Paramount Pictures is adding another production prexy even as it winnows its target for its number of annual releases to 20 from 25.
Studio brass said the moves are an effort to make the company leaner and more efficient. Former DreamWorks exec Adam Goodman has been named Par production prexy, and will work alongside existing production prez Brad Weston in overseeing a staff that will manage the roughly 180 DreamWorks-developed projects Par has inherited, as well as some new projects.
Just three weeks ago, Par brass said they were holding steady with the number of projects they planned to release annually. Paramount execs said the latest decision has been in the works for months, but couldn’t be executed until the full financial impact of DreamWorks’ exit was understood.
Earlier this month, Paramount and DreamWorks ironed out a separation agreement that sees the majority of DreamWorks-developed projects and about 25 of DreamWorks 150-employee roster staying with the Melrose studio (Daily Variety, Oct. 6). Par said it will save $50 million a year in overhead now that DreamWorks is gone.
It’s probably no coincidence that Par’s efficiency drive comes at a time of mounting financial pressure on parent company Viacom, which last week was forced to lower its third-quarter earnings forecast given the broader turmoil in global markets. The hit to Viacom’s earnings is expected to stem largely from its advertising-dependent cablers, but Par’s move is further evidence that belt-tightening in the face of the economic downturn is the new mantra of the moment for Viacom units.
“Viacom CEO Philippe Dauman has laid out a very smart strategy that will put Viacom in great position to prosper in the current economic climate,” said Brad Grey, Paramount chairman and CEO, in a statement. “In line with that strategy, we at Paramount are taking steps to ensure our business and creative plans are sound and viable for the long term.”
The slimdown follows similar actions in recent years at Disney and Warner Bros., both of which appeased shareholders critical of the coin spent on major releases.
In the new production-prexy hierarchy, Goodman and Weston will work in tandem with their respective creative staffs on developing projects for Paramount as well as MTV Films and Nickelodeon Movies. Goodman, who had 18 months left on his contract when Par and DreamWorks split, will report dually to John Lesher, president of Paramount Film Group, on creative areas and to Rob Moore, vice chairman of Paramount, on business issues. Weston will continue to report solely to Lesher.
Paramount plans to release 12 homegrown pics, including MTV Films and Nickelodeon Movies, and up to four additional ones from its Paramount Vantage unit. Par will also continue to distribute two to four films a year produced by DreamWorks Animation and Marvel Studios.
Paramount has been working to streamline its efforts for some time. In June, the studio restructured the Vantage operation to fold the label’s marketing, distribution and physical production departments into the parent studio.
“We have established a slate volume that balances our financial goals with our creative objectives,” Grey said. “I am confident we can continue to meet our long-term financial targets and offer a strong and diverse slate of films.”
Viacom shares tumbled 9% to close at $18.62 on another volatile day of broad losses across Wall Street’s major indices. Conglom’s shares have plunged 59% from their 52-week high of $45.40.