Executive Firings: What's Behind Hollywood's Season of the Witch Hunt (Analysis)
THR's studio-by-studio breakdown reveals surprising new details of the movie business' biggest executive upheaval in years -- Sony's hunt for money, will Jeff Robinov finally land at Fox? -- and the politics of the shake-ups.
This story first appeared in the Oct. 11 issue of The Hollywood Reporter magazine.
Hollywood executives aren't an endangered species -- yet. More than at any time in years, it's open season on movie moguls. Amid skyrocketing costs and a sea change in how people consume entertainment, a sense of panic seems to have enveloped corporate CEOs, financiers and shareholders. Even as the global box office hit a summer record in both admissions and revenue, top execs are being picked off at an alarming pace.
Beginning in early 2012, the current wave of firings and executive suite reshuffling hit Disney first, as chairman Rich Ross exited under the cloud of megabomb John Carter. Then Fox co-chief Tom Rothman was shown the door. The town knew an overhaul was coming at Warner Bros., where a three-executive "bake-off" drama was taking place, but when Kevin Tsujihara got the top job and TV chief Bruce Rosenblum and film head Jeff Robinov soon left, it was no less cataclysmic. More recently, the ax suddenly fell at Universal and Sony. Focus Features CEO James Schamus was abruptly dismissed Wednesday and replaced by FilmDistrict's Peter Schlessel. Paramount on Tuesday announced it would lay off 110 employees, but so far its top execs have been spared.
Such frenzies of upheaval seem to pop up periodically in the movie business. For instance in 1984, when Paramount's corporate boss Martin Davis forced out Barry Diller and Michael Eisner because he was jealous of all the attention they were getting for their success, it triggered a domino effect that led to big changes at Fox and Disney. But this time, it's not just a matter of boardroom egos. There are a number of specific factors in play. At the top of the list is the fact that even as most of the studios have cut back on the number of movies they make, while also inviting in more investors to share the risk, the big tentpole bets have just become too risky. "The studios have gotten into a rut -- they're making Iron Man 65 and Superman: Version 18," says analyst Harold Vogel. "And when you have the budgetary collapse of these large films, as you did this spring and summer, it puts the execs under added pressure. Those kinds of films give a kick in the pants to the people who watch budgets and assess risk."
Universal chairman Adam Fogelson endured last year's Battleship and had enjoyed several 2013 successes, but when the brass at the Comcast-owned NBCUniversal turned their attention to Universal, he was out and Ron Meyer and Donna Langley were paired with Jeff Shell, whose experience is mostly in television. Sony's Michael Lynton and Amy Pascal could have found themselves on the hot seat for recent misfires, but instead they moved quickly, declaring change at the studio was needed as they fired their marketing president Marc Weinstock.
Digital technologies already have impacted music and TV and are just beginning to hit the film industry, as going to the movies now competes with streaming media and video-on-demand. When analog-bred execs are ushered off the lots, jobs often are being given to those versed in digital distribution, like Tsujihara, or digital marketing, like Sony's Dwight Caines, who inherited part of Weinstock's job.
"We're coming out of a 20-year period where there was a degree of stability, but the technology has gradually changed. Many of the studio heads are not as young as they used to be, so a generational shift is inevitable," adds Vogel. But another problem plaguing Hollywood is a dearth of strong executive talent. Which is why Alan Horn, eased out of Warners in 2011, was soon scooped up by Disney's Bob Iger. Even as execs find themselves on the firing line, there's a sense of reluctance to let the next generation take over. What follows is THR's analysis of each studio's recent executive moves.
