November 3, 2004

Sherry Lansing is no dummy…

Friends and confidantes have been reading her moods for a while now, sure that she was ready to leave the job she has held for 12 years. There has long been a belief that Lansing was safe, effectively protected by Sumner Redstone and somewhat invulnerable to Tom Freston's eagerness to rebuild.

The first big threat was this time last year when the shifts inside of Viacom were really percolating and the studio was releasing dud after dud. The media was on the attack and by spring, the studio was forced to re-position itself as "The New Paramount." That meant a public rethinking of the caution with which the studio approached big budget projects.

But the internal thinking didn't really change much, even after Sacrificial Lamb #1, John Goldwyn (you can be sacrificial, even if you have earned an exit), was replaced by Donald DeLine. The idea that Paramount was going to start spending aggressively in franchise building was thwarted by the inability to get Tom Cruise to get M:I3 off the ground (though it has been replaced in next summer's schedule by War of The Worlds… which still hasn't started shooting) and the inability to find a big title that isn't driven by a long-standing Paramount relationship. This isn't to suggest that jumping out of the pan into the fire would have been the best move, but the only Paramount 2005 movie besides War of the Worlds with any "smash hit" profile at this point is the Adam Sandler remake of The Longest Yard, which was a gimme, since the remake rights are owned by Paramount.

Suicidal Lamb Jon Dolgen's exit was hailed as the death of the wicked witch. But, as tough as he was, he was a manifestation of the corporate thinking about Paramount. Dolgen is like the disciplinarian football coach that no one likes but who can do the job. But in the film business, the only studio that could use him at this point is one that really has a fiscal responsibility problem. I guess that describes them all, but unless he is the architect of that structure - which he was not at Paramount, was not allowed to become and is why he left - his nun-with-a-ruler demeanor is not going to work for anyone.

Almost a year into "The New Paramount," Lansing has not shown any new colors in her game.

The product of "Old Paramount" has been painfully unsuccessful. The one pure success was Without a Paddle, a horrible movie that managed $57 million in a nice long run. Mean Girls was a hit… but it grossed tens of millions less than it should have, given the reception and other studios' ability to extend their product when they have success. (The same was true of School of Rock last fall.) They managed to fight off complete meltdown disaster with The Stepford Wives, though a $100 million worldwide gross on a $120 million production budget leads a writedown of no less than $50 million for Paramount and partner DreamWorks.

Far worse was the run of The Perfect Score, Against The Ropes, Twisted, The Prince & Me and Suspect Zero, every one of which was moved around the release schedule checkerboard like a molten lava checker. The failure of Sky Captain & The World of Tomorrow (which the marketing and publicity department managed to open pretty well) and Team America: World Police - the studio's hip, young efforts - are also damaging. Both films have a chance of eking out some black ink - but both were too expensive to be hits at $40 million and both were niche films that were always going to have a hard time passing that landmark.

And the dark forces are gathering again. Alfie, Sk8er Boi and Sahara are all presumed misses. Concerns about the theatrical life of The Spongebob Squarepants Movie, which has a huge cult following but is said to essentially be a big screen extended episode (note the advertising emphasis on human interaction with Sponge and Patrick), which may make for huge DVD sales, but theatrical of no more than $70 million or so, which will pale behind The Incredibles numbers, a competitor which Sponge will still have to face in the Pixar/Disney film's third weekend.

And then there are the wins that are dangerous. The final number on Lemony Snicket's A Series Of Unfortunate Events is said to be significantly higher than its starting budget of $125 million… so much so that it is said to be scaring not only Paramount folks, but DreamWorks as well. Breakeven is looking like $400 million theatrical worldwide, all ancillaries included in the calculation. That number has been hit 32 times in these first four years of the new millennium, so it is quite doable. But the idea that the bar starts that high is scary and the titles that have achieved it, and that are still not perceived as hits, are Pearl Harbor, Men in Black II, The Matrix Revolutions.

Another co-production with DreamWorks, War of the Worlds, is also a pricy effort and one must keep in mind that the last Cruise-Spielberg film (a movie I consider to be quite underrated), Minority Report, did "only" $360 million worldwide, which supports a production budget of about $175 million if you want to hit black ink. War of the Worlds is budgeted below that, but any desperate effort to get effects done for a July 4 weekend date could increase that budget in a hurry. The cost of effects are significantly higher when you are in a big hurry. The pressure on Ms. Lansing next summer - if Spielberg was racing to completion in the face of Star Wars: Episode III and with Sahara disappointing in the spring - would be enormous. No fun.

The only relief would be Sandler's football comedy, which seems sure to be a $150 million-plus hit… a true sure bet. But when thinking about the bottom line, one wonders, how much are they paying Sandler? Sure bets are not cheap.

But the timing of this anouncement - and make no mistake, it was an announcement - seems to be tied to Alfie, a film Lansing already pushed off of last month, practically sending an S.O.S. With the Disney story going quiet and Miramax's future being managed like a nuclear submarine, odds are that Lansing got wind of a story brewing on the fall failures and the price of Snicket, refocusing on the studio after eight months of relative quiet... probably by Claudia Eller, who "broke" this news, and/or Sharon Waxman, who was given the break on "The New Paramount" last winter.

And so, Sherry has done her Michael Eisner… "It's been lovely, but I'm not renewing my contract and if you find someone to follow my legacy, I'll be here to give them a hand."

It is a rare executive who hasn't emptied out their bag of tricks in six years, much less twelve. And it is rarer still to find a bag of tricks that lasts longer than that. 'Twas nature that killed Ms. Lansing. I think it is fair to remember her remarkable career.

And now, to look forward....

(Look at The Hot Blog for a "What's next?" piece later today.)

E-ME: How are you doing?