Times Staff Writer

Dawn Steel, one of Paramount Pictures’ top creative executives, has been quietly negotiating to resign as the studio’s president of production and to become an independent producer associated with Paramount, according to several sources familiar with the talks.

Separately, writer-director John Hughes--who made “Pretty in Pink” and “Ferris Bueller’s Day Off” under a contract with Paramount--is negotiating to leave the studio for a deal with Universal Pictures, according to sources familiar with those negotiations.

However, Paramount executives strongly disputed repeated reports that Ned Tanen, president of the phenomenally successful studio’s motion picture group, is considering leaving his post when his contract expires at the end of October. “Ned is in his job, and that’s that,” a Paramount spokeswoman said regarding Tanen’s plans.


The spokeswoman confirmed that the studio is discussing a production deal with Steel but declined to provide details. The spokeswoman declined to comment on the studio’s relationship with Hughes.

Neither Steel, Tanen, nor Hughes could be reached for comment on the various discussions and reports.

Paramount’s creative team has been Hollywood’s strongest in recent years. Driven by this summer’s success with “The Untouchables” and “Beverly Hills Cop II,” Paramount is currently the industry’s top-ranked movie studio, commanding about 21% of the combined 1987 box office. The studio, a unit of New York-based Gulf & Western Inc., last year accounted for about $830 million, or more than 22%, of the industry’s $3.78 billion in box-office receipts.

Frank Mancuso, a long-time Paramount distribution and marketing executive, was named chairman in 1984. But the studio has occasionally been troubled by tensions in its executive ranks. According to several sources close to the studio, Steel and Tanen have frequently disagreed about policies or projects. Both have reportedly told industry associates that they were increasingly bothered by the crush of administrative work and that they might take positions as independent producers.

Sources close to Steel said she had settled on the terms of, but hadn’t yet signed, an agreement to produce movies for Paramount under an arrangement similar to that of Simpson/Bruckheimer Productions. Steel hasn’t yet resigned her post, but has been on maternity leave since having a baby girl in March. According to the sources, Steel expects to begin producing movies within the next few weeks.

One of Hollywood’s top-ranked female executives, Steel, 40, joined Paramount as director of merchandising in 1978, and was named a production vice president two years later. Steel became production president in 1985, after Paramount’s longtime production team--Barry Diller, Michael Eisner and Jeffrey Katzenberg--left for jobs at other studios. She has been involved with some of Paramount’s biggest hits, including “Top Gun” and “Beverly Hills Cop II” since taking over as production president in 1985.


Steel’s relatively short tenure as production chief has almost become the norm in recent years, partly because of severe pressures associated with the job of picking hits and managing relationships with Hollywood’s writers, directors, producers and stars.

“(Steel) will make an outstanding producer. She’s developed great relationships,” Thomas Pollock, chairman of rival Universal Pictures, said of Steel’s plan to become a producer. It wasn’t immediately clear whether Paramount planned to fill Steel’s job or shift her responsibilities to others.

Pollock declined to comment on his discussions with the 36-year-old Hughes--who is a client Bloom and Dekom, the law firm of which Pollock was a founding partner before joining the MCA Inc.-owned movie studio last year.

“Pretty in Pink,” which took in about $40.5 million at the U.S. box office, and “Ferris Bueller,” which took in $70.1 million, were hits produced by Hughes after he moved to Paramount from Universal about two years ago. But Hughes’ last production, “Some Kind of Wonderful,” was less successful, and some Paramount executives have complained that his youth-oriented movies were becoming too expensive to remain profitable.

According to one Paramount executive, “She’s Having a Baby,” a Hughes-directed movie set for release by Paramount next February, cost well over $20 million to make, and “Planes, Trains and Automobiles,” a Hughes movie set for release at Christmas, cost “close to $30 million.”

Tanen, 56, was named to Paramount’s top creative post in 1984 after working as an independent producer and as a production executive for nearly 30 years at Universal. In the past, he has told associates that he might quit his post for a production deal, then stopped short of doing so. “When Ned has two bad days in a row, he’s ready for the beach. When he has three good days, he’s back on top of the world,” one associate said about persistent claims in Hollywood that Tanen might leave his job at Paramount.


A Paramount executive, who declined to be identified, called the claims a “vicious reaction” by jealous competitors to the studio’s strong development slate, which includes projects involving actors Robert De Niro, Sean Connery, Eddie Murphy; directors Francis Coppola, Martin Brest, Tony Scott, and others.