Tom Cruise, Paramount And Hollywood Powers Shift, And Now Hedge Funds
Until the 1950s, Hollywood was controlled by seven major motion picture studios. More importantly it was controlled by moguls, all of whom were men they of eastern European descent, who ruled the studio in the same way that the kings of their previous countries ruled the peasants. Creative control belonged to the mogul, while the money was always controlled by the New York bankers, the so-called Suits.
This power alignment began with the beginning of Hollywood prior to 1920, and continued for 40 plus years. What held it intact was the caste system, whereby the stars were controlled by individual studios. They were paid on a yearly basis, and had no say whatsoever in the movies they would appear in. In essence they were slaves to the system, not very different from how baseball players were handled until the Supreme Court outlawed career-long captive players.
The Hollywood caste system began to crack in the 1950s, when Kirk Douglas, the father of Michael Douglas went independent, and formed one of the first independent film companies called Bryna, for his mother. They produced the Vikings, Spartacus, and Seven Days in May. The so called Studio system was now dead. Power shifted to the individual actors, who became BRAND NAMES in their own right.
Two developments began in the 1960s. The Hollywood studios would be taken over by corporations, and then reacquired by giant multinational corporations seeking world-wide influence. The second development was that the stars began to exercise their power. Giant multinationals like Sony, Newscorp, and Viacom hated the fact that stars had so much power. In the last ten years, A-List actors like Tom Cruise, Johnny Depp, and Robert Redford started to receive profit participations, which the studios only gave begrudgingly.
At first it didnt matter because Hollywood accounting is such that somehow the studios could always show a loss on the movie. The stars got wise to that very quickly, and started taking front end participations, a percentage of the ticket when movie goers bought their tickets. In my 35 years on Wall Street, I participated in financing many movies, and I have to tell you that nobody ever made money on the backend. No matter how big the movie, somehow the movie always lost money when it came to the backend participations.
We have now reached a point where the giant multinationals that control media on a world wide basis are fed up with what they are putting up with on behalf of brand name stars. Mel Gibson as you know has run into trouble on the West Coast with his drinking, and purported anti-Semitic remarks resulting in Disney canceling a Holocaust series with Gibsons production company.
Now Tom Cruise has had a falling out with Sumner Redstone, and Viacom. Publicly Redstone has stated he doesnt like some of Cruises actions in the last year. This doesnt make sense. Normally when a studio breaks with a star, there is no public statement. None is required to be given, and they just part ways. This is more personal.
It is rumored that Viacom had offered Cruise a $2 million production deal, down from $4 million in the previous deal, plus a $6 million fund for the development of movie projects. Heres the real deal. Tom Cruise did Mission Impossible III for Viacom, the movie grosses near $400 million world-wide. Cruise had negotiated as a fee, 25% of Viacoms gross revenue on the movie.
This is the way it works. The movie does $400 million. The theaters get half, and Viacom gets half, thats $200 million apiece. Cruise gets 25% of Viacoms half, thats $50 million. In the end Viacom gets $150 million, and Cruise gets $50 million. Sounds great for Viacom doesnt it. Not really, Viacom must pay for the movie which had to be $150 million plus advertising. Viacom gets zero, and Cruise still gets $50 million. This is why Sumner Redstone of Viacom is annoyed, and Cruise is sitting on top of the world.
In the end Redstone will last laugh, why you ask? Theres still Hollywood accounting to deal with. Remember that all the original Hollywood studios were sold off into the hands of multinational corporations (MNCs). Do you really think the MNCs bought the studios for the theater gross? Absolutely not. In reality movie ticket sales represent a third of a movies earnings power. Viacom can lose money on a picture, and still make a fortune on DVD sales (a third), and future television and cable rights (a third).
The MNCs have never shared profits on these other two-thirds of the revenue, and they never will. They refuse to even discuss it, and the numbers are buried deep in the corporations financial statements. They are never broken out, and they are kept secret. Viacom has made, and will make hundreds of millions of dollars on Mission Impossible III.
