Reiner named the company in honor of the Maine town that serves as the setting of several stories by Stephen King, after the success of his film Stand by Me, which was based on The Body, a novella by King. Reiner and Scheinman already had a production company. They were friends with Shafer, who worked with Horn at 20th Century Fox at the time. Horn was disappointed at Fox and agreed to join the trio at forming the company. Horn brought along Padnick, who was an executive at Embassy Television. In Castle Rock, Horn became the CEO, Shafer ran the film division, Padnick ran TV, and Reiner and Scheinman became involved in the development of productions. The company was originally backed by The Coca-Cola Company, then the parent company of Columbia Pictures. Coca-Cola and Castle Rock's founders jointly owned stakes in the company. Months after the deal, Coca-Cola exited the entertainment business, and was succeeded by Columbia Pictures Entertainment, Inc.. In 1989, Castle Rock was supported by another backer, Group W, a subsidiary of Westinghouse. Castle Rock later struck a deal with Nelson Entertainment, the company that owned the domestic home video rights to Reiner's This Is Spinal Tap, The Sure Thing, and The Princess Bride, to co-finance Castle Rock's films. Under the deal, Nelson also distributed the films on video in North American markets, and handled international theatrical distribution, while Columbia, which Nelson forged a distribution deal with, would receive domestic theatrical distribution rights. Some of Nelson's holdings were later acquired by New Line Cinema, which took over Nelson's duty. Columbia, shortly after the company's formation, thereafter had to re-invest with a substantial change in terms when accumulated losses exhausted its initial funding. Reiner has stated that Castle Rock's purpose was to allow creative freedom to individuals; a safe haven away from the pressures of studio executives. Castle Rock was to make films of the highest quality, whether they made or lost money. Castle Rock has also produced several television series, including the sitcom Seinfeld.
Turner purchase and WarnerMedia ownership
In August 1993, Turner Broadcasting System agreed to acquire Castle Rock, along with co-financing partner New Line Cinema. The sale was completed on December 22, 1993. The motivation behind the purchase was to allow a stronger company to handle the overhead. By 1994, Castle Rock launched a foreign sales operation, Castle Rock International, and planned to produce 12-15 films annually. Castle Rock also had aspirations to distribute its own films once its deal with Columbia expired in 1998. Turner Broadcasting later merged with Time Warner in 1996. After a failed attempt to divest the company, Time Warner integrated Castle Rock Entertainment into Warner Bros., and cut its production slate to five films per year. On June 27, 1997, Castle Rock's staff was reduced to 60 employees and Castle Rock International was folded into Warner Bros. In January 1998, Warner and PolyGram Filmed Entertainment formed a deal to co-finance and co-distribute Castle Rock films; that deal was taken over by Universal Pictures after said studio's parent company Seagram merged with PolyGram later that year. The Warner/Universal deal expired in 2000. In April 2002, Warner Bros. reduced Castle Rock Entertainment's budget following a string of box office bombs. Castle Rock fired 16 of its 46 employees, and Castle Rock's physical production and public relations departments, back-office duties, and remaining employees were absorbed into Warner Bros.
Currently, Warner Bros. owns the copyrights and overall rights to most of the Castle Rock films and television shows from the pre-1994 and post-1993 eras, with a few notable exceptions. Metro-Goldwyn-Mayer owns the worldwide home video rights to most of the pre-1994 films by virtue of the purchase of the pre-1996 PolyGram Filmed Entertainment/“Epic” library in 1999.
