The University of South Carolina already had a good relationship with Fox: faculty member Jim Jackson had worked with the South Carolina public broadcasting affiliate SCETV and famed adventurer-journalist Lowell Thomas (Jackson and Thomas were both members of The Explorers Club in NY) to produce a long-running PBS series, "Lowell Thomas Remembers," built around the Movietone newsreel footage. Fox was impressed with the University's commitment to, and track record of, using historical moving images in educational products. Fox decided to gift the entire collection, including the copyrights to the newsreels, to the University.
Initially the gift plan specified that Fox would convert all the nitrate film to safety masters at its own expense, then destroy the dangerous nitrate originals so that the University would have the only copy. Here's how Greg Wilsbacher, Curator of the Movietone collection at the University (and one of the nation's experts on nitrate film stock), narrates what followed, in "The Fox Movietone News Donation: A Brief History":
Most of the rest of the collection, the majority in fact, is still owned by the Fox Film Corporation's corporate successor, the Fox News Channel (now owned by Rupert Murdoch's News Corp). Other portions are held at the Library of Congress. The Fox material is stored in a climate-controlled facility in New Jersey and much of it has not been converted from the original film elements. It can be viewed by request in the Fox Movietone New York offices, and, like the University, Fox partially funds conversion of the nitrate stock by charging transfer fees to researchers and commercial filmmakers who want to license footage for reuse. The University is apparently involved in a long-term program to digitize its holdings. One can only hope that all three repositories succeed in transferring the millions of untransferred feet to other media before they inevitably disintegrate or spontaneously combust.Two annual deeds of gift were signed (1980 and 1981) before the deal began to unravel. First, Fox determined that the expense of converting the nitrate film was too great and adjusted the gift agreement so that nitrate film elements were to be donated. Second, Fox's new owner, oilman Marvin Davis, had used the value of the Movietone News library as part of the collateral required for his hostile takeover of Twentieth Century-Fox. Davis had no intention of giving away any more of the company's assets to the University.
University President Holderman now had the enormous responsibility and expense of preserving one of the largest nitrate film collections in the United States without the academic and business advantages of holding the entire newsreel library. Movietonews, Inc. remained open for business in New York City.
When the deeds of gift ceased, the University had received 7 million feet of original nitrate elements and 4 million feet of safety film transfers made by Fox, for a total of 11 million feet.