10 Movie Studio Decisions That Completely Backfired

Hollywood executives are tasked with making massive decisions that shape the film industry—but sometimes, they get horribly wrong. Whether it’s turning down billion-dollar franchises, firing key actors, or rejecting movies that went on to become classics, these blunders ended up costing studios millions (or even billions) of dollars.

Here are 10 of the biggest Hollywood mistakes that completely backfired.

Related: 10 Things You Never Knew About Hollywood’s Blacklist Era

10 Warner Bros. Letting The Lord of the Rings Go to Another Studio

In the 1990s, Warner Bros. owned the rights to J.R.R. Tolkien’s The Lord of the Rings and was approached by filmmaker Peter Jackson, who wanted to make a trilogy. However, Warner Bros. executives didn’t believe the films would be profitable, dismissing the idea as too risky and expensive. Instead, they let the project go to New Line Cinema, a much smaller studio at the time.

This turned out to be one of the biggest mistakes in Hollywood history. The Lord of the Rings trilogy went on to gross nearly $3 billion worldwide, winning 17 Academy Awards, including Best Picture for The Return of the King. It became one of the most successful franchises ever while Warner Bros. sat on the sidelines, missing out on box office revenue and decades of merchandising profits.^[1]

9 Universal Selling the Rights to Marvel Superheroes

In the 1990s, Marvel Comics struggled financially and began selling the movie rights to its characters. Universal Pictures had the chance to buy the rights to nearly all of Marvel’s superheroes for just $25 million—including Iron Man, Thor, Black Panther, and Captain America. Instead, Universal passed on the deal, thinking the characters weren’t valuable enough to make blockbuster films.

Marvel eventually sold Spider-Man to Sony and X-Men to Fox. Disney purchased Marvel Studios for $4 billion in 2009—a move that turned into a $29 billion box office empire with the Marvel Cinematic Universe (MCU). Universal ended up with only the Hulk, which they barely used. The studio had the chance to dominate the superhero genre but threw it away, leaving billions on the table.^[2]

8 20th Century Fox Letting James Cameron Keep Avatar’s Rights

When James Cameron pitched Avatar to 20th Century Fox in the early 2000s, they agreed to fund the movie—but with one major condition. They refused to buy the full rights, allowing Cameron to retain ownership of the franchise in exchange for reducing his salary. At the time, Fox executives didn’t believe Avatar would be a long-term success, so they saw no issue with the deal.

Then, Avatar became the highest-grossing movie of all time, making $2.9 billion at the box office. Because Cameron kept the franchise rights, Disney was able to swoop in and make a deal with him, leading to the Pandora-themed expansion at Disney World and multiple upcoming sequels. Fox, meanwhile, lost complete control over what could have been their next big sci-fi franchise, all because they failed to secure the rights upfront.^[3]

7 Warner Bros. Choosing Wild Wild West over The Matrix

In the late 1990s, Warner Bros. had two major projects in development: The Matrix, an ambitious cyberpunk sci-fi film, and Wild Wild West, a big-budget action-comedy starring Will Smith. The studio’s executives thought The Matrix was too weird and didn’t fully understand its appeal, so they gave Wild Wild West a bigger budget and more promotion.

The decision completely backfired. Wild Wild West bombed at the box office, earning just $222 million against a $170 million budget, while The Matrix became a cultural phenomenon that revolutionized sci-fi cinema. The franchise went on to make over $1.8 billion, spawning sequels, spin-offs, and a lasting influence on Hollywood. Even Will Smith admitted he deeply regretted turning down the role of Neo in favor of playing a cowboy in one of the biggest flops of his career.^[4]

6 Sony Letting Disney Take Full Control of Star Wars

In the early 2010s, George Lucas wanted to sell Lucasfilm, the company behind Star Wars and Indiana Jones. He initially approached Sony Pictures, but the studio wasn’t interested in taking on such a big project and feared that Star Wars wouldn’t be profitable in the modern era. So Lucas turned to Disney, who immediately saw the franchise’s potential.

In 2012, Disney bought Lucasfilm for $4 billion and turned Star Wars into an even bigger media empire, generating over $10 billion in box office revenue alone and billions more from toys, TV shows, and theme park attractions. Meanwhile, Sony was left watching one of the most profitable franchises in history slip through its fingers, proving that their fear of Star Wars being a “risky investment” was completely misplaced.^[5]

5 Paramount Turning Down Raiders of the Lost Ark

Before Indiana Jones became one of the biggest adventure franchises of all time, it was a tough sell to Hollywood executives. In the late 1970s, George Lucas and Steven Spielberg were shopping around their idea for Raiders of the Lost Ark, a high-adventure film inspired by 1930s serials.

They initially approached Paramount Pictures, one of the biggest studios at the time, but executives were skeptical. They didn’t believe adventure movies would appeal to modern audiences, fearing the genre was outdated. Additionally, Spielberg had a reputation for going over budget after the costly production of Jaws (1975) and Close Encounters of the Third Kind (1977), which made Paramount hesitant to trust him with such an ambitious project.

