Paramount Pictures (US)

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Paramount Pictures is arguably the world's oldest surviving movie studio, tracing its lineage back to 1912. It now forms the core of the Filmed Entertainment division within media group Viacom. Although a giant of the movie industry from the 1970s to the 1990s with films including the Godfather, Star Trek and Indiana Jones series and all-time box-office champion Titanic, Paramount scaled down its operations in the early 2000s. As a result, however, the studio came close to falling off the Hollywood map. A return to big-budget blockbusters has paid a few dividends since 2007: Paramount was re-established as the #1 studio that year for the first time in decades. Some of the credit for that achievement was due to an alliance with the DreamWorks studio, acquired in 2005. However that partnership proved fractious. Several key figures, including director Steven Spielberg, left the company at the end of 2008. The termination of a separate relationship with DreamWorks Animation has prompted a prolonged slump in box office performance since 2011, although the Transformers franchise continues to be a substantial moneyspinner every couple of years.

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Adbrands Weekly Update 18th May 2017: Brad Grey, chairman & CEO of Paramount Pictures for 12 years until his forced resignation only three months ago, has died at the age of just 59. According to his family the cause was cancer. Before his appointment at Paramount, Grey had enjoyed considerable success as a producer in TV, most notably with the Larry Sanders Show and The Sopranos. Though there were early successes at Paramount, such as the hugely successful Transformers series and Mission: Impossible, the studio has in recent years been struggling as a result of a series of box office flops. Yet Grey had managed to retain the support of Sumner Redstone, controlling shareholder of Paramount parent Viacom. That support began to waver with Redstone's increasing mental incapacitation, and the growing influence of his daughter Shari Redstone.

Adbrands Weekly Update 13th Apr 2017: There's no respite yet for ailing Paramount Pictures. Futureshock thriller The Ghost In The Shell looks certain to become its latest flop despite the presence of Scarlett Johansen in the lead role. Trade source Deadline predicts a loss of at least $60m on the project, which is thought to have cost over $250m to make and market, possibly much more. So far it has taken in only a little over $32m in the US, though international has been stronger, making a combined total so far of $129m.

Adbrands Weekly Update 30th Mar 2017: Viacom picked former 20th Century Fox chief Jim Gianopoulos to lead its ailing Paramount Pictures movie division. At Fox, Gianopoulos oversaw huge hits including Avatar, Deadpool and the X-Men series. He is tasked with reviving a studio which has enjoyed critical praise for recent releases like Arrival and Fences, but a string of commercial flops. It has been the bottom-ranked major studio by US box office for the past five years, and filed a net loss of $445m for 2016. Its last major hit was Transformers:Dark of the Moon in 2011. Since then, out of 40 movies to have exceeded a gross of $250m at the US box office, not one has been from Paramount, and only six of its releases exceeded $100m.

Adbrands Weekly Update 23rd Feb 2017: The latest shakeup at Viacom appears to be the possible departure of Paramount CEO Brad Grey who has led the fabled movie studio since 2005, despite a run of recent flops including Monster Trucks, Ben Hur and Zoolander 2. Grey was a close confidante of Viacom's former CEO Philippe Daumann and ailing patriarch Sumner Redstone, but has failed to consolidate his position with new CEO Robert Bakish and current controlling shareholder Shari Redstone. His exit was widely rumoured but has yet to be confirmed.

Adbrands Weekly Update 1st Sep 2016: Latest development in the Viacom soap opera is that Paramount Pictures chief Brad Grey appears to have survived the axe. He was called before the struggling media group's new board of directors to explain the studio's run of box office disappointments. Ousted Viacom CEO Philippe Daumann had been proposing to sell a stake of as much of 49% in Paramount to outside investors, possibly from China. That plan, which was apparently opposed by controlling shareholder Sumner Redstone and his daughter, vice chair Shari Redstone, looks like it will not be green-lit, though Daumann will still get a chance to argue his case before his departure mid-September. In a joint statement, the Viacom board said they "remain fully supportive of Brad and his leadership of the studio. Under Brad’s leadership, Paramount has taken significant, successful steps to broaden and strengthen its business, and we are confident that Brad and his team have the skills, relationships and resources necessary to return Paramount to success in its movie business and continue its rapid growth in television." Grey, who has run Paramount for the past 11 years, is moving the studio aggressively into television, with 15 shows currently in production.


