Paramount shrinks in post-DreamWorks era

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Looking to cut overhead and operating expenses in a world without DreamWorks, Paramount Pictures plans to release fewer films, consolidate some operations and slash the remaining DreamWorks staff by some 25 employees. Paramount is under heightened pressure from its corporate parent, Viacom Inc., to continue finding efficiencies at the studio amid a tough economic climate.

‘We want to be as profitable as we can and meet the Viacom financial targets,’ said Paramount Chairman Brad Grey, who said streamlining the DreamWorks operation will save the studio $50 million in overhead.

This summer, Paramount eliminated about $10 million in costs at its specialty film unit Paramount Vantage by laying off dozens of employees and combining the unit’s marketing, distribution and physical production divisions with the bigger studio.

Now that Paramount’s separation agreement from DreamWorks principals Steven Spielberg and Stacey Snider has been completed, Grey and his vice chairman, Rob Moore, said they could begin implementing their long-contemplated plans to downsize the remaining DreamWorks operation and integrate some of its heretofore separate functions.

Just as it did with Vantage, Paramount will take over the physical production, business affairs and other operating functions that previously were handled separately by DreamWorks. DreamWorks will continue to maintain its own creative staff under Production President Adam Goodman, but it will be dramatically smaller than the 150 employees it had for the past three years under Spielberg and Snider.

Spielberg and Snider have told Paramount that they plan to eventually take about 100 employees with them to their new studio, which has financial backing from India’s Reliance ADA Group and has a new distribution pact with Universal Pictures.

‘About 25 people will end up with jobs and another 25 will other jobs or get laid off,’ said Moore.

Goodman will oversee the existing pipeline of about 100 active DreamWorks projects and producer deals, as well as work on developing new projects for Paramount. Paramount has the option to co-finance and co-distribute 35 of DreamWorks’ current projects with Spielberg’s new studio.

Meanwhile, Paramount’s current production president, Brad Weston, will continue supervising the studio’s creative staff, talent deals and the development of new projects.

Without DreamWorks contribution of four to six movies a year, Paramount will pare down its annual releases to about 20. One dozen will be produced by Paramount and its MTV Films and Nickelodeon Movies labels. Paramount Vantage will supply up to four movies, with a new strategy to make and acquire movies of all genres costing under $15 million. An additional two to four releases will be produced by DreamWorks Animation and Marvel Studios, both of which have long-term distribution deals with Paramount.

-- Claudia Eller