Why Tom Rothman Is Leaving 20th Century Fox (Analysis)

Tom Rothman, Fox Filmed Entertainment
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Rothman on Ray: "He was irrepressible and irreplaceable. The very fact that a movie was an underdog is what excited him. Bingham had what you have to have to be a longtime warrior in the indie fight: above all, conviction, belief  and boundless energy."

UPDATED: A soft summer at the box office, a power shift at News Corp. and a perceived flirtation with Universal lead to the end of an 18-year run at Fox.

Top industry executives responded to Tom Rothman’s abrupt departure Friday as co-chairman and CEO of the Fox film studio with surprise — though not quite shock — and several said they believe that more change is in the works.

In connection with Rothman announcing he will step down in January after 18 years at the studio, Fox parent News Corp. revealed a reorganization that will have Rothman's current partner Jim Gianopulos solely running 20th Century Fox Film while 20th Century Fox Television becomes a stand-alone unit with co-chairs Gary Newman and Dana Walden reporting to News Corp. president and COO Chase Carey. Previously they reported to Gianopulos and Rothman; the new structure increases Carey's power within the Rupert Murdoch empire.

Insiders say Rothman and Gianopulos only learned of the structural change on Wednesday of this week. Sources say that when Rothman was informed of the move by News Corp. — a shift that took responsibilities away from him — Rothman was given the opportunity to get out of his contract early, an offer that had to be acted on quickly. Rothman's deal was set to expire in 2014.

STORY: Tom Rothman Leaving 20th Century Fox

A top executive at another studio said it seemed as late as Tuesday that Rothman, 57, was unaware that changes were coming. The Fox chief participated in an MPAA conference call that day and was “as aggressive and opinionated as you could possibly imagine,” this person says. “He was almost dominating the call.”

Rothman, who began his career as an attorney before becoming a producer and executive, has served one of the longest tenures atop a major studio in the modern era. He is known as a great film enthusiast but is far from the most beloved executive in the entertainment community. One executive who has worked with him described his style as “autocratic,” adding that he was also “punishing on budgets and deals.” The hard line might not have gone over well with some talent, but the fiscal prudence consistently delivered profits to the News Corp. conglomerate. "When other studios were delivering 6 percent margins, Tom was delivering 15 percent," notes a top agent. "As a shareholder, wouldn't you want that?"

Rothman also does mantain some talent relationships, notably with Steven Spielberg, whose upcoming film Lincoln will be distributed internationally by Fox.

At the same time, sources say Rothman had a tense relationship with Gianopulos and was known to have opposed the making of both Avatar and Titanic, which became the No. 1 and the No. 2 top-grossing films in Hollywood history, as well as the original X-Men movie (though another source denies that).

Rothman also is said to have opposed the studio's recently-announced distribution deal with DreamWorks Animation, possibly in response to a perception that its CEO Jeffrey Katzenberg did not want to work with him. In the hours after Rothman announced his departure via an email to Fox staff, Katzenberg's name already had been floated as a possible replacement, especially if Katzenberg has designs on selling his publicly-traded animation company to Fox, as some have speculated.

With the exception of the fourth installment in the mega-grossing Ice Age franchise, Fox has not had a strong summer. June's Abraham Lincoln: Vampire Hunter grossed less than $100 million worldwide and the Ben Stiller-Vince Vaughn-Jonah Hill comedy The Watch flopped with a global haul of less than $50 million. Ridley Scott’s Alien prequel Prometheus, which cost more than $200 million to make and market (its budget was about $130 million, plus $100 million to market), grossed a somewhat disappointing $378.5 million. In addition, Rothman passed on Family Guy creator Seth MacFarlane’s directorial debut, Ted, which went on to be a sleeper hit for Universal.

Rothman has had successes as well. In addition to founding the Fox Searchlight specialty division in 1994, he launched several broad franchises, including the Night at the Museum movies and Alvin and the Chipmunks. But those franchises are aging. “They made high-concept movies that for a while were successful but increasingly less so,” says one former studio insider. Under Rothman's watch, Fox released such hits as Cast Away, Moulin Rouge, Minority Report and There's Something About Mary. Fox Searchlight has released such Oscar winners as Juno, Little Miss Sunshine, Black Swan and Sideways.

It was also perceived that Rothman had been angling for a top job at Universal, which some sources say might also have displeased his bosses at News Corp. Rothman and Fox declined to comment beyond the prepared statements.

“He’s an extremely bright guy and well-versed in the business and they had, for a long time, a very successful run,” says producer Bill Mechanic, who was Rothman’s boss as former chairman of the Fox studio. “But every run comes to an end.”

Pamela McClintock contributed to this report.

Email: Kim.Masters@thr.com

Twitter: @KimMasters