Redstone got fed up and threw Cruise off the lot. There are now statements being made by Cruises production partner Paula Wagner. She says that Cruise is raising $200 million from hedge funds to fund Cruises future projects. Wait until these Wall Street hedge fund types learn about Hollywood accounting. They are going to lose their shirts funding movies. This is not an industry that Wall Street should want to get involved with. Losing your shirt is one thing, but not even knowing that you have lost it until you are standing naked in the street is quite another.
Richard Stoyecks background includes being a limited partner at Bear Stearns, Senior VP at Lehman Brothers, Kuhn Loeb, Arthur Andersen, and KPMG. Educated at Pace University, NYU, and Harvard University, today he runs Rockefeller Capital Partners and http://StocksAtBottom.comFederated Home Micronesia Page State
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This power alignment began with the beginning of Hollywood prior to 1920, and continued for 40 plus years. What held it intact was the caste system, whereby the stars were controlled by individual studios. They were paid on a yearly basis, and had no say whatsoever in the movies they would appear in. In essence they were slaves to the system, not very different from how baseball players were handled until the Supreme Court outlawed career-long captive players.
The Hollywood caste system began to crack in the 1950s, when Kirk Douglas, the father of Michael Douglas went independent, and formed one of the first independent film companies called Bryna, for his mother. They produced the Vikings, Spartacus, and Seven Days in May. The so called Studio system was now dead. Power shifted to the individual actors, who became BRAND NAMES in their own right.
Two developments began in the 1960s. The Hollywood studios would be taken over by corporations, and then reacquired by giant multinational corporations seeking world-wide influence. The second development was that the stars began to exercise their power. Giant multinationals like Sony, Newscorp, and Viacom hated the fact that stars had so much power. In the last ten years, A-List actors like Tom Cruise, Johnny Depp, and Robert Redford started to receive profit participations, which the studios only gave begrudgingly.
At first it didnt matter because Hollywood accounting is such that somehow the studios could always show a loss on the movie. The stars got wise to that very quickly, and started taking front end participations, a percentage of the ticket when movie goers bought their tickets. In my 35 years on Wall Street, I participated in financing many movies, and I have to tell you that nobody ever made money on the backend. No matter how big the movie, somehow the movie always lost money when it came to the backend participations.
We have now reached a point where the giant multinationals that control media on a world wide basis are fed up with what they are putting up with on behalf of brand name stars. Mel Gibson as you know has run into trouble on the West Coast with his drinking, and purported anti-Semitic remarks resulting in Disney canceling a Holocaust series with Gibsons production company.
Now Tom Cruise has had a falling out with Sumner Redstone, and Viacom. Publicly Redstone has stated he doesnt like some of Cruises actions in the last year. This doesnt make sense. Normally when a studio breaks with a star, there is no public statement. None is required to be given, and they just part ways. This is more personal.
It is rumored that Viacom had offered Cruise a $2 million production deal, down from $4 million in the previous deal, plus a $6 million fund for the development of movie projects. Heres the real deal. Tom Cruise did Mission Impossible III for Viacom, the movie grosses near $400 million world-wide. Cruise had negotiated as a fee, 25% of Viacoms gross revenue on the movie.
This is the way it works. The movie does $400 million. The theaters get half, and Viacom gets half, thats $200 million apiece. Cruise gets 25% of Viacoms half, thats $50 million. In the end Viacom gets $150 million, and Cruise gets $50 million. Sounds great for Viacom doesnt it. Not really, Viacom must pay for the movie which had to be $150 million plus advertising. Viacom gets zero, and Cruise still gets $50 million. This is why Sumner Redstone of Viacom is annoyed, and Cruise is sitting on top of the world.
In the end Redstone will last laugh, why you ask? Theres still Hollywood accounting to deal with. Remember that all the original Hollywood studios were sold off into the hands of multinational corporations (MNCs). Do you really think the MNCs bought the studios for the theater gross? Absolutely not. In reality movie ticket sales represent a third of a movies earnings power. Viacom can lose money on a picture, and still make a fortune on DVD sales (a third), and future television and cable rights (a third).
