Byline: By richard siklos section: Section C; Column 5; Business/Financial Desk; Pg. 1 Length
PERSON: KEITH RUPERT MURDOCH (92%); RICHARD BRANSON (93%) Richard Branson; Rupert Murdoch; Eric Pfanner GEOGRAPHIC
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PERSON: KEITH RUPERT MURDOCH (92%); RICHARD BRANSON (93%) Richard Branson; Rupert Murdoch; Eric Pfanner GEOGRAPHIC: LONDON, ENGLAND (73%) UNITED KINGDOM (93%); UNITED STATES (93%); ENGLAND (73%) Great Britain LOAD-DATE: March 5, 2007 LANGUAGE: ENGLISH GRAPHIC: Photos: Richard Branson, left, has a large stake in the cable provider Virgin Media Rupert Murdoch controls British Sky Broadcasting. (Photo by Rick Maiman/Bloomberg News) (Photo by Christopher Furlong/Getty Images)
Copyright 2007 The New York Times Company 1063 of 1258 DOCUMENTS The New York Times
Late Edition - Final Girl Scout Cookies SECTION: Section A; Column 6; Editorial Desk; Pg. 18 LENGTH: 195 words To the Editor: Re ''In a Fat Nation, Are Thin Mints on Thin Ice?,'' by Peter Applebome (Our Towns column, Feb. 21): The essence of the Girl Scouts is a 90-year tradition that empowers young women to practice leadership skills, self-reliance, community service, respect for self and others and entrepreneurship. A campaign to discourage people from buying Girl Scout cookies would cripple our ability to serve the girls who need us most. Without revenue from the cookie sale, we could not provide Girl Scouting to our more than 21,000 girls ages 5 to 17 every year in New York City. In the five boroughs, 67 percent of our members come from low-income homes. More than 1,200 of our members are in Housing Authority projects. We have a troop in a homeless shelter. Girl Scouts of the U.S.A. has eliminated trans fats from Girl Scout cookies. The Girl Scout Council of Greater New York applauds this achievement and believes that all snacks -- even our favorite Girl Scout cookies, available only once a year -- should be eaten in moderation as part of a healthy diet.Carmen DubrocPresident, Board of DirectorsGirl Scout Councilof Greater New York New York, Feb. 22, 2007
Copyright 2007 The New York Times Company 1064 of 1258 DOCUMENTS The New York Times
Late Edition - Final What Starbucks Can Learn From the Movie Palace BYLINE: By RANDALL STROSS. Randall Stross is an author based in Silicon Valley and a professor of business at San Jose State University. E-mail: stross@nytimes.com. SECTION: Section 3; Column 1; Money and Business/Financial Desk; DIGITAL DOMAIN; Pg. 3 LENGTH: 1441 words WI-FI service is quickly becoming the air-conditioning of the Internet age, enticing customers into restaurants and other public spaces in the same way that cold ''advertising air'' deliberately blasted out the open doors of air-conditioned theaters in the early 20th century to help sell tickets. Today, hotspots are the new cold spots. Starbucks became the most visible Wi-Fi-equipped national chain when it began offering the service in 2002. Now, at more than 5,100 stores, Starbucks offers Internet access ''from the comfort of your favorite cozy chair.'' Before you pop open your laptop, however, you need to pull out your credit card. Starbucks and its partner, T-Mobile, charge $6 an hour for the ''pay as you go'' plan. Day passes or monthly subscriptions are available but can be used only at Starbucks stores and other T-Mobile partners like Borders bookstores. McDonald's offers Wi-Fi in more than 8,000 of its 13,700 stores in the United States, giving it wider reach than even Starbucks, and it also charges for access. McDonald's doesn't charge as much: it asks $2.95 for two hours. You can't apply your T-Mobile subscription there, however, because McDonald's works with other partners. Metering and charging for a service, of course, is the prerogative of any business owner in a free market. One will always find entrepreneurs willing to try new ways to profit by erecting tollbooths in front of facilities that had been freely accessible. In the past, this took the form of coin-operated locks on bathroom stalls. (You may have first encountered these at a moment when you were least ready to praise the inventor's ingenuity.) Today, the outer frontier of pricing innovation can be found at the Dallas-Fort Worth International Airport, where some electrical outlets are accompanied by a small sign: ''To Activate Pay $2 at Kiosk.'' This is an experimental service, ''Power Up My Portable,'' which provides chairs and outlets for laptops; $2 buys 20 minutes of juice. But what about the many other wall outlets scattered around the terminals and originally installed for vacuum cleaners? Zenola Campbell, the