A special Paramount-themed episode as Skydance Media completes its $8 billion takeover after a yearlong battle to acquire the storied studio. Hollywood historian Jeanine Basinger, Variety chief film critics Peter Debruge and Owen Gleiberman and MoffettNathanson analyst Robert Fishman join host Cynthia Littleton to examine the pioneering film factory’s past, present and future.
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Speaker 1 (00:03):
Welcome to Daily Variety, your daily dose of news and
analysis for entertainment industry insiders. It's Thursday, August seventh, twenty
twenty five. I'm your host, Cynthia Littleton. I am co
editor in chief of Variety alongside Ramin Setuda. Today we're
taking a departure from the usual format for Daily Variety.
This episode is devoted to the house that Adolph Zukor built,
(00:26):
Paramount Pictures. It's one of the foundational brands of Hollywood,
and today it is formally changing hands. Skydance Media has
closed its eight billion dollar acquisition of Paramount Global. So
here we take a long look back at the history
and legacy of the Melrose Avenue studio, and we also
look to the future, to the challenges and opportunities that
(00:49):
lay ahead for the new regime led by CEO David
Ellison and President Jeff Schell. To help put it all
in perspective, we'll speak first with respected Hollywood has history
in Jeanine Bassinger. She talks about what made Paramount unique
at its founding in nineteen twelve and what has allowed
it to endure for more than a century. Then we'll
(01:11):
talk to Peter de Bruges and Owen Gleiberman, Variety's chief
film critics. They give us a qualitative take on the
riches stored in Paramount's vaults, and we finish out with
a discussion with media analyst Robert Fishman, senior researcher for
Moffatt Nathanson. He offers thoughts on the business speed bumps
ahead and what Wall Street wants to see from the
(01:33):
new owners. As Janine Bassinger explains, Paramount Pictures from the
very start was built to produce and distribute movies at scale.
Variety had been in business for about seven years when
Adolf Zuker's Famous Players Film Banner joined forces with producers
Jesse Laski, Cecil B. De Mille, and others to create
(01:54):
a film factory. The first significant story in Variety about
Paramount was public on June twenty sixth, nineteen fourteen. It
has great detail of Zuker's vision for how his fledgling
studio would operate. He referred to it as the Paramount
in those days. It's amazing how much of what he
(02:14):
had to say back then is still relevant today. Here's
a bite from that report.
Speaker 2 (02:19):
The underlying principle no doubt of the Paramount formation is
the feature film business in its present unsettled state must
be guarded against, and the Paramount is aimed to become
a permanent agency that, when its advantages are made apparent
to the picture trade, will be recognized as the proper
way to handle output, in contrast to the fly by
(02:43):
night filmmaker who puts a little money into a picture
and wants a great deal back, or those feature manufacturers
who must have money quickly and will distribute their film
regardless to obtain it.
Speaker 1 (02:58):
Now we'll hear from Hollywood historian Janine Bassinger. She is
the Corwin Fuller Professor of Film Studies Amerita at Wesleyan University.
She sets the scene for us of Paramount's early years
and on up through the momentous nineteen forty eight antitrust
decision that forced Paramount and other studios to divest from
(03:19):
their theater chains. She also explains how May West saved
the studio from bankruptcy in the depths of the depression.
Janine Bassinger, thank you for joining me today. I appreciate
you helping me put the storied history of Paramount Pictures
into perspective.
Speaker 3 (03:35):
Absolutely my pleasure and you couldn't have a better example
to use than Paramount Pictures to depict the history of Hollywood.
The great thing about Paramount was which is now the
second oldest studio in the United States after Universal Pictures,
is that it founded and grounded itself from the beginning
(03:59):
and the understanding you're going to have to look after production,
you're going to have to look after distribution, and you're
going to have to have somebody looking ahead to get
a plan for the changes that were going to come.
And Adolf Zukor, the guy that founded the real Paramount
Pictures with somebody doing those three things very carefully, and
(04:23):
he was the look ahead idea guy. And the sense
of buying their own movie theaters and that kind of
thing was just very smart.
Speaker 1 (04:32):
So, okay, Adolf Zukor nineteen twelve, what was the catalyst
for him and his key partners Jesse Laski and Cecil B.
Speaker 4 (04:40):
De Mill.
Speaker 1 (04:40):
What was the spark to put the stick in the
ground and say we're launching a studio.
Speaker 3 (04:45):
It all started with a merger, which is really Hollywood.
They understood that the elements that they were going to
need really to make it work. You couldn't just be
making great movies. You had to have a way to
get them out that was great to your public in
small towns and everywhere, and you had to have somebody
(05:07):
looking out for what you were going to need as
a business. For Zukor, he thought it was about stars.
Zukor understood that selling the stars their names and making
them what the audience wanted would be a secret of success.
That logo that they have, the original wonderful logo, had
(05:29):
twenty four stars around the mountain, one for each of
the stars that Zukor had cleverly signed up and had
under contract. Paramount meant to you movie stars like Being
Crosby and Bob Hope and Paula Goddard and Veronica Lake
and Marlena Dietrich. And in the thirties it had meant sophistication,
(05:54):
foreign kind of attitude. Everybody said, if you went to Paramount,
you went into the common It was like you've gone
to a foreign country, where are so many different languages
being spoken.
Speaker 1 (06:06):
So many great European actors, for obvious reasons, headed across
the Atlantic and found a good trade here in the
United States.
Speaker 3 (06:14):
They gathered there and they made a slightly more sophisticated
form of storytelling, often set in Paris instead of Peoria,
and women wearing furs and good cloth coats and that
kind of thing. And when they had financial trouble, they
(06:34):
found May West. She saved them from bankruptcy.
Speaker 1 (06:38):
She'd been doing her very risk shows on stage, and
they poureded that over to movies.
Speaker 3 (06:44):
They went into receivership, and they declared bankruptcy in nineteen
thirty three. But then they came bouncing back from that
really largely through having May West. Zouk Or understood you
have to be looking at what do you not have.