The MNCs have never shared profits on these other two-thirds of the revenue, and they never will. They refuse to even discuss it, and the numbers are buried deep in the corporations financial statements. They are never broken out, and they are kept secret. Viacom has made, and will make hundreds of millions of dollars on Mission Impossible III.
Redstone got fed up and threw Cruise off the lot. There are now statements being made by Cruises production partner Paula Wagner. She says that Cruise is raising $200 million from hedge funds to fund Cruises future projects. Wait until these Wall Street hedge fund types learn about Hollywood accounting. They are going to lose their shirts funding movies. This is not an industry that Wall Street should want to get involved with. Losing your shirt is one thing, but not even knowing that you have lost it until you are standing naked in the street is quite another.
Richard Stoyecks background includes being a limited partner at Bear Stearns, Senior VP at Lehman Brothers, Kuhn Loeb, Arthur Andersen, and KPMG. Educated at Pace University, NYU, and Harvard University, today he runs Rockefeller Capital Partners and http://StocksAtBottom.comFederated Home Micronesia Page State
Am Antenna
Simple Healthy Vegetarian Recipes
Comprar Disco Duro
Millets Outdoor
1 800 Dog Meds Pet
Copy X Xbox Game With Nero
17 Boat Sail Venture
Walnut Trees
Magic Carpet Ride Song
Expanding Files
Antique Jewelry Chest
Boot Nine Shoes West
Blog Chronicle Houston Job
2nd Georgia Hiking
Television X
Discount Tennis Racquets
0 Chicago Down Mortgage
2007 2008 Admission Cd Dat Dat Dental Edition Kaplan Kaplan Rom Test
Four Seasons Town Center
Graphic I Love Myspace Soldier
Graco Snug Ride Infant Car Seat
Life12
Adidas Golf Shoes University
Free Online Career Assessment Test
Sickle Cell Traits
Yacht For Sale
04 Cheap International Travel
068 Coat Dog Healthy Skin Ww
Boot Jacobs Marc Rain
03 Prince Racquet Tennis
New York Chocolate Model Magazine
Real30
Cheap Flights From Vancouver
Peterbilt Logging Truck
Effects Loss Side Topamax Weight
Carpet Ratings
Anti Server Software Spam
04 House
Best Rated Pain And Rehabilitation Center
Air Cheap Europe Flight In
Blue Cafe Dog
Antigua Club Club Night Orlando
Wine Chillers
0f America Bank Banking Online
0 Intrest Credit Cards
Animal Cartoon Safari
Transportation Orlando
1 Com Internet Marketing Solution Stop
Nursery Pro
Cell Cricket Phone
Denver Nissan Truck
Immigration Test
Improving Vertical Leap
Cause Effects Global Warming
Williams Gas Heater
Bank Of Montreal Mortgage Rate
Exercise Machine Rating
Cheap Vending Machine
Real28
Buy Chicago Cubs Ticket
Black Dress Man Shirt
Ice Cream Sneaker
Depression Carnival Glass
1 Dvd Minute Workout
Herbergers Department Store
2008 Car Hyundai
Chaise Lounge Outdoor Furniture Review
06 College Halloween Party
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Darth Vader Costume
Dada Footwear
Acne Treatment Pregnancy
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Aquarium Fish Lamp Motion
Slovakia Tourism
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Coffee Maker Red
Transfection Protocol
Life16
Baby Costume Halloween Unique
10 Fact On Global Warming
Erie News Obituary Times
Suunto Dive Manager
Creating Dating Dream Guide Kiss Kissing Kissing No Save Whom Will
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0 Car Deal Finance New
Butterfly Icon Myspace Now Online
Wholesale Equipment For Hair Salon
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Indian Online Dating Site
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1 18 Car Diecast Truck
Radio Sports Toronto
Enjoying Life
African Airline Cheap Find Flight Flight Hotel Hotel Safari Ticket Travel
1 Fr
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Philadelphia Life Insurance Co
360 Xbox Cord Vga X
Beach Fernandina Florida Rental Vacation
Los Angeles California Obituary
Murphys Law Band
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