airport vice president who oversees concessions, demurred last week when asked whether travelers could always count on having free access to those outlets. ''I can't tell you where we're going to be in the future,'' she said. When Starbucks and McDonald's decided to exact a toll from their customers as they set up their in-store Wi-Fi networks, they created a confusion of conflicting signals: how welcome can one feel when staring at a meter that is running? The restaurants' predecessors, the movie theater owners of almost a century ago, understood that not every amenity, every service, every offering must have a separate price tag attached. The owners and the architects sought to give theatergoers an environment that was pleasing in all aspects. Marcus Loew, the head of a nationwide chain, once said, ''We sell tickets to theaters, not movies.'' Panera Bread, which has more than 900 Wi-Fi-equipped sandwich and bakery stores, has set itself apart from its contemporaries by upholding the old-fashioned spirit of those bygone theater owners who never stinted in their efforts to make public space inviting. The grand movie palaces did not have to show the revenue-enhancing potential of an ornamental gold cornice or plaster pilaster. So, too, at Panera Bread, where its fireplaces do not have to demonstrate a monetary payback to justify their place in the stores. Neither does Wi-Fi. Neil Yanofsky, Panera's president, said that no cost accounting had been done on its service, which is free. The rationale relates to ambience: ''We want our customers to stay and linger.'' A Panera cafe does half of its business at lunchtime -- there is little lingering then. But before and after the lunch rush, the restaurant addresses what it refers to internally as ''the chill-out business,'' which constitutes a not-insignificant 15 to 20 percent of its revenue. Panera has no interest in rushing these customers out -- the longer they stay, the greater the likelihood that resistance to the aroma of freshly baked muffins will crumble. Free, unmetered Wi-Fi is one way the restaurant sends an unambiguous signal: Stay as long as you like. Of course, Mr. Yanofsky is the first to point out that he is in a position to be much more welcoming than the competition across the street at Starbucks. The average Panera store has 120 seats and does about two and a half times as much business as the average Starbucks store. Mr. Yanofsky said he could not see why Starbucks, given its more limited seating, would drop access charges so that it could match Panera's Wi-Fi offering. ''Why make it free?'' he said. ''They're already full.'' Each Panera cafe averages 220 connect hours a week; Starbucks and McDonald's declined to provide similar information about the use of their services. In the 1920s, when air-conditioning began to be installed in movie theaters, owners had to spend a sizable sum -- $50,000 (roughly equivalent to $570,000 today) -- to transform the property into a ''cold spot.'' But it was worth it. Before the ''refrigeratory process'' came along, theaters could not draw customers during the summer because of the unbearable heat in confined space. With air-conditioning, patronage increased so sharply that even the largest investments were quickly repaid. Wi-Fi does not address a similar problem of seasonal attendance. Nor will it produce a multifold increase in patronage. But, then again, it's not nearly as costly to introduce as the cooling plants of the 1920s. The access charges assessed at Starbucks and McDonald's suggest that behind the scenes, their service providers have had to make huge infrastructure investments and carry burdensome operational costs. But if the stores already have business-class broadband connections for their own operations, the addition of a Wi-Fi access point is trivial. Schlotzsky's Deli, which offers free Wi-Fi in 82 of its restaurants, uses Internet connections that were already in place, just as Panera Bread did. And Val King, Schlotzsky's director of information technology, said the technical demands of remotely overseeing a wireless network were minimal. ''It doesn't take rocket science to run these things,'' he said. Customers need feel no shame, however, if they need help configuring their laptops, and sandwich makers and baristas are not necessarily the ones who can solve their technical problems quickly. A Starbucks spokeswoman, Sonja Gould, explained that her company's Wi-Fi customers receive, in exchange for their access fees, ''excellent customer service help from T-Mobile.'' It should be added that businesses offering free Wi-Fi also contract with