Why did RKO end its relationship with Orson Welles and Mercury Productions?

RKO ended its relationship with Orson Welles and Mercury Productions primarily due to the studio's dissatisfaction with the commercial performance and production management of his projects.1

While Citizen Kane (1941) is now considered a masterpiece, it was not a financial success upon its release. The film's complex structure and lack of an appealing protagonist made it difficult to market, and its box-office prospects were further damaged by the efforts of newspaper magnate William Randolph Hearst, who used his media power to suppress the film.1

Tensions escalated during the production of The Magnificent Ambersons (1942). Following poor test screenings, RKO took the film out of Welles's control, heavily reediting it and forcing the addition of a new ending. Simultaneously, while Welles was in South America filming the documentary project It’s All True, RKO canceled the production, leaving him stranded. When Welles returned to find the studio meddling with his work on Journey into Fear (1943), RKO executives ultimately decided to remove him and Mercury Productions from the studio lot.12