You don't have May West, you need block booking. If
(07:04):
you have block booking, if you have a star that
they want, then they got to buy the other stars
material too. So these business practices that were so smart
and that define the studio system and then ultimately kill
the studios.
Speaker 1 (07:20):
It's the central concept of leverage. You have something they want,
they'll have to take these eight others and therefore scale.
There's so much we could talk about, but certainly foundational
to the Paramount story is the nineteen forty eight antitrust decision.
The federal government came in and basically broke up the
(07:40):
vertical integration of the day, which was the studios that
owned theaters in major cities, and the federal government said
to Hollywood, that's just too much power. So Paramount, Warner Brothers, MGM,
they all had to divest themselves of their theaters from
your research and your studies. What was that moment like
(08:00):
for Paramount and for Hollywood.
Speaker 3 (08:02):
First of all, the threat from the government about monopoly
was around quite a bit before nineteen forty eight. I mean,
in the thirties, everybody was looking at In nineteen forty
on the brink of war, this issue was laid out
pretty clearly to Paramount, because Paramount owned the most theaters
(08:23):
of any studio. But the war came and put everything aside.
So in nineteen forty eight when the consent to Cree
came down, and Paramount was the studio that had to
undergo the case because of their theater ownership was so large.
I mean, obviously nobody liked it. But the war had
brought such boom to the film business. During World War Two,
(08:45):
the business boomed. It made money hand over fists. Everybody
went to the movies and went all the time, and
so when it happened the business was slow to realize
what a difference it was going to be. So at
first it was not so terrible, but then suddenly they
saw the box office going down, down down. The business
(09:09):
died that day in nineteen forty eight when the Supreme
Court made that decision. That is to say, as it existed,
the old studio system died, but nobody knew it was dead.
Speaker 1 (09:20):
And of course television at the same time is taking
steam as a medium.
Speaker 3 (09:25):
And an influx of new foreign films that everybody was trying,
which created new appetites for different kinds of movies. It's
all about adjustment and looking ahead that whole zook or thing.
Keep the production in the distribution going, but look ahead
to what kind of production and what kind of distribution.
(09:46):
And that's really the game. That's the game that Paramount
has played so successfully for so long, and which they're
trying to do again with this new merger. We as
people need storytellers, bland stories. We talk about streaming, we
talk about money, we talk about many many things, but
(10:07):
what it really is about, we need stories.
Speaker 1 (10:10):
Janine, thank you so much. I can't think of a
better note to end on.
Speaker 3 (10:15):
Thank you for having me.
Speaker 1 (10:19):
Now we'll get a critics I view on Paramount and
its influence on the art, science, and commerce of filmmaking.
Variety is fortunate to have not one but two terrific
chief film critics, Peter Debrush and Owen Gliberman, our illustrious
chief film critics. Thank you so much for joining me.
Sure thanks to tinger Well. The subject of the morning
(10:42):
here is Paramount Pictures, one of Hollywood's foundational brands, started
in nineteen twelve, which means it's only a little bit
younger than Variety, which, of course we started in nineteen
oh five. As the folks at Skuydance Media take over
the August part Pictures and the associated assets, I thought
it would be good to talk about Paramount Pictures, the history,
(11:06):
the library that Skydance is now inheriting. Let me ask you, both,
in the different eras that the studio has been around,
what if anything, has defined a Paramount Picture.
Speaker 4 (11:17):
When you think of a Hollywood studio, you probably picture
the arches on Melrose Boulevard in front of their.
Speaker 1 (11:24):
Studio, those ornate iron gates.
Speaker 4 (11:27):
When Owen and I spearheaded Variety's Greatest Films of All
Time list a couple of years ago, we came up
with a ton of Paramount movies. And it turns out
that our number one film, Psycho, was produced by the studio,
you know, when they were working with Hitchcock. We had Psycho,
we had Godfather one and two in the top ten.
You've got a number of Paramount films. You've got Apocalypse now.
(11:50):
Paramount is consistently delivering quality movies as well as sometimes
just understanding what audiences want and giving things that are
populist hits and Peter.
Speaker 1 (12:02):
They famously won the first Oscar for Best Picture back
in nineteen twenty seven.
Speaker 4 (12:06):
That's true for Wings, and they've been consistently featuring into
the Academy Awards ever since, famously winning the most Oscars
for Titanic seventy years after that.
Speaker 1 (12:17):
Ellen, As, we're talking about Paramount. When you think of Paramount,
what are some of the first titles that come to
your mind?
Speaker 5 (12:22):
Well, there are so many. I think Wings points to
the idea that Paramount has always been a studio on
the cutting edge of where Hollywood is going. It was
the studio that invented block booking. It was on the
cutting edge of animation right along with Walt Disney. It
was one of the first studios to have a music
division and television stations. It made the racy movies that
(12:47):
spearheaded the creation of the production code. And then when
Paramount was sold to Gulf and Western in nineteen sixty six,
that was the real launch of the corporate age of Hollywood.
But then, in one of the grandest iron needs in
movie history, Gulf and Western hired Robert Evans to be
head of production, and the new corporate Paramount ended up
(13:10):
ushering in a legendary chapter of the New Hollywood. And
I would say that the time when Paramount most had
a kind of house style, just movies that totally defined
it as a studio, was in the New Hollywood era.
And I would say what that was is if you
think of those great movies that were made under Robert Evans,
(13:30):
Rosemary's Baby in Chinatown, the Two Godfathers, they were kind
of the new Hollywood studio that combined the new sensibility
with this Hollywood classicism.
Speaker 1 (13:41):
Think about Love Story, a classic Hanky Weeper if there
ever was one. My old boss Peter Bart used to
just talk about that thing went out and made money
for years. They captured that magic.
Speaker 5 (13:56):
You felt that Paramount had retained some of that DNA
of the studio system and at the same time and
it probably wouldn't have happened without Robert Evans moved into
this new era that's as close to glory days as
it never had.