Daniel Loeb appears to have accomplished at least part of his goal of shaking up Sony Pictures. The hedge fund manager, whose Third Point holds nearly a 7 percent stake in the studio, sharply criticized its "overspending on numerous projects" after a punishing summer that saw two big-budget flops, After Earth and White House Down. Seeking a new public face, Sony's leaders Lynton and Pascal drafted crisis PR veteran Charles Sipkins as its new corporate spokesman in August, and a few weeks later longtime studio mouthpiece Steve Elzer revealed he would exit by year's end. Sony then axed worldwide marketing president Weinstock and replaced him with digital marketing head Caines and international marketer Nigel Clark.
Weinstock is expected to be the only top executive shown the door, insiders say, as the studio focuses on reducing spending and finding a co-financing partner -- which many see as Sony's most pressing need. Currently, the studio is one of only two majors without a massive slate-financing partner. (Disney, the other, is content to self-finance its films.)
Sources say Lynton made a major push to land David Ellison's Skydance Productions before the deep-pocketed company re-upped with Paramount. He also flew to China to woo the Wanda Group. As with Skydance, he couldn't close a deal. "We're always open to potential financial partners," Sipkins says, declining comment on specific suitors.
Meanwhile, as its parent studio looks for money, sources say genre label Screen Gems, whose films have been fully financed by Sony in the past, also is hunting for new sources of funding. Screen Gems, led by Clint Culpepper, typically receives four distribution slots per year, but one source says it may be in danger of losing a slot if it can't line up additional financing.
Columbia Pictures president Doug Belgrad is likely to lose a slot as well as Sony entrusts its old TriStar Productions label to former Fox exec Rothman, who plans to produce up to four films per year. Sony will provide financing for the new entity and retain all distribution rights worldwide. "Nobody knows how [the Rothman arrangement] will work," says a source with strong connections to the studio. "Tom has been very gracious in saying anything Sony executives want, they get."
Producers and dealmakers with the best material might well decide to pitch to Rothman before approaching anyone else at the studio since he's perceived as "most receptive" and most likely to pull the trigger as he gears up.
Loeb initially argued Sony should spin off its entertainment business, but the board of directors balked and decided to hold on to its showbiz assets. Now, a source close to Loeb says he will no longer publicly agitate for change and will either sell off his shares or quietly hold on to them.
Moving forward, Sony is looking to create new franchises. High on its list to move quickly into production is Goosebumps, to star Jack Black and be directed by Rob Letterman.
Hollywood's insular film industry always has been leery when outsiders are named to big studio jobs, and it was no different when NBCUniversal CEO Steve Burke dispatched Shell, a longtime Comcast exec, to Los Angeles on Sept. 9 to replace Fogelson as head of Universal. "This is the real world and we knew one of their guys was coming," says one insider. But when the move came, it was swift and ruthless. While 18-year studio veteran Meyer was granted a contract extension and a new title (vice chairman of NBCU), Fogelson was blindsided shortly after stepping off a flight from Toronto, where he'd spent the previous evening celebrating the North American premiere of Rush with director Ron Howard.
Shell became part of Burke and Comcast chairman Brian Roberts' inner circle when he joined the cable company in 2005 as president of programming. He spent the past two years in London as chairman of NBCUniversal International, overseeing all foreign operations of Comcast-owned entertainment companies. And, though an outsider, so far he's impressed those he's met. Before he officially moved into Fogelson's office Sept. 27, he'd already begun meeting with producers with strong ties to the studio, including Imagine Entertainment's Brian Grazer and horror maestro Jason Blum. Shell doesn't pretend to be an expert on the film business, say those who've met with him. "He knows what he knows, and he knows what he doesn't know. He's already well-liked," notes one source.
The plan, says another insider, is for Universal chairman Donna Langley, who was promoted from the co-chairman role she played alongside Fogelson, to serve as the creative force, while Shell will be the studio's business leader. Shell has made sure that he is accompanied by Langley at the meet-and-greets. "The person who will help Jeff the most is Donna, who is the day-to-day person. He's got a lot to learn," the source says.
