Brad Grey Fights For Paramount’s Future – Part Two
EXCLUSIVE: Before Brad Grey showed footage from Paramount’s Oscar contenders and future slate highlights in New York last week and in Los Angeles last night, he promised a new chapter for Paramount Pictures. Though brief, his appearances marked his re-emergence as the studio’s public face. And really, who could blame him for lying low in recent months? While Paramount was turning in the worst fiscal year performance of Grey’s almost 12-year tenure, a boardroom battle raged upstairs at the corporate parent, culminating in the ouster of Viacom chief Philippe Dauman by controlling shareholders Sumner Redstone and daughter Shari.
The Redstones now have investment bankers looking at ways to re-unite their two media companies, Viacom and CBS, which were split in 2006. That reunion could take form before year’s end, likely with Les Moonves atop the fused entities. Everything will be reviewed and for Grey, that brings a chance to present what he expects will be a much rosier future for a post-Dauman Paramount, removed from an era that had been defined by a strategy of severe cost-cutting at the studio. While Disney was spending billions buying companies like Marvel, Pixar and Lucasfilm that set up its slates for the next decade and beyond, Viacom was spending comparable sums buying back $15 billion in shares that since 2004 have dropped 57.2% in value at a time when the S&P 500 was up 15.6% in the same period.
Is a resurgence really in the offing? Grey certainly thinks so, and is eager to lead the charge. He spoke exclusively to Deadline of plans that include the repair of Paramount’s image in the film community, where it has been seen as a penny-pincher with a torturous business affairs process; the stabilization of a production division that has watched a long list of production presidents come and go; the inability to launch branded sequels like Terminator Genisys, Star Trek Beyond and Teenage Mutant Ninja Turtles; and the restocking of a development cupboard that went relatively bare, as the departures of Marvel, DreamWorks Animation and DreamWorks SKG left the studio scrambling to fill its slate, sometimes with festival pre-buys and acquisitions.
Grey is aware of the criticism, but is undaunted by it. “I’m on each and every one of those perceptions and issues,” he insisted, when asked about a litany of plaints. “Some I think are appropriate perceptions, and maybe appropriate in fact,” he said. “But I’m on them and I really do believe there will be a resurgence in time. I feel very confident and optimistic that we will take every one of those perceptions and right them.”
We asked why it should be Grey who ushers in Paramount’s new chapter when he has long sat atop a studio that just ended the worst year of his tenure, with concerns about a paucity of blockbuster franchises that could quickly turn things around.
“Recently, we’ve missed more than we should have,” he said. “I take responsibility for our rough run at the box office, my first truly rough year in the 11 years I have been here.”
But he had no apologies for anything except, perhaps, parent company policies over which he did not have final say.
“This is a legendary institution and I am honored the Redstones have allowed me to occupy this seat for 11 years,” Grey said. “I felt I owed them to fight the fight for Paramount, even if I couldn’t diversify as I had wanted, something truly necessary in the volatile movie business. It’s almost impossible to cut your way to success in a creative industry. I had a contract to honor. I did not quit. I pushed to make the strategy work, and did it for a time. At the same time, I feel we would have fared better if we could have altered the strategy and diversified earlier.”
The product reel was encouraging. Of a coming roster of films that ranges from Oscar contenders like Denzel Washington’s Fences and Martin Scorsese’s Silence to the blatantly commercial Transformers: The Last Knight in June, Grey said, “We have a very strong, diverse slate ahead.” More, he insisted that his staff is equipped to execute a turnaround. “We also have a stellar team of executives, people I am very proud to work with,” he said. “We have recently added talent from Google, Facebook and Activision to strengthen our marketing and digital teams, and we intend to add more to other areas like business affairs.”
Perhaps unfairly, Paramount’s vice-chairman Rob Moore attracted public blame for the studio’s woes when he was fired in September — an ouster that occurred mostly because Moore had pressed the case for Dauman’s plan to sell 49% of Paramount to China’s Dalian Wanda Group. It wasn’t clear how much of the $4.9 billion would have been earmarked to help Paramount, but the majority would have gone towards curing the stock buyback shortfalls, and it was also clear that Sumner and Shari Redstone didn’t favor the deal. Internally, Moore, to whom most division heads reported, was not so much a villain as the unhappy face of Dauman’s cost-containment strategy. He ran the studio with hands-on, fiscally conservative principles so controlling that executives were threatening to leave. When Grey couldn’t convince Viacom to commit the resources to match tentpole-heavy rivals like Disney, Warner Bros and Universal, his own mission was narrowed to staying in the black. Moore’s financial acumen helped make that happen, as Paramount turned a (sometimes very modest) profit for a decade before sinking into the red this year.
