Paramount says it will not replace Berman

Paramount Pictures is eliminating the position of president now held by Gail Berman, who resigned Wednesday.

Berman would probably agree with that decision: She discovered there wasn’t as much power behind the title as when she joined the studio 18 months earlier. Her job was cut in half about a year ago after Paramount’s acquisition of DreamWorks SKG’s live-action studio.

Berman’s resignation is yet another setback for Paramount and its chairman and chief executive, Brad Grey, whose nearly two-year run at the Viacom Inc.-owned studio has been punctuated by high drama and turmoil.

Analyst Jessica Reif Cohen, who covers Viacom at Merrill Lynch & Co., put out a report late Wednesday calling Berman’s exit a loss for Paramount and another sign of continued instability at Viacom.

“We view this as an incremental negative for Viacom as it appears management turmoil continues,” Reif Cohen said. “Ms. Berman is an extremely talented creative executive.”

Independent media analyst Harold Vogel agreed that the ground had not stopped shaking at Paramount since Grey succeeded Sherry Lansing nearly two years ago.

“It’s still an unstable equilibrium,” Vogel said.

“It’s been a rocky road with lots of bumps,” he added, citing such headline-grabbing incidents as the surprise firing in the summer of Grey’s boss, Tom Freston, the studio’s severing of ties with actor Tom Cruise and Grey’s link to indicted private investigator Anthony Pellicano.

However, Viacom Chairman Sumner Redstone said he fully supported Grey’s decision to sever ties with Berman.

“If Brad decided she was not for Paramount, then Brad was right,” he said in an interview. “Brad’s the boss, and I have total confidence in his decisions.”

Redstone declined to comment when asked what Berman’s exit settlement would cost Viacom.

“I have no idea what arrangements will be made between Gail, Brad and Paramount,” he said.

Redstone added that he was feeling “very, very bullish” on Paramount these days: “Paramount is on a real roll. I believe in the first six months of this year, we’ll go from the bottom to No. 1.”

Paramount was suffering from a prolonged box-office slump when Grey gave up his position as one of Hollywood’s most powerful talent managers to take the helm. The choice came as a surprise to Hollywood because most of his experience had been in television.

Even the wisdom of Grey’s first move in his new job -- hiring Berman -- was questioned when her appointment was initially announced. She was a top TV executive who had no experience in the movie business.

It turned out that Berman, who left a successful job as president of entertainment at Fox Broadcasting Co., had a tough time adapting to her new job.

Berman struggled with the culture of the movie business. Agents sniped about her sometimes blunt style when she rejected projects or jettisoned producer deals.

The job she originally signed on for in March 2005 changed radically less than a year later. The DreamWorks purchase reduced the number of movies Berman was responsible for in a given year to six to eight from about twice that amount.

Grey acknowledged the change Wednesday.

“Gail is an extraordinary talent and made wonderful contributions to the Paramount turnaround,” Grey said. “The evolution of our label strategy and the purchase of DreamWorks meant the job simply became too small for her.”

Unlike most departing movie chiefs, Berman will not have a production deal at the studio. Nor will Allison Shearmur, who was forced out Wednesday as co-president of production.

That puts Brad Weston, who had shared that title with Shearmur, in charge of production.

Grey said he would streamline the creative structure in other ways.

Weston, who previously reported to Berman, will now answer directly to Grey, as will Scott Aversano, president of the labels MTV Films and Nickelodeon Movies. John Lesher, president of the studio’s specialty film label Paramount Vantage, will continue to report to Grey.

Paramount also said Stacey Snider, co-chairman and CEO of DreamWorks, would continue in her current role, but it did not specify to whom she reports.

Paramount and DreamWorks are each responsible for six to eight movies a year; MTV Films and Nickelodeon Movies, four to six; and Paramount Vantage, as many as 10.

Although Paramount has continued to experience convulsions in its executive ranks, its fortunes at the box office have improved recently with such hits as “Dreamgirls,” “World Trade Center” and “Nacho Libre.”

On Wednesday, Paramount credited Berman with helping to shepherd those movies.

Yet people close to Berman said she had been expressing unhappiness in her job to Grey since October.

Then, before the Christmas break, Berman and Grey agreed to have a definitive conversation in the new year about parting company.

Late Tuesday, Grey called Berman into his office to have that conversation, said two Paramount insiders who asked not to be named because the matter was private.

Asked how DreamWorks, the company behind “Dreamgirls,” and Snider might figure into the future of the studio, Redstone said, “Stacey Snider has a lot more responsibility because she is involved in DreamWorks’ productions, and DreamWorks is making a big contribution to Paramount.”

As for nagging speculation that Snider could one day replace Grey, Redstone, 83, said, “I have no reason to believe that Brad will ever be gone as long as I’m alive -- and I expect to be here for 50 more years.”

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claudia.eller@latimes.com