EXCLUSIVE: There won’t be any formal announcement but I’ve learned that Brad Grey re-upped as Chairman/CEO of Paramount Pictures Corp a few weeks ago. It coincides with Paramount placing No. 1 in market share among the Hollywood studios and perhaps even keeping that crown for 2011. Right now the studio is about $100 million ahead of Warner Bros which usually takes the coveted title with about half a dozen more movies released than Paramount this year. Granted, Paramount mostly distributed rather than owned most of the film fare that put it in first place. But No. 1 is still No. 1. Meanwhile, the minor news that Grey and his wife recently bought a $15.5M swanky NYC coop in The Carlyle tower recently sparked a new wave of rumors that Brad was going to divide his time between Los Angeles and New York to work on more Viacom business for boss Philippe Dauman. But I can knock that down now. Certainly Grey’s signing a new deal to keep him atop Paramount for 5 more years through early 2017 will help the continuing stability at the studio run by him, Vice Chairman Rob Moore, and Film Group President Adam Goodman. Frankly, I didn’t know if the studio’s roiling would ever stop at the start of Grey’s tenure. Hollywood openly wondered if the Brillstein-Grey Entertainment co-founder could segue from a mostly TV manager/producer into a studio movie mogul. And it didn’t help that Grey churned through a revolving door of top executives: Gail Berman, Alli Shearmur, Brad Weston, and Jon Lesher, until Goodman finally fit the bill. And during the first years Grey outlasted widespread whispers that he was about to be canned. Of course those ended when DreamWorks exited Paramount after a very unhappy pairing from 2006 to 2009.
Grey’s turf includes responsiblility for all feature film development and production for the Paramount Motion Picture Group which includes Paramount Pictures, Paramount Vantage, Paramount Classics, Paramount Animation, Insurge Pictures, MTV Films and Nickelodeon Movies. He is also responsible for the worldwide business operations for Paramount Pictures International, Paramount Home Entertainment, Paramount Digital Entertainment, Paramount Famous Productions, Paramount Licensing Inc., Paramount Studio Group and Worldwide Television Distribution. When Grey arrived at Paramount, the studio was in a decidedly down cycle with the cupboard bare of decent product. (“It’s like turning the Titanic,” Grey said on more than one occasion.) Immediately Grey struck deals with Marvel Studios and DreamWorks and DreamWorks Animation to fill the distribution and production pipeline until Paramount could get back on its feet with its own pics. Grey greenlighted the blocbuster franchises Transformers and Paranormal Activity, Jackass, and GI Joe, and re-booted the Mission: Impossible and Star Trek brands. The studio also has had several successful franchises — Shrek, its spin-off Puss In Boots, and Kung Fu Panda – from DreamWorks Animation whose deal runs out at the end of 2012. But Paramount also has the awards-touted Adventures Of Tintin franchise just beginning this month (Steven Spielberg and Peter Jackson plan a trilogy) and began its own animation division with Oscar-buzzed Rango.
In terms of film financing, Paramount remains the one major without a risk-reducing constant partner. That’s why Fox has Dune, Warner Bros has Legendary, Disney has Kingdom, etc. Paramount’s existing investors include Skydance and Melrose II. The latter continues to have the right to co-finance sequels to the specific movies originally co-funded by them starting back in 2006. (Melrose I from 2004 was a $225 million fund bankrolling 25 Paramount films.) But no rights to finance any go-forward Paramount pics other than those sequels and no sequels that Paramount doesn’t want to make. I remember very clearly the moment 3 1/2 years ago that Hollywood studios received a nasty shock when the worldwide credit crunch began arriving on their doorsteps unannounced. The warning bell was sounded by an unfolding story about venerable Paramount’s financing crisis to mitigate the studio’s risk on 30 films. Grey quickly put out the spin that the studio walked away from one big financing deal because the terms weren’t good enough. The result is that, all this time, Paramount has not had an overall co-financing deal. It’s not crucial for survival, but it does let moguls sleep sounder at night. Instead its parent company Viacom has been almost solely on the hook for financing new slates of pictures, which is like a tightrope walker working without a net. Remember what happened to the Wallendas?
The alternative at Paramount was for filmmakers to BYOF (Bring Your Own Financing) so, without an overall co-financing deal, Paramount arranged for individual partners to help fund its slate of films on a one-by-one basis. Now, as Paramount goes forward with more of its own pics, I predict that Grey will try to put together an overall co-financing deal. And if not? Clearly Brad is sleeping soundly at night until early 2017. Read More »