Less than a month after she was promoted to chairman, Langley made her first big move, bringing in FilmDistrict's Peter Schlessel to overhaul Focus Features, the studio's specialty film division. James Schamus, who co-founded the unit more than a decade ago and cultivated hits like Brokeback Mountain and The Kids Are All Right, was sent packing. While Focus, which is currently overseeing the production of Fifty Shades of Grey, has been releasing about six pictures a year, the studio wants Schlessel to oversee a more diversified (which is to say, more commercial) slate of as many as 10 pics a year.
Some did find the timing of Fogelson's exit ironic considering the studio had moved past last year's megabomb Battleship -- which Roberts called "an unfortunate, large miss" -- and now is enjoying its best year ever, having crossed the $2 billion mark overseas while taking in $1.3 billion domestically. The winning streak has been fueled by Fast & Furious 6 and Despicable Me 2, which will be Universal's most profitable film in history after earning nearly $864 million worldwide. But beyond the numbers, a big part of a studio head's job is having a rapport with fellow executives, talent, agents, financiers and producers. And that's where insiders say Fogelson, a former marketing exec, fell short -- at least according to the Comcast team.
In his new job, Shell will have to build a strong relationship with Thomas Tull, CEO of Legendary Pictures, Universal's new co-financier. Legendary, with its deep coffers, had a successful run at Warner Bros., where it co-financed marquee titles, including Christopher Nolan's Batman films. Tull and Shell have met several times and have hit it off. "Jeff is getting his arms around the business," says one person who knows him.
The honeymoon period might not last long, though. On Christmas Day, Universal's big-budget gamble 47 Ronin is slated to open. And while Shell certainly won't be blamed if the troubled film, starring Keanu Reeves, doesn't work, he'll certainly get a crash course in crisis management.
When Time Warner chairman and CEO Jeff Bewkes crowned the studio's home entertainment chief Tsujihara as the new CEO at the start of the year, he risked destabilizing one of the most consistent regimes in Hollywood. And sure enough, by June, both Rosenblum and Robinov were out. Rosenblum soon landed at Legendary, but negotiating Robinov's exit turned into a prolonged affair that has only just been completed. Tellingly, Robinov isn't taking any Warners development projects with him.
Instead of importing a new film chief, Tsujihara entrusted the studio to a team comprised of Sue Kroll, with the new title of president, worldwide marketing and international distribution, Warner Bros. Pictures; Greg Silverman, who'd served as production president under Robinov since 2011; and New Line president and COO Toby Emmerich. The new structure initially puzzled onlookers wondering who exactly would be in charge. But according to dealmakers, save for Robinov's absence, not much has changed. Tsujihara took the lead in convincing J.K. Rowling to sign a new film deal with the promise that she can write the screenplay for Fantastic Beasts and Where to Find Them, but that kind of hands-on involvement has been more the exception than the rule on his part. Agents continue to go to Silverman for big Warners-type pitches and Emmerich for projects more suited for New Line. Except for the ongoing Hobbit trilogy -- which it produces with MGM -- New Line is swearing off big-ticket items like Bryan Singer's nearly $200 million Jack the Giant Slayer, which grossed just $198 million worldwide this year. Instead, New Line will stick with mid-range comedies like current smash We're the Millers and horror pics like The Conjuring. Kroll, meanwhile, has been busy with openings like Prisoners, which Warners distributed for partner Alcon Entertainment, and Gravity, which launches worldwide Oct. 3.
There also was a lot of speculation that the talent associated with Robinov would defect with him. But Warners seems to have cauterized any potential bleeding with its surprise announcement that Ben Affleck will don Batman's cowl for Zack Snyder's 2015 Man of Steel sequel. Sources say overtures have been made to filmmakers Robinov had alienated like Danny Boyle and David Fincher. The new team has greenlighted a number of films -- Guy Ritchie's Man from U.N.C.L.E., Clint Eastwood's Jersey Boys -- though they still represent projects that had been in development under Robinov rather than a new direction. Insiders say that if rifts between the studio's leaders develop, it likely won't be until tough greenlight decisions need to be made.
