After the 1927 death of theater magnate Marcus Loew, William Fox saw a chance to transform his growing theater-and-film empire into an industry colossus. With the assent of Loew’s successor, Nicholas Schenck, Fox arranged in 1929 to purchase the Loew family’s controlling holdings in Metro-Goldwyn-Mayer. The maneuver was conducted without the knowledge of MGM’s most powerful studio executives, Louis B. Mayer and Irving Thalberg. Although Mayer and Thalberg occupied commanding positions at MGM, they were not shareholders, and they were reportedly furious when they learned that control of the parent company had effectively been negotiated over their heads. Mayer used his political influence to encourage the Justice Department to challenge the proposed Loew’s-Fox combination under federal antitrust law. The merger was therefore already facing a serious legal obstacle when disaster struck. In July 1929, Fox was badly injured in an automobile accident, and while he was recovering, the stock-market crash of October 1929 destroyed much of his personal fortune and wiped out the financial foundation of the transaction. The Justice Department’s antitrust action, Fox’s injuries, and the collapse of the market combined to end his attempt to absorb Loew’s and MGM. The episode became one of Hollywood’s great near-takeovers: a secret boardroom coup that might have remade the studio system, undone by corporate resistance and financial catastrophe.
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