New Chief Remaking Paramount Pictures

One of the first complaints Brad Grey heard when he took over Paramount Pictures in March was about DVD prices.

Workers were charged more to buy the discs on the studio lot than at a Best Buy or Target store. From now on, Grey decreed, prices would be wholesale.

“I didn’t think it was necessary to make a profit on our employees,” Grey said.

Grey’s fingerprints are everywhere on Paramount’s Melrose Avenue lot, even in the company store. Since assuming the job, he has been immersed in trying to boost morale, end dysfunctional staff relations and cure a creative malaise that has hung over the venerable studio.

Some moves came easy. Grey immediately spent millions of dollars junking antiquated office computers for new ones and buying his top executives BlackBerry devices. He organized employee barbecues and breakfasts. This summer, workers can take Friday afternoons off.

Other actions were unsettling: Grey cleaned out top management, sometimes making moves with no warning. President Donald De Line was on a business trip to London when he got word indirectly that he had been axed in favor of Fox TV’s Gail Berman, who now oversees day-to-day creative matters.

“Change is tricky and difficult, and people are entitled to be nervous about it,” Grey said in his first extensive interview since taking the job.

Grey also is shaking up a stodgy culture at the Viacom Inc.-owned studio, in part by spicing up the movie slate with edgy, offbeat films, including one opening Friday about a pimp who aspires to hip-hop stardom.

Under the former regime of studio chief Sherry Lansing and her boss, Viacom Entertainment Group Chairman Jonathan Dolgen, Paramount enjoyed considerable success for years, releasing such films as “Forrest Gump,” “Braveheart” and “Titanic.” Eventually, the studio hit a lengthy dry spell, and the two executives earned reputations as being overly cautious.

Paramount lagged behind competitors at the box office, in video stores and in international distribution. Executive turnover plagued the studio. Hardball negotiating didn’t endear it to agents and filmmakers.

Enter Grey. Viacom co-President Tom Freston had vowed to reverse Paramount’s often last-place box-office ranking and to turn the studio into an easier place to work.

Freston tapped the 47-year-old talent manager who for two decades had sat atop Brillstein-Grey Entertainment, which represents such stars as Brad Pitt and Adam Sandler.

Grey had limited film experience, although he was one of the producers on last weekend’s top film, “Charlie and the Chocolate Factory.” Grey was better known for producing such TV shows as “The Sopranos.”

“I wanted to create a great vibe, take chances and improve the business on every front,” Freston said. “Brad is off to a great start. This is a turning of the page.”

Grey is still enjoying a honeymoon with many producers and agents, who already see the studio operating more smoothly.

“This place is working in a higher gear,” said Paramount producer Sean Daniel. “It’s a different culture. Answers are quick, notes are smart and projects are moving along quicker. There’s forward progress.”

Jim Berkus, chairman of United Talent Agency, said the studio “is much more user-friendly and straight ahead.”

To achieve that, Grey and his team encourage the staff to speak up. Business affairs executives who had little to do with their counterparts in production now attend creative meetings.

“I’ve never seen any good come out of a stifled environment,” Grey said.

Grey will need a lot of that goodwill beginning next year, when the pressure turns up.

That’s when Viacom is scheduled to split in two, elevating Paramount from a relatively small part of Viacom’s entertainment empire into one of the most important stars of a smaller, high-growth company headed by Freston. Paramount’s performance will become more visible.

Grey’s freshman year as a studio chief starts with him wrestling with the industrywide problem of how to get people back into theaters. Paramount might even commission a study to learn why audiences have been eroding, Grey said, although he believes the answer is simple.

“Make entertaining movies,” he said, “and people will show up.”

For him, that means fare that has a better chance of grabbing younger audiences. The first tangible measure of Grey’s creative decisions comes this weekend with the premiere of “Hustle & Flow” -- a gritty, R-rated film that Grey snapped up at the Sundance Film Festival in January.

The Paramount Classics and MTV Films release is an unflinching tale of a small-time Memphis pimp, hardly the tired remake genre (think “Alfie” and “The Stepford Wives”) that saddled Paramount with a reputation for being out of step with audiences. Grey paid $9 million for the film and is spending $15 million to market it.

“He’s making a strong statement that he’s not going to settle for the status quo,” said David Schiff, who manages such clients as rappers Eminem and Nelly.

“Hustle & Flow” writer-director Craig Brewer, along with producers John Singleton and Stephanie Allain, sold Grey on financing their next production, “Black Snake Moan,” starring Christina Ricci and Samuel L. Jackson. Like “Hustle & Flow, the R-rated, $14-million film is the mirror opposite of Paramount’s typical fare.

“It’s about an anxiety-ridden sex addict who’s held captive by an old black bluesman who aims to cure her wickedness,” Brewer said. “There’s nothing really ‘Titanic’ about these movies.”

Grey said he wasn’t playing it safe, “because if you play it safe, you lose.”

