Rumor mill feeds on studio turmoil

WHEN Brad Grey got on the phone Friday, the chairman of Paramount Pictures had a pretty good idea what I was going to ask. Did Gail Berman, his embattled production chief, still have his backing? “Gail has my full confidence and support,” he said. “Our plan is for our films to speak for themselves instead of being swayed by the Hollywood rumor mill.”

Whether you’re a baseball manager, a studio executive or the head of Homeland Security, someone is always wondering if you’ll still have your job next week. For the past few months, Topic A during lunchtime conversation in Hollywood has been the question -- what on Earth is going on at Paramount? If you believe the buzz, since Grey arrived last March, the studio has been in constant turmoil.

There is good reason for such scrutiny. After years of sedate stability under Sherry Lansing, Paramount has been rebuilt pretty much from the ground up. In less than a year, virtually every division chief has been replaced, some without warning, as happened to production chief Donald DeLine, who found out from friends that he was being replaced when he was in London on a business trip. Countless staffers have been let go after the studio paid $1.6 billion to acquire DreamWorks last December in a selection process that one staffer described as a “human bake sale.” And Berman, hired last spring to replace DeLine, is now seen as a lame duck herself, having endured a stream of criticism for the studio’s pokey production pace and her dealings with producers and talent agents. Her perceived shaky status at the studio took another hit Friday after The Times reported that Universal Pictures Chairman Stacey Snider was considering moving to DreamWorks after her contract expires at year’s end.

Paramount’s problem is that while they have an interesting story to tell -- how do you reinvent a studio? -- today’s overcaffeinated media have seized on a more tantalizing narrative, the saga of a professional woman in jeopardy. If you believe her detractors, Berman is getting her comeuppance for being arrogant, imperious and unwilling to admit that, coming from TV, she’s facing a steep learning curve in movieland. Her supporters argue that she is being cruelly derided by a town that has proved time and again to be ferociously intolerant of powerful women (the sniping against Berman sounding eerily similar to the trashing that Dawn Steel, Jamie Tarses and Amy Pascal endured when they first assumed power).

Since the DreamWorks deal closed, the rumor mill has been brimming with tales of Berman’s charmless attitude with talent agents and conflicts with Alli Shearmur, her co-head of production. By Jan. 10, the roar was deafening enough for Variety -- the ultimate barometer of showbiz rumor status -- to publish a carefully worded story floating the various rumors and then allowing them to be shot down by anonymous studio sources. “Everyone [here] works really well together,” one insider told Variety. “There doesn’t seem to be any dissension whatsoever.”

It’s possible the buzz would’ve started to taper off, but it erupted again after Grey gave an interview Feb. 6 to the New York Times’ influential industry reporter, Laura Holson, in which, instead of decisively putting the rumors to rest, he said of Berman, “She’s working hard and it’s early.” This seemingly halfhearted endorsement put Berman back into the frying pan, encouraging a new round of speculation, the latest being that Snider’s move to DreamWorks would give the studio a prized talent who could easily assume Berman’s responsibilities if her first batch of films performed poorly.

Given a second chance Friday, Grey was more effusive in his praise of Berman, but once the bloodhounds get the scent, it’s hard to keep them off the trail. In an era when the Internet ravenously consumes every flap or kafuffle, stories take on a life of their own, especially with bloggers volunteering all sorts of off-the-cuff theories and hunches, which the mainstream media -- meaning newspapers like mine -- pursue to determine if they contain any truth worth reporting on. Nobody can stoop too low anymore, whether it’s half-baked Web gossip about celebrity breakups or the sorry spectacle of Lawrence O’Donnell, a savvy political analyst reborn as a blogger, claiming on the Huffington Post that “every lawyer I’ve talked to assumes Dick Cheney was too drunk to talk to the cops” after he shot Harry Whittington.

