CRUISE/WAGNER OUT AT PAR...REDSTONE SAYS CRUISE COMMITTED "CREATIVE SUICIDE"...WAGNER, CAA FIRE BACK...ALL THE DETAILS

By Tom Tapp

According to The Wall Street Journal, Paramount has decided not to renew its deal with Tom Cruise and Paula Wagner's Cruise/Wagner Productions. Viacom chairman Sumner Redstone tells The Journal the decision is directly related to Cruise's recent antics on Oprah Winfrey's couch to declare his love for Katie Holmes as well as Cruise's criticisms of antidepressant drugs.

The Journal reports that Redstone feels such behavior diminished the box office of Cruise's most recent film, "Mission: Impossible III," by $100-$150 million.

Redstone:

"As much as we like him personally, we thought it was wrong to renew his deal. His recent conduct has not been acceptable to Paramount."

"It's nothing to do with his acting ability, he's a terrific actor," said Mr. Redstone. "But we don't think that someone who effectuates creative suicide and costs the company revenue should be on the lot."

One giant question is why Redstone would say such a thing. And if it needed to be said, why wasn't it Brad Grey, the head of the studio, speaking? Deadline Hollywood Daily's Nikki Finke says it doesn't bode well for Grey, since Redstone is usurping a role (studio spokesman) usually reserved for Grey.

As a result says the Los Angeles Times, Grey and his boss, Viacom Chief Executive Tom Freston, were less than pleased by Redstone's public dismissal of Cruise.

Variety says insders are not happy about the development and the way it's been handled. "When you talk to Paramount, which voice will respond to you?" asked one top agent.

A spokesman for Cruise/Wagner declined to comment, but Cruise's personal handlers told a story that differed from Redstone's.

WSJ:

After being contacted by the Wall Street Journal, Mr. Cruise's representatives presented a different version of events. They said that Mr. Cruise's production company had decided to set up an independent operation financed by two top hedge funds, which they declined to name.

Paula Wagner, Mr. Cruise's partner in the company, did have something to say about Redstone's comments, telling Variety the statement was "outrageous and disrespectful." Then she went a little further with the adjectives.

Los Angeles Times:

"It is graceless. It is undignified. It's not businesslike," she said. "I ask, what is his real agenda? What is he trying to do? Is this how you treat artists? If I were another actor or filmmaker, would I work at a studio that takes one of their greatest assets and publicly does this?"

The Hollywood Reporter:

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."

VAR:

Rick Nicita (who is married to Wagner) and Kevin Huvane, the two agents who rep Cruise, denounced Redstone's remarks as "shockingly offensive and graceless."

Wagner said the hedge fund arrangement represented a new business model for top actors prominent enough to take advantage of the flood of money coming into Hollywood from Wall Street.

"This is a dream of Tom and mine," Ms. Wagner said. She challenged Mr. Redstone's assertion that Mr. Cruise's behavior had cost the studio ticket sales, pointing out that the star's movies have made the studio a huge amount of money. In fact, Wagner tells Variety that figure accounts for 15% of Par's theatrical revenue in the last 10 years and 32% for the past six years.

THR:

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 name. "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."

But Viacom doesn't sound convinced.

NYT:

A spokesman for Mr. Redstone, Carl Folta, scoffed at Ms. Wagner's talk of new financial backers. "Did they give you a name?" he said.

The New York Times also reports that Cruise/Wagner had already begun looking for a new distribution deal.

VAR:

In fact, Wagner said that CAA, Cruise's agency, terminated discussions with Par earlier in the week. After Cruise/Wagner made 14 films in 14 years (not all Par releases), the studio had declined to renew the original Cruise deal and offered a sharply reduced pact.

The New York Times says a key sticking point was the company's $10M in yearly overhead which, while huge, is relatively insignificant to Paramount's bottom line.

The Los Angeles Times elaborates:

After failing to renew the contract, Paramount had extended the production deal for a month to continue negotiations, according to people with knowledge of the talks. Paramount offered the pair $2 million a year plus a $500,000 discretionary fund for each of two years, said the sources, who didn't want to be named because of the sensitivity of the talks.

Cruise's CAA reps tell The Hollywood Reporter their side of the story, including the fact that they were willing to take less money.

WSJ:

Mr. Cruise's representatives had indicated in recent weeks that the star might be willing to discuss a less-lucrative deal to stay at the studio.

One person familiar with the situation said Paramount had not, as of Tuesday morning, informed Mr. Cruise's camp that the studio would not renew the deal. Another person familiar with the situation said Mr. Cruise's camp also had not informed Paramount that they were working on a stand-alone production deal backed by hedge funds.

THR:

According to Rick Nicita and Tory Metzger, Cruise's agents at 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.

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."

CRUISE/WAGNER OUT AT PAR...REDSTONE SAYS CRUISE COMMITTED "CREATIVE SUICIDE"...WAGNER, CAA FIRE BACK...ALL THE DETAILS

By Tom Tapp

Related Links