With the departure of Legendary to Universal, Warners lost a valuable financing source. While it has an ongoing $1 billion-plus partner in Village Roadshow, it still needed to come up with additional financing. Tsujihara met that challenge Sept. 30 by closing a massive financing arrangement with RatPac-Dune, a partnership between Dune's Steven Mnuchin, filmmaker Brett Ratner and Australian billionaire James Packer. Valued at $450 million, it will cover as many as 75 films during the next three-to-four years, beginning with Gravity.
Is Robinov, finally free of Warner Bros., about to join 20th Century Fox? It's been a year since Rothman exited the studio where he and Jim Gianopulos had served side by side since 2000 as co-chairmen of Fox Filmed Entertainment. That left Gianopulos with sole oversight over Rupert Murdoch's movie kingdom, where his chief mandate has been to build -- and in some cases, rebuild -- talent relationships while erasing the reputation Rothman helped create that Fox is a difficult place to work. Industry speculation is that Robinov, whose filmmaker relationships run deep, could help mend those fences. (The studio won't comment, though several sources say no official negotiations are taking place.) But Gianopulos seems to be doing fine with talent on his own. Fincher, who clashed with Rothman over 1999's Fight Club, has returned to the studio to direct Gone Girl, the thriller based on the Gillian Flynn novel. Tim Burton, who last directed for Fox on 2001's Planet of the Apes, will helm Miss Peregrine's Home for Peculiar Children, which is scheduled for 2015.
As a solo act, Gianopulos also helped put together the deal for George Clooney's upcoming The Monuments Men. The Sony project came close to being scrubbed because of budget concerns until Fox agreed to co-finance. Sony will now distribute domestically, while Fox handles international.
During their time together, Gianopulos is said to have chafed at the notion that Rothman made all the creative decisions. After all, Gianopulos boasted the key relationship with James Cameron, the studio's most important filmmaker, who is prepping three Avatar sequels. "Jim is not Jeff Shell or Kevin Tsujihara," says one exec. "He is not just a business guy." Gianopulos also has given more authority to the heads of the studio's various production units -- Fox's Emma Watts, Fox 2000's Elizabeth Gabler, Fox Animation's Vanessa Morrison and Fox International Productions' Sanford Panitch.
On the financing front, Gianopulos extended Fox's relationship with Arnon Milchan's New Regency. And in late 2012, he helped arrange a new $400 million co-financing deal with Chip Seelig's The Seelig Group. Gianopulos also manages Fox's relatively new distribution and marketing deal with Jeffrey Katzenberg's DreamWorks Animation, which so far has generated a big hit (The Croods) and a big miss (Turbo).
The Walt Disney Studios was ahead of the pack, experiencing its executive upheaval in 2012 when Iger gave up on the experiment of having television executive Ross run the motion picture company and turned instead to the seasoned Horn, former president of Warner Bros.
Horn has a penchant for stability, and since his arrival in June 2012, there have been no major executive changes. Studio sources emphatically reject persistent rumors that president of motion picture production Sean Bailey might be replaced, but that hasn't stopped insiders from pondering whether some of Horn's meetings might really be prospective job interviews. Bailey's contract, which was to expire in January, has been extended, but the studio declines to disclose its duration.
Disney's big-picture strategy was set by Iger well before Horn was hired. As Horn arrived, Disney had just opened Marvel's The Avengers, which took in $1.5 billion worldwide, and was poised to release Pixar's Brave, which would gross $539 million. A few months later, Disney acquired Lucasfilm and plunged into the Star Wars business.
Unlike its rivals, Disney eschews outside financing in its quest to make branded entertainment that can be exploited across its vast platforms. That means the studio reaps all the success from its big franchises but also takes the full brunt of misses like June's The Lone Ranger. Its loss of up to $190 million was a major contributor to the demise in September of the studio's 22-year relationship with producer Jerry Bruckheimer.
