Studios bank on management changes

Universal, Disney shuffle deck as industry struggles

Universal's premiere of the comedy "Couples Retreat," held Monday night at the Hammer Museum in Westwood, inevitably turned into a coronation of sorts. Earlier in the day, the studio, reacting to a prolonged boxoffice slump, ushered its chairmen Marc Shmuger and David Linde out the door -- even though they presided over record-grossing years in 2007 and 2008 -- and promoted executives Adam Fogelson and Donna Langley to chairman and co-chairman, respectively.

So, at the Polynesian-themed afterparty, the movie's filmmakers found themselves taking a back seat to the new studio heads.

Langley was barraged with air kisses, and Fogelson found himself at the head of a long receiving line of patiently waiting supplicants.

As he watched the evening play out, Jon Favreau, who stars opposite Vince Vaughn in "Couples," observed that talent -- in front of and behind the camera -- has long known their Hollywood careers are unpredictable. But amid the latest round of executive shake-ups at Universal, Disney and other studios around town, executives are discovering that they aren't immune either.


 
"The sands are shifting everywhere," Favreau said. "Even the people who are making the movies and the people who are financing the movies are dealing with a lot of uncertainty because we are dealing in a mercurial industry where trends change, and who's to say what you're judged on. There must be tremendous pressure on people who work at studios because you are answering not just to people above them and to stockholders, but they also have to be a liaison to the talent, making them comfortable so they can do what they do. It's a very unique occupation."

Another observer, watching the attention showered on Fogelson and Langley, noted more cynically, "Let the parade of sycophants begin."

Certainly, Hollywood courtiers had a lot to absorb this week.

As they move quickly to curry favor with the new bosses in town, it is becoming clearer that 2009 is proving one of the most tumultuous years in memory. Arguably, Hollywood hasn't seen such a concentrated round of musical chairs since the watershed year of 1984, when the top management at three studios changed hands within a few months.

On Monday, the same day that Universal Studios president and COO Ron Meyer anointed a new team to steer a cost-conscious course, Disney president and CEO Robert Iger drafted Rich Ross, president of Disney Channels Worldwide, to be the new chairman of Walt Disney Studios. He replaced Dick Cook, who was forced to resign two weeks earlier.

Disney's summer hadn't been as dire as Universal's; Pixar's animated "Up" is the year's third-highest-grossing film. But in Iger's eyes, Cook, a 38-year studio veteran, was seen as old school; Ross, who'd demonstrated a knack for selling Disney fare -- especially shows aimed at tweens -- to a worldwide audience, looked like a more future-oriented manager as the Burbank-based studio enters a new era where it also will juggle releases from new deals with DreamWorks and Marvel.

 
In announcing his choice, Iger praised Ross for "success in building the Disney brand across many of our business" -- brand-building being the current measure by which executive effectiveness is judged -- and for his "talent and skill at navigating complex global markets."

Universal and Disney aren't the only companies battening down the hatches as the film business struggles with declining DVD sales and the difficulty of securing new financing sources.

In August, MGM's board, confronting a suffocating debt load, ousted CEO Harry Sloan and sought to stop the bleeding by creating a triple-headed Office of the CEO that includes production chief Mary Parent, CFO Bedi Singh and turnaround specialist Stephen Cooper.

Only two months before, Paramount chairman and CEO Brad Grey performed a little surgery of his own by firing Paramount Film Group president John Lesher and his production lieutenant Brad Weston, entrusting the studio's production efforts to relative newcomer Adam Goodman, who was left behind when DreamWorks decamped from Paramount.

At the moment, the film teams at Sony, Fox and Warners appear stable. But they are not immune to changes further down the road.

This summer, Chase Carey replaced Peter Chernin as Rupert Murdoch's right-hand man at News Corp., which oversees Fox. And Time Warner chairman Jeff Bewkes is looking at replacing the Warners Bros. duo of Barry Meyer and Alan Horn in 2011, when their current contracts run out.

In terms of executive turmoil, Hollywood hasn't seen quite so much change in such a short period of time since '84, when Barry Diller, after a successful 10-year tenure, abruptly resigned as chairman and CEO of Paramount to take the reins at Fox, where he oversaw film and TV operations.

Diller's decision set off a chain of cascading moves. Denied Diller's old position at Paramount, Michael Eisner opted to join Disney as its new CEO. Jeffrey Katzenberg, another Paramount alumnus, soon joined him as head of Disney's motion picture division. Distribution exec Frank Mancuso rose to the top at Paramount, where former Universal exec Ned Tanen served as his second-in-command.

The industry found the rapid series of changes unsettling: Eisner took more than a dozen top execs with him to Disney, and Diller eventually cycled through several production chiefs at Fox. But that atmosphere was quite different from now, when the industry is wrestling with diminishing expectations.

Diller and his proteges hardly were spendthrifts; they were known for striking tough deals. But riding the booming economy of the Reagan era, they were willing to take flyers on new opportunities.

Diller created a fourth network in Fox and Eisner re-energized Disney, creating a healthy revenue stream by releasing the studio's classics on videocasette.

By comparison, today's entertainment moguls aren't so much maneuvering to win as they are trying to minimize losses.

Ron Meyer's decision to replace Shmuger and Linde as well as Grey's removal of Lesher and Weston could be read as pre-emptive strikes, designed to reassure their respective corporate bosses, who in turn are trying to convince Wall Street they are doing everything to protect profits and boost the stock price.

Unlike their Diller-era counterparts, who were schooled in production backgrounds, the newest studio heads are just as likely to come from the worlds of cable and marketing. They are more about attracting, and measuring, audiences than coddling filmmakers.

They have to worry about bringing down costs by reining in the huge sums spent on talent while also whittling away at production and marketing budgets. If a project doesn't hold the promise of contributing significantly to the bottom line, it's elminated. Warners and Paramount have closed down their speciality film divisions; Disney recently announced it is downsizing Miramax.

To be sure, studios also are experimenting with different digital-delivery systems -- in movie theaters, on cable and online -- but so far the digital revolution is wreaking havoc on old media without leading to the kind of significant revenue that can replace it.

As the latest generation of execs settles into their new offices, caution is the watchword.

"We want to make absolutely certain that we are confident that all the risks we take are responsible risks," Fogelson, Universal's new chief, repeatedly stressed as he spoke about the sobering challenges ahead.

Borys Kit contributed to this report.
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