Associated Press
Tom Cruise greeted his fans in Tokyo earlier this year as he arrived for the premiere of a film. |
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LOS ANGELES – Now playing: Tom Cruise, the sequel.
Cruise, the film star who took a beating when Paramount ended his long-standing production deal last summer, has found not just a home, but a new career direction that could point the way for expensive actors who are struggling in cost-conscious Hollywood.
Cruise and his producing partner, Paula Wagner, will take charge of United Artists, the famous production company started by Charlie Chaplin and Mary Pickford, the company said yesterday.
Wagner will be named chief executive of United Artists and Cruise will be an executive and producer associated with the studio under an unusual arrangement that gives them a minority share of the company. Ultimately Metro-Goldwyn-Mayer, which owns United Artists, hopes that investors take a direct stake in both the unit and Cruise's career.
“The studios and talent don't trust each other,” said Harry E. Sloan, MGM's chairman and chief executive, in an interview yesterday. “We need to start a dialogue.”
For MGM, which is owned by private equity firms in partnership with Comcast and Sony, the deal offers an alliance with a major star on terms more manageable than the massive fees Cruise commanded from Viacom's Paramount Pictures for expensive films like May's “Mission: Impossible III.” It also offers a way to unlock the value of the United Artists brand name, which carries enormous cachet but has been attached to only a few films lately.
For Cruise, the alliance promises a welcome new phase in a professional life that had seemed to falter when “Mission: Impossible III” fell short, his relationship with Katie Holmes and belief in Scientology created embarrassing publicity, and Paramount dumped his deal, citing its cost.
The deal also offers a fresh twist on recent trends that have seen investors become directly involved with film producers, even as stars seek more creative and financial control over their careers. Established producers such as Joel Silver and Ivan Reitman are among those who have made partnerships with outside investors, allowing them to finance films intended for distribution by studios.
Creative Artists Agency, the talent agency which has long represented Cruise and which counts many of Hollywood's biggest stars among its clients, was actively involved in bringing MGM and Cruise together, as was Bertram Fields, Cruise's lawyer, said Sloan.
Initially, Cruise and Wagner will have authority to produce about four movies a year for distribution by MGM. Neither Cruise nor Wagner put up any capital, Wagner said. Cruise may or may not star in the pictures, and he will remain free to work as an actor for other studios.
Sloan and his team have been working to revive MGM as a full-blown movie and television distribution company. Last year, several producers in Hollywood had sought to buy United Artists but were unsuccessful. So far MGM's track record as a distributor of other producers' movies is unimpressive.
“School for Scoundrels,” which starred Billy Bob Thornton and Jon Heder, brought in only $17.2 million at the domestic box office when it was released in September. The World War I epic “Flyboys” flopped, bringing in only $12.8 million; its budget was near $60 million.
Sloan said MGM was trying to create a new studio model in its dealings with Cruise and Wagner. The company will finance United Artists' first few movies, with budgets of $40 million to $50 million – relatively modest amounts by current Hollywood standards – and will pay for the unit's overhead. To make a movie at that level, a star of Cruise's magnitude would have to forgo a salary that can easily reach $20 million, along with a large share of the film's proceeds.
After that, Sloan expects to approach outside investors to finance United Artists' movies in partnership with Cruise, who will share an ownership stake in the operation with Wagner.
Those outside investors could be hedge funds, wealthy individuals or investment banks. Sloan said the proposed United Artists financial model will spread risk more equally between the studio, talent and the outside investors than a conventional Hollywood deal.
Sloan said he expected to announce United Artists' first movie soon.
Recently, some financial funds have seen disappointing results from their investments in studio films. Legendary Pictures, which has a five-year, $600 million deal with Warner Brothers Entertainment to co-finance and co-produce deals, for instance, was an investor in some of that studio's more noticeable summer duds, including “Lady in the Water” and the animated “The Ant Bully.”
“The actors are not going to have a cakewalk,” said Harold Vogel, the author of “Entertainment Industry Economics.” “These investors don't say, 'Oh, it's so glamorous to go to a party.' They aren't that dumb. Instead they say, 'You will get your money, but we get ours first.' ”
Cruise seems to be hedging his own bets by staying on the market as an actor for hire. Also, films already in development under their Cruise/Wagner Productions moniker can be produced by other studios, although Wagner said she and Cruise were in negotiations with Paramount to buy back some of the projects they developed there.
Wagner said she hoped United Artists would become a home for talent, in keeping with the company's roots. The studio was originally founded in 1919 by Chaplin, Pickford, Douglas Fairbanks and D.W. Griffith. In later years, it became associated with MGM and for decades was controlled by the billionaire Kirk Kerkorian, who ultimately engineered the sale to its current owners.
Unlike Silver and Reitman, who expect to focus on low-budget horror and comedy, United Artists expects to make mainstream films of considerable range, Wagner said. She added that United Artists' financial backers would have no creative input, instead it would be limited to how money was spent. “We are not looking to make a film that makes people unhappy,” she said.
Of course, that is harder than it seems. Other well-known Hollywood personalities have tried to start talent-friendly studios over the years with limited success. Revolution Studios, to choose one relatively recent example, was started in 2000 by the veteran producer and executive Joe Roth, who said he too wanted to bring actors deeper into the process of creating artful films at a reasonable cost, like the old United Artists. But the deal he cut with Sony to create Revolution was not renewed after a string of disappointments, and he is now going to be a Sony producer.
“I'm still reeling,” said Wagner of the day's news. “The ink is not dry on this. If you have a movie, send it our way. We are still figuring this all out.”
