Job Insecurity Pervades Paramount

With Viacom Inc. poised to take control of Paramount Communications, rumors surfaced on Monday that company President Stanley Jaffe and studio chief Sherry Lansing are already scouring Wall Street for funding to revive their film production company.

Others flatly denied such a move, which would violate their contracts. But sometimes even bad speculation speaks to the mood of an industry--which in this case gives many of Paramount’s top executives little or no chance of keeping their jobs.

People who do business with Paramount widely expect Viacom Chairman Sumner Redstone to reshape the company in his own image after the dust has cleared around the $10-billion deal. There are two reasons for that: One is that new owners almost always assign their own lieutenants to carry out new management plans--often as part of a cost-cutting strategy. The other is that entertainment executives traditionally have no job security, even under the best circumstances.

Paramount Chairman Martin Davis has already largely taken on a caretaker’s role, following a court decision that voided his friendly merger agreement with Viacom.

Jaffe has also conceded that he’s on slippery ground, since Redstone has a strong No. 2 man in Viacom President Frank Biondi. While no one’s confirming anything publicly, sources say the temperamental executive is examining several job possibilities. One report had Jaffe, an avid sports fan, trying to arrange financing to buy Paramount’s two professional teams--basketball’s New York Knicks and hockey’s New York Rangers.

Jaffe declined comment on Monday. A Paramount spokesman responded by saying: “None of the assets are for sale, and we don’t comment on speculation.”

At the very least, Jaffe and Davis won’t go hungry. One report valued Jaffe’s exit package of stock and stock options at about $60 million, and Davis’s at $155 million.

If Jaffe goes as expected, many people take for granted that he and Lansing will resume their production partnership, while resulted in successes such as “Fatal Attraction” in the 1980s. But the studio chief’s fate may not be so clearcut.

People close to Lansing say it’s wrong to assume that she would necessarily reunite with Jaffe. Some see her going her own way. Others say that Redstone might even decide to leave Lansing in place if the studio continues to make headway during the next three to six months.

Redstone could also keep Lansing around for continuity, since the studio has had three chairmen in four years.

Lansing is personally popular with other Hollywood executives, and analysts are high on upcoming films such as the third “Naked Gun” installment, “Beverly Hills Cop 3” and “Clear and Present Danger.”

With more than a dozen movies set to go into production this year, Lansing also has fostered relationships with such A-list producers such as Gale Anne Hurd (“Terminator 2”), Walter Hill (“48 Hours”), Barry Levinson (“Rain Main”) and the team of Frank Marshall and Kathleen Kennedy, who previously worked with Steven Spielberg.

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The studio chief, who was in Indiana on Monday for a premiere of “Blue Chips,” Paramount’s next release, had no comment on speculation about her future. Sources close to Lansing, however, said it’s only natural to conclude that she presently “has no job security,” as one put it.

“It’s almost certain Sherry will go,” another source maintained. “There may be a polite period where she hangs in there. But with Stanley out either way--which has been made clear--there’s no motive for Sherry to stay and work for Redstone.”

Lansing’s modus operandi so far has been to operate the studio as usual. “It’s more than business as usual there,” said one executive close to the studio.

Even if Lansing survives, however, many people close to the company fear that there will be mass upheaval in Paramount’s legal and business affairs departments--since Viacom has its own fully staffed divisions.

That leaves Paramount Television Group Chairman Kerry McCluggage, who might also be toppled under some doomsday scenarios. One school of thought has Viacom putting all of Paramount’s television operations, under Biondi or MTV head Tom Freston--who’s seen as being on a fast track at Viacom.

“Viacom already knows the TV market and syndication business,” one source said.

But there’s also a reasonable argument to be made that Viacom will leave the television operation in place, since it’s operating so successfully. Paramount’s network programs include “Frasier” and “Wings.” In the lucrative first-run syndication market its programs include “Entertainment Tonight,” “The Arsenio Hall Show” and two Star Trek spinoffs.

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Meet the new boss: Ted Turner, Hollywood’s newest mogul, addressed his troops for the first time at a meeting at the Cinerama Dome Theatre on Sunset Boulevard last week. The meeting brought together employees from his New Line Cinema, Castle Rock Entertainment and Turner Pictures. Turner reportedly had many words of encouragement, but no word on who will head Turner Pictures, which has been up in the air for months. “We’re still working on that,” said one executive.