Peter Bart and Mike Fleming Jr. worked together for two decades at Daily Variety. In this weekly column, two old friends get together and grind their axes, mostly on the movie business.
BART: In his first remarks to stockholders, Bob Bakish, Viacom’s new CEO, promised to deal promptly with his company’s “points of pain,” but he’s stuck on one of his first such “points.” His effort to recruit major players like Jim Gianopulos and Michael De Luca is stalled by his hesitancy to delegate autonomy to green light new projects. Since studio chiefs have become an endangered species, I think Bakish should be delighted to delegate the “green light” – neither he nor his CFO Wade Davis, have a background in film deals or relationships.
FLEMING: Well, there are four big jobs out there in Hollywood, and one piece dropped into place today with Scott Stuber at Netflix. The others are the Paramount chairman job that many feel Jim Gianopulos will ultimately take, another the Michael Lynton Sony replacement for which ex-Disney exec Thomas Staggs is most often rumored. De Luca pulled out of the final one, the vice chairman role at Paramount, where he would have been charged with putting together new projects and tent poles. It continues to be a weird time in town, with numerous other displaced but experienced execs still figuring out their new roles. That list’s topped by former New Regency president/CEO Brad Weston, Lionsgate’s Rob Friedman, Warner Bros’ Greg Silverman. And don’t forget former Paramount vice chairman Rob Moore, whose non-compete ends soon. Despite the disrepair at Paramount, Moore’s got a strong financial background and will undoubtedly resurface. There’s also Studio 8’s Jeff Robinov, who did great things running the movie business at Warner Bros, and who still might resurface at Paramount if Gianopulos passes. Another big question is whether Mary Parent will stay at Legendary; it would be an easier decision if Gianopulos was replacing the deposed Thomas Tull. Parent was one of the first calls Bakish made, and she turned down a meeting when Gianopulos seemed a strong possibility at Legendary. With all these questions about China’s funding commitments right now, who knows how she feels about the future?
BART: It’s paradoxical that Hollywood’s production chiefs have been falling like flies because I would argue that the industry’s biggest culprits have been its CEOs, not its picture-pickers. This is especially true at Paramount where former CEO Martin Davis egomaniacally blew away Barry Diller and Jeffrey Katzenberg. Universal’s one-time CEO, Jean-Marie Messier, brought that studio to its knees and his successors from General Electric never figured out how to manage the movie business. Michael Lynton’s reign as CEO of Sony has been at best marginal in terms of vision and profitability. When David Begelman was CEO of MGM, his main achievement was staying out of jail. One reason Bob Iger has been deified by the industry is that he stands out in a sea of mediocrity. Bakish has yet to prove himself as a CEO and if wants to combat his “points of pain” I would recommend hiring the two major league executives on his list. And then take some Aleve.
FLEMING: Give Bakish credit at least for choosing well, even if it isn’t clear he’ll get his choices. Most of the industry folks I spoke to felt that a pairing of Jim G and Mike De would be good for Paramount, and the movie business. Some initial reports painted De Luca into the job, but he was aloof about it for days. Who can blame him? This wasn’t Kevin Durant coming to the Golden State Warriors and sublimating his game for another championship run. If De Luca is joining the last place team, why would he want to be second banana, even if the first banana is Gianopulos, who has complementary skills and a track record as good or better than most of those who have the job at other studios? Stuber was also courted for the top Paramount job. Like De Luca, he has young kids and that’s hard when you’re a producer living on location. I’d argue Stuber took the best job on the table with Netflix. He has security – word is this is a five year multi-million dollar deal – and financial resources aren’t a problem as he tries to make big star driven pictures on a different platform. That is a clear mandate. After all the dysfunction, who knows what Paramount’s future holds? You need the rope to make bold moves. Sony’s fortunes have to improve, but Tom Rothman this week got one over on his old haunt, Fox, by jumping into a world rights deal for Ridley Scott’s next pic, the Getty kidnapping tale All The Money in the World, for which Natalie Portman is being courted. He pounced on Skydance’s sci-fi pic Life, which originally was at Paramount and stepped up for foreign on the Blade Runner sequel. Stacey Snider grabbed for Fox the Steven Spielberg-directed Pentagon Papers pic The Post with Tom Hanks and Meryl Streep, which Amy Pascal bought as a spec last fall. Both the Spielberg and Scott movies start production in May. That is blazingly fast. A studio chairman needs to be able to act, quickly, and green light committees are anathema to that.
BART: Another issue giving Bakish back pain is his billion dollar Chinese financing deal, which, like many China deals, seems to be melting before his eyes. The Shanghai Film Group and Huahua Media were going to come up with co-financing for a major part of the Paramount slate but suddenly the deal ran into the same issues that apparently killed the billion dollar Dick Clark Productions sale. That was the baby of an even bigger Chinese player, Wang Jialin, chairman of the Wanda Group, who also owns the AMC Theater circuit, biggest in the world. A possible MGM negotiation also has been sidelined, according to The Wall Street Journal. What is causing these deal making convulsions? Here are the theories: China is tightening restrictions on capital leaving the country. China also is worried about falling currency values – it was Donald Trump who called China “the great champions of currency manipulation.” That hasn’t helped the process. Add to this the tendency of Chinese dealmakers to close deals, then try to syndicate them among other Chinese investors. Hence even when deals are closed, the funding seems to seep out in small doses.
FLEMING: Not every China deal is crapping out. Wanda is still funding Legendary and holding fast on its co-financing deal at Sony, even though that was for select pictures and at a smaller percentage. Money is harder to pull out of China now, but who’d want to spend vast sums until you see what Paramount is going to look like. If Bakish’s programming of tying the movies to Viacom networks is a puzzlement because those network brands don’t mean anything here, imagine how that all goes over for two China-based investors? Before he loses Gianopulos too, Bakish might want to simply say, Jim G here’s the keys to this broken down auto. Do what you have to, spend what you need to, to fix it. The slate co-financiers will emerge, even if they aren’t Chinese.
BART: I recall the days when many U.S. films were funded by German dentists. At least they paid their bills on time.
FLEMING: The only German dentist I can think of is the one played by Laurence Olivier in Marathon Man. This somehow seems relevant to the topic. And isn’t that a Paramount film? Talk about one that is ripe for remake for a new audience! Maybe a turnaround isn’t far from reach at that studio where they managed the margins each year because Viacom wasn’t willing to spend aggressively.