tech-support companies to help customers. One such company, HotPoint Wireless, says its network now handles five times as many sessions originating from businesses offering free access as those that charge fees. Getting connected is one thing, but keeping one's e-mail private is another. Wi-Fi signals, by their nature, are notoriously susceptible to electronic eavesdropping. Wi-Fi services you pay for are no better protected than free services. As T-Mobile informs customers on its support Web page, all wireless service is ''inherently insecure.'' Its recommendation should be heeded by users of Wi-Fi hotspots everywhere: use a virtual private network, which provides secure industrial-strength encryption. If your employer does not provide a V.P.N. server, consider using a commercial service, like JiWire, which charges $30 a year for a V.P.N., personal firewall and other services, including a hotspot directory that can be used offline. STARBUCKS, which has rolled out a plenitude of stores, follows the same design concept that is behind the modern multiplex: for interior space, small is beautiful. It's unfortunate that the grand architecture of early movie theaters no longer exists to put today's microscale retail architecture to shame. Gail Cooper, a professor of history at Lehigh University who has written about the introduction of air-conditioning, said: ''In the movie palaces, one-third of the space was devoted to the lobby so people could come and 'promenade' -- today we would say 'hang out.' Welcome was built into the space, and air-conditioning was one part.'' The movie palaces are long gone, and so, too, is the novelty of air-conditioning. We now step into public space less to be chilled than to chill. The palace's spiritual successor is the cafe that sends out a welcoming blast of free, unlimited Wi-Fi. URL: http://www.nytimes.com SUBJECT: WIRELESS INTERNET ACCESS (90%); RESTAURANTS (90%); INTERNET & WWW (78%); ENTREPRENEURSHIP (73%); BOOKSTORES (71%); LAPTOP COMPUTERS (89%); AIRPORTS (66%) Restaurants; Computers and the Internet; Prices (Fares, Fees and Rates); Motion Pictures; Theaters (Buildings); Air Conditioning COMPANY: STARBUCKS CORP (93%); BORDERS GROUP INC (69%) ORGANIZATION: Starbucks Corp; Mcdonald's Corp TICKER: STB (LSE) (93%); SBUX (NASDAQ) (93%); BGP (NYSE) (69%) INDUSTRY: NAICS722213 SNACK AND NONALCOHOLIC BEVERAGE BARS (93%); SIC5812 EATING PLACES (93%); NAICS722213 SNACK & NONALCOHOLIC BEVERAGE BARS (93%); NAICS451211 BOOK STORES (69%); SIC5942 BOOK STORES (69%) PERSON: ANN LIVERMORE (51%); MICHAEL MCMAHON (51%) Randall Stross GEOGRAPHIC: DALLAS, TX, USA (79%) TEXAS, USA (79%) UNITED STATES (79%) LOAD-DATE: March 4, 2007 LANGUAGE: ENGLISH GRAPHIC: Drawing (Drawing by James Yang) PUBLICATION-TYPE: Newspaper Copyright 2007 The New York Times Company 1065 of 1258 DOCUMENTS The New York Times
Correction Appended Late Edition - Final
Some things never change. Asked how United Artists' early revenues compare with what it takes in today, Harry E. Sloan, chief executive of the studio's parent company, MGM, replies: ''We don't have any yet. It's all cost.'' If Mr. Sloan has his way, however, that will soon change. Last November, he signed the latest set of United Artists contracts with yet another Hollywood heavyweight determined to chart his own financial and creative course: Tom Cruise. Mr. Cruise and his business partner, the veteran film producer Paula Wagner, have signed on to run United Artists with what insiders describe as a relatively free hand for a term of at least five years. In exchange, MGM has granted the pair about a one-third stake in the dormant studio without asking them to invest a penny in it. Ms. Wagner is the chief executive of UA -- as the studio is commonly known -- while Mr. Cruise bears no official title except, perhaps, the world's most famous movie star. Unlike Ms. Wagner, Mr. Cruise does not draw a salary from UA, according to a person with direct knowledge of the arrangement. The idea is that his ownership stake alone will align the interests of Tom Cruise the actor with Tom Cruise the studio grandee. ''I can't put a number on it yet,'' says Bert Fields, the Hollywood rainmaker and lawyer who represents Mr. Cruise and Ms. Wagner. ''I will tell you this: If their pictures succeed, it will be worth a very large amount.'' Still, in a town awash in news releases written in magic ink on fairy parchment, Hollywood does not know exactly what to make of the idea of Cruise-as-mogul -- or, for that matter, how exactly the fast-moving Mr. Sloan plans to deploy UA and the deep pockets of private equity investors to yank MGM back