Paramount Resignation Stirs Debate : Strategy: Studio watchers are wondering what’s wrong as the steady parade through Paramount’s executive suite in recent years continues.

Brandon Tartikoff’s abrupt resignation Thursday as chairman of Paramount Pictures spawned concern over the studio’s stability and the parent corporation’s long-term direction.

Stanley R. Jaffe, president of the studio’s parent, Paramount Communications, was named to temporarily succeed Tartikoff, who said he was leaving after 15 months on the job to spend more time with his daughter, who is recuperating from a 1991 car accident.

The naming of the 52-year-old Jaffe, a seasoned movie producer who is said to have frequently meddled in studio operations, may temporarily quell concern that the studio is adrift. But the parent company must still find a permanent successor and spell out a long-term strategy.

Paramount Communications stock closed off 37.5 cents per share, to $43, on New York Stock Exchange trading Thursday, although the volume was high with nearly 1.5 million shares changing hands. Some analysts speculated that the company might be purchasing its own stock to bolster the price, which has traded as high as $48.75 in the last year.

Wall Street had already reduced its expectations for the next few quarters because relatively few Paramount films are scheduled for release until next summer. A downgrade by Goldman, Sachs last week prompted heavy trading, and this week, Oppenheimer & Co. analyst Jessica Reif advised clients to “switch out of Paramount and into Disney.”

Privately, analysts focused on reports of friction between Jaffe and Tartikoff and questioned how easily a successor will be found if Jaffe is as demanding and volatile as he is inevitably portrayed.

Jaffe declined comment.

But Paramount Communications Chairman and Chief Executive Martin S. Davis--no shrinking violet himself--declared: “This is not going to cause a blip. The organization is intact. We have one job to fill, period.”

Davis was featured years ago in Fortune magazine as one of America’s toughest bosses, and he has been criticized for losing a series of talented studio executives. Since Davis took the helm in 1983, the exodus has included Barry Diller, Michael Eisner, Jeffrey Katzenberg and most recently, Frank Mancuso.

But Tartikoff was the first studio chief recruited from outside by Davis and touted to Wall Street.

“Of course it’s a disappointment,” Davis said, his tone softening as he expressed his compassion for the Tartikoff family. “He has a home here anytime he wants it.”

Jaded observers, however, were not wholly surprised by Tartikoff’s resignation.

It was widely known on both Wall Street and in Hollywood that New York-based Davis and Jaffe have kept tight reins on the operations of its Hollywood studio.

“I was surprised it happened when it did, although it didn’t surprise me that the conflict between Brandon’s wanting to spend time with his family and what was going on in business ultimately led him to make a decision that he had to spend time with his family,” said Jerry Katzman, president of the William Morris Agency.

Davis bristled at Hollywood and Wall Street speculation that Tartikoff’s departure was sped by clashes with Jaffe. “(Would he) use his daughter as a shield? Come on!” Davis said. The Paramount chairman said he had no inkling of Tartikoff’s decision until last Thursday.

Among the most frequently mentioned names for a permanent successor is Sherry Lansing, a former partner with Jaffe in his production company and former studio head at Fox. Other prospects are TriStar Pictures’ Mike Medavoy and Fox’s Joe Roth, both of whom are rumored to be leaving their present posts.

“The problem with the Paramount job,” said one senior Hollywood attorney, “is that Stanley Jaffe is kind of the head of production in his own right. He has run a studio. He has made a bunch of pictures. He has great taste. He knows everybody in town.”

Jaffe shared credit for the hit “Fatal Attraction” but more recently was associated with the disappointing “School Ties.”

“It’s the best short-term Band-Aid available,” said John Tinker, an analyst with Furman Selz in New York. “But it raises the question, ‘Who will they get to run the studio over the long term?’ ”

Tartikoff leaves behind a recently assembled studio management team that was only beginning to get its feet wet. The movie division has 17 films set for release over the next year, and the TV division has 13 series on the air.

Paramount has also been a pioneer in “first-run” syndication, a highly profitable area of the TV business, and is a partner with Universal in the new Sci-Fi Channel cable TV network.

But the impact of Tartikoff’s departure shouldn’t be dismissed, some analysts cautioned. Oppenheimer’s Reif, for one, noted that a change in studio management often prompts a firm to write down the value of its film inventory.

And the turmoil calls attention to Paramount’s larger strategy, which has been criticized for a lack of focus. Although Paramount is cash-rich from its sale of non-entertainment businesses, Davis lost his bid for Time Inc. in 1989 and has not made any major acquisitions since then.

Although Paramount is often rumored to be looking at big properties--including NBC--the largest sum shelled out by Davis was $400 million this summer for a group of mid-sized theme parks.

That purchase disappointed Wall Street, which wants Paramount to move boldly into a new technology or acquire more significant assets.

“What are they going to do now?” asked one analyst privately. “In the end, people are going to question Davis’ judgment.”

RELATED STORY: A1

Tartikoff Steps Down

Brandon Tartikoff announced his resignation as chairman of Paramount Pictures, and will be replaced on an interim basis by Stanley R. Jaffe, president of the studio’s parent company, Paramount Communications.

Why He’s Leaving:

Tartikoff said he is moving to New Orleans to spend more time with his 9-year-old daughter Calla, who is undergoing treatment there for several injuries from an accident nearly two years ago.

*

He is said to have had differences with Jaffe, who reportedly exercises extensive control over the company’s major projects.

*

He confided to being unhappy with Hollywood’s pressure-cooker environment, where movie studio chiefs are given little more than a year to prove themselves.

Paramount Under Tartikoff Hits and Misses

Hits Domestic Box Office Revenues Wayne’s World $121,436,898 The Addams Family $113,379,166 Naked Gun 2 1/2 $85,748,264 Patriot Games $83,351,587 Star Trek VI $74,739,913 Boomerang $69,428,969

Misses Domestic Box Office Revenues Frankie & Johnny $22,773,535 Cool World $14,110,589 School Ties $12,589,297 The Butcher’s Wife $9,689,816 Bebe’s Kids $7,910,080 “1492” $6,093,824