Brad Grey expected to exit Paramount Pictures in an overhaul of the struggling studio
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Paramount Pictures Chairman Brad Grey is preparing to leave his job, ending months of speculation about his future as Bob Bakish, the CEO of parent company Viacom Inc., moves aggressively to revive the long struggling studio.
Grey, who has led the storied movie company for 12 years, is in negotiations with Viacom to exit after a long period of financial woes at Paramount Pictures, according to three people briefed on the matter who were not authorized to comment on the situation. The company could announce his resignation as early as next week, one of the people said.
The planned departure is the latest management shakeup at a major Hollywood studio as fewer people watch movies at the multiplex. Last month, another struggling studio, Sony Pictures, announced that its longtime chairman, Michael Lynton, would be leaving.
"The performance has been consistently bad for years now, and it had become a major source of financial problems for Viacom's earnings," said media analyst Michael Nathanson of the MoffettNathanson research firm. "The industry itself isn't in great shape, and that's part of the problem too. It's just a tougher business now."
Grey’s tenuous position was underscored last week when Bakish announced a turnaround plan for the beleaguered media giant, with a particular focus on Paramount, which lost $445 million last fiscal year.
While Grey long enjoyed a strong relationship with controlling Viacom shareholder Sumner Redstone and his daughter Shari Redstone, the studio chief was put on notice after Bakish took over as CEO in December. In a recent interview with the Los Angeles Times, Bakish stressed that his division heads would be held responsible — and he didn’t mince words about Grey.
"I’m held accountable, and he’s going to be held accountable," Bakish told The Times of Grey. "It would be a nice world if you weren’t held accountable, but I’m held accountable to a board of directors, including board of directors who have some shares — including one who has a lot of shares. There is real accountability."
Viacom declined to comment Friday. Grey, through a spokesman, also declined to comment.
Bakish said he aims to dramatically alter how Paramount Pictures operates. No longer will the Melrose Avenue studio offer filmmakers a vast blank canvas. Instead, he said, Paramount will turn over about half of its film slate to movies that have clear ties to Viacom’s TV channels, including Nickelodeon and MTV.
The company is expected to look outside its own walls for a new studio head, one person said. It’s unclear who would replace Grey. Among possible contenders for the job are former Fox film chief Jim Gianopulos and former Warner Bros. executive Jeff Robinov.
Paramount lagged its rival studios for years as it focused on short-term profitability rather than building the big brands that now bolster the bottom lines of competitors such as Walt Disney Co. and Warner Bros. Entertainment. Paramount has ranked no higher than sixth out of the major distributors at the box office since 2012.
Its major flops have included horror reboot “Rings,” the summer tentpole “Teenage Mutant Ninja Turtles: Out of the Shadows” and “Monster Trucks,” a kids movie that resulted in a $115-million writedown for Viacom before the film was even released. The troubles have amounted to a major fall from grace for the studio that made “The Godfather” and “Forrest Gump.”
Yet, since his days as a talent manager and partner at Brillstein-Grey Entertainment, Grey has established himself as one of Hollywood's preeminent survivors, known for forging close relationships with the likes of Leonardo DiCaprio, Martin Scorsese and J.J. Abrams.
After he was hired to run Paramount in 2005, Grey led the acquisition of DreamWorks SKG, the studio created by Steven Spielberg, David Geffen and Jeffrey Katzenberg. DreamWorks Animation and Grey’s distribution deal with Marvel Studios filled Paramount’s lineup with reliable hits, until the DreamWorks and Marvel deal evaporated, leaving big holes in the pipeline.
Grey made recent maneuvers to bolster the studio’s finances and ramp up its production slate, which in one year dipped to only eight films. Last month he secured a partnership with Chinese studio Shanghai Film Group and marketing and distribution company Huahua Media worth $1 billion in film financing over three years. Paramount has also enjoyed a strong awards season run with its alien visitation movie “Arrival” and the Denzel Washington drama “Fences.”
But the misses far outweighed the hits, with high-profile commercial flops like Martin Scorsese’s “Silence” — which audiences ignored despite critical acclaim — and “Zoolander 2.”
"Management needs to be held accountable," said Rich Greenfield, media analyst at BTIG Research who has been a critic of the studio and its management. "Paramount has under-performed for so long and by so far. It's time for a change in management."
Grey will join a growing list of recently departed Viacom executives, including Philippe Dauman, the former Viacom CEO who left in August, and Thomas Dooley, the longtime chief operating officer who left in November. The head of MTV Networks, Doug Herzog, who had been with Viacom for more than two decades, and the company's distribution executive Denise Denson left the company in December, shortly after Bakish took over.
Paramount itself has gone through a series of management overhauls in recent months. Vice Chairman Rob Moore, who had long run the studio day-to-day, was booted in September. In November, former Sony executive Andrew Gumpert was brought in to serve as chief operating officer. In a telling sign, Viacom deployed its New York-based Chief Financial Officer Wade Davis to the Paramount lot in December to dig into the studio’s finances.
