Paramount wants to get back into the TV business. Brad Grey, chairman and CEO of Paramount Pictures and a prominent former TV producer himself, is looking to build a new TV division to insulate the studio from the lagging film industry.
Grey has begun meeting with candidates who could run the new TV studio, individuals close to the CEO told TheWrap, reviving a business that Paramount successfully ran for decades until the end of 2005 when Viacom and CBS were split into two distinct companies. Viacom kept Paramount's film business, and CBS inherited the TV production side.
Grey acknowledged at a recent company town hall alongside Viacom CEO Philippe Dauman that it would "absolutely" make sense for Paramount to get more involved in TV production, and the executive has been discussing it openly with colleagues.
"Their dream is to bring a TV company back," an individual with knowledge of the studio's plans said of Paramount executives, who remember when the company produced hits like "Happy Days" and "Taxi," which drove long-tail revenue for decades. "They haven't figured out how to do it, but they definitely want do it."
Paramount, which declined to comment for this story, is a subsidiary of Viacom, which owns profitable cable networks including MTV, Comedy Central and Nickelodeon. Yet while rival studios like Warner Bros. and Sony operate both film and television production studios, Paramount does not. For now.
But financially, the strategy makes sense. "They have the ability to hire the people who know that business very well, but it takes quite a while to do it," Hal Vogel, CEO of Vogel Capital Management, told TheWrap. "You first incur the expense of hiring people and then the expense of developing pilots."
He added: "But once you have one of those hits, it's an oil well."
Individuals close to Grey told TheWrap that the build will take up to five years and be treated like a startup. The studio recently signed on to co-finance and co-produce an upcoming TV series based on Paramount's hit film "Beverly Hills Cop." Sony developed the show, and Paramount boarded it later.
As for who would run the division, Grey is looking for a creative executive rather than a seasoned administrator, according to individuals familiar with his thinking. That would likely rule out some of the highest-ranking people in the business who might not be up for the three- to five-year process of building a studio from scratch – including Warner Bros' studio chief Bruce Rosenblum, who was recently passed over for the role of chairman and whose future plans are still unclear.
The real question is the scale of Grey's ambitions and Viacom's support. Grey could try to rival the major studios like Warner Bros., which produces more than a dozen shows currently on the air, including "The Big Bang Theory," "Two Broke Girls" and "Revolution." If more restricted, Grey may go the route of Lionsgate, which produces a smaller number of shows, many of them critically acclaimed, such as "Mad Men" and "Nurse Jackie."
Paramount operated a television studio for decades, dating to its predecessor -- Desi Arnaz and Lucille Ball's Desilu. Paramount created different TV banners, including Telemount and Paramount Pictures Television, but it wasn't until new owner Gulf + Western reincorporated Desilu and Paramount as Paramount Television that the hit parade began.
Paramount produced a series of successful shows in the 1970s, including "Happy Days," "The Brady Bunch" and "Taxi" – all on ABC. In 1995, it launched a TV network called UPN (United Paramount Network), and around the same time Viacom acquired Paramount.
Five years later, Viacom acquired CBS, at which point Paramount began to produce shows for the network, such as "NCIS" and "Criminal Minds." Yet in 2006, Viacom split the two companies and awarded Paramount's library to CBS. Paramount retained home video rights.
In recent years, CBS CEO Les Moonves has explored the possibility of purchasing a film studio, with recent reports suggesting Sony was an acquisition target. But at a time when TV trumps film in scale and profits at every media company, a TV production studio may sound like a more sound investment.
The motivation is apparent to anyone familiar with how show business has changed. While film has long bested television when it comes to prestige, there is no question as to which is a more profitable business. TheWrap conducted an analysis last year of major media companies' financial results in 2011, and all five companies charted at least $3.3 billion in profits on the TV side; not one of their film studios hit $1 billion.
Grey, who took over two years before Viacom spun off CBS, has a long history in television as a former partner and leader of management and production company Brillstein-Grey Entertainment. Brillstein-Grey produced hit series, such as "The Larry Sanders Show" and "It's Gary Shandling's Show," as well as a few movies like "Happy Gilmore."
After Grey gained full control of the organization in 1996, he rechristened the television department "Brad Grey Television" and produced such shows as "The Sopranos" and "The Wayne Brady Show" before leaving to run Paramount.
Though he has now been at Paramount for almost a decade, overseeing such hit film franchises as "Transformers" and the rebirth of "Mission: Impossible," he never left TV behind.
"He is serious about doing something and has been meeting with people," the individual told TheWrap. "He's most comfortable in TV given his history and misses the action. TV is instant gratification."