Actor and film producer Tom Cruise has quickly found funding for his production company, which Paramount Pictures jettisoned last week.
Heralding the start of an unusual entrepreneurial relationship, Tom Cruise and his producing partner said Monday they have joined forces with a new investment partnership that will fund the duo’s production endeavors for the next two years.
The announcement comes less than a week after Viacom Inc. and its Paramount Pictures unit publicly revealed they had ended negotiations to renew the studio’s 14-year deal with Cruise/Wagner Prods., which Cruise runs with Paula Wagner.
In comments unprecedented for their bluntness, Viacom chairman Sumner Redstone said last Tuesday that Cruise had committed "creative suicide." Wagner quickly countered that C/W was not planning to renew anyway, and planned to seek other options, including a deal with hedge funds to provide about $100 million in financing.
The company will produce a variety of types of films, some starring Cruise. The option for a long-term arrangement will be settled after the two-year contract is concluded.
The Reuters report points out that the agreement sets up a new model for actors’ production companies in light of recent changes in Hollywood’s economic situation, and that it shows a strong belief in the viability of Cruise’s company:
The deal represents a potential new model for financing stars’ production companies, particularly if studios continue to pull back from backing deluxe production deals. Sources at CAA said they know of no other outside investment partnership that has taken a similar interest in a star’s company.
Despite Redstone’s tart comments, this was an inevitability. Cruise’s well-publicized missteps in recent years have not changed the fact that his movies make loads of money. And a relatively brief, two-year commitment with an option for long-term renewal protects the investors. It makes good sense for all parties concerned.