Medavoy Out, Canton in as Tristar Pictures Is Shaken Up : Studios: Latter will assume control of the operation while continuing as chairman at Columbia. Sony owns both.

Hollywood was rocked by a double dose of management upheaval Friday, when Tristar Pictures Chairman Mike Medavoy resigned and Columbia Pictures Chairman Mark Canton was promoted to a new position running both studios.

Medavoy’s departure had been anticipated in industry circles for months. While the Tristar chairman struck pay dirt recently with “Sleepless in Seattle” and “Cliffhanger,” he had frequently butted heads with executives at the studio’s parent company, Sony Pictures Entertainment, and was known to be unhappy in the job.

Sources say Medavoy abruptly announced his resignation to Sony Pictures Chairman Peter Guber this week, after spending the holidays considering his options. Guber then elevated Canton to a consolidated post managing both studios.

While Canton is personally close to Guber and had been rumored to be in line for the job, the news still surprised some industry observers, who assumed that his star had fallen with the summer debacle “Last Action Hero” and the recent disappointment of “Geronimo: An American Legend.”

“I thought it would be an exciting opportunity,” Canton said of his job. “I also like to work 24 hours a day.”

Canton’s new title is chairman of the Columbia Tristar Motion Picture Companies, which puts him on an equal footing with Motion Picture Group President Jonathan Dolgen. Company sources say Canton will handle most creative decisions under the new structure, while Dolgen will continue to manage the business side. They will share responsibility for choosing a movie slate, with Sony President Alan J. Levine acting as the mediator.

Levine said Sony never seriously considered going outside the studio to replace Medavoy, despite rumors to the contrary. He added that he’s “very happy with the quality of the talent we have in Columbia and Tristar and their ability to lead us in the future.”

Sony executives also expressed optimism that the new lineup will help stabilize the company, which has been racked by management turnover in recent years with the departures of Sony Pictures Co-Chairman Jon Peters, Columbia Pictures Chairman Frank Price and now Medavoy.

In a similar confidence-building move, Guber and his senior executives recently announced that they had also renewed their contracts with the company, a division of Japan’s Sony Corp.

Friday was Medavoy’s last day on the job. Studio sources say that while Tristar is on track now, he never fully recovered from a dismal 1992, in which the studio’s output slowed to a trickle. The veteran studio executive, who has been involved with Academy Award-winning pictures such as “Amadeus” and “Platoon” during his career and who had a year remaining on his contract, said he chose to leave now in order to go out in the most “dignified” way.

“In my mind, I came here to do a job, and I did it as best I could,” he said. “Now it’s time to take a short break and figure out what I want to do next.”

Medavoy said he expects to lay low for a while as he considers his options. He did not ask for a production deal as part of his exit package. Friends speculated that Medavoy could resurface in a senior executive position at another company. He denied rumors that he will take a political job, despite a history of activism in the Democratic Party.

News of the restructuring brought mixed reactions on Sony’s Culver City lot. By handing the combined studios to Canton, some speculated, Sony will avoid the sort of massive ripple effect that usually accompanies high-level management turnovers.

But some people also questioned whether the Canton-Dolgen partnership can last, based on past friction between the two over spending decisions. Others see Dolgen, who is known for being fiscally conservative, tilting the company toward cheaper, less adventurous movies.

“Dolgen will be very cautious,” said one person. “And that’s not Mark’s style.”

Canton denied the two have any problem working together. He also said he expects all of the senior executives at the two studios to remain in place.

Together, Canton and Dolgen will manage 25 to 30 films a year. Sources say Tristar’s development slate is the stronger of the two as of now, because Columbia only recently appointed a new production chief, Lisa Henson.

Columbia’s upcoming releases include “I’ll Do Anything,” “My Girl 2” and “Wolf.” Tristar has on tap the nationwide release of “Philadelphia,” “Guarding Tess” and Threesome.”

Columbia’s biggest hit last year was “In the Line of Fire,” which was produced by Castle Rock Entertainment. Its biggest bomb was the now infamous “Last Action Hero.”

At Tristar, Medavoy enjoyed his greatest success last year with “Sleepless in Seattle” and “Cliffhanger,” which was produced by Carolco Pictures. His bombs included “So I Married an Ax Murderer” and “Manhattan Murder Mystery.”