While Grey gave Moore much autonomy, he sometimes stepped in. That happened, for instance, when Moore halted pre-production of Mission: Impossible 6 over star and producer Tom Cruise’s compensation. Grey, who is generally said to have a sure hand with talent, got the film back on track, though he declined to say how much Cruise will be paid.
Grey hasn’t had the latitude to buy big pieces the way that rivals have. Two of his first big deals made prior to the ascension of Dauman from Redstone’s estate lawyer to Viacom chairman came when Grey made a seven-year marketing distribution deal with Ike Perlmutter’s Marvel, and then acquired DreamWorks SKG for $1.6 billion, from which Paramount got the billion dollar Transformers franchise. When Perlmutter wanted to sell the company, Paramount got first crack, but in the tight-fisted cost-cutting Dauman regime, that deal was not made. Marvel has proven such a bonanza for Disney that its $4 billion price tag seems a bargain in hindsight. Bold plays like Marvel and DreamWorks stopped once Dauman took the reins and had his own ideas.
Viacom sources said that Grey was even thwarted in one case where he was willing to help even when he didn’t have much to gain. In a corporate sideshow that had no direct connection to Paramount, Grey once hoped to salvage Viacom’s relationship with Jon Stewart when the comic made it clear to Viacom he was planning to end his run as the host of Comedy Central’s The Daily Show. Having started his career by haunting comedy clubs to sign stand-up talent — Grey first met Les Moonves at the Improv where Moonves tended bar between acting gigs — he knew something about the psyche of comics, and Grey knew Stewart from his appearances on several episodes of The Larry Sanders Show, on which Grey was executive producer. Stewart, Grey argued, was simply burned out and would embrace a new deal that would allow him a nine-month rest before returning for the election season. But Dauman was aloof, and didn’t want Grey’s help. It remains unclear whether Stewart could have been swayed. But before Viacom knew it, Stewart proteges Stephen Colbert and John Oliver exited for CBS and HBO, respectively, and Comedy Central had lost its mojo.
Under Viacom’s current regime — in which Dauman still has no permanent replacement, though insider Bob Bakish was named acting CEO and board member Shari Redstone is a leading voice — Grey is confident he has support and a mandate for change. Strikingly, his most vibrant plans involve a build-up in television, where growth is typically quicker than in film.
Grey points to the success Paramount TV’s Amy Powell has enjoyed in three short years. “For the last three years, we have been working hard to build a television production business, a new business, one that in my opinion could potentially exceed the revenue of the movie business someday,” he said.
Elaborating on the studio’s catch-up status in television, Grey said: “The major studios who have succeeded in this day and age have had a diverse pipeline of product. We were kept from diversifying, for a decade.” Regarding progress so far, he added that Paramount has “sold 11 shows, every place from Netflix to Showtime, Amazon, Hulu. We’re really doing well, all under Amy Powell’s division. She is doing great and we are building something formidable.”
Three Paramount series will air this fall — Shooter on USA Network, Berlin Station on Epix, and School Of Rock on Nickelodeon. With or without a CBS merger, Paramount’s television division is expected to expand, in part by building on movie properties like Fatal Attraction, Varsity Blues or The Italian Job.
On the film side, Grey said one priority is to create an animation division that would expand Paramount’s presence in the family market, following if not exactly matching rivals like Disney and Universal. But that will take time, including the location of the next John Lasseter or Chris Meledandri to build it. “We’re slowly building an animation business,” said Grey.
He added: “The first picture that shows the vision of what we’re trying to do is Amusement Park, which we’ll have out in 2019. We have done some animation; we won the Oscar for Rango, we had SpongeBob, we’re doing Sherlock Gnome with Elton John. We also made a deal with Liz Murdoch for a company called Locksmith, a wonderful animation studio she is backing out of the UK.”
Known as a master of Hollywood relationships, Grey will need his skills to hold and expand Paramount’s ties in the film world. A core alliance has been David Ellison’s Skydance Media, its partner on films like the next Mission: Impossible and a World War Z sequel that has so far been elusive, though Grey is trying to make it happen with Brad Pitt’s Fight Club director David Fincher. But Skydance says it is not currently discussing an extension of its Paramount relationship under a deal that expires in 2018.
As that deal, one of Paramount’s most important, nears its end, Skydance has evolved from the studio’s primary co-financier of tentpoles (excluding Transformers) into something closer to the more freewheeling Legendary Pictures. The relationship, once largely monogamous, has become strained at times and Skydance, with $700 million in new funding, placed projects at other studios after Terminator Genisys and Star Trek Beyond fell short of expectations. When Paramount balked at co-financing the Mars mission thriller Life with Ryan Reynolds because in-house producer JJ Abrams had a similarly themed project in God Particle, Ellison set his picture at Columbia — which premiered the first trailer for the Memorial Day weekend 2017 opener during Sunday’s The Walking Dead episode — while taking the Dean Devlin-directed Geostorm to Warner Bros. For the moment, Skydance is committed to make six more films under its current deal including Baywatch, Annihilation, Mission: Impossible 6 and WWZ 2 if that sequel comes together.