Paramount really shouldn't brag about Forrest Gump anymore, given how they cheated Winston Groom out of his profits to the point he refused to allow a sequel. The one hit film series they still have is Mission: Impossible, but that's mostly due to Cruise's star power and the popularity of spy films in general.
Is Mission Impossible a hit because of Cruise or is Cruise still relevant because of Mission Impossible?
Transformers is their big reliable franchise. Also they're sitting on a potentially solid hitmaker with World War Z, which is in a conundrum of its own based on a recent report.
Putting the brakes on F13 is a bad idea. Slasher films are cheap and they had the perfect gimmick: the 13th F13 coming out on Friday October 13th. Printed money down the drain.
I don't know a $25M movie making $66M WW so far is considered a major flop
To many executives, no movie ever makes a profit. There's always one more clause, loophole, or unforseen expense. They call it "Hollywood accounting", but its theft plain and simple. A well-known saying advises people to never accept net points, nicknamed "monkey points"...but corrupt accountants can always make it look like the film's still in the red.
To many executives, no movie ever makes a profit. There's always one more clause, loophole, or unforseen expense. They call it "Hollywood accounting", but its theft plain and simple. A well-known saying advises people to never accept net points, nicknamed "monkey points"...but corrupt accountants can always make it look like the film's still in the red.
It's such bullshit. They complain about movies being flops when they make profit like this, but that's not even the end of it. A well critically received movie, which may flop and cause a studio to stop giving projects to that director or writer or whatever, are usually well remembered and sell great on home media. Why do studios never account for post-cinema sales? If you count those, it'd probably divide the number of "flops" by 10.
Putting the brakes on F13 is a bad idea. Slasher films are cheap and they had the perfect gimmick: the 13th F13 coming out on Friday October 13th. Printed money down the drain.
Exactly this. Studios seem perfectly willing to spend several hundred million on a single movie that may bomb, and won't spend ten million on something that will turn a profit opening weekend. The writeoff they took on Monster Trucks alone would have funded a dozen movies like The Shallows or The Purge or Lights Out or Saw or Paranormal Activity. With budgets that low, even flops like Blair Witch break even, and the hits make a substantial profit.
Just watch the small Doc called The House That Freddy Built: The Legacy Of New Line Horror. It talks about everything that New Line did. It was base on the back of everything Freddy had done for them up until that point. And everything else came from it.
Grey should have been let go sooner. He's made some really bad decisions in recent years.
They won't hire Robinov. Warner Bros. let him go for a good reason (mainly all of the bombs he greenlighted and the lack of diversity on his projects) and his first project for Sony got dumped.
Friday the 13th won't save Paramount. The last one had horrible legs and their recent attempt at resurrecting a once-popular horror franchise (The Ring) didn't work. And does Jason really have any relevancy to anyone born after 1995? World War Z 2 won't either (Paramount splits the profits with several other companies and almost no one wants to make it. And no, David Fincher will never agree to do it. He passed on The Girl Who Played with Fire and he directed the previous installment.).
And I'd rather be bragging about Forrest Gump (a film that made millions and won countless awards) than making a Cloverfield movie every year when the first two movies weren't even that popular (with the last Divergent being dumped to cable, this is the new textbook example of a forced franchise).
Personally, I think they should listen to Lionsgate's offer. They seem to know what they are doing and they are in much better shape than Paramount right now.
It's such bullshit. They complain about movies being flops when they make profit like this, but that's not even the end of it. A well critically received movie, which may flop and cause a studio to stop giving projects to that director or writer or whatever, are usually well remembered and sell great on home media. Why do studios never account for post-cinema sales? If you count those, it'd probably divide the number of "flops" by 10.
"Like this?" Like what? A film needs to typically make 3 times its budget just to break even because marketing costs are not include din budget and these days are often higher than the budget. Not to mention, the studio doesn't keep 100% of the ticket sales (part goes to the theater), and they keep even less from foreign box office.
When talking about profit, everyone seems to forget about advertising costs. Advertising costs a lot of money (especially nowadays, where advertising ends up costing more than the film much of the time). So you will see people trying to claim that Pacific Rim and Warcraft made money solely on Chinese numbers when those two were still far in the hole due to advertising costs (Warcraft needed to make around $600 million to break even while Pacific Rim's sequel is going to be a cheap Scott Eastwood vehicle that other distributors would make a day-and-date title as the first was such a money loser for Warner Bros. and Legendary).
In the process, this shows why post-theatrical markets are still important even though studios are short-sighted about those now. Home video sales, VOD rentals/sales, sales to television (pay cable and basic cable, streaming*, even syndication packages or the rare sale to an over-the-air network). That's where the real money is, not China (where your film might not even get released, look at Deadpool for example).
* - Netflix and Amazon Prime may seem like VOD at first but these have become gradually part of the pay cable scene in recent years, with Netflix having deals with Disney, Sony Pictures Animation, Illumination, and a number of other companies while Amazon has deals with A24, Bleecker Street, and a few other indie labels.
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