Venerable Paramount Brings In Novice Chief

Viacom Inc.’s co-president, Tom Freston, swears he picked the brains of 100 Hollywood insiders about whom to tap to reinvigorate the company’s Paramount Pictures.

In the end, though, Freston chose somebody he already knew quite well -- a friend who has joined him on travels to Cuba and Brazil.

On Thursday, as expected, Freston named top talent manager and producer Brad Grey as Paramount’s new chairman and chief executive. He becomes the 10th leader of the 93-year-old studio whose rich history includes “Breakfast at Tiffany’s,” “The Godfather” and “Braveheart.”

Grey is set to take over by March 1 for industry veteran Sherry Lansing, who is retiring after 12 years as chief of the studio. The appointment vaults the 47-year-old into an elite club of executives who can get a movie made with the stroke of a pen.

The announcement about Grey had been anticipated for days before loose ends were finally tied up Wednesday. At 9 a.m. Thursday, Grey showed up at the Melrose Avenue studio to meet his new team of senior executives.

Grey is being given broad responsibilities over creative and business issues. He will be charged with restoring Paramount’s luster, tarnished by a box-office slump and management upheaval.

Last year, Paramount had a paltry 7% domestic market share and ranked last internationally at 3%. Grey is expected to make the studio more aggressive by more fully exploiting its films overseas and on DVD.

“We do have a low market share, and Paramount has suffered from a poor reputation as talent-unfriendly, tough to deal with, for bad marketing and being slow on DVD,” Freston said.

Paramount also has been reluctant to gamble on expensive film franchises such as “Harry Potter” that can potentially generate huge profits.

“Paramount needed a big change,” said Richard Greenfield, an analyst at Fulcrum Global Partners. “If Brad Grey embraces new technology and creates better content, there could be a significant upside.”

Critics have chided Paramount for too many remakes and old-fashioned themes, including “The Stepford Wives” and “Alfie.” Freston promised change.

“I’m not saying we’re going to be the MTV or Nickelodeon studio,” Freston said. “But we might have more movies skewing toward younger audiences.”

Freston added that things had been improving over the last year under Lansing. Upcoming major releases launched by her include Steven Spielberg’s big-budget “War of the Worlds,” starring Tom Cruise.

“The spirit and morale were pretty low and now are pretty high,” Freston said.

Freston approached Grey just before Thanksgiving, shortly after Lansing announced plans to leave. Grey had spurned past overtures to run a studio. This time he was ready.

“It was just a combination of my age, the timing, Tom Freston, the history of Paramount Pictures, and I really took the time to think it through,” Grey said.

By Wednesday night, Grey, Freston and Viacom Chief Executive Sumner Redstone were already celebrating with their wives at a nearly two-hour dinner at Madeo in West Hollywood. “The deal is done,” Redstone declared.

On Thursday, Redstone said, “Brad will be like a breath of fresh air. He won’t start with any preconceived ideas; he brings a fresh perspective.”

Freston was given oversight of the studio last year when he was elevated to his current post after heading Viacom’s MTV Networks. By his own admission, he was unschooled in film. So he sought a studio leader with deep movie experience.

But his thinking changed when no seasoned hand he liked was available. And now, Freston has turned Grey’s being green into a virtue.

“The fact that Brad hasn’t had hands-on experience is an advantage,” Freston said, noting that former Warner Bros. studio co-chief Terry Semel helped turn around Yahoo Inc. even though he was new to the Internet arena.

Grey comes to Paramount as a top talent manager, having helped guide the careers of such stars as Brad Pitt, Jennifer Aniston and Adam Sandler. He also has served as executive producer on such TV hits as HBO’s “The Sopranos.”

Grey expects his experience in handling Hollywood stars to be an asset in rebuilding Paramount. “The big picture is to create an environment where artists are comfortable and that fosters creativity,” he said.

One big challenge for Grey will be to boost Paramount’s international profits. Until recently, the studio routinely sold off foreign rights to immediately recoup some of its investment, a cautious strategy that sacrifices potentially bigger paydays down the line if a movie is a big hit overseas.

Freston and Grey also need to bolster the studio’s specialty film division, Paramount Classics, which has lacked the financing to compete with rivals such as News Corp.’s Fox Searchlight.

Grey will report directly to Freston after years of being his own boss. It’s unclear how many millions of dollars a year Grey will make at the helm of Paramount. Because he is not an officer or director of Viacom, his compensation package doesn’t have to be publicly disclosed.

Freston acknowledged that while it might be “dicey” working with a friend, it was not as if he and Grey were “close buddies” who hung out a lot together.

Unclear is how Grey will start overhauling the studio.

Paramount production chief Donald De Line had hoped to succeed Lansing, indicating he would return to producing if passed over for the top job. But both Freston and Grey went out of their way to praise De Line, saying they looked forward to working with him.

Grey must meet with Warner Bros. brass to extract himself from Plan B, a film company he formed at the Burbank studio with stars Pitt and Aniston, both clients of his management firm. Warner President Alan Horn said he was confident these issues would be resolved shortly.

More important, Grey needs to separate himself from Brillstein-Grey Entertainment, his management and production firm, by crafting a deal to sell his interest to the executives who helped him build the business.

Veteran manager Bernie Brillstein, Grey’s longtime mentor, said he had mixed emotions about losing his 20-year colleague. “I’m so proud of him,” Brillstein said. “It’s a great day for Paramount. But it’s like a son leaving the house.”