If future ties with Skydance are in question, Grey will also have to bolster relationships with other lot-based producers, most of whom don’t bring half the film’s budget with them. At present, key lot-based production companies include Abrams’ Bad Robot, Martin Scorsese’s Sikelia (Scorsese follows Silence with the Robert De Niro mob film The Irishman for Paramount), Lorenzo di Bonaventura (Transformers), Jerry Bruckheimer (Top Gun 2), and relative newcomers Leonardo DiCaprio’s Appian Way (Grey hopes hard that DiCaprio will follow The Revenant with The Devil In The White City) and Hasbro.
Prominent in that equation is Michael Bay, a priority for Grey since Moore was the Transformers director’s key studio relationship. Beyond the surprising failure of Bay’s Platinum Dunes-produced Teenage Mutant Ninja Turtles sequel, the firing of Moore left an especially large gap on the China front, where he had been Paramount’s point person. Much of his China work involved Michael Bay’s Transformers films, the fifth of which — Transformers: The Last Knight — is set for release next June with a spinoff on the Bumblebee character loosely slotted for 2018. Moore had been working on a significant deal for the film’s release in China, one that had been important to Bay, sources said. That negotiation has now stalled, and Grey will likely head to China himself by early December to pursue an alternative that will please the producer-director whose Hasbro toy based series has provided the biggest triumphs of Grey’s tenure since Robert Downey Jr.’s Iron Man left for Disney with the rest of the Marvel superheroes.
That planned China trip is one indicator of the fresh engagement that is now required of Grey. Moore’s exit, in fact, suddenly left him with more direct responsibility — and a work load that might conceivably require hiring a top executive to share it. (In the past, seasoned prospects like Michael De Luca and Mary Parent shied away from joining Paramount’s executive ranks, with its tight administration and close fiscal constraints.)
“With Rob’s departure, for the time being, I have eight direct reports and I’ve jumped into it,” said Grey.
“I’m overseeing marketing and distribution of the movies with Megan Colligan, and working with Marc Evans on a daily basis to package the movies, managing finance and business affairs, and then working with the people who make the movies to keep those relationships and efforts going at Paramount,” he continued.
“I’m loving it more, because I’m more engaged than I have been for years. It’s a wonderfully invigorating time. It has been a wild ride, but it’s like an ending to that, and a rebirth and I feel ready for it.”
Most of those tasks, of course, might also be easier with CBS and its assets strengthening the overall company. One person who has monitored Hollywood’s scramble for distribution rights to future James Bond films, for instance, suggested that even a newly energized Paramount would not be a serious contender for a deal many speculate will end up at Warner Bros unless Sony really steps up to keep 007. A CBS-run studio, on the other hand, might make Paramount a more attractive landing pad for the franchise. Similarly, video game giant Activision Blizzard is considering an overall distribution deal for its own movies based on game properties. Since little high-profile IP hasn’t been gobbled up, that becomes a potentially important deal. Hypothetically, new resources and closer attention from Grey could put Paramount in contention for that deal, or one like it.
Asked how the product reel’s preoccupation on prize contenders with perhaps limited crowd appeal — Arrival, Fences, Silence, Allied, and Florence Foster Jenkins are all likely to have some sort of awards campaign — when majors now most covet global tent poles that earn 70% of their grosses overseas, Grey strongly defended his attraction to traditional Hollywood values. He does, after all, have such tasteful projects on his resume as the Emmy-winning The Sopranos and the Oscar-winning The Departed.
“I think there has to always be a place for the kind of movies where people believe they are going to be told a great story, and be entertained, and moved,” he said. “There must be a place for that. I don’t think it will ever go away. It may be a niche in our business, for a cycle. But that will just be a cycle. People are not going to go away from good storytelling, they’re just not.”
Of bigger films, he said, bluntly, that he wants them: “The version of the movie business we’re in right now, where you can see something like Doctor Strange or some other big blockbuster, is fantastic. Believe me, I’d love to make as many of them as possible and we will try to do that.”
Overall, he said that Paramount will simply have to build without the luxury of properties like those owned at, say, Disney. But he insisted that Hollywood dynamics, both in film and television, make a build-up possible.
“If you don’t have the benefit of owning franchise IP, you have to find another way,” he said. “You see it from television’s resurgence, that people have that appetite. Netflix has 55 new TV shows a year, and puts them all on the air. Networks maybe used to do 12, and maybe picked four of those. It’s a whole different time now, and there is room for everybody. You asked if market share will go up. I hope so, but there is a profitable business there for us in managing 15 movies. If you manage your business profitably, you can build the library.”
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