I just heard the announcement that Paramount Studios has dropped Tom Cruise. Even though his recent movies have brought in record breaking revenues, they cited his recent "unacceptable" off-screen behaviour as the reason why his contract will not be renewed.
Excellent business decision IMO.
Tom Cruise's mission aborted at studio
By Anne Thompson
Reuters
Wednesday, August 23, 2006; 7:04 AMLOS ANGELES (Hollywood Reporter) - Amid a breakup that took a publicly acrimonious turn Tuesday, Tom Cruise and Paramount Pictures are parting company.
Cruise and his producing partner Paula Wagner, whose Cruise/Wagner Prods. has been based at the Hollywood studio for 14 years, said they ended negotiations several days ago when a Paramount offer came up short. Wagner said the production company has lined up private equity that will allow it to operate independently of any of the studios.
However, Sumner Redstone, chairman of Viacom Inc., Paramount's parent company, stunned the Cruise camp Tuesday when he told the Wall Street Journal that the studio was not renewing its pact with Cruise, which was due to expire August 31, because, "As much as we like him personally, we thought it was wrong to renew the deal. His recent conduct has not been acceptable to Paramount."
Said Wagner: "That came out of nowhere. It seems erratic. Paramount needs to spend more time identifying its goals and what films it wants to make. This is Hollywood's oldest film studio, with a legacy to uphold."
The separation comes in the wake of widely reported public relations setbacks that the once-invulnerable star has suffered during the past year. His publicity faux pas ranged from his manic, couch-hopping profession of love for actress Katie Holmes on "The Oprah Winfrey Show" to his strident denunciations of psychiatry.
Cruise's representatives said they had walked away from the negotiations earlier after weighing Paramount's latest offer.
Wagner said that the company going forward will be financed by two private equity funds, one in Los Angeles and one in New York, which she declined to identify. "The deal is there," she said, and it consists of a revolving fund of $100 million annually to be used for film production, with the option to increase funds to as much as $200 million-$300 million per year. It will permit Cruise and other filmmakers to work on a range of "major-budget, high-concept films as well as smaller-budget films," she said. "This gives us the opportunity to work with every studio and make great films."
Cruise has worked at Paramount since 1986's "Top Gun," and C/W's productions for the studio have grossed about $2.5 billion worldwide. But what was once a cordial relationship began to deteriorate in the 18 months since former talent manager Brad Grey took over as chairman.
Grey took a tough line renegotiating the production company's "Mission: Impossible III" deal, asking for some reductions in budget and profit participation, which Cruise and Wagner granted. The $150 million picture is expected to top out at $400 million worldwide.
According to sources at the studio, Grey was not willing to pay a premium to keep Cruise's cushy overall deal on the lot. The deal has been estimated at as much as $10 million a year, though Wagner has denied that figure. "He wanted to spend that money elsewhere," said one producer with a deal at Paramount-based DreamWorks. Paramount executives were not available for further comment, and a Viacom spokesman said Redstone stood by his statement.
According to Rick Nicita and Tory Metzger, Cruise's agents at Creative Artists Agency (CAA), Paramount made an offer to renew C/W's overall Paramount deal. It was "within the zone of acceptability, but it wasn't acceptable," Nicita said. "It was not improper. That was not the issue. What is the issue is Paramount's behavior over the last 12-18 months. We got fed up."
Nicita, who is married to Wagner, said he became unhappy with the way Paramount "was negotiating the deal in public. It showed a lack of goodwill and a lack of appreciation for what Cruise/Wagner did for the studio and a sense of history. This shows that they're willing to not only invoke the wrath of CAA, but they're taking on the whole town. It's not so much Cruise/Wagner leaves -- it's Cruise/Wagner flees."
The development is a signal that once-lenient studios are getting tougher with talent. The fact that Paramount was willing to go up against CAA also suggests Cruise's declining status at the studio, which also might have been hurt by tensions between the actor and Steven Spielberg that developed while he was promoting Spielberg's "War of the Worlds" last year.
Before CAA broke off negotiations, the agency started to set up independent funding for C/W, which is already looking to move into new offices and is entertaining offers for distribution deals from interested studios.
C/W will have more freedom to choose movies, Wagner said. While it will work with different studios as free agents on a project-by-project basis, it also expects to continue working with Paramount on the many projects in development at the studio. "Cruise/Wagner wants to do unhampered business with the studios," Metzger said, citing the trend of independent, nontraditional financing of big-budget international pictures. "The key word here is creative freedom, not hindered by financial considerations that often burden studio pictures."
Added Nicita: "The traditional first-look deal is not a good deal anymore."
Reuters/Hollywood Reporter © 2006 Reuters