Two months after he was kicked out of Paramount Pictures, actor Tom Cruise and his producing partner are returning as part owners of one of Hollywood's most storied movie names.
The deal for Cruise and longtime associate Paula Wagner to own at least 30% of a resurrected United Artists reflects a changing economic climate in the movie industry in which outside money from sophisticated investors is increasingly bankrolling stars and filmmakers as an alternative to studio checkbooks.
Cruise and Wagner will partner with UA owner Metro-Goldwyn-Mayer Inc., another historic name in Hollywood now controlled by private equity firms, to take charge of reviving a company that is in effect returning to its roots as an artist-operated studio. In 1919, UA was founded by four of the most important figures in the silent-movie era -- Charlie Chaplin, Douglas Fairbanks, Mary Pickford and director D.W. Griffith to offer artists creative freedom and ownership in movies.
At UA, Wagner will serve as chief executive, a role she has never held in a career that has included being Cruise's production partner for 14 years and, before that, his agent.
For The Record
Los Angeles Times Saturday November 11, 2006 Home Edition Main News Part A Page 2 National Desk 1 inches; 53 words Type of Material: Correction
United Artists deal: A chronology accompanying a Nov. 3 article in Section A about actor Tom Cruise and associate Paula Wagner's becoming part owners of a resurrected United Artists included the film "The Greatest Story Ever Told" as one of the studio's hits. The movie, though critically praised, was considered a box-office disappointment.
Cruise won't have an executive title but is expected to be heavily involved in developing and producing UA movies. He will star in an unspecified number but will still be able to act in movies for other studios.
The two, who are not risking their own money, plan to produce at least four films a year averaging $40 million to $50 million that MGM will market and release, and can give the go-ahead to projects costing as much as $60 million.
"When you look at the tradition of UA and what the philosophy was -- to make pictures driven by artists -- it fit into what Tom and I wanted to do," Wagner said.
Cruise said in a statement, "It's our desire to create an environment where filmmakers can thrive and see their visions realized."
But some industry watchers were skeptical. Cruise and Wagner have a mixed track record as producers, and they lack experience overseeing what amounts to a mini-studio.
"Good for Tom -- it's a great press release," said media analyst Harold Vogel. "But it's little beyond a press release and the revival of a moribund label that happened to be available."
Although he is still one of the world's biggest stars, Cruise has hurt his public image lately with off-screen antics that have turned off some moviegoers. And, at age 44, he is no longer the youthful superstar he was when he made such films as "Top Gun," "The Firm" and "Jerry Maguire."
Although Cruise and Wagner are considered bona fide producers, making hundreds of millions of dollars over the years for Paramount when Cruise starred in such movies as the "Mission: Impossible" films and "War of the Worlds," they have not done as well on films without him as an actor. Last year's "Elizabethtown" lost about $30 million for Paramount.
The Cruise-Wagner deal comes as Hollywood's biggest stars and filmmakers are seeking outside money as they are being squeezed by cost-conscious studios coping with soaring production and marketing costs, erratic box-office returns and flattening DVD sales. Over the last year, thousands of jobs have been slashed, and lavish talent deals like the one Cruise and Wagner had at Paramount for 14 years are coming under scrutiny.
Top actors often branch out into production to make pet projects, gain creative freedom and to get a bigger slice of the profits. Cruise for years enjoyed by far the richest studio-funded production company deal of any top star, with Paramount paying as much as $10 million a year to cover payroll, script purchases and fees he and Wagner were guaranteed.
However, Cruise and Wagner were jettisoned from Paramount in August after the studio balked at continuing to fund the duo's production company at that level. In a move that blindsided Cruise, Wagner and even Paramount's own management, Sumner Redstone, chairman of studio parent Viacom Inc., publicly trashed Cruise, saying the star hurt the studio with his public behavior.
Cruise had jumped on talk-show host Oprah Winfrey's couch professing his love for actress Katie Holmes, aggressively promoted his Scientology beliefs and criticized actress Brooke Shields for taking medication to treat her postpartum depression.
Redstone estimated that Cruise's actions cost the studio as much as $150 million in box-office receipts for "Mission: Impossible III." Although Paramount expects to break even on the film, which grossed nearly $400 million worldwide, Cruise could reap as much as $80 million because of his lucrative arrangement.
Despite that, Redstone issued a statement Thursday saying, "I wish Tom and his associates the greatest fortune in their new venture."
A few years ago, even a star of Cruise's caliber might not have pulled off a venture such as UA. But money from new sources such as hedge funds and private equity groups is pouring into a business once financed almost exclusively by major studios.