With Skydance merger, Paramount Pictures begins an uncertain new chapter in its storied history

by

As someone who has spent decades observing and analyzing the film industry, I have witnessed firsthand the meteoric rise and fall of many studios. Paramount Pictures, in particular, holds a special place in my heart, having been an integral part of Hollywood’s golden age. However, with the passage of time and the seismic shifts in the media landscape, even giants like Paramount have not been immune to the upheavals that come with progress.

As a film enthusiast, I’ve always been fascinated by the backstory of iconic logos in Hollywood, and Paramount Pictures’ star-crested mountain emblem is no exception. According to legend, this timeless symbol was brought to life in 1914 by co-founder W.W. Hodkinson. Inspired by his cherished childhood memories of the towering peaks in Utah, he sketched a simple doodle on a napkin, and there it was – the genesis of Paramount’s distinctive mark. The name of the budding studio, the tale continues, was borrowed from a sign outside an apartment building. And so, from such unassuming beginnings emerged the oldest film production company in Tinseltown, forever to be known as the Mountain.

As a passionate fan, I’ve noticed how this iconic peak, once a symbol of grandeur in Hollywood, has faced more than its fair share of erosion lately. Paramount, with its historic lot situated in the heart of Los Angeles and a successful roster of franchises like “Mission: Impossible,” “Transformers,” and “Star Trek,” has found it challenging to keep up with its studio rivals and adjust to the emergence of streaming services. Despite these hurdles, Paramount’s worth remains immeasurable in this era of consolidation. With a media empire that encompasses CBS and cable networks like MTV and Nickelodeon, this Mountain continues to be an essential piece of Hollywood real estate valued at billions. The only question remaining is not if but when and to whom Paramount will be sold.

Following the recent takeover of National Amusements Inc., owned by Shari Redstone, by Skydance Media led by tech entrepreneur David Ellison for $8.4 billion, Paramount Pictures is about to begin a new phase in its long history. Amidst growing concerns and instability within the film industry, this transition marks an exciting yet uncertain beginning for Paramount Pictures.

In light of industry developments, we aim to strengthen Paramount for the future while keeping content as our top priority, according to Redstone, Chair of Paramount Global and CEO of National Amusements. The intended Skydance transaction is hoped to facilitate Paramount’s continued prosperity in this rapidly evolving landscape.

Many people in Hollywood view Skydance’s acquisition as a welcome change since the other potential suitors, Sony Pictures Entertainment and Apollo Global Management, were predicted to bring about job cuts and reduce the number of possible purchasers even more.

As I reflect on Paramount’s current state, I can’t help but ponder the uncertainty that looms over its future as a film studio. With Ellison set to assume the role of studio chief, he will undoubtedly inherit both the riches and the financial burdens that have accumulated during the almost 40-year tenure of the Redstone family. These challenges have been gradually piling up, creating a formidable obstacle for the new leader to tackle.

As a film enthusiast, I’ve noticed that the studio has significantly faded from its past brilliance, according to Stephen Galloway, who holds the esteemed position of Dean at Chapman University’s Dodge College of Film and Media Arts.

“The Redstones once gained control of one of industry’s grand estates, but unfortunately, they can no longer keep up with the expenses. Galloway remarked, “This means saying goodbye to the staff including butlers, maids, valets, chauffeurs, and gardeners. It remains uncertain if anyone else is capable of preserving this palace. I have my doubts, though David Ellison might have a solution. However, it seems that the film industry as a whole may not be financially viable.”

Director Alfred Hitchcock on the set of 1958’s thriller “Vertigo,” one of several films he made for Paramount Pictures.
(Baron / Getty Images)

Despite the various highs and lows, and multiple ownership shifts throughout Paramount Pictures’ history, its tale is deeply intertwined with that of Hollywood as a whole.

Paramount Pictures, with roots reaching back to 1912 through the mergers of Adolph Zukor’s Famous Players Film Company, Jesse L. Lasky’s Feature Play Company, and distributor Hodkinson, played a significant role in establishing the movie industry. Their first major triumph was Cecil B. DeMille’s 1914 silent western “The Squaw Man,” one of Hollywood’s earliest feature-length films. Paramount took an innovative approach from the start, leading the way out of the silent film era with the release of “Wings” in 1927 – the first World War I movie featuring a synchronized musical score and sound effects. Later on, they adopted Technicolor and widescreen formats.

In Paramount’s prime years, they consistently churned out successful films and introduced iconic actors such as Marlene Dietrich, Gary Cooper, and the Marx Brothers into Hollywood. Paramount was recognized for its elegance and sophistication; in fact, their film “Wings” won the first Academy Award for Best Picture in 1929.

In his influential book “An Empire of Their Own” about Hollywood’s Jewish pioneers, Neal Gabler described Paramount Pictures’ films from the 1920s and 1930s as exuding a refined purr of sophistication. Paramount Studios took pride in its boldness, inclusivity, class, and panache during that era.

Ernst Lubitsch, the renowned director known for his musicals and comedies produced at Paramount in the 1930s, jokingly remarked, “I’ve been to Paris, France, and Paris, Paramount. To be honest, I preferred the Paris at Paramount.”