Speaker 1 (14:09):
I'm going to throw it. Also one of my all
time favorite movies, Medium Cool, from the late great cinematographer
and director Haskell Wexler. There's just like a document of
the world at that moment when you go back.
Speaker 5 (14:22):
To the old days. When I think of Warner Brothers,
I think of gangster movies. When I think of Universal,
I think of horror. When I think of MGM, I
think of musicals. I don't think the name Paramount quite
conjures the idea of a house style in that way,
but I think it's closest that Paramount came to having
a house style came much later, even after the Robert
(14:43):
Evans period, in the late seventies, when the studios were
less distinctive than they had been. The Paramount became the
laboratory where they invented the high concept film with movies
like Saturday Night Fever, Meatball, The Friday the Thirteenth Series,
the Simp and Bruckheimer films and the Indiana Jones films.
Paramount became associated with very glossy, high powered commercial content.
(15:10):
I personally think the most influential movie of the last
sixty years is Raiders of the Lost Arc That feels
to me like a quintessential escapist Paramount creation. This was
the era of Barry Diller, Michael Eisner, Jeffrey Cassenberg, and
of course Eisner and Katzenberg then took what they learned
at Paramount over to Disney. But Paramount came to represent,
(15:33):
in my book, this kind of product, and in some
ways that quality was inseparable from also some of the
great and defining movies they made in this period, like
An Officer and a Gentleman and Ghost and Forrest Gump.
Speaker 1 (15:46):
As you say, those movies, they just work on so
many levels and so interesting. Owen As all of this
is happening on the film side, the TV side of
the lot is really stepping up, and you have Gary
Marshall inventing television franchises with things like Happy Days. And
then came Laverne and Shirley and Mork and Mindy and
Joni loves Chacci I'm dating myself, and you had two
(16:08):
of my all time television series, Taxi and Cheers.
Speaker 5 (16:12):
That's right, And where I think that's important is that
when we talk about hyper commercial aspect of the Paramount style,
I think the television was part of it. I think
part of what started to happen in certain comedies is
that the DNA of television began to merge with movies
a little bit, and I think Paramount led that Star
Trek is a great example.
Speaker 1 (16:32):
Well, as we said before, it's not every day that
a studio changes hands, and as Paramount goes into the
hands of Skydance Media, David Ellison, Jerry Cardinali at Redbird Capital,
I hope they're listening to this and understand the qualitative
history of this great studio, and certainly they didn't buy
it not to make great movies.
Speaker 5 (16:52):
It's worth remembering that back in the eighties, the age
of Mike Govitz and high concept, which Paramount more or
less paved the way for, and back then griped about
the new studio mentality, which seemed at the time like
a travesty. All these executives caught up in the blockbuster mentality.
They seem to care about nothing but the opening weekend grosses.
(17:12):
The creative mentality of the nineteen seventies seemed to have
gone out the window.
Speaker 1 (17:16):
Right agents driving everything with packages.
Speaker 5 (17:19):
But in hindsight, those eighties executives and the studio like
Paramount now seemed like the high renaissance. They were making
very commercial movies, but in their way, I think Paramount
back then really cared about movies, and you see it
in the movies they made that people are still talking about,
like The Naked Gun or The Firm, or Wayne's World,
(17:40):
or Clueless or the Mission Impossible series. They were making
a lot of terrific movies. So maybe in that sense
we can be optimistic about this merger, that these new executives,
under whatever skydence, Paramount becomes, Oh, they're just gonna care
about content and reduce movies to content. But I'm an optimist,
so I say maybe not. Maybe the new Paramount movies
(18:03):
can be more than just productions by algorithm.
Speaker 4 (18:06):
And if I ran the Zoo. You've seen the Paramount
lately kind of exploiting their catalog and the strength of
so many big brands Indiana Jones, Top Gun, Star Trek.
But let's remember that Paramount created all of those brands,
when they were taking the risks betting on filmmakers like
Francis Ford Coppola. That was the lesson of the Robert
Evans Ero. I'd love to see a return to that
(18:28):
kind of ethos at Paramount in the future.
Speaker 1 (18:31):
Well, I hope David Ellison and Jeff Shell and company
are listening. I suspect they will. Thank you Owen, thank
you Peterson, and now we look to the future of
the business. In a conversation with Robert Fishman, he's a
sharp analyst who covers Paramount Global for the respected independent
research firm Moffat Nathanson. Robert Fishman, senior researcher for Moffatt Nathanson.
(18:55):
Thank you so much for joining me.
Speaker 6 (18:57):
Thanks for having me, Sotha.
Speaker 1 (18:58):
It's not every day that a major Hollywood studio, a
founding Hollywood studio, changes hands, so I appreciate you looking
a little bit ahead. What do you think the first
things that Ellison and his new management team are going
to have to address at the company they just bought.
Speaker 6 (19:14):
I think there's lots of open questions here that remained
to be answered, and really what we're looking for. I
think what Wall Street is looking for is really to
understand or have a better understanding as to the direction
of the company and what do I really mean by that?
It's what is the future of Paramount Plus that that's
probably at the top of the list, but how much
(19:36):
is new management and really going to invest in Paramount
Plus and Streaming going forward? Clearly the old regime, if
you will, has taken this back to break even, so
the losses are gone, But the real question that we
all have is as we look forward, what's the sustainability
of that if they've pulled back on some of the contentvestment.
(20:00):
So I think that's big question number one and the
related question around overall content spending for the company is
two of these critical questions that investors really need to
have a better understanding where the company is going on that.
Speaker 1 (20:15):
From an investor perspective, are you looking for David Ellison
to come out and say we're going to put many
more billions into production or would that give you pause
because that just makes the climbing out that much deeper.
Speaker 6 (20:27):
I think investing many more billions without understanding what the
true payoff is and where the investment is going to go.
