nies later," he re­mem­bers of the Rambo III shoot, “but work­ing with Carolco you didn’t have to worry too much about money. If you needed the bud­get for a se­quence, you got it. They ab­so­lutely wanted that money up on the screen. Ac­tu­ally, I never re­ally ex­pe­ri­enced that again.”

What, it turned out, Kas­sar and Va­jna also wanted up on screen was in­sane lev­els of vi­o­lence. “I was a bit dis­con­certed when Mario turned to me and said, ‘This is the best car­nage I’ve ever seen!’” re­mem­bers Macdon­ald. “I wasn’t sure that was what I wanted. I’d al­ways wanted to make mu­si­cals.” In typ­i­cal Carolco style, Rambo III would end up en­ter­ing the Guin­ness Book of World Records as the most vi­o­lent film ever made, with 221 in­di­vid­ual acts of may­hem, 70 ma­jor ex­plo­sions and at least 108 char­ac­ters killed on screen. “They’re count­ing the bul­lets? Good for them,” shrugs Kas­sar.

But it was Stal­lone’s un­prece­dented deal to star in Rambo III that fi­nally led to Carolco’s split. Va­jna be­came ir­ri­tated with the in­creas­ingly spi­ralling bud­get, and re­port­edly at­tempted to fire the stu­dio’s star money-maker. “If ei­ther of them was go­ing to do that it would be Andy,” says Macdon­ald. “That would be very much like him.” The move fi­nally drove an un­bridge­able wedge be­tween the two founders and Kas­sar bought out Va­jna’s shares at a cost of $100 mil­lion.

Freed of his for­mer part­ner’s more cau­tious pres­ence, Kas­sar be­gan splash­ing the cash even more wildly. He bought a pricey prop­erty in Bev­erly Hills and parked his Rolls-royce, com­plete with RAMBO li­cence plates, in its drive­way.

“Guar­an­tees!” yelled Paul Ver­ho­even. “There’s no such thing as guar­an­tees! Guar­an­tees don’t hap­pen and if any­one prom­ises you guar­an­tees, they’re ly­ing! We don’t even know that if you walk out of the build­ing here you won’t get hit by a truck! I can­not have con­trol over God! I don’t even be­lieve in God! Why am I talk­ing about God?

This is lu­di­crous!”

It was 1994, and the scene was a pro­duc­tion meet­ing for Ver­ho­even’s vi­o­lent me­dieval epic Cru­sade, set to star Arnold Sch­warzeneg­ger, and the rea­son for the di­rec­tor’s not un­typ­i­cal hys­te­ria was Carolco’s in­sis­tence that he give them as­sur­ances that the al­ready eye­wa­ter­ing bud­get, near­ing $100 mil­lion, wouldn’t be ex­ceeded.

“I just kept kick­ing him un­der the ta­ble and try­ing to tell him to shut up while we’re ahead,” Sch­warzeneg­ger told Em­pire later. “But he just wouldn’t. That was the end of that movie. It was a shame.”

By the mid-1990s, Carolco was on the ropes. Due to the com­pany’s orig­i­nal busi­ness model, rais­ing bud­gets for their block­busters via pre­sales, even mas­sively prof­itable films like Ter­mi­na­tor 2 turned out to be less fi­nan­cially re­ward­ing than they looked on pa­per. Its only pos­si­ble life­lines were the two po­ten­tial block­busters it had in de­vel­op­ment: Ver­ho­even’s Cru­sade and Renny Har­lin’s Cutthroat Is­land, a pi­rate pic­ture star­ring Michael Dou­glas — whom they had paid $13 mil­lion — and Geena Davis.

The for­mer was now dead. “It’s a sore point

for me, be­cause I re­ally be­lieved in Cru­sade,” says Kas­sar. “I wanted to do it very badly. Arnold was ready to do it. Paul was ready to do it. But Paul is con­vinced that I stopped Cru­sade to do Cutthroat Is­land, which in re­al­ity — and he’s not gonna be­lieve me — is not true. I was a big fan of his and al­ways gave him carte blanche to do his movies. But I needed to have a com­ple­tion model for that movie, and he wouldn’t pin the num­ber down. He thought I was trick­ing him and I wasn’t trick­ing him, ac­tu­ally. I re­ally wasn’t.”