from the brink of obscurity. Moreover, Mr. Cruise stands at the end of a long line of creative potentates in Hollywood, including Burt Lancaster, Paul Newman, Barbra Streisand, Sidney Poitier, Steve McQueen and Steven Spielberg, who have tried to follow the original Chaplin-Fairbanks-Pickford blueprint by overseeing their own mini-studios. All of them experienced mixed results as they ran up against the brutal economics of a hit-and-miss industry in which independents often lack the size needed to overcome the financial vagaries of filmmaking. Though the relationship between studios and stars has grown ever more tangled in modern Hollywood, one thing has stayed the same: what many stars most covet -- along with fame and fortune -- is creative autonomy from their corporate overlords. For actors like Brad Pitt, Reese Witherspoon, Tom Hanks and Leonardo DiCaprio, that has meant deals as independent producers that give them a stronger hand in developing their pet projects and bestow production fees and credits on them. Until last year, the gold standard of such deals was an arrangement between Cruise/Wagner Productions and Paramount, the studio where Mr. Cruise, 44, had starred in many of his biggest pictures. But that relationship vaporized in a mushroom cloud last August, after what many critics called Mr. Cruise's erratic behavior during his promotional tour for the spy thriller ''Mission: Impossible III.'' Sumner M. Redstone, the chairman of Viacom, Paramount's owner, contended that he had fired Mr. Cruise for ''inappropriate'' behavior that had hurt his studio's bottom line. Mr. Cruise's defenders accused Mr. Redstone of grandstanding and said that, actually, both sides had already been planning to part amicably. Regardless, the media firestorm and scrutiny of Mr. Cruise's career and conduct only intensified when, two months later, Mr. Cruise and Ms. Wagner landed at United Artists, which through different owners has hewed in varying degrees to its founding ideals of artistic hegemony. The producer Jerry Bruckheimer, who worked with Mr. Cruise early in his career on the film ''Top Gun,'' said that the news of the move ''kind of shocked Hollywood.'' Mr. Bruckheimer added: ''You have a star and his producing partner actually running a studio. That hasn't happened in I don't know how many years.'' BEFORE it became part of MGM in 1981, United Artists spawned the ''James Bond,'' ''Pink Panther'' and ''Rocky'' franchises and, during one prolific run in the 1970s, won three consecutive best-picture Oscars for ''One Flew Over the Cuckoo's Nest,'' ''Rocky'' and ''Annie Hall.'' A promotional reel that Mr. Sloan shows investors in MGM's penthouse screening room makes plain that many of the best-known titles in the current MGM film library -- from ''The Apartment'' to ''West Side Story'' -- were United Artists releases. The lore is not lost on Mr. Cruise. At a recent party, Peter Bart, the editor in chief of Variety, greeted Mr. Cruise and mentioned that for a two-year period in the 1980s he, too, had been a senior executive at United Artists. ''I know,'' Mr. Cruise replied instantly, and proceeded to list all the movies made under Mr. Bart's tenure, Mr. Bart recalled in an interview. Discussing their fledgling plans to revive one of the more storied names in filmdom -- and considering the maelstrom in which the whole idea was hatched -- United Artists' new chieftains acknowledge in interviews that they have stitched together their business plan on the fly because, they say, they are in a hurry and have a lot to prove. As a result, UA in its new incarnation is a basket of contradictions and question marks: it's a filmmaking enterprise ultimately owned by a studio, MGM, that had only recently vowed to get out of that line of work to focus on the less risky and more predictable -- albeit far less sexy -- business of marketing and distribution. Moreover, it's a small studio co-managed by one of the world's ultimate ''big movie'' movie stars. ''UA is in the shadows here,'' Ms. Wagner insists. At the new studio, she adds, ''It's the film that's the star.'' Everyone involved cautions that it is still early and that the studio's course is not fully set; its first production, a political thriller called ''Lambs for Lions,'' directed by Robert Redford and starring Mr. Redford, Mr. Cruise and Meryl Streep, is being shot now and is scheduled for a November release. If all goes as planned, United Artists will announce as soon as this week a debt financing of $400 million to $500 million to finance its first slate of pictures, backing that includes $100 million from MGM itself. Beyond