So if that's all going to be in streaming, and
taking away from all the linear investment. That's a pivot
that obviously a lot of these media companies have already
started to make, including para Amount. But what I would
(20:48):
say is which categories of spending is really going to
be targeted? So sports is obviously a critical piece to
this overall portfolio. Is the company willing to lean in
to additional sports rights that they think is going to
drive new subscribers to Paramount Plus. That's another very clear
related question, what is going to be the future of
(21:10):
investing in kids content? So you start to go down
the list of where that investment is going and what
the returns are in today's traditional media ecosystem becomes very
different answers than where the company has invested in the past.
Speaker 1 (21:26):
Now it sounds like you're saying that basically all roads
for Paramount Global lead through Paramount Plus, like they really
need to make Paramount Plus a bigger player, or at
the very least shore up the audience that they have.
Speaker 6 (21:40):
I think a big piece of the future of Paramount's
news story will be focused around Paramount Plus. But the
thing that we can't ignore here is still how important
the cash flows are from the traditional cable networks portfolios.
So what the future of that portfolio is going to
be is another critical question that investors need to understand,
(22:02):
especially given what some of the competitors are doing about
spinning out and you know, you've been potentially merging some
of these portfolios. So which direction guideance Paramount tries to
take with its linear networks portfolio is going to be
another critical piece to this puzzle as far as how
(22:22):
investors are going to value this company going forward.
Speaker 1 (22:25):
I've read a lot of analysis from you and others
about that they don't have as much flexibility as NBC
Universal or Warner Brothers Discovery to do that kind of
separation because they are so dependent on the cash flows
from this. Let me ask you also about something that
doesn't get as much attention, but through CBS, Paramount Global
owns twenty eight television stations. What do you think is
(22:46):
the future for those stations.
Speaker 6 (22:49):
It's a really interesting question. I'd say that the future
of their owned and operated TV station portfolio kind of
goes hand in hand with the future of Paramount Plus
and whether or not they want to continue to drive
those linear affiliate few dollars through retrans right that that's
obviously been a key reason for owning that TV station
(23:12):
portfolio looking backwards, and again how sports plays into that,
whether or not they want to use their sports rights
to drive those retrans dollars going forward, And really it
comes also down to the bigger picture on TV stations
and how the new company wants to deal with their
affiliate relationships outside of their owned and operated portfolio. So
(23:34):
I think it is a key question that the new
management team has to give us a better understanding how
they're going to use their linear portfolio and balance that pivot.
Speaker 1 (23:45):
In the lead up to this merger, we've heard a
lot of discussion from David Ellison and Jeff Schell about
the technology capabilities that s Guidance Media that that operation
can bring to Paramount, and they've been pretty candid that
Paramount is behind it larger rivals in this area at
a time when no sizeable media company can afford to
be that much farther behind it's competitors. Is there anything
(24:08):
that you're going to be specifically looking for in these
first few months.
Speaker 6 (24:13):
I think in terms of the investment in this technology capabilities,
that's really the critical question here. I think we would
all agree that traditional media companies need to invest more
and to close that gap versus some of the other
streaming leaders, you know, with Netflix at the top of
the list, So there's clear room for improvement on the
(24:36):
technology capabilities and recommendation engines and streaming back end. But
at the same time, what will that take in terms
of the investment and how can they do that efficiently? Well,
still again investing in content and investing in the overall business.
So it's going to be that continued balancing act of
(24:57):
investing in streaming. But where the dollars come coming from.
If they're coming from linear, that does obviously make sense
given the pressures of that ecosystem. If they're incremental spend
over and above what our current expectations are, then it's
just something that we need to get a better handle
on to understand what the trajectory of the cash flow
(25:18):
is going to be for the future of this company.
Speaker 1 (25:20):
Robert, my last question for you, Skuidance Media, Redbird Capital.
Do you get the sense that they are going to
be in the market for more assets, looking for things
that they can bolt on in the rehabilitation of paramount.
Speaker 6 (25:33):
Really, that's the ultimate question that you're leaving us with.
To me, the answer is clearly they have to digest
what they just finally acquired first. But I think the
best answer I can give you sitting here today is
I have a hard time believing that this is it,
And I think there's other meaningful combinations out there from
(25:56):
some of the peer companies that are also looking to
do transformational m and A and figuring out what is
the right assets to keep and what's the right assets
to sell off. So I think, you know, cable networks,
potential streaming combinations, joint ventures, or even full scale m
and A is going to be a lot of how
(26:18):
this sector plays out over the coming years.
Speaker 1 (26:21):
There will certainly be no shortage of things to watch. Robert,
thank you so much for helping us sort through what
we need to be focusing on here and in your term.
Appreciate it.
Speaker 2 (26:29):
Thank you.
Speaker 1 (26:32):
Listeners, Thank you for going with me on this journey
through past, present and a glimpse of Paramount's future. The
industry we love has been through hard times of late,
but the Paramount story reminds us that hard times don't
last forever and change is the only constant. As we
close out today's episode, I'm thinking about my late colleague
(26:53):
High Hollinger. I had the pleasure of working with High
in the early two thousands. He was a sharp editor
who knew every everything there was to know about the
international film business, and in his earliest days in Hollywood,
High worked as an assistant AKA and office boy for
Adolph Zukor. I loved hearing High's stories of how the
(27:14):
diminutive Zukor was a demanding boss to say the least,
and all these years later, I still love the fact
that I worked with someone who worked with one of
the undisputed og founders of Hollywood. Thanks for listening. The
soundtrack for this episode includes music from the nineteen thirty
three May West smash I'm No Angel, as well as
(27:38):
the special theme music written for Paramounts one hundredth anniversary
and the theme from the studio's hit TV series Yellowstone.
This episode was written and reported by me Cynthia Littleton,
with contributions from Janine Baisinger, Peter de Bruges, Owen Gleiberman,
Robert Fishman, and Clayton Davis. That was Clayton you heard
(27:59):
reading the vin to Variety report. Stick snickt hick picks.