And so there re­mained only the pi­rate movie. But Cutthroat Is­land seemed doomed from the start. “They had to make this movie,” Geena Davis told the New York Times shortly af­ter the film re­leased. “The com­pany was dead. Every­one knew that, one way or an­other, this was their last film.” Michael Dou­glas was un­happy with the screen­play, a prob­lem that only got worse when Renny Har­lin re­peat­edly boosted Davis’ on­screen role at the ex­pense of Dou­glas’, a sit­u­a­tion un­com­fort­ably com­pli­cated by the fact that Har­lin was ro­man­ti­cally in­volved with Davis at the time. Shortly be­fore prin­ci­pal pho­tog­ra­phy was due to com­mence in Malta, where over 1,000 feet of build­ings had al­ready had fake fa­cades built and gar­gan­tuan sets were un­der con­struc­tion, Dou­glas quit the film. None of the A-lis­ters ap­proached — Keanu Reeves, Liam Nee­son, Michael Keaton, Ralph Fi­ennes — would take the role. Even­tu­ally, Matthew Mo­dine stepped in, but a key plank of Carolco’s win­ning for­mula, a ma­jor in­ter­na­tional star, was al­ready miss­ing be­fore the film even be­gan pro­duc­tion.

“I as­sumed the whole project would be can­celled,” said Davis in 1996. “To my hor­ror, I learned not only would they not can­cel, but I had a le­gal obli­ga­tion to go ahead. I tried des­per­ately to get out of that movie.”

Kas­sar chuck­les when that quote is put to him. “You know, it’s very funny how they all want to get out of it, but they end up do­ing it,” he says. “Matthew Mo­dine is a good ac­tor and I did ex­actly the same num­bers of sales, even with­out Michael Dou­glas. But [MGM] re­leased it at Christ­mas, they spent $2, put it into two the­atres. You will al­ways read it ev­ery time you read a Carolco ar­ti­cle: at the end, a boil­er­plate ‘… and Cutthroat Is­land, and then, and then, and then…’ It fol­lows me ev­ery­where. But I laugh when I read it, be­cause it doesn’t mat­ter to me.”

Fi­nally cost­ing the be­lea­guered com­pany $98 mil­lion, Cutthroat Is­land limped out of cin­e­mas in early 1995, hav­ing made just $10 mil­lion. Swing­ing cuts at the once-lav­ish of­fices had al­ready been en­acted, staff let go. An in­fa­mous memo an­nounced that free milk would hence­forth no longer be pro­vided at the firm’s drinks sta­tions. The com­pany that had once bought Arnold Sch­warzeneg­ger a jet was now ask­ing its re­main­ing em­ploy­ees to take their cof­fee black.

It was to no avail. The com­pany was forced to file for Chap­ter 11 bank­ruptcy, the rights to its li­brary of films sold to Canal+. Though Kas­sar and Va­jna would team up again to pro­duce the likes of Ter­mi­na­tor 3: Rise Of The Machines and Ba­sic In­stinct 2, Carolco was no more.

But the com­pany had changed the in­dus­try, prov­ing that an in­de­pen­dent could take on the stu­dios at their own game, and leav­ing be­hind some of the era’s defin­ing, best-re­mem­bered movies. With­out them, we wouldn’t have the T-1000. There’d be no Rambo. Arnie would never have gone to Mars.

“It was a dif­fer­ent time,” Kas­sar re­flects of his golden age. “I did some dif­fer­ent things than the out-of-the-box things peo­ple did in those days. Ev­ery­thing was very spe­cially done, from the way we did screen­ings to the way our of­fice was set up. But you’re in show­busi­ness. You have to be a show­man. You’ve got to cre­ate an aura around ev­ery­thing.”

What­ever it costs.

Above: Arnold Sch­warzeneg­ger hangs around for a few mil­lion dol­lars in Ter­mi­na­tor 2. Left: Sylvester Stal­lone cuts up rough as Rambo in 1982’s First Blood.

Above: Michael Dou­glas and Sharon Stone smoul­der in

Ba­sic In­stinct. Right: Arnie with pro­duc­ers Mario Kas­sar and An­drew Va­jna at the T3 pre­miere in 2003.

Left: Geena Davis and Matthew Mo­dine in Carolco’s ill­fated Cutthroat Is­land.

Above: Sly brings out his big guns (times two) in Rambo III.

Right: Mr Sch­warzeneg­ger gets To­tal Re­call.

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