Heads Keep Rolling in Hollywood

Head keep rolling in Hollwood Layoffs
Mario Wagner

Executive body count stirs fears as conglomerates realign their entertainment strategy

From the time the first movie studios were founded, Wall Street has viewed the entertainment business somewhat like the Tea Party views Washington: Spending is too high, ambitions are too grandiose.

That’s why investors see the continuing wave of executive changes in Hollywood as propitious, while Hollywood sees corporate turbulence as disruptive and counterproductive.

The body count lately has been especially high among production and marketing chiefs: Adam Fogelson and James Schamus at Universal, Marc Weinstock at Sony, Jeff Robinov at Warners, Tom Rothman at Fox, Terry Curtin at Relativity, Oren Aviv and Tony Sella at Fox, Eric Kessler at HBO, among others. The TV seas, too, have been stormy.

Here’s the anomaly: All of these executives arguably were doing a damn good job. Fogelson’s most recent slate at Universal was successful. Schamus was a defining force at Focus in the culture and commerce of cinema. Further, in most cases the execs were blindsided by their bosses. “There’s nothing collegial about corporate life any more,” observed one of those on the hit list.

Talk to the money men in New York, and you come away with the sense that the continuing turbulence reflects a basic tension between two powerful forces. On the one hand, Wall Street understands that the ground is shifting — that the basic business model of the entertainment industry is undergoing a major change, both in distribution platforms and financing schemes — and that strategic accommodations must be made. Still, the CEOs in New York are demanding continued short-term improvements to the bottom line. Strategy is keyed to quarterly performance, as though Hollywood were producing widgets, not volatile entertainment products.

CEOs clearly have the right to fire key executives, but Hollywood firings in times past were more justifiable — and more colorful.

Sumner Redstone fired Tom Freston as Viacom president because he failed to buy a company (MySpace) that no one ended up wanting anyway. Columbia ousted David Begelman for allegedly embezzling funds, just like the MGM board canned Giancarlo Parretti before he could flee the country to avoid incarceration after being sentenced on charges of securities fraud. Jack Warner fired Hal Wallis because he tried to take Oscar credit for “Casablanca.” Darryl F. Zanuck fired his son Richard mainly because he was his son.

In Old Hollywood, corporate beheadings usually had a delicious subtext of scandal or secret swindles. In ’70s Hollywood, firings related to cocaine as often as to policy differences.

By the ’80s, however, as the conglomerates moved in, corporate egos spun out of control. Paramount’s Martin Davis felt he could run his company better without Barry Diller, Michael Eisner and Jeffrey Katzenberg, thus arming rivals with strong new management for years to come.

In bygone years, top CEOs like Steve Ross of Warner Bros. and Rupert Murdoch in his early days at News Corp. took time to explain their strategic thinking to the Street. Comcast’s Steve Burke and Time Warner’s Jeff Bewkes have made their changes without ever explaining the redesign.

Though the changes in structure have been massive, the demand for immediate returns has remained absolute, as has the pressure to produce higher international revenues. The late John Calley, who at one time or another presided over Warners, MGM/UA and Sony Pictures, once explained to me that his bosses started insisting on precise forecasts quarter by quarter when “I don’t even know what’s happening next week.”

While Calley disdained forecasts, I will nonetheless hazard a few of my own: Given the tensions of the moment, corporate heads will continue to roll. And the bankers will continue to nod their own heads sagely and remind us that the ground is shifting, as though they’d just discovered both the ground and the shift.

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  1. Dick Delson says:

    I have been on the marketing end of the biz for more than 40 years. I’ve worked on such films as “Jaws”,
    “Rambo”, “Shakespeare In Love”, etc. When someone new comes in on top, he/she usually fires the marketing and distribution people who work there. It’s just the way it is.

  2. Teresa says:

    It is just brilliant!

  3. Contessa46 says:

    Obviously there are some who know nothing of how films are made and what goes into the production of a picture. Movie making is an art form that some would like to see as a manufacturing plant! The wall street suits are ruining the best of what the writers, actors and the production people have to offer, serving the stock holder, of which I am. The victors are the wall st. Suits because the stock holders are not getting “over the top” dividends, and any price of a stock is paper wealth and not real until you cash it in! In the quest to make more money and trim the fat, the big studios are producing horrible films for the most part and complain that we don’t go to the movies! They are losing money because they are selling an inferior product to us! They have dumbed everything down and then to add Insult to injury, farm as much work overseas or to Canada. The executives of the studios are driving the industry that is theirs into the ground. You get a grade of F for most of the films that make it to the movies. Thankfully some good ones make it through! Thankfully we have the foreign films!

  4. Reginald V. Wedge says:

    America and its industries have been ground to a halt by complacency and indifference and a feeling that a “safety net” lies beneath us all. Heads deserve to be rolling not only in Hollywood, but across the United States in all businesses, industries, professions. The high and low of Hollywood and the Entertainment Industry have no clue as to what it is like to show up for a lifetime at a cubicle or a desk for a desultory 40 hour to 60 hour a week job. The people, “you people” in the Entertainment Industry have no idea how privileged, if that is even the word, you may be to be practicing your craft. Most of what the rest of us see in “Variety” is a population of the most insecure individuals in existence. You spend your time partying, drinking, doing lines (not script), glad-handing, back-slapping, trying to outdress one another. “Variety” itself is nothing but a swelled organ of self-congratulation. Everyday folks do not receive any near the recognition in their lifetimes that “Hollywood” folks receive in a day or a week of theirs. I praise Steve Burke and others for sending folks packinig back to the coal and salt mines. America will be a better county when Hollywood does an honest day’s work at projetcts that are not schlock, dreck and drivel.

  5. Dick Delson says:

    I’ve been in the marketing end of the business for more than 40 years. I’ve gotten the films I worked on some 200 Academy Award nomination and won nearly 100. It’s just the nature of the business.

    • hollywood your doing a wonderful job! keep doing it….it is the nature of that business…how ever I don’t work in that business..even tho I do have my own studio and make Non profit internet art films I work a 8-5 job and love spending my time making my art for Free … but I do understand the profit part of hollywood ya still got to pay the bills somehow …R.G.

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