Likely New Studio Chief Still Has a Lot to Learn

Two years ago, Brad Grey set out to transform himself from Hollywood’s top talent manager into a movie mogul.

The chairman of Brillstein-Grey Entertainment was “a little bored,” a friend says, after his many years helping guide the careers of A-listers such as Brad Pitt, Jennifer Aniston and Adam Sandler. So Grey, whose production experience was mainly in television, threw himself into learning how a movie gets made.

In 2004, Grey spent an average of 10 days a month on the London set of “Charlie and the Chocolate Factory,” a $150-million movie on which he is a producer. More recently, amid complicated negotiations on another big-budget film project, Grey sarcastically quipped to a colleague, “God, this movie business is fun!”

Grey is about to find out just how “fun” the movie business can be -- not to mention how political, publicly humbling and Wall Street-centric.

This week, the 47-year-old executive is expected to be named chairman and chief executive of Viacom Inc.-owned Paramount Pictures, succeeding outgoing industry veteran Sherry Lansing. According to people with knowledge of the negotiations, Viacom and Grey were working Sunday to finalize a deal that was due to be presented to the compensation committee of Viacom’s board for approval today.

Grey’s contract has yet to be signed, but one thing is certain: He has a lot to learn. Although his skills as a talent wrangler, strategist and troubleshooter will serve him well, he will be a relative neophyte in a job for which most studio chiefs spend their entire careers preparing.

“Managing a personal-service firm is a very different process than putting together a slate of 20 movies over the course of a year,” said one industry source who asked not to be named. “It’s not only a different mind-set but a different cockpit. You’re flying a different plane.”

Where managers such as Grey make their living trying to get their star clients as much money as possible on any given deal, heads of studios, all of which are now owned by big media conglomerates, are under intense pressure to deliver their corporate parents the highest return on investment in a volatile, slow-growth business.

And with the ever-escalating costs of movie production and marketing squeezing the margins on even the biggest box- office hits, that goal has gotten harder and harder to achieve.

Unlike Lansing, a 30-year industry veteran who has been battle-tested over many years as a studio chief, Grey has never sat on the opposite side of the table in making a talent deal.

“He may be in for a rude awakening,” one insider said.

In taking the job, Grey would be assuming not only Lansing’s creative responsibilities of deciding which films to make but also the bottom-line concerns that previously fell to Lansing’s former boss, Viacom entertainment chief Jonathan Dolgen.

Dolgen abruptly stepped down last summer after being passed over for a bigger role at the company. But he said Sunday that he, for one, thought Grey was a good fit for the job.

“Grey would be a first-rate choice,” Dolgen said. “He’ll have the capacity to understand the economics of the business.”

At Paramount, Grey would report to Viacom co-President Tom Freston, who oversees both its movie studio and its cable programming assets. Viacom, controlled by Chief Executive Sumner Redstone, also owns CBS, Infinity Broadcasting, MTV Networks and Showtime.

Freston personally wooed Grey, sources said, because he wanted a studio chief who was open to new ideas about how to manage the changing economics of the film business.

In recent years, the job of running a movie studio has become even more complex. The best studio chiefs have a knack for greenlighting a movie today that will hit big at the box office two years from now. But that kind of prescience is only the beginning.

Studio heads also must understand the intricacies of making and marketing films for worldwide audiences. They must have a nose for what movies work best in what international territories. And in a hugely competitive environment, they must grasp how to persuade movie fans to buy DVDs.

“This is a very, very hard job with very high stakes,” one studio chief said.

Grey is used to being under pressure. Talent managers have perhaps the most between-a-rock-and-a-hard-place of jobs, caught as they are between the big egos of their clients and the studios’ bean counters. But there are many issues that will be new to him, including piracy, emerging technologies, global distribution and complicated film financing arrangements.

Grey also lacks experience managing thousands of employees. The management firm he owns has 85.

Typically, a change at the top of a studio precipitates a tumultuous period of turnover, as loyalists to the previous management leave and the long and torturous process of assembling a new team begins. If he is named to head Paramount, Grey’s first challenge will be to assess his troops.

Donald De Line, the studio’s well-liked production head who was the inside favorite for Lansing’s job, has said he would leave the studio if he were passed over. He was unavailable for comment Sunday.

Paramount’s most prolific producer, Scott Rudin, meanwhile, is strongly aligned with Lansing. Although Rudin has been a moneymaker for the studio for 15 years, some of his recent big-budget movies, including the critically acclaimed “The Manchurian Candidate,” were financial disappointments. Rudin, too, could not be reached.