Please leave us a review at the podcast platform of
your choice, and please tune in Monday for another episode
of Daily Variety.
Welcome to Daily Variety, your daily dose of news and
analysis for entertainment industry insiders. It's Thursday, August seventh, twenty
twenty five. I'm your host, Cynthia Littleton. I am co
editor in chief of Variety alongside Ramin Setuda. Today we're
taking a departure from the usual format for Daily Variety.
This episode is devoted to the house that Adolph Zukor built,
(00:26):
Paramount Pictures. It's one of the foundational brands of Hollywood,
and today it is formally changing hands. Skydance Media has
closed its eight billion dollar acquisition of Paramount Global. So
here we take a long look back at the history
and legacy of the Melrose Avenue studio, and we also
look to the future, to the challenges and opportunities that
(00:49):
lay ahead for the new regime led by CEO David
Ellison and President Jeff Schell. To help put it all
in perspective, we'll speak first with respected Hollywood has history
in Jeanine Bassinger. She talks about what made Paramount unique
at its founding in nineteen twelve and what has allowed
it to endure for more than a century. Then we'll
(01:11):
talk to Peter de Bruges and Owen Gleiberman, Variety's chief
film critics. They give us a qualitative take on the
riches stored in Paramount's vaults, and we finish out with
a discussion with media analyst Robert Fishman, senior researcher for
Moffatt Nathanson. He offers thoughts on the business speed bumps
ahead and what Wall Street wants to see from the
(01:33):
new owners. As Janine Bassinger explains, Paramount Pictures from the
very start was built to produce and distribute movies at scale.
Variety had been in business for about seven years when
Adolf Zuker's Famous Players Film Banner joined forces with producers
Jesse Laski, Cecil B. De Mille, and others to create
(01:54):
a film factory. The first significant story in Variety about
Paramount was public on June twenty sixth, nineteen fourteen. It
has great detail of Zuker's vision for how his fledgling
studio would operate. He referred to it as the Paramount
in those days. It's amazing how much of what he
(02:14):
had to say back then is still relevant today. Here's
a bite from that report.
Speaker 2 (02:19):
The underlying principle no doubt of the Paramount formation is
the feature film business in its present unsettled state must
be guarded against, and the Paramount is aimed to become
a permanent agency that, when its advantages are made apparent
to the picture trade, will be recognized as the proper
way to handle output, in contrast to the fly by
(02:43):
night filmmaker who puts a little money into a picture
and wants a great deal back, or those feature manufacturers
who must have money quickly and will distribute their film
regardless to obtain it.
Speaker 1 (02:58):
Now we'll hear from Hollywood historian Janine Bassinger. She is
the Corwin Fuller Professor of Film Studies Amerita at Wesleyan University.
She sets the scene for us of Paramount's early years
and on up through the momentous nineteen forty eight antitrust
decision that forced Paramount and other studios to divest from
(03:19):
their theater chains. She also explains how May West saved
the studio from bankruptcy in the depths of the depression.
Janine Bassinger, thank you for joining me today. I appreciate
you helping me put the storied history of Paramount Pictures
into perspective.
Speaker 3 (03:35):
Absolutely my pleasure and you couldn't have a better example
to use than Paramount Pictures to depict the history of Hollywood.
The great thing about Paramount was which is now the
second oldest studio in the United States after Universal Pictures,
is that it founded and grounded itself from the beginning
(03:59):
and the understanding you're going to have to look after production,
you're going to have to look after distribution, and you're
going to have to have somebody looking ahead to get
a plan for the changes that were going to come.
And Adolf Zukor, the guy that founded the real Paramount
Pictures with somebody doing those three things very carefully, and
(04:23):
he was the look ahead idea guy. And the sense
of buying their own movie theaters and that kind of
thing was just very smart.
Speaker 1 (04:32):
So, okay, Adolf Zukor nineteen twelve, what was the catalyst
for him and his key partners Jesse Laski and Cecil B.
Speaker 4 (04:40):
De Mill.
Speaker 1 (04:40):
What was the spark to put the stick in the
ground and say we're launching a studio.
Speaker 3 (04:45):
It all started with a merger, which is really Hollywood.
They understood that the elements that they were going to
need really to make it work. You couldn't just be
making great movies. You had to have a way to
get them out that was great to your public in
small towns and everywhere, and you had to have somebody
(05:07):
looking out for what you were going to need as
a business. For Zukor, he thought it was about stars.
Zukor understood that selling the stars their names and making
them what the audience wanted would be a secret of success.
That logo that they have, the original wonderful logo, had
(05:29):
twenty four stars around the mountain, one for each of
the stars that Zukor had cleverly signed up and had
under contract. Paramount meant to you movie stars like Being
Crosby and Bob Hope and Paula Goddard and Veronica Lake
and Marlena Dietrich. And in the thirties it had meant sophistication,
(05:54):
foreign kind of attitude. Everybody said, if you went to Paramount,
you went into the common It was like you've gone
to a foreign country, where are so many different languages
being spoken.
Speaker 1 (06:06):
So many great European actors, for obvious reasons, headed across
the Atlantic and found a good trade here in the
United States.
Speaker 3 (06:14):
They gathered there and they made a slightly more sophisticated
form of storytelling, often set in Paris instead of Peoria,
and women wearing furs and good cloth coats and that
kind of thing. And when they had financial trouble, they
(06:34):
found May West. She saved them from bankruptcy.
Speaker 1 (06:38):
She'd been doing her very risk shows on stage, and
they poureded that over to movies.
Speaker 3 (06:44):
They went into receivership, and they declared bankruptcy in nineteen
thirty three. But then they came bouncing back from that
really largely through having May West. Zouk Or understood you
have to be looking at what do you not have.
You don't have May West, you need block booking. If
(07:04):
you have block booking, if you have a star that
they want, then they got to buy the other stars
material too. So these business practices that were so smart
and that define the studio system and then ultimately kill
the studios.
