Sylvester Stallone actually wrote this before Rocky (1976) and tried to sell it to producers for years, to no avail. Once Rocky (1976) became a smash hit, producers were willing to look at the script, and Universal Pictures green-lit the production due to the overwhelming success of Rocky (1976).
In an interview with Roger Ebert in 1980, Sylvester Stallone mentioned that Paradise Alley was originally much longer film before he was forced by Universal Pictures to cut it down. Stallone said; "I'll never forgive myself for the way I allowed myself to be manipulated during the editing of that film. There were a lot of scenes in there to give atmosphere and character, and they wanted them out just to speed things along. They removed forty scenes, altogether. I put ten of them back in for the version shown on television. For example, the whole sequence of the soldier without legs, sitting on a bar eating peanuts." Same type of studio interference and forced big cuts on the film also happened to the next movie he made for Universal, Nighthawks (1981).
Directing was such a new job to Sylvester Stallone on this project that several times, cast and crew were in position, ready to do their jobs, but they could not, because Stallone would forget to yell, "Action."
Sylvester Stallone later said about Paradise Alley, "It should not have been made at that time and probably not with me acting in it."
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