Management of Gencorp's RKO Pictures unit has come up with backing from Wesray Capital Corp. to salvage its purchase of the venerable movie firm, after failing to arrange financing for the deal earlier this year.
Wesray, a private New Jersey investment firm that recently bought the Six Flags amusement park chain, said it will be a partner in owning the Los Angeles company that has an extensive library of vintage RKO films including "Citizen Kane" and "King Kong." One of Wesray's founding partners is former Treasury Secretary William E. Simon.
"We look forward to working with existing management team to really gear up a high-class film production program," said Burke Ross, the Wesray executive vice president in charge of the deal, in a telephone interview.
Gencorp announced Thursday that it had signed a definitive agreement to sell its money-losing film subsidiary to Entertainment Acquisition Co., jointly formed by the RKO Pictures management and Wesray. Gencorp said it expects the deal to be completed by Nov. 30.
Gencorp, of Akron, Ohio, which has major interests in the aerospace and automotive industries and which made only 2% of its revenue from RKO Pictures, said it expects to realize about $31 million "net, after taxes," but did not give the specific price. The price tag on the earlier failed purchase was $48 million.
Ross said he could not comment on the price or on the scope and financial means envisioned for a future RKO Pictures film production program. He referred those questions to Gerald Offsay, the chief management figure in the buyout. Offsay did not respond to telephone calls from The Times on Thursday.
As reported, Gencorp halted movie production by RKO Pictures last June after its sale to management members Alan J. Hirschfield and Robert Fell collapsed for lack of sufficient financing.
RKO's latest film, "Hamburger Hill," was released recently through Paramount Pictures, as previously arranged. The Gencorp subsidiary has resumed making movies in recent years but with little commercial success. Other RKO releases through Paramount this summer were "Hot Pursuit" and "Campus Man."
The film subsidiary holds the rights to 750 films in the old RKO library, largely pre-1955 releases. Among them are "The Hunchback of Notre Dame," "Gunga Din" and "Top Hat."
In 1955, the original RKO firm was bought from financier Howard Hughes by General Teleradio, whose name was changed in 1959 to RKO General, which has been a Gencorp subsidiary.
"What attracted us to this deal," said Wesray's Ross, "is the RKO Pictures name. It is one of the top names in Hollywood. We'd love to see it regain its position among the top names and generate a lot of films which 30 years from now will be considered classics."
Ross said his firm holds equity interests in about 25 firms, including the Six Flags chain bought for $350 million last May from Bally Manufacturing.