saying that the plan is to live up to the United Artists legacy of making talent feel like partners rather than employees, and a goal of releasing four to six films a year distributed by MGM, Ms. Wagner says that little else is set in stone. ''There are no absolutes,'' she says over brunch at the Polo Lounge in the Beverly Hills Hotel. ''Under no circumstances am I making any proclamations or declarations -- we're new; we're 100 days here.'' Ms. Wagner carries herself with the poise of someone who once worked as a theater actress and a talent agent before becoming Mr. Cruise's collaborator and the public face of his entrepreneurial and filmmaking ambitions. Mr. Cruise declined to be interviewed for this article, because, Ms. Wagner says, he prefers that she speak publicly about their mutual business interests. As far as those first 100 days go, Ms. Wagner says their new company is on track: it is hiring new employees, has ''Lambs for Lions'' under way, has just optioned a hot book, ''The Birthday Party'' by Stanley N. Alpert, and is taking meetings and pitches all over town. The plan is to make films of varying budgets and genres. But anything that is projected to cost more than about $60 million needs a green light from MGM. Mr. Cruise is not obligated to appear in any UA films, though the incentive of owning a large chunk of the print, as well as the bragging rights and perquisites that entails, is meant to be a strong motivator for him to ply his ''day job -- or night job,'' as Ms. Wagner puts it, at UA. In the case of ''Lions for Lambs,'' MGM is providing the film's $35 million budget. Mr. Cruise, Mr. Redford and Ms. Streep have all deferred their usual upfront fees or percentages of gross revenue in exchange for cumulatively splitting half of the film's profit with UA. Ms. Wagner would not discuss the numbers, joking that she ''never discusses her budgets or her age.'' But she said that the structure was typical of how she envisions UA: as a trusted partner rather than as a big studio with arcane accounting that prompts agents to insist that their most bankable clients are paid up front. Of course, Ms. Wagner is now something of an expert in the perks and pitfalls of life at a big studio. All she needs to do is flash back to last fall, to the Cruise/Wagner Productions offices on the Paramount lot. Cruise/Wagner was initially fueled by the adrenalin of Mr. Cruise's star power in the early 1990s, when he anchored hits like ''A Few Good Men,'' ''The Firm'' and ''Days of Thunder.'' Over nearly 15 years, Cruise/Wagner produced 13 films, aided in the latter years by a plush overhead deal from Paramount in which Paramount provided office space and underwrote their projects in exchange for a first crack at bringing them to the screen. The result of that collaboration was films approaching a gross of $3 billion at the box office, with Cruise/Wagner having particular success in shepherding the lucrative ''Mission: Impossible'' franchise to the big screen for Paramount. But last year Viacom was in transition, and the studio's new overseers, the Paramount chief executive, Brad Grey and the Viacom chief, Tom Freston -- like other Hollywood chieftains -- believed that they were spending too much money on too many co-producers. Where Cruise/Wagner was concerned, they reasoned that the studio could just as easily work out a deal with Mr. Cruise to shoot another ''Mission: Impossible'' installment by hiring him and Ms. Wagner as producers, without subsidizing their company. What's more, Cruise/Wagner's track record was strong with films starring Mr. Cruise, but those that did not feature the actor -- pictures like ''The Others,'' ''Elizabethtown,'' ''Shattered Glass'' and ''Narc'' -- had ''mixed'' commercial success, according to an executive with knowledge of the discussions. ''Any producer who makes more than one or two films in their lifetime -- with the exception perhaps of Tom Cruise -- has a 'mixed' thing,'' Ms. Wagner says when asked if that was a fair assessment of her partnership with Mr. Cruise. Viacom declined to comment. As the mood in Hollywood changed and Paramount offered a greatly reduced production deal, Ms. Wagner says that she and Mr. Cruise decided that it was time for a change. Following the lead of other successful producers like Ivan Reitman and Joel Silver, they wanted to tap into the new Wall Street and hedge fund money flowing into Hollywood. Under these new business arrangements, big-name producers can control nearly every aspect of filmmaking -- even the most exalted perk, the ability to greenlight a picture. Big studios remain crucial to a film's