Speaker 1 (07:20):
It's the central concept of leverage. You have something they want,
they'll have to take these eight others and therefore scale.
There's so much we could talk about, but certainly foundational
to the Paramount story is the nineteen forty eight antitrust decision.
The federal government came in and basically broke up the
(07:40):
vertical integration of the day, which was the studios that
owned theaters in major cities, and the federal government said
to Hollywood, that's just too much power. So Paramount, Warner Brothers, MGM,
they all had to divest themselves of their theaters from
your research and your studies. What was that moment like
(08:00):
for Paramount and for Hollywood.
Speaker 3 (08:02):
First of all, the threat from the government about monopoly
was around quite a bit before nineteen forty eight. I mean,
in the thirties, everybody was looking at In nineteen forty
on the brink of war, this issue was laid out
pretty clearly to Paramount, because Paramount owned the most theaters
(08:23):
of any studio. But the war came and put everything aside.
So in nineteen forty eight when the consent to Cree
came down, and Paramount was the studio that had to
undergo the case because of their theater ownership was so large.
I mean, obviously nobody liked it. But the war had
brought such boom to the film business. During World War Two,
(08:45):
the business boomed. It made money hand over fists. Everybody
went to the movies and went all the time, and
so when it happened the business was slow to realize
what a difference it was going to be. So at
first it was not so terrible, but then suddenly they
saw the box office going down, down down. The business
(09:09):
died that day in nineteen forty eight when the Supreme
Court made that decision. That is to say, as it existed,
the old studio system died, but nobody knew it was dead.
Speaker 1 (09:20):
And of course television at the same time is taking
steam as a medium.
Speaker 3 (09:25):
And an influx of new foreign films that everybody was trying,
which created new appetites for different kinds of movies. It's
all about adjustment and looking ahead that whole zook or thing.
Keep the production in the distribution going, but look ahead
to what kind of production and what kind of distribution.
(09:46):
And that's really the game. That's the game that Paramount
has played so successfully for so long, and which they're
trying to do again with this new merger. We as
people need storytellers, bland stories. We talk about streaming, we
talk about money, we talk about many many things, but
(10:07):
what it really is about, we need stories.
Speaker 1 (10:10):
Janine, thank you so much. I can't think of a
better note to end on.
Speaker 3 (10:15):
Thank you for having me.
Speaker 1 (10:19):
Now we'll get a critics I view on Paramount and
its influence on the art, science, and commerce of filmmaking.
Variety is fortunate to have not one but two terrific
chief film critics, Peter Debrush and Owen Gliberman, our illustrious
chief film critics. Thank you so much for joining me.
Sure thanks to tinger Well. The subject of the morning
(10:42):
here is Paramount Pictures, one of Hollywood's foundational brands, started
in nineteen twelve, which means it's only a little bit
younger than Variety, which, of course we started in nineteen
oh five. As the folks at Skuydance Media take over
the August part Pictures and the associated assets, I thought
it would be good to talk about Paramount Pictures, the history,
(11:06):
the library that Skydance is now inheriting. Let me ask you, both,
in the different eras that the studio has been around,
what if anything, has defined a Paramount Picture.
Speaker 4 (11:17):
When you think of a Hollywood studio, you probably picture
the arches on Melrose Boulevard in front of their.
Speaker 1 (11:24):
Studio, those ornate iron gates.
Speaker 4 (11:27):
When Owen and I spearheaded Variety's Greatest Films of All
Time list a couple of years ago, we came up
with a ton of Paramount movies. And it turns out
that our number one film, Psycho, was produced by the studio,
you know, when they were working with Hitchcock. We had Psycho,
we had Godfather one and two in the top ten.
You've got a number of Paramount films. You've got Apocalypse now.
(11:50):
Paramount is consistently delivering quality movies as well as sometimes
just understanding what audiences want and giving things that are
populist hits and Peter.
Speaker 1 (12:02):
They famously won the first Oscar for Best Picture back
in nineteen twenty seven.
Speaker 4 (12:06):
That's true for Wings, and they've been consistently featuring into
the Academy Awards ever since, famously winning the most Oscars
for Titanic seventy years after that.
Speaker 1 (12:17):
Ellen, As, we're talking about Paramount. When you think of Paramount,
what are some of the first titles that come to
your mind?
Speaker 5 (12:22):
Well, there are so many. I think Wings points to
the idea that Paramount has always been a studio on
the cutting edge of where Hollywood is going. It was
the studio that invented block booking. It was on the
cutting edge of animation right along with Walt Disney. It
was one of the first studios to have a music
division and television stations. It made the racy movies that
(12:47):
spearheaded the creation of the production code. And then when
Paramount was sold to Gulf and Western in nineteen sixty six,
that was the real launch of the corporate age of Hollywood.
But then, in one of the grandest iron needs in
movie history, Gulf and Western hired Robert Evans to be
head of production, and the new corporate Paramount ended up
(13:10):
ushering in a legendary chapter of the New Hollywood. And
I would say that the time when Paramount most had
a kind of house style, just movies that totally defined
it as a studio, was in the New Hollywood era.
And I would say what that was is if you
think of those great movies that were made under Robert Evans,
(13:30):
Rosemary's Baby in Chinatown, the Two Godfathers, they were kind
of the new Hollywood studio that combined the new sensibility
with this Hollywood classicism.
Speaker 1 (13:41):
Think about Love Story, a classic Hanky Weeper if there
ever was one. My old boss Peter Bart used to
just talk about that thing went out and made money
for years. They captured that magic.
Speaker 5 (13:56):
You felt that Paramount had retained some of that DNA
of the studio system and at the same time and
it probably wouldn't have happened without Robert Evans moved into
this new era that's as close to glory days as
it never had.
