Who Loses in the Split — Paramount or Cruise?

  • Share
  • Read Later
KEVIN WINTER / GETTY

Chairman and CEO of Viacom Sumner Redstone with actor Tom Cruise, and actress Katie Holmes in happier times: a screening of "Mission: Impossible III" at Grauman's Chinese Theatre on May 4, 2006, in Hollywood, California.

You're fired! Hey, you can't fire me, because I quit!

That's the gist of the war of words between Tom Cruise's production company and Paramount Pictures following news from the film studio's parent late Tuesday that it was severing ties with Cruise/Wagner Productions after 14 years.

Sumner Redstone, chairman of Paramount owner Viacom, told the Wall Street Journal, which first broke the story on its website, that Cruise's "recent conduct has not been acceptable." Redstone cited the actor's public comments defending Scientology and criticizing psychiatry. "As much as we like him personally, we thought it was wrong to renew his deal," Redstone is quoted as saying in the Journal.

But in an interview with TIME.com Tuesday night, Paula Wagner, Cruise's partner, said that days before Paramount's move, the two producers had already decided to leave the studio, accept an offer of a $100 million-a-year revolving fund from a group of private investors and produce their future film projects independently. (Under terms of its "first-look" deal with Paramount that recently expired, Cruise/Wagner was paid an annual chunk of money to cover overhead and development costs — a sum estimated by sources at the studio to be around $10 million, although Wagner insists it was much less than that. In return, the studio got first dibs on releasing the pictures Cruise/Wagner produced.) "A few days ago, we instructed our agents to cease negotiations [on a new deal] with Paramount," Wagner told TIME.com. "We decided that it was best for us to do something where we lead the way in terms of where the film industry is going. We're very excited to be making films independently."

The decision by Paramount to end a business relationship with an A-list star like Cruise comes as all of the major studios are sweating out the gate receipt tallies every weekend, aggressively cutting the size of star-driven production deals and all other costs, and looking for ways to mitigate financial risks. It's a reflection of just how sensitive their publicly traded corporate parents have become about any issue that could pose a threat to the bottom line. It probably wasn't lost on Paramount executives that about half of the people queried in a USA Today/Gallup poll several months ago had an unfavorable opinion of Cruise, in the wake of his controversial public statements and puzzling behavior such as using Oprah Winfrey's couch as a trampoline while declaring his love for future wife Katie Holmes. And coming just weeks after Disney's decision to drop out of a Holocaust TV miniseries project with Mel Gibson following the torrents of negative publicity about Gibsonís anti-Semitic comments during his DUI arrest, it's an indication that in this celebrity-gossip-saturated age, even stars with stellar box-office records are no longer immune from career reverberations when they get entangled in controversy and public opinion turns against them. "This bespeaks something about where the industry is and where it's going," lamented one producer.

Officials from Paramount and Viacom declined requests to elaborate on Redstone's comments to the Journal, or to react to Wagner's version of events. However, when told about her contention that she and Cruise walked away before being cut loose, a source close to the studio responded dismissively, "Whatever."

Wagner called the remarks about Cruise's behavior attributed to Redstone in the Journal "unprofessional, offensive and undignified" and "not good business." She complained that references to his off-screen actions created a misimpression that their deal with the studio covers Cruise as an actor as well as a producer, when it actually only involves him as producer. "As an actor, he has never had an exclusive deal with any studio," Wagner said.

Nevertheless, she said the success of the films he has made for Paramount attest to her partner's enduring appeal. According to Cruise's publicist, during the past decade, "Cruise has made six films for Paramount with worldwide box office totals of $2.4 billion, accounting for 32% of Paramount's total income for the six years he had a film in release." The publicist added that Cruise's last two films, War of the Worlds and Mission Impossible 3, have grossed $977.8 million worldwide. "As an actor, Tom is responsible for almost $3 billion in box office revenue for Paramount," said Wagner. "That's more money than any other actor has made for any single studio in history."

The source with knowledge of Paramount's thinking replied, "You have to factor in how much he cost them. His production deal was expensive and he was providing diminishing returns, based on his box office performance and the [off-screen] behavior that the studio executives felt was impacting it."

Still, the decision to end its association with Cruise isn't risk-free for Paramount. It's a testament to the ongoing strength of the Cruise/Wagner brand that their company attracted such a huge amount of private capital. Moreover, two of Hollywood's biggest producers are still fans of Cruise the actor. Wagner says JJ Abrams, who directed Mission Impossible 3 and just inked big production deals of his own with Warner Bros. and Paramount, still wants to work with him.

Jerry Bruckheimer, producer of the Cruise blockbusters Days of Thunder and Top Gun, says, "I'd love to make as many films with him as I can. First of all, Tom gives you big openings no matter what, which is what it's all about. You always have to be careful about what you do, no matter what profession you're in. But I don't think Tom has done anything that would change people's moviegoing habits if he's got the right material because he's a brilliant actor."

And in ending the relationship in such a public and messy way, Paramount could wind up alienating other talent, industry insiders warn. "As a movie studio, your business is to attract filmmakers and artists," said one, who is a Cruise ally. "Why would you say something about an important movie star when it could make his friends and colleagues [think twice] about working at a place that attacks artists?"

The combatants are going their separate ways, but the war might not be over.