That doesn’t mean Grey has abandoned the big-budget Hollywood films. Nor that he isn’t fully enjoying the hits that Paramount’s previous regime bequeathed him, such as “The Longest Yard” and Steven Spielberg’s “War of the Worlds.”

Nonetheless, Grey said he was shocked to find so few good projects in the hopper, leaving holes to plug in the studio’s upcoming schedule. Grey let his staff know he wasn’t pleased.

Grey also took a strong stand on projects he inherited that weren’t to his liking both creatively and financially. Grey called friend and producer Larry Gordon to tell him he was killing his costly sci-fi thriller “Watchmen,” even though Paramount had spent millions hiring crews and booking soundstages in London.

“The new regime came in and said, ‘We can’t get behind the project,’ ” said Gordon, once a studio chief. “I’m not happy that my movie got canceled, but Brad was very professional about it. And I’ve been on both sides, so I know how things work.”

It was “Mission: Impossible 3” that gave Grey his first big test. Under the peering eyes of agents, studio rivals and the media, Grey signaled that he would stand up even to a superstar such as Tom Cruise, the star and producer. Grey threatened to spike the movie because he believed the proposed $185-million budget and Cruise’s profit sharing made the investment too risky. The cost was shaved to $150 million, and the deal restructured.

Long term, Grey vows to build an aggressive specialty film group, churn out more DVDs from Paramount’s film and TV library and better enlist such Viacom networks as MTV and Nickelodeon to promote Paramount movies worldwide.

Grey, along with Freston, also believes that Paramount left too much money on the table in the international market. They have scrapped the studio’s practice of routinely selling off the foreign rights to minimize risk.

“This was a very domestically oriented company,” Freston said.

Grey said he and Freston also were considering a movie label strategy with Viacom cable channels that would beef up the film operations of MTV and Nickelodeon and possibly launch movie arms with Black Entertainment Television and Comedy Central.

To accomplish his agenda, Grey is working hard to win over employees, including those who are still uncomfortable that a movie novice now runs the lot. Before Grey’s arrival, Freston hired what he calls “an organizational shrink” to tap into the psyche of Paramount’s 1,600 employees and solicit their opinions about work. That’s how the DVD price issue and numerous other gripes came to Grey’s attention.

“We’re in show business,” Grey said. “The climate didn’t reflect that. It was more like a corporate enterprise rather than a Hollywood studio where everyone is feeling creative.”

During a studiowide catered breakfast after his arrival, Grey showed an appreciation for Paramount’s heritage by asking to be introduced by the studio’s unofficial ambassador, A.C. Lyles, 87, who first set foot on the Paramount lot in 1937 as mogul Adolph Zukor’s office boy.

Grey is Lyles’ 10th studio chief, one who he says has energized the place.

“When Brad came in, the morale on the lot was pretty low because there was a decline in our stature in Hollywood,” Lyles said. “The studio is now going full force.”

*

(BEGIN TEXT OF INFOBOX)

Coming attractions

Movie projects to which Paramount Chairman Brad Grey has given the go-ahead, along with prospective release periods.

“Hustle & Flow,” a gritty urban drama directed by Craig Brewer, starring Terrence Howard as a Memphis pimp who aspires to hip-hop stardom (opens Friday)

“Get Rich or Die Tryin’,” directed by Jim Sheridan, about the rise of rap star 50 Cent (for release Nov. 11)

“Yours, Mine and Ours,” a remake of a 1968 film about the merging of two families, starring Rene Russo and Dennis Quaid (November)

“Mission: Impossible 3,” next installment in the action franchise starring Tom Cruise (May 2006)

“Nacho Libre,” a wrestling comedy directed by Jared Hess and starring Jack Black (2006)

“The Secret Life of Walter Mitty,” a remake of a 1947 film about a daydreamer, starring Owen Wilson (2006)

“Black Snake Moan,” directed by Craig Brewer and starring Samuel L. Jackson and Christina Ricci, about a blues guitarist who tries to reform a girl (2006)

“World Trade Center Project,” directed by Oliver Stone and starring Nicolas Cage, about men trapped in the rubble (2006)

“Beneath,” a thriller directed by Dagen Merrill, starring Nora Zehetner as a woman haunted by a car crash (2006)

“Babel,” directed by Alejandro Gonzales Inarritu, starring Brad Pitt and Cate Blanchett as a married couple struck by tragedy (fall 2006)

“Freedom Writers,” directed by Richard LaGravenese and starring Hilary Swank, about a teacher at a racially divided Long Beach school (fall 2006.)

“Zodiac,” directed by David Fincher and starring Robert Downey Jr., about a cartoonist obsessed with solving the Zodiac case. Shared with Warner Bros. (fall 2006)

“The Curious Case of Benjamin Button,” directed by David Fincher, an adaptation of an F. Scott Fitzgerald story that again teams Pitt with Blanchett (2007)