Right now, Paramount Pictures needs Tom Cruise. The Viacom-owned studio is dangerously low on the film industry’s most-coveted commodity: profitable franchises. Their list of controlled properties includes two recently failed franchise re-boots (Jack Ryan, Terminator), a couple of franchises stuck in development hell (Beverly Hills Cop, G.I. Joe, Tomb Raider) and a pair of modestly budgeted comedies (Zoolander, Anchorman). That really leaves them with just Star Trek, Teenage Mutant Ninja Turtles, Transformers and Mission Impossible as significant players moving forward, but almost all of them have question marks.
Mission Impossible is unquestionably solid, though. With the one-two punch of Ghost Protocol in 2011 and Rogue Nation in theaters now, the franchise is trending upwards, both in box office returns and critical acclaim. Paramount essentially has its own Fast & Furious now, i.e., a franchise finally hitting its creative and financial stride right after most observers had given up on it. It’s one of Paramount’s few sure things.
It’s quite the turnaround for Tom Cruise, who also produces all of the Mission Impossible movies, working hard to get all of them done on time and on-budget. Back in 2006, Paramount wanted out of the Tom Cruise business. The man with the dazzling smile and infectious laugh had, through a rash of public relations disasters in 2005, turned into the man with the insane smile and laugh which lasted just a bit longer than it should. We want to like our movie stars, and it had always been easy to ignore Cruise’s Scientology associations. However, now here he was refusing to shut up about it and picking fights with Matt Lauer and Brooke Shields for seemingly no good reason, and threatening Comedy Central if they reran South Park’s “Trapped in the Closet” episode.
So, Viacom chairman Sumner Redstone canceled Paramount’s 14-year-relationship with Cruise’s production company, Cruise/Wagner, and told The Wall Street Journal (via CNN), “As much as we like him personally, we thought it was wrong to renew his deal. His recent conduct has not been acceptable to Paramount.”
To some degree, Cruise has yet to fully recover. Outside of the Mission Impossible movies, his films don’t make the kind of money they used to, and studios are left wondering whether or not intended-franchise starters like Edge of Tomorrow and Jack Reacher made enough to justify sequels, regardless of how well they did internationally. However, a lot has changed in movies since 2006, particularly once Iron Man came out in 2008. Cruise’s ever so slightly faded star might be attributable to changing viewer habits as much as the fallout from his Scientology meltdown. Things could be shifting again since the growing backlash against the CGI spectacle of comic book movies makes Cruise’s brand of practical but insane stunts seem more like the work of an actual superhero than anything The Avengers have green-screened into existence (though now there’s a backlash against the CGI backlash).
But Cruise’s “recent conduct” is not really why Paramount cut ties with the biggest movie star in the world in ’06. Not according to economist Jay Epstein. No, what really ended that relationship is that Cruise out-negotiated Paramount:
When Paramount decided to reinvent its TV series Mission: Impossible as a movie, Cruise not only starred in it, but he (along with partner Paula Wagner) produced it. In return for deferring his salary, he negotiated a deal for himself almost without parallel in Hollywood. To begin with, he got 22 percent of the gross revenues received by the studio on the theatrical release and the television licensing.
Nobody in Hollywood ever really gets “gross revenue” because the studio accountants funnel the money through various entities to work around any gross revenue obligations. Well, Cruise wouldn’t stand for that.
He insisted on—and received—”100 percent accounting,” which means that the studio, after deducting the out-of-pocket manufacturing and distribution expenses, paid Cruise his 22 percent share of the total receipts. As a result, Cruise earned more than $70 million on Mission: Impossible, and he opened the door for stars to become full partners with the studio in the so-called back-end.
For Mission Impossible 2, Cruise’s cut of the theatrical gross increased to 30% and he also got 12% of the total video/DVD receipts with no expenses deducted by Paramount.
If Mission: Impossible sold $320 million worth of DVDs and videos (which it did), Cruise’s cut would be $38.4 million. In return for this amazing deal, Cruise agreed to pay the only other gross participant, the director John Woo, out of his share. As with Mission: Impossible, Cruise’s company produced the film, and Cruise, who proved to be a relentlessly focused producer, brought Mission: Impossible II in on budget. The movie went on to be an even bigger success than the original, earning more than a half-billion dollars at the box office and selling over 20 million DVDs. Cruise’s share amounted to $92 million—and he was now the key element in Paramount’s most profitable franchise.
Cruise got the same deal for Mission Impossible 3 with Paramount giving him $1.80 per every DVD sold (assuming the DVD retailed for $15). Better yet, Cruise was the only gross participant on the movie meaning he didn’t have to pay anyone their share like he did with John Woo on MI:2. Unfortunately, Mission Impossible 3 ended up costing $180 million to make, and grossed considerably less than MI:2, just $397 million worldwide. Still, Cruise had his lucrative contract, and in the end Sumner Redstone realized Cruise was now making more from the Mission Impossible franchise than Paramount. The fact that he was also undergoing a public relations meltdown which hurt the studio’s MI3 promotions made the decision to part ways that much easier.
And then a couple of years later Cruise disappeared under prosthetics and make-up in Tropic Thunder and forced us to love him again, moving away from PR disasters to the point that not even Alex Gibney’s damning documentary Going Clear is sticking to Cruise on the promotional tour for Rogue Nation. Now, we just want to see what crazy stunt Cruise will do next, and Paramount probably misses the days when DVD sales used to be so important. There were plans to use Mission Impossible: Ghost Protocol as a means of handing the franchise off to Jeremy Renner. Yeah, that didn’t happen (nor did that really work out for Renner with The Bourne Legacy). Now, nearly 40 percent of the North American audience said they turned out for Rogue Nation this weekend just to see Tom Cruise, an insane number for any actor in a big movie these days. Those type of numbers are surely very acceptable to Paramount now.