Speaker 1 (14:09):
I'm going to throw it. Also one of my all
time favorite movies, Medium Cool, from the late great cinematographer
and director Haskell Wexler. There's just like a document of
the world at that moment when you go back.
Speaker 5 (14:22):
To the old days. When I think of Warner Brothers,
I think of gangster movies. When I think of Universal,
I think of horror. When I think of MGM, I
think of musicals. I don't think the name Paramount quite
conjures the idea of a house style in that way,
but I think it's closest that Paramount came to having
a house style came much later, even after the Robert
(14:43):
Evans period, in the late seventies, when the studios were
less distinctive than they had been. The Paramount became the
laboratory where they invented the high concept film with movies
like Saturday Night Fever, Meatball, The Friday the Thirteenth Series,
the Simp and Bruckheimer films and the Indiana Jones films.
Paramount became associated with very glossy, high powered commercial content.
(15:10):
I personally think the most influential movie of the last
sixty years is Raiders of the Lost Arc That feels
to me like a quintessential escapist Paramount creation. This was
the era of Barry Diller, Michael Eisner, Jeffrey Cassenberg, and
of course Eisner and Katzenberg then took what they learned
at Paramount over to Disney. But Paramount came to represent,
(15:33):
in my book, this kind of product, and in some
ways that quality was inseparable from also some of the
great and defining movies they made in this period, like
An Officer and a Gentleman and Ghost and Forrest Gump.
Speaker 1 (15:46):
As you say, those movies, they just work on so
many levels and so interesting. Owen As all of this
is happening on the film side, the TV side of
the lot is really stepping up, and you have Gary
Marshall inventing television franchises with things like Happy Days. And
then came Laverne and Shirley and Mork and Mindy and
Joni loves Chacci I'm dating myself, and you had two
(16:08):
of my all time television series, Taxi and Cheers.
Speaker 5 (16:12):
That's right, And where I think that's important is that
when we talk about hyper commercial aspect of the Paramount style,
I think the television was part of it. I think
part of what started to happen in certain comedies is
that the DNA of television began to merge with movies
a little bit, and I think Paramount led that Star
Trek is a great example.
Speaker 1 (16:32):
Well, as we said before, it's not every day that
a studio changes hands, and as Paramount goes into the
hands of Skydance Media, David Ellison, Jerry Cardinali at Redbird Capital,
I hope they're listening to this and understand the qualitative
history of this great studio, and certainly they didn't buy
it not to make great movies.
Speaker 5 (16:52):
It's worth remembering that back in the eighties, the age
of Mike Govitz and high concept, which Paramount more or
less paved the way for, and back then griped about
the new studio mentality, which seemed at the time like
a travesty. All these executives caught up in the blockbuster mentality.
They seem to care about nothing but the opening weekend grosses.
(17:12):
The creative mentality of the nineteen seventies seemed to have
gone out the window.
Speaker 1 (17:16):
Right agents driving everything with packages.
Speaker 5 (17:19):
But in hindsight, those eighties executives and the studio like
Paramount now seemed like the high renaissance. They were making
very commercial movies, but in their way, I think Paramount
back then really cared about movies, and you see it
in the movies they made that people are still talking about,
like The Naked Gun or The Firm, or Wayne's World,
(17:40):
or Clueless or the Mission Impossible series. They were making
a lot of terrific movies. So maybe in that sense
we can be optimistic about this merger, that these new executives,
under whatever skydence, Paramount becomes, Oh, they're just gonna care
about content and reduce movies to content. But I'm an optimist,
so I say maybe not. Maybe the new Paramount movies
(18:03):
can be more than just productions by algorithm.
Speaker 4 (18:06):
And if I ran the Zoo. You've seen the Paramount
lately kind of exploiting their catalog and the strength of
so many big brands Indiana Jones, Top Gun, Star Trek.
But let's remember that Paramount created all of those brands,
when they were taking the risks betting on filmmakers like
Francis Ford Coppola. That was the lesson of the Robert
Evans Ero. I'd love to see a return to that
(18:28):
kind of ethos at Paramount in the future.
Speaker 1 (18:31):
Well, I hope David Ellison and Jeff Shell and company
are listening. I suspect they will. Thank you Owen, thank
you Peterson, and now we look to the future of
the business. In a conversation with Robert Fishman, he's a
sharp analyst who covers Paramount Global for the respected independent
research firm Moffat Nathanson. Robert Fishman, senior researcher for Moffatt Nathanson.
(18:55):
Thank you so much for joining me.
Speaker 6 (18:57):
Thanks for having me, Sotha.
Speaker 1 (18:58):
It's not every day that a major Hollywood studio, a
founding Hollywood studio, changes hands, so I appreciate you looking
a little bit ahead. What do you think the first
things that Ellison and his new management team are going
to have to address at the company they just bought.
Speaker 6 (19:14):
I think there's lots of open questions here that remained
to be answered, and really what we're looking for. I
think what Wall Street is looking for is really to
understand or have a better understanding as to the direction
of the company and what do I really mean by that?
It's what is the future of Paramount Plus that that's
probably at the top of the list, but how much
(19:36):
is new management and really going to invest in Paramount
Plus and Streaming going forward? Clearly the old regime, if
you will, has taken this back to break even, so
the losses are gone, But the real question that we
all have is as we look forward, what's the sustainability
of that if they've pulled back on some of the contentvestment.
(20:00):
So I think that's big question number one and the
related question around overall content spending for the company is
two of these critical questions that investors really need to
have a better understanding where the company is going on that.
Speaker 1 (20:15):
From an investor perspective, are you looking for David Ellison
to come out and say we're going to put many
more billions into production or would that give you pause
because that just makes the climbing out that much deeper.
Speaker 6 (20:27):
I think investing many more billions without understanding what the
true payoff is and where the investment is going to go.