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Background

Free for all users | see full profile for current activities: The Paramount Pictures name began as the distribution business for a film studio created by Hungarian-born entrepreneur Adolph Zukor. Originally the owner of a small nickelodeon theatre in New York, Zukor gambled a considerable sum to acquire rights to Queen Elizabeth, a four-reel film made by and starring the legendary stage actress Sarah Bernhardt. When it opened in July 1912, it was the first full-length film drama ever to be screened in the United States. Its success prompted Zukor to set up his own production company, The Famous Players Film Company, to deliver a succession of similarly grandiose classical adaptations, billed as "Famous Players in Famous Plays". Titles included The Prisoner of Zenda and The Count of Monte Cristo. In 1914, Zukor acquired a small distribution company named Paramount Pictures Corporation to release his products to other cinema owners. It was America's first national film distribution company.

In 1916, Zukor's Famous Players merged with a fledgling studio run by Jesse Lasky in Hollywood to form Famous Players-Lasky Corporation. Both companies' interests were merged, with the resulting films released through the Paramount distribution company. Eventually, the Paramount name became so significant that the company changed its name to Paramount-Famous Lasky. In 1926, partners Zukor and Lasky also constructed a huge new production studio on Marathon Street in Hollywood, which Paramount remains to this day. Many of the biggest names in Hollywood worked under the Famous Players-Lasky banner in its early days, including Cecil B DeMille (who had got his start in pictures from Lasky), Douglas Fairbanks, Mary Pickford, Gloria Swanson and cowboy star William S Hart. Later stars included Rudolph Valentino and Clara Bow. The company's World War I drama Wings was the very first recipient of the Oscar for Best Picture in 1929.

In the mean time, Zukor also accumulated numerous other interests including a national chain of almost 2,000 cinemas, and was one of the principal backers of William Paley's Columbia Broadcasting System in 1928. However this rampant expansion led to serious problems in the Great Depression of the early 1930s and the business narrowly avoided bankruptcy in 1935. It managed the transition into the sound era with some success, and launched to a new generation of stars during the course of that decade including Marlene Dietrich, the Marx Brothers, Bing Crosby and Bob Hope. Paramount was also one of the main early rivals to Walt Disney in cartoon shorts, through the work of animator Max Fleischer, whose creations included Betty Boop and Popeye.

Throughout this period, the group had continued to expand its extensive national cinema chain, and this led to numerous run-ins with monopoly regulators. Eventually in 1946, the government ruled that none of the major studios should be allowed to own their own cinemas, and Paramount was effectively split in two in 1949, its movie exhibition business hived off into an independent company. The loss of this enormously profitable sideline, as well as the emergence of a powerful new rival, television, sounded the death knell for all the great Hollywood studios, Paramount included. The business suffered a steady decline during the course of the 1950s, punctuated by a few occasional triumphs, not least Cecil B DeMille's remake of The Ten Commandments, a massive commercial hit in 1956. 

In 1966, Paramount was acquired by Gulf & Western, an industrial conglomerate run by the obsessive and notoriously foul-mouthed Austrian entrepreneur Charles Bludhorn. Paramount was by now one of the weakest of the major studios, having failed to develop a strong position in TV production. In what was considered at the time to be the final nail in Paramount's coffin, Bludhorn appointed a virtual novice, former actor Robert Evans, as its head of production. In fact Evans managed to engineer a spectacular turnaround of Paramount's fortunes. Over the next eight years, he delivered a string of huge hits, including Love Story, The Odd Couple, Rosemary's Baby and above all The Godfather, which re-established Paramount as the #1 Hollywood studio. When Evans quit to become an independent producer, he was succeeded by another young turk, TV-trained Barry Diller. 

