Like other film industry pioneers, Marcus Loew started with the nickelodeon crazy and built it into an impressive chain of theaters. But by the late 1910s, one of the major problems was having a constant supply of good films for his theaters.
Loew had been one of Adolph Zukor's (Famous Players) best customers until Zukor started charging a percentage of the theaters receipts for his bigger pictures. Loew knew that it was time to go the way of several other theater chain owners and procure their own supply and distribution companies.
In 1920, Loew was offered Metro Pictures. Metro had some good talent under contract, both directors and actors. The problem was that Metro was not well equipped and didn't have good distribution set up. Still the acquisition of Metro was an excellent introduction into the production side of film making.
After a couple of years, the problems facing Loew had improved but as he continued expanding his theater chain, he need more production and the management problems were a real headache.
In 1924, Lee Shubert, who was on the board of Loews AND on the board of Goldwyn Pictures, a studio that was that was floundering, approached Loew that it may be time to expand.
Goldwyn had lost it's management, but were stronger than Metro. Goldwyn had great studio facilities, a great roster of directors and actors, great distribution set-up AND had taken in Cosmopolitan Pictures which gave direct access to the William Hearst magazine and newspaper empire for marketing. As a side benefit, rumors are that Loew hated the parrot logo of Metro but LOVED the Leo the Lion logo of Goldwyn.
As fate would have it, the attorney for Goldwyn Pictures was J. Robert Rubin, who was also the attorney for Loews, so a takeover easily worked out. The only thing missing was the management to handle such an expansion.
AGAIN, J. Robert Rubin also just happened to be the attorney for Louis B. Mayer. Mayer had the management team but didn't have the assets. Mayer's management skills was just what was needed to bring everything together. Mayer also brought with him Irving Thalberg who was considered at the time, the 'boy wonder' of Hollywood.
A deal was quickly struck with Loew's absorbing Goldwyn Pictures and Louis B. Mayer Productions. Metro-Goldwyn would control production and distribution as a subsidary of Loew's. Contracts were signed with Mayer as studio chief Thalberg as supervisor of production and Rubin as secretary. All 3 were to be vice-presidents with Mayer and Thalberg to be at the Goldwyn studio and Rubin at the Loews headquarters in New York.
Metro already had their headlining stars of Ramon Novarro, Alice Terry, Viola Dana, Jackie Coogan, Buster Keaton and Monte Blue. They also had directors like Rex Ingram and Victor Schertzinger.
Goldwyn brought their headlining stars of Conrad Nagel, Blanche Sweet, John Gilbert, William Haines and Marion Davies. Their director contributions were King Vidor, Mrshall Neilan, Erich von Stroheim, Robert Leonard, Charles Brabin and Victor Seastrom. Goldwyn also contributed writers Frances Marion and Carey Wilson and art director Cedric Gibbons AND the Leo the Lion trademark devised by Howard Dietz.
Mayer brought production manager Thalberg and headlining stars of Lon Chaney, Norma Shearer, Renee Adoree and Hedda Hopper and directors Fred Niblo, Reginald Barker, Hobart Henley and John Stahl.
This massing of talents caused the using of the slogan 'More Stars Than There Are in Heaven'.
With Mayer taking control, his name was soon added making the name complete as Metro-Goldwyn-Mayer.
This gave MGM a dominance in Hollywood and Mayer continued to increase his dominance over the next 10 years by continually expanding and adding talent in all directions.
By 1934, MGM had expanded to 23 sound stages on 117 acres. The property included everything from a lake, harbour, park, a jungle, streets of houses and the world's largest film laboratory. But MGMs biggest asset was their people. By 1934, MGM had about 4,000 employees with 61 featured actors, 17 directors and 51 writers under contract.
In 1934, Mayer brought in Hugh Harman and Rudolph Ising and created the MGM Animation Department.
In 1936, the death of Irving Thalberg was a major blow to the studio. Mayer handled both management and production. He started instituting more series oriented films to take advantage of already established money makers. Mayer kept the management end going well, but soon the quality of production begin to fall. The replacement for Thalberg was Dore Schary.
In 1951, Mayer had a major disagreement and left MGM which started a trend. In 1955, Schenck stepped down as president of Loews and was replaced by Arthur Loew who stepped down the next year and was replaced by Joseph Vogel.
Louis B. Mayer died in 1957. (That same year, by coincidence, MGM lost money for the first time in their existance)
In 1958, the government stepped in and divided Loew's and MGM with Loew's retaining the theater chain and the radio station WMGM; MGM kept the studio, distributing companies, and international theaters and distribution (which had been developed by Arthur Loew who was one of Marcus Loews twin sons)
Sol C. Siegel took over as head of MGM but left in 1962 to have Robert Weitman take the reigns until 1969 when Herbert Solow briefly took control then James Polk Jr. and then James Aubrey Jr. This started share deals and proxy battles that wound up with Kirk Kerkorian with controlling interest.
Liquidation of many of the overseas properties became a focus until 1973 when Aubrey announced with withdrawal of MGM from distribution. A contract was created with United Artists for domestic distribution and to Cinema International Corp. (CIC) for international distribution with CIC buying the MGM owned international theaters.
In 1981, United Artists was purchased by MGM with UA becoming a wholly owned subsidiary. In 1983, the name was changed to MGM/UA Entertainment Co.
In 1986, Turner Broadcasting bought MGM/UA for approximately $1.5 billion and sold the UA portion to Tracinda Corp. along with the MGM motion picture and television production and distribution businesses and the home entertainment division. The MGM lot and laboratory were sold to Lorimar-Telepictures. Turner retained only the MGM film library.
In 1990 Pathe Communications Corp. acquired MGM/UA for $1.3 billion and changed the name to MGM-Pathe. Lawsuits and corporate problems started immediately. Italian financier Giancarlo Parretti purchased MGM-Pathe and United Artists which stopped the lawsuits and corporate problems but immediately there were financial problems. By 1991 Parretti was removed from his position as chairman with control given over to Alan Ladd Jr. MGM-Pathe received a $145 million loan allowing them to start up film distribution again.
In May 1992, Credit Lyonnais bought up 98.5% of MGM-Pathe eliminating Parretti. The name was changed by to Metro-Goldwyn-Mayer Inc.
Despite a few commercial successes, Credit Lyonnais was unable to stem the tide of red ink during the mid-1990s; putting the studio up for sale with the only bidder being Kirk Kerkorian (again). Kerkorian sold a portion of the studio to Australia's Seven Network and installed a top notch management team. This move allowed Wall Street to pick up MGM stock again.
In 1991, MGM bought the properties of Orion Pictures and Goldwyn Entertainment.
In 2001, MGM severed ties with UIP, which was a joint distribution company for MGM, Universal and Paramount, for their international distribution and shifted international distribution to 20th Century Fox.
In 2004, Sony purchased MGM for approximately $5 billion. Since that time MGM has restarted their domestic distribution and has started up making films again.