So if that's all going to be in streaming, and
taking away from all the linear investment. That's a pivot
that obviously a lot of these media companies have already
started to make, including para Amount. But what I would
(20:48):
say is which categories of spending is really going to
be targeted? So sports is obviously a critical piece to
this overall portfolio. Is the company willing to lean in
to additional sports rights that they think is going to
drive new subscribers to Paramount Plus. That's another very clear
related question, what is going to be the future of
(21:10):
investing in kids content? So you start to go down
the list of where that investment is going and what
the returns are in today's traditional media ecosystem becomes very
different answers than where the company has invested in the past.
Speaker 1 (21:26):
Now it sounds like you're saying that basically all roads
for Paramount Global lead through Paramount Plus, like they really
need to make Paramount Plus a bigger player, or at
the very least shore up the audience that they have.
Speaker 6 (21:40):
I think a big piece of the future of Paramount's
news story will be focused around Paramount Plus. But the
thing that we can't ignore here is still how important
the cash flows are from the traditional cable networks portfolios.
So what the future of that portfolio is going to
be is another critical question that investors need to understand,
(22:02):
especially given what some of the competitors are doing about
spinning out and you know, you've been potentially merging some
of these portfolios. So which direction guideance Paramount tries to
take with its linear networks portfolio is going to be
another critical piece to this puzzle as far as how
(22:22):
investors are going to value this company going forward.
Speaker 1 (22:25):
I've read a lot of analysis from you and others
about that they don't have as much flexibility as NBC
Universal or Warner Brothers Discovery to do that kind of
separation because they are so dependent on the cash flows
from this. Let me ask you also about something that
doesn't get as much attention, but through CBS, Paramount Global
owns twenty eight television stations. What do you think is
(22:46):
the future for those stations.
Speaker 6 (22:49):
It's a really interesting question. I'd say that the future
of their owned and operated TV station portfolio kind of
goes hand in hand with the future of Paramount Plus
and whether or not they want to continue to drive
those linear affiliate few dollars through retrans right that that's
obviously been a key reason for owning that TV station
(23:12):
portfolio looking backwards, and again how sports plays into that,
whether or not they want to use their sports rights
to drive those retrans dollars going forward, And really it
comes also down to the bigger picture on TV stations
and how the new company wants to deal with their
affiliate relationships outside of their owned and operated portfolio. So
(23:34):
I think it is a key question that the new
management team has to give us a better understanding how
they're going to use their linear portfolio and balance that pivot.
Speaker 1 (23:45):
In the lead up to this merger, we've heard a
lot of discussion from David Ellison and Jeff Schell about
the technology capabilities that s Guidance Media that that operation
can bring to Paramount, and they've been pretty candid that
Paramount is behind it larger rivals in this area at
a time when no sizeable media company can afford to
be that much farther behind it's competitors. Is there anything
(24:08):
that you're going to be specifically looking for in these
first few months.
Speaker 6 (24:13):
I think in terms of the investment in this technology capabilities,
that's really the critical question here. I think we would
all agree that traditional media companies need to invest more
and to close that gap versus some of the other
streaming leaders, you know, with Netflix at the top of
the list, So there's clear room for improvement on the
(24:36):
technology capabilities and recommendation engines and streaming back end. But
at the same time, what will that take in terms
of the investment and how can they do that efficiently? Well,
still again investing in content and investing in the overall business.
So it's going to be that continued balancing act of
(24:57):
investing in streaming. But where the dollars come coming from.
If they're coming from linear, that does obviously make sense
given the pressures of that ecosystem. If they're incremental spend
over and above what our current expectations are, then it's
just something that we need to get a better handle
on to understand what the trajectory of the cash flow
(25:18):
is going to be for the future of this company.
Speaker 1 (25:20):
Robert, my last question for you, Skuidance Media, Redbird Capital.
Do you get the sense that they are going to
be in the market for more assets, looking for things
that they can bolt on in the rehabilitation of paramount.
Speaker 6 (25:33):
Really, that's the ultimate question that you're leaving us with.
To me, the answer is clearly they have to digest
what they just finally acquired first. But I think the
best answer I can give you sitting here today is
I have a hard time believing that this is it,
And I think there's other meaningful combinations out there from
(25:56):
some of the peer companies that are also looking to
do transformational m and A and figuring out what is
the right assets to keep and what's the right assets
to sell off. So I think, you know, cable networks,
potential streaming combinations, joint ventures, or even full scale m
and A is going to be a lot of how
(26:18):
this sector plays out over the coming years.
Speaker 1 (26:21):
There will certainly be no shortage of things to watch. Robert,
thank you so much for helping us sort through what
we need to be focusing on here and in your term.
Appreciate it.
Speaker 2 (26:29):
Thank you.
Speaker 1 (26:32):
Listeners, Thank you for going with me on this journey
through past, present and a glimpse of Paramount's future. The
industry we love has been through hard times of late,
but the Paramount story reminds us that hard times don't
last forever and change is the only constant. As we
close out today's episode, I'm thinking about my late colleague
(26:53):
High Hollinger. I had the pleasure of working with High
in the early two thousands. He was a sharp editor
who knew every everything there was to know about the
international film business, and in his earliest days in Hollywood,
High worked as an assistant AKA and office boy for
Adolph Zukor. I loved hearing High's stories of how the
(27:14):
diminutive Zukor was a demanding boss to say the least,
and all these years later, I still love the fact
that I worked with someone who worked with one of
the undisputed og founders of Hollywood. Thanks for listening. The
soundtrack for this episode includes music from the nineteen thirty
three May West smash I'm No Angel, as well as
(27:38):
the special theme music written for Paramounts one hundredth anniversary
and the theme from the studio's hit TV series Yellowstone.
This episode was written and reported by me Cynthia Littleton,
with contributions from Janine Baisinger, Peter de Bruges, Owen Gleiberman,
Robert Fishman, and Clayton Davis. That was Clayton you heard
(27:59):
reading the vin to Variety report. Stick snickt hick picks.
Please leave us a review at the podcast platform of
your choice, and please tune in Monday for another episode
of Daily Variety.
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