After Paramount hesitated, Lucas and Spielberg pitched the film elsewhere, eventually partnering with Lucasfilm and Walt Disney Studios to bring Indiana Jones to life. The gamble paid off in a massive way. Raiders of the Lost Ark (1981) was a massive box office hit, earning $389 million worldwide (the equivalent of over $1 billion today when adjusted for inflation). It spawned multiple sequels, a TV series, theme park attractions, and one of the most recognizable characters in film history. By the time Paramount realized their mistake, it was too late—they had missed out on one of cinema’s most lucrative and beloved franchises.^[6]

4 Fox Canceling Firefly Before It Had a Chance

Fox executives failed to understand the potential of Firefly, the space western TV series created by Joss Whedon. Premiering in 2002, Firefly had a unique blend of sci-fi, western, and character-driven storytelling that immediately gained a small but devoted audience. However, Fox made several key mistakes that sabotaged the show before it had a chance to succeed.

First, they aired the episodes out of order, confusing audiences and making it difficult to follow the overarching story. Then, they gave it an unpredictable Friday night time slot, which was notorious for low ratings. Finally, the studio barely promoted the show, treating it as an afterthought rather than a major network investment.

As a result, Firefly was canceled after just 11 episodes, despite glowing reviews from critics and passionate fans. However, the show’s cult following only grew after its cancellation. DVD sales skyrocketed, and fans launched petitions to bring it back.

In 2005, Universal Pictures greenlit Serenity, a feature-length film that served as a conclusion to the show. While Firefly never got the long-running TV lifespan it deserved, it remains one of the most beloved canceled shows of all time. Fox’s decision to abandon it early is considered one of the worst TV blunders in history.^[7]

3 MGM Rejecting Pulp Fiction

When Quentin Tarantino was developing Pulp Fiction in the early 1990s, he had already proven his talent with Reservoir Dogs (1992), a low-budget crime film that became a cult hit. Naturally, Tarantino expected that his next project, Pulp Fiction, would attract interest from major studios.

He initially pitched it to MGM, but studio executives were turned off by the script’s nonlinear storytelling, excessive violence, and unconventional dialogue. They believed such an experimental film would never be commercially viable and passed on the opportunity to fund it. Tarantino then took the project to Miramax, which had a reputation for taking risks on bold, independent films.

Miramax took the gamble, and it paid off beyond anyone’s expectations. Pulp Fiction became a cultural sensation, grossing over $200 million worldwide on an $8 million budget. It won the Palme d’Or at the Cannes Film Festival and went on to be nominated for seven Academy Awards, winning for Best Original Screenplay.

The film not only revived John Travolta’s career but also cemented Tarantino as one of the most influential filmmakers of his generation. MGM’s decision to pass on the film cost them millions in box office revenue and the chance to be associated with one of the most iconic films in modern cinema.^[8]

2 Disney Losing Pixar in the Early 2000s

In the late 1990s, Pixar and Disney had a strong partnership, producing some of the biggest animated hits of the decade, including Toy Story (1995), A Bug’s Life (1998), and Toy Story 2 (1999).

However, behind the scenes, a rift was growing between Pixar’s Steve Jobs and Disney’s then-CEO Michael Eisner. Jobs was frustrated with Disney’s strict control over distribution and profits and their insistence that Pixar films be labeled as “Disney-Pixar” rather than recognizing Pixar’s independent brand. In response, Jobs decided to sever ties with Disney in 2004, planning to take Pixar’s future films elsewhere.

This nearly destroyed Disney’s animation dominance. Without Pixar, Disney Animation went into a downward spiral, releasing a string of underperforming films like Home on the Range (2004) and Chicken Little (2005). Meanwhile, Pixar thrived, releasing Finding Nemo, The Incredibles, and Cars, which dominated the box office. Disney quickly realized they had made a catastrophic mistake.

In 2006, they bought Pixar outright for $7.4 billion, putting Pixar’s John Lasseter in charge of reviving Disney Animation. The acquisition saved Disney’s animation division, leading to the success of Frozen, Tangled, Moana, and Zootopia. Had Disney not rectified their mistake, it could have permanently lost their position as the leader in animation.^[9]

1 Blockbuster Passing on Buying Netflix for $50 Million

Perhaps the most infamous Hollywood blunder of all time happened in 2000, when Reed Hastings, the co-founder of Netflix, approached Blockbuster with an offer to sell Netflix for just $50 million. At the time, Netflix was a small DVD rental-by-mail service struggling to gain market share.

Hastings believed merging with Blockbuster would help both companies grow, as Netflix could handle online rentals while Blockbuster dominated physical stores. However, Blockbuster executives laughed Hastings out of the room, thinking that online streaming and rentals would never replace brick-and-mortar stores.

Fast-forward a decade, and that decision completely destroyed Blockbuster. As streaming technology improved, Netflix shifted from DVD rentals to digital streaming, eventually becoming a multi-billion-dollar entertainment giant. Today, Netflix is worth over $200 billion, producing some of the world’s biggest TV shows and movies.

Blockbuster filed for bankruptcy in 2010 and closed almost all its stores. The company that once dominated home entertainment missed out on the biggest shift in media history, and their $50 million rejection of Netflix became one of the worst business decisions ever made.^[10]