NBCU Shake-up: What's Next at Universal? (Analysis)

5:34 PM PST 09/09/2013 by Kim Masters
Jeff Shell, Ron Meyer and Adam Fogelson

"I'm kind of in shock," says one insider as Hollywood reacts to Adam Fogelson leaving, Jeff Shell ascending and Ron Meyer and Donna Langley getting new roles.

Hollywood was reeling Monday over news that Universal Studios chairman Adam Fogelson was out and Donna Langley, whose job had been considered to be in jeopardy for far longer, was ascending to the role of studio chairman.

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"I'm kind of in shock," the head of one production company said, in a typical reaction from those polled by The Hollywood Reporter.

The question going forward is what kind of studio Universal will be under new chairman of Universal Filmed Entertainment Jeff Shell, whose background consists largely of television jobs. One former insider predicted that Universal will continue to scale back budgets, and believes that NBCUniversal CEO Steve Burke has given assurances to the studio's new financing partner, Thomas Tull, that his Legendary Entertainment will be the primarily supplier of big-budget pictures with "unfettered access" to the studio's projects in development that appeal to him.

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Another source with ties to the studio agreed that the changing of the guard at Universal underscores the importance of Legendary, which has Godzilla still in the works under its expiring deal with Warner Bros.

The level of surprise with respect to Fogelson's departure after 15 years at the studio is not the same as that which greeted the ouster of Jeff Robinov from Warner Bros. in June, when the industry stood mouth agape at the fate of an executive who had top-tier talent relationships and who had enjoyed a long run of success that had recently included Argo, The Great Gatsby and Man of Steel. Fogelson was seen as presiding over a much-improved studio, but he still bore the stigma of failures such as Battleship.

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Many thought, however, that the studio's recent turnaround, with hits including Fast & Furious 6, Identity Thief and Despicable Me 2, would be enough to keep Fogelson in the chair. Shell is an outsider with experience primarily in TV and has been running NBCU's international operation for the past two years. It seemed, at most, that Fogelson might lose his direct report to NBCU chief Burke.

But there are lurking issues that might have caused Burke to lose confidence in Fogelson. The studio took a heavy shot to the bottom line with this summer's $150-million-plus R.I.P.D., which grossed only $66.6 million and will lead to a significant writedown. And still in the pipeline for a December release is the Keanu Reeves samurai movie 47 Ronin, which is said to have cost $200 million and is expected to lead to another major loss.

Fogelson cannot claim credit for Despicable Me 2 -- by far the studio's most profitable hit, with a worldwide gross of $833 million -- because that film came from Chris Meledandri's Illumination Entertainment. Meledandri is known to operate independently and to have his own close relationship with Burke. 

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The industry greeted news of Langley's elevation with surprise and a bit of skepticism. "I like Donna a lot personally but I think she's ill-suited to this job," says a leading talent representative. "Her tastes run toward adult material. If you're running production at a studio, you need to have an understanding of where the youth pop culture lives."
 
On the other hand, another insider says Langley can be counted on to be a team player while Fogelson might have pushed for more autonomy. And if she isn't necessarily in sync with the fanboy audience, her bosses might expect Tull to help fill that void.
 
A producer with ties to Universal says Langley could succeed in the job. "She's made some big mistakes but I think she's owned up to them. Her taste has become more commercial," this persons says.
 
But more pragmatically, this observer asks, "If you're Jeff Shell, why would you fire her now? You need time to get your feet wet and she's a get-out-of-jail-free card. You get to let her run with it a little bit and if it's not going well, you get to axe her."
 
E-mail: Kim.Masters@THR.com
Twitter: @KimMasters
 
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