In 1948, Paramount experienced a significant setback when the Supreme Court ruled against the company in an antitrust lawsuit filed by the US government. As a result, Paramount, alongside its competitors, was compelled to relinquish their theater businesses and put an end to the vertical integration that granted them dominion over film production, distribution, and exhibition. Known as the Paramount Decrees, these settlements severely impacted Hollywood’s traditional studio system and hampered Paramount’s operations.

In the mid-1960s, Paramount Studio underwent a resurgence after being bought by Gulf + Western, a large oil and manufacturing company. This turnaround was spearheaded by Robert Evans, a former actor who became head of worldwide production in 1966. According to Evans’ memoir “The Kid Stays in the Picture,” Paramount ranked as the ninth major studio at that time.

Salvatore Corsitto, left, James Caan and Marlon Brando in Francis Ford Coppola’s “The Godfather.”
(Silver Screen Collection / Getty Images)

Over the course of ten years, Evans significantly improved Paramount’s financial situation and transformed its public perception through a series of successful films, such as “Rosemary’s Baby,” “Love Story,” “The Godfather,” and “The Conversation.” In 1975, at the peak of Evans’ influence on Paramount, the studio received an unprecedented 43 Oscar nominations, primarily for “Chinatown” and “The Godfather Part II.”

In the shift from the imaginative era of the 1970s to the more business-oriented climate of the 1980s, Paramount Studios thrived by turning their “Star Trek” TV shows into a series of blockbuster films and launching new franchises based on popular titles such as “Raiders of the Lost Ark,” “Beverly Hills Cop,” “Friday the 13th,” and “Airplane!”.

As a supporter, I’d say: During Sherry Lansing’s tenure as Paramount’s leader starting in 1992, we produced movies that resonated with a wide audience. For instance, Brian De Palma’s “Mission: Impossible” (1996) and James Cameron’s “Titanic” (1997) were two notable examples. The former launched the successful “Mission: Impossible” franchise, while the latter, in partnership with 20th Century Fox, broke box office records as the highest-grossing film ever made at that time, a title it held for over a decade.

Back in the ’70s, Paramount was hailed as a pioneer among forward-thinking filmmakers. However, according to my 2017 biography on Lansing penned by yours truly (Galloway), Sherry had quite a different palate. Her preferences leaned more towards commercial, mainstream fare with broad appeal. She was drawn to character-driven dramas that resonated deeply with audiences, like “Fatal Attraction,” which she produced. Additionally, she enjoyed blockbuster hits that left a lasting impression on the crowd. Movies such as “Titanic,” “Forrest Gump,” and “Braveheart” were among her favorites – all of which went on to win prestigious Oscars.

After the media and entertainment industry split into various parts in the ensuing years, Paramount gained a reputation for stringently controlling expenses under its studio head Brad Grey and the higher-ups at Sumner Redstone’s Viacom Inc., who assumed control of the studio in 1994.

Paramount heavily invested in Michael Bay’s “Transformers” series and Marvel productions such as “Iron Man” and “Captain America: The First Avenger.” However, their production lineup started to look rather slim in other areas. Although this frugality improved profitability, it made Paramount seem less appealing to some Hollywood actors and filmmakers.

I’ve observed Paramount’s journey over the years as they tried to keep up with evolving consumer trends and an unpredictable streaming marketplace. However, it seems that Paramount has been unable to secure the top spot in the US box office since 2011, when they earned a impressive $1.96 billion in domestic revenue. Additionally, their Paramount+ streaming service has faced tough competition from industry leaders like Netflix and Disney+, making it a challenge for them to stay competitive.

One of Paramount’s key stars, Tom Cruise, in a scene from the 1996 hit “Mission: Impossible.”
(Murray Close / Paramount Pictures)

To obtain Paramount for Skydance, Ellison, known for producing hit movies like “Top Gun: Maverick” (2022), proposed a strategy to the board and shareholders. This involved reducing debt, altering expenses, increasing investment in film production, and leveraging data effectively to succeed in streaming services competition.

Despite the studio’s impressive ability to bounce back throughout its over 100-year history, the upcoming obstacles are greater than any it has encountered before. The influence of the Mountain (the studio) may never be as dominant as it once was. Due to a decrease in box office revenue for the film industry this year, the studio’s summer lineup consists of only one release – “A Quiet Place: Day One,” which debuted last month with record-breaking earnings of $53 million for the franchise.

In the age of streaming services, even Paramount’s storied history hasn’t made the journey easier for conventional film studios.

As someone who has spent decades observing the entertainment industry, I have witnessed firsthand the transformative power of corporate mergers and acquisitions. MGM, a storied Hollywood studio with a rich history, is now just a fraction of its former self, absorbed into Amazon’s vast empire with no distinct identity left. It’s a sad reality that could potentially be Paramount’s future as well.

In the world of cinema, as the once-radiant and legendary actress Norma Desmond from “Sunset Boulevard” (1950), a gem in Paramount’s treasure trove, famously declared: “The movies have lost their grandeur. They’ve shrunken down to something small.”

Read More

2024-07-18 21:49