Being a woman in a high-profile new job in an industry where even your friends root for you to fail, Berman has been a tempting subject for the woman-in-jeopardy storyline. The most striking example of this was a posting about Berman from Web gadfly Jeffrey Wells that quickly became the talk of the town after appearing in his Hollywood Elsewhere column last week.

Under the headline “Scent of Toast,” he ran an anonymous letter from a Berman critic that skewered the studio executive for insensitivity, rudeness and “an unexamined loathing that lurks just under the surface when she deals with artists.” Wells vouched for the authenticity of the story by writing, “You can half-tell she’s credible by the insider-sounding information and her down-to-it prose style, but I wanted to make sure of this and now I’m 98% certain she’s legit.” Geez, how do you argue with that?

Berman didn’t respond to my offer to give her side of the story, not that I really blame her. But her behavior, good or bad, is hardly the issue. Her biggest stumbling block is that she doesn’t have enough of the two kinds of currency that really count in Hollywood -- power and success. The person with the real power at Paramount (after Grey) is Rob Moore, a former partner at Revolution Studios who arrived last summer. Moore is essentially the studio’s chief operating officer. Outside of production and post-production, every department at the studio reports to him. Berman’s power took a hit the day Paramount bought DreamWorks, both in terms of perception and reality. Because the costs for the half-dozen movies DreamWorks will make each year come out of Berman’s production budget, she’s in charge of only 10 or 12 movies a year, not the 16 or 18 she had expected to oversee.

The perception has made things worse. The DreamWorks triumvirate takes a lot of air out of the room. And they have emerged as such key players at the new Paramount that what looked in December like an acquisition is viewed by some now as a reverse merger. Since the deal closed, the top executives at Paramount’s distribution, home entertainment and TV divisions have all been replaced or moved to new positions, with DreamWorks executives assuming control. The one thing the new executives have in common is that they have all worked for Jeffrey Katzenberg, something you could also say about Moore, who spent nearly a decade at Disney, most of it during Katzenberg’s reign there.

Of course, none of this would’ve happened without Grey, who orchestrated the DreamWorks acquisition. He may not be a natural leader -- as a talent manager, you are accustomed to avoiding the limelight -- but he’s a quick learner. He could use some of Lansing’s legendary schmoozing skills, especially when it comes to explaining to people, both inside and outside his company, why DreamWorks is such a good fit. As it turns out, DreamWorks’ greatest value isn’t just its manpower, but its modernity.

As a relatively new company, DreamWorks is oriented to the future; Paramount has always looked to the past. As Grey discovered in his first months at Paramount, the studio was a crumbling edifice, full of antiquated technology and staffers with equally antiquated ideas about the business. The studio, which missed out on a big chunk of the DVD bonanza by being the last to open its vaults, was equally slow to embrace digital media. Grey once told me that when he arrived at the studio he was shocked to discover he couldn’t make a conference call.

This is all changing now. The studio has launched a new digital media division. And another new recruit, Paramount Classics chief John Lesher, is speedily putting that division back on the map with an impressive slate of new films. But change is wrenching, especially when so many executives, from Grey on down, are doing jobs they’ve never done before.

I often get the feeling that Grey is impatient with the glacial pace of studio script development, prompting him to pay top dollar for projects that can be quickly put into production. But with the world moving so fast, maybe impatience isn’t such a bad thing. Studios are too slow to embrace change as it is.

It’s worth recalling that perhaps the last time Paramount was in such turmoil, it was in the hands of the mercurial Robert Evans, who oversaw a remarkable run of movies that helped shape film history. Maybe it’s foolhardy to imagine that history could repeat itself, especially in today’s era of cautious media conglomerates. But after years of seeing Paramount aim as low as it could go, I’m strangely hopeful that, amid all this discord and discontent, maybe lightning could strike twice.

“The Big Picture” runs each Tuesday in Calendar. His weekly podcast, “The Oscar Call,” with John Horn, can be found at www.theenvelope.latimes.com/custom/podcasts, and you can reach him at patrick.goldstein@latimes.com.