Diller maintained Paramount's run of movie hits - including Grease, the first two Indiana Jones movies, Terms of Endearment and Beverly Hills Cop - while also building the company as a major force in television comedy. In the late 1970s and early 1980s Paramount was responsible for developing and creating long-running hit shows Taxi and Cheers. (The latter, in turn, spawned the equally successful Frasier in the 1990s). Diller also trained up a new generation of executives who would come to dominate the industry by the end of the 1980s, including Michael Eisner, Jeffrey Katzenberg, and Don Simpson. However the sudden death of Charles Bludhorn in 1983 left a vacuum at parent group Gulf & Western. His successor, Marvin Davis, began a restructuring of the conglomerate's widely spread interests in mining, metal production and sugar plantations to concentrate on media and entertainment. In 1989, Gulf & Western changed its name to Paramount Communications. 

In 1994, the group was targeted by cable group Viacom, which agreed to buy the business for $8.2bn, mostly to be paid in stock. Viacom's offer was quickly topped by a higher cash offer from the TV home shopping network QVC, now run by former Paramount Studios boss Barry Diller. Both sides spent the next five months in a bruising bidding war, upping the stakes by bringing on a host of corporate partners. Viacom recruited cable operator Nynex to back its bid, and added firepower by announcing a second mega-deal. In January of 1995, with the Paramount takeover still unresolved, Viacom announced it would spend a further $8.4bn to acquire video retail chain Blockbuster, and also upped its bid for Paramount to over $10bn. (Beaten on Paramount, Diller went on to create the interactive entertainment group IAC).

Having clinched the takeover of Paramount, Viacom then spent several years digesting its various acquisitions, selling off non-core businesses, before pulling off another big deal in 1999 with the takeover of CBS. In the mean time, the movie studio scored several more spectacular successes, not least Titanic in 1997 and the first two Mission: Impossible features in 1996 and 2000. However, the need to deliver more consistent profits led to a change of strategy in the early 2000s. Rather than gamble on expensive star actors and directors, Paramount opted for a line-up of what looked on paper at least like less risky ventures. Yet the results were, arguably, disastrous. Not one Paramount release made the US Top 20 in either 2002 or 2003, and only one (Lara Croft: Tomb Raider) took more than $130m in the four years from 2001 to 2004.  

In 2005, Paramount bought out the live action division of DreamWorks SKG, the "mini-major" established by Steven Spielberg with David Geffen and Jeffrey Katzenberg. That same year, The War of the Worlds, directed by Spielberg and starring Tom Cruise, signposted a return to blockbusters. However, it was clear that the company - or at least owner Sumner Redstone - still had reservations regarding top-dollar talent. In late summer 2006, when another blockbuster, Mission Impossible III, was slow to deliver results at the box office, Sumner Redstone surprised many observers by delivering an unprecedented personal criticism of superstar actor Tom Cruise. He accused Cruise of committing "creative suicide" by making several unconventional and outspoken public appearances which, said Redstone, reduced the potential appeal of M:I III to a female cinema audience. Though by no means a flop, M:I III generated less at the box office than either of its predecessors, and Paramount's income was reduced by a substantially higher payout to its star. As a result Redstone declined to renew Paramount's longstanding production partnership with Cruise.

A similar succession of slights also weakened the studio's relationship with star director Steven Spielberg. In 2007, reports began to circulate that the DreamWorks team felt underappreciated by Paramount management and were considering whether or not to renew their contracts when they expire in 2008. Viacom CEO Philippe Dauman expressed his public regrets over any such dissatisfaction and hoped that the contracts would be renewed. But if not, he said, Paramount would move ahead and "achieve its goals without missing a beat". That comment only appeared to exacerbate the bad feeling on the part of Spielberg and his supporters. In June 2008, Spielberg agreed a deal to establish a new independent DreamWorks studio with backing from Indian billionaire Anil Ambani and his Reliance conglomerate. Reliance's Big Entertainment movie production subsidiary has already signed development deals with a string of other Hollywood stars including Jim Carrey, Tom Hanks and George Clooney. The DreamWorks management team left Paramount at the end of the year. See full profile for current activities


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