Disney is sticking with its other major suppliers, expecting two Marvel films per year and, starting in 2015, a movie a year from Lucasfilm. Pixar is supposed to contribute one or two films each year, though it recently pushed The Good Dinosaur into 2015, meaning next year will be the first since 2005 with no Pixar movie on the slate. While some critics have expressed disappointment with once-golden Pixar's recent sequels, Monsters University has raked in $736 million worldwide. Disney also is betting on one film per year from its own animation unit.
Horn's greatest challenge appears to be ensuring that Disney can execute two or three profitable tentpoles from its own studio. This year, he had a pyrrhic win with Sam Raimi's Oz the Great and Powerful, which brought in $493 million worldwide but was hobbled by reshoots that blew up an already-outsized budget. Projects set for 2014 include Maleficent with Angelina Jolie and Tomorrowland from director Brad Bird. Disney will round out the slate with some smaller films, such as the upcoming Saving Mr. Banks, which it is positioning as an awards contender, and a couple of films that it will distribute from its deal with DreamWorks.
Internal meetings are underway to consider the definition of a Disney-branded live-action film. A studio source says the smaller and less expensive Disney films are referred to internally as "brand deposits" and uplift the company's brand even though they won't necessarily sell lots of T-shirts and lunch boxes. Upcoming films in that category include Muppets Most Wanted, Million Dollar Arm and McFarland -- less than $35 million each with the exception of Muppets, which is a bit more. Horn also pulled the trigger on the musical Into the Woods with a budget just above $50 million. "Alan isn't steering away from these movies and is pushing the development team for more films like this to complement the slate," the insider says.
Given the upheaval everywhere else, Paramount's stability has some industry observers slightly suspicious. Chairman and CEO Brad Grey has been at the helm since 2005; Rob Moore has served as vice chairman since 2008; and Adam Goodman has been president of the film studio since 2009.
At the beginning of the year, things didn't look so good as the studio readied for a series of troubled and delayed films: Hansel and Gretel: Witch Hunters, G.I. Joe: Retaliation and most worrisome of all, World War Z. But Paramount has so far avoided a major flop this year. The Brad Pitt zombie movie grossed $539 million worldwide, and though the cost of reshooting the third act prevented the film from becoming a mighty profit engine, Paramount wants a sequel if it can hold the budget to about $160 million. The studio even feels Hansel and Gretel's $225 million worldwide gross justifies another go-round -- for a price.
Paramount continues to place its emphasis on sharing risk. "They're not taking any chances, and that seems to be what [Viacom CEO Philippe Dauman] wants," says a producer who's done business at the studio. In July, Paramount extended its deal with key financing partner Ellison and his Skydance Productions for four years, overcoming overtures he got from competitors. Skydance is in on major franchise plays including Mission: Impossible (a studio source says the next will soon get the go-ahead), Star Trek, World War Z, the upcoming Jack Ryan movie and two planned Terminator films. Paramount shares risk on the G.I. Joe series, Hansel and Gretel and the upcoming Hercules with MGM while Warner Bros. and Legendary are covering half of Nolan's Interstellar.
Paramount does fully finance an occasional film with a low- to mid-range budget, including Anchorman 2: The Legend Continues (an insider claims a $50 million budget), two upcoming Paranormal Activity movies and the new Jackass installment, Bad Grandpa. Given the importance of the Transformers series, pretty much anything associated with filmmaker Michael Bay feels the Paramount financing love, including the upcoming Teenage Mutant Ninja Turtles (a gamble at more than $125 million). "The problem with Transformers is Michael Bay takes so much of the profits from the movie," says one observer. Looming over the seeming calm, of course, is the possibility that 90-year-old Sumner Redstone, executive chairman of parent Viacom, will turn out to be mortal. What happens then is something of a parlor game in the industry.