Paramount Aims to Get Control of Sister Units

Paramount Pictures plans a sweeping reorganization that will bring in house its two sister movie operations, MTV Films and Nickelodeon Movies, as part of an effort to end what has frequently been viewed as a dysfunctional relationship.

Although all three are owned by parent Viacom Inc., the movie arms of the popular MTV and Nickelodeon cable networks have largely operated autonomously from Paramount, much to the frustration of the studio’s current management, which finds the arrangement costly and unwieldy.

As independent producers, MTV and Nickelodeon currently collect fees of more than $1 million per film from Paramount and retain a small percentage of profits when the studio releases their movies theatrically and on DVD.

The heads of the two movie units also report to executives at the New York-based cable networks, rather than having to answer to Paramount, even though the studio finances, markets and distributes the movies.

But all that would change under a new structure being championed by Paramount Chairman Brad Grey that has been long espoused by his boss, Viacom Chief Executive Tom Freston.

Under the plan, the units would become film labels of Paramount alongside recently acquired DreamWorks SKG and the specialty film division Paramount Vantage (formerly Paramount Classics). The move is part of a larger strategy in which Grey and Freston envision further developing Viacom’s cable channels, which also include BET and Comedy Central, into lucrative movie banners.

“Paramount and MTV Networks have been working together to find an optimal new structure to bring MTV Films and Nickelodeon Movies into the Paramount Motion Picture Group,” studio spokeswoman Janet Hill said.

The new structure anticipates that the MTV Films and Nickelodeon Movies chiefs would answer directly to Paramount management. The two movie units’ executives, however, would continue to work closely and collaborate with the cable networks on film content and promotion.

The goal is to create a more harmonious and productive relationship between the two film labels and Paramount -- one that historically has been strained and competitive.

In the past, the output of the MTV and Nickelodeon labels also has been sporadic. Paramount, under the new arrangement, hopes to get two to four movies a year from each, while continuing to tap the marketing prowess their respective cable networks enjoy with teens and families.

Nickelodeon Movies chief Julia Pistor, who oversaw Nickelodeon/Paramount’s current hit “Nacho Libre,” is expected to remain in place after the folding into Paramount.

But her counterpart, MTV Films head David Gale, was named Monday to a new job, the first step in the planned revamp.

Van Toffler, president of MTV Networks Music/Logo/Films Group, moved Gale into a newly created position as MTV Networks executive vice president for new media and specialty film content.

In his new job, Gale will focus on developing, acquiring and producing original programming for iPods, cellphones, wireless devices, broadband services and other digital formats. He will also bring projects to such MTV Networks operations as Comedy Central, Nickelodeon and VH1.

Gale, whose replacement is expected to be named soon, will continue to work in Los Angeles and report to Toffler.

“There’s a whole new world of new media and new platforms. Fortunately, I work for a company that’s been groundbreaking in this area,” said Gale, who supervised such films as “Hustle & Flow” and “The Longest Yard.”