Poor Tom Cruise.

He probably never guessed that his relationship with Viacom would end poorly. Unfortunately, it was all too predictable.

You probably think I’m going to call Cruise a closet homosexual placenta-eating Scientology freak. Actually, no. Tom Cruise is one of the biggest Hollywood moneymakers of all time. And having made $2.7 billion (gross) for the studios, he evidently decided that it was time to strike out on his own, becoming his own production house, using the studios for distribution only. Edward Jay Epstein sums up Tom Cruise’s business acumen in a good article in Slate:

Paramount, despite its bluster, needs Tom Cruise, who stands—along with George Lucas, Steven Spielberg, and Jerry Bruckheimer—as one of the handful of producers who can reliably deliver a billion-dollar franchise—and, without one, Paramount’s fortunes are dismal. So, while Cruise, for better or worse, emerges as one of the most powerful—and richest—forces in Hollywood, the media remain totally fixated on the fact that he’s a Scientologist and the anachronistic notion that he is fabricating his love life, like Gene Kelly in Singin’ in the Rain, just to get publicity for himself and to fool the press.

Right. What Tom evidently didn’t believe was that in separating with Viacom, that they would be the ones who would be spreading those smears. But honestly, he should have known.

Viacom is owned by a man named Sumner Redstone. He has a LONG history of shitting all over people who do good work for him. First there was Frank Biondi. Biondi was the chief executive who built Viacom for its owner, Sumner Redstone. And then, just as Redstone was entering his seventies, just as Wall Street wanted to know about succession planning, for Biondi to take Redstone’s place as chairman, Redstone fired him.

Next there was the loss of Mel Karmazin. Karmazin came in with the CBS buyout, and has been generally regarded as something of a genius in the broadcasting business. Mel left Viacom to work for Sirius after Howard Stern announced he was leaving for Sirius. And of course with respect to Stern, who can forget his bitter breakup with Viacom, resulting in a lawsuit against the radio host.

I think there’s a central strain that’s missing with respect to all the news stories about all of this. Namely, that Viacom has trouble retaining talent. Whether it be managerial talent, or entertainment talent. And they handle their breakups badly. Who, after the firing of Frank Biondi, would really want to take the helm of Viacom reporting to Sumner Redstone? Who would want to be a major name talent in the Viacom empire after witnessing how money machines Cruise and Stern were treated?

In my experience, corporate culture problems stem directly from the top. In this case, it’s Sumner Redstone, who whatever he may have once been, is today an old coot who dyes his hair like a Hamas terrorist dyes his beard. If I were a Viacom shareholder, I would be worried. Viacom should have looked to Cruise and Stern, both proven money makers, as alumni, and positioned Viacom as first-in-line should either star need them again in the future. Now they’re last in line. Nice work.

I’d short Viacom. They’re in desperate need of good management.

The WSJ has an article on the matter here, though it takes more of a pro-Sumner Redstone stance.

This entry was posted on Thursday, August 24th, 2006 at 11:15 am and is filed under News & Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.