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RKO

From the 1940s to the late 1950s, the Hughes Tool Company ventured into the film industry when it obtained partial ownership of the RKO companies, which included RKO Pictures, RKO Studios, a chain of movie theaters known as RKO Theatres and a network of radio stations known as the RKO Radio Network.

In 1948, Hughes gained control of RKO, a struggling major Hollywood studio, by acquiring the 929,000 shares owned by Floyd Odlum 's Atlas Corporation, for $8,825,000 ($107,165,160 in 2023). Within weeks of acquiring the studio, Hughes dismissed 700 employees. Production dwindled to 9 pictures during the first year of Hughes' control; previously RKO had averaged 30 per year.

That same year, 1948, he was able to arrange for his previous films with United Artists (UA), The Outlaw, Mad Wednesday, and Vendetta to be transferred to RKO. In exchange for the three completed being removed from UA distribution, Hughes and James and Theodore Nasser of General Service Studios would provide the financing of three independent films for distribution by UA. In terms of negotiations directly with RKO, the company agree to remove the production of the film Jet Pilot from David O. Selznick to Hughes. Hughes produced the film during the years 1949-1950 and owned RKO and in turn the distribution for the film. However, the film was not released until 1957 by Universal Pictures due in part to the subsequent events that would take place at RKO Distribution, and largely due the extra aerial film footage that had been filmed over the years after the film's 1950 completion. Hughes was undertaking a final edit before the 1957 release.

After his acquisition of RKO, Hughes shut down production at the studio for six months, during which time he ordered investigations into the political leanings of every remaining RKO employee. Only after ensuring that the stars under contract to RKO had no suspect affiliations would Hughes approve completed pictures to be sent back for re-shooting. This was especially true of the women under contract to RKO at that time. If Hughes felt that his stars did not properly represent the political views of his liking or if a film's anti-communist politics were not sufficiently clear, he pulled the plug. In 1952, an abortive sale to a Chicago-based five-man syndicate, two of whom had a history of complaints about their business practices and none with any experience in the movie industry, disrupted studio operations at RKO even further.

In 1953, Hughes became involved with a high-profile lawsuit as part of the settlement of the United States v. Paramount Pictures, Inc. Antitrust Case. As a result of the hearings, the shaky status of RKO became increasingly apparent. A steady stream of lawsuits from RKO's minority shareholders had grown to become extremely annoying to Hughes. They had accused him of financial misconduct and corporate mismanagement. Since Hughes wanted to focus primarily on his aircraft manufacturing and TWA holdings during the years of the Korean War of 1950 to 1953, Hughes offered to buy out all other RKO stockholders in order to dispense with their distractions.

By the end of 1954, Hughes had gained near-total control of RKO at a cost of nearly $24 million, becoming the first sole owner of a major Hollywood studio since the silent-film era. Six months later Hughes sold the studio to the General Tire and Rubber Company for $25 million. Hughes retained the rights to pictures that he had personally produced, including those made at RKO. He also retained Jane Russell's contract. For Howard Hughes, this was the virtual end of his 25-year involvement in the motion-picture industry. However, his reputation as a financial wizard emerged unscathed. During that time period, RKO became known as the home of classic film noir productions, thanks in part to the limited budgets required to make such films during Hughes' tenure. Hughes reportedly walked away from RKO having made $6.5 million in personal profit. According to Noah Dietrich, Hughes made a $10,000,000 profit from the sale of the theaters and made a profit of $1,000,000 from his 7-year ownership of RKO.