success under this new model, but largely as marketers and distributors. ONE Wednesday morning last August, Mr. Redstone, in an interview that appeared on the front page of The Wall Street Journal, announced that he had fired Mr. Cruise. Mr. Cruise's antics, Mr. Redstone contended, had cost him money. Indeed, while ''Mission: Impossible III'' grossed close to $134 million at the box office domestically, it fell $81 million shy of the previous installment. And the roughly $70 million that Mr. Cruise took home as his share of the film's worldwide receipts meant that he probably earned more than Paramount did on the picture, said an executive with direct knowledge of the film's financial results. Ms. Wagner and Viacom would not confirm that calculation. Mr. Redstone's comments came in the wake of Mr. Cruise's statements about his faith in Scientology, his public declarations of love for his girlfriend -- and now wife -- Katie Holmes, and his crusade against prescription antidepressants. Ms. Wagner bristles when she recalls the episode. ''Tom Cruise, in 10 months, for Paramount Pictures, generated just under $1 billion,'' she says, referring to the box office take of his last two films, ''Mission: Impossible III'' and ''War of the Worlds.'' Mr. Cruise's so-called firing was extraordinary in Hollywood -- and nothing personal, Mr. Redstone has said in subsequent interviews. Mr. Cruise's camp says that his contract had merely expired and that he was already planning to move on. That issue aside, the incident raised a salient question in filmdom: had the pay for talent grown out of kilter with the financial realities of the marketplace? In the uncertain days that followed, Cruise/Wagner announced a deal to develop films for a company backed by Daniel Snyder, the investor who owns the Washington Redskins, but it was hardly the big move that showed the world that they were unfazed. Friends of Mr. Cruise, meanwhile, advised him to focus less on his production business and more on picking smart follow-ups to ''Mission: Impossible III'' so he could put the bad publicity behind him. FOR Harry Sloan, meanwhile, the raging headlines about Mr. Cruise gave him a flash of inspiration. After taking charge of MGM in 2005 at the behest of its main investors, Providence Equity Partners and Thomas H. Lee Partners, Mr. Sloan set out to revive the company, which also counts Sony and Comcast as investors. The private equity firms had initially backed the Sony Corporation's $5 billion takeover of MGM from the investor Kirk Kerkorian in 2004, with the strategy that MGM would be largely shuttered and its 4,000-film library fed through the distribution pipeline of Sony Pictures. But the investors, unhappy with MGM's performance under the Sony strategy, changed course after a year and installed Mr. Sloan, an MGM director, as the studio's chief executive. Mr. Sloan, an entertainment lawyer turned entrepreneur, founded SBS Broadcasting in Europe in the early 1990s and sold it three years ago for $2.6 billion. The venture made him a tidy fortune, an undisclosed portion of which he has reinvested in MGM. In addition to moving the distribution of MGM's home video business to 20th Century Fox, Mr. Sloan wanted to shore up MGM's own television channels around the world by cutting deals with various small and independent producers. Mr. Sloan, who once served as chairman of Lion's Gate Entertainment, also wanted to revive MGM's movie-making capabilities, but without the expense of layers of creative executives and producers. In an interview, Mr. Sloan estimated that big studios spent as much as $100 million apiece annually on films that are never released, and he called Hollywood's film development deals ''an enormous welfare project'' for writers, agents and producers. Mr. Sloan considered selling the UA brand name because it was doing nothing more for MGM than gathering dust in a closet. But when he saw Mr. Cruise's broad smile flashed across the evening news during the Paramount dust-up, he decided to give him and Ms. Wagner the UA shingle to hang. ''You can't lose,'' Mr. Sloan says of the deal with Mr. Cruise and Ms. Wagner. ''There are plenty of things I'm doing that have plenty of risk and downside. This is not one of them.'' So while the news media buzzed with speculation about whether Mr. Cruise's career would be dented or even destroyed, Harry Sloan placed calls to Mr. Fields, the lawyer. He also phoned Mr. Cruise's longtime representatives at Creative Artists Agency, whose co-chairman, Rick Nicita, is Ms. Wagner's husband. (Ms. Wagner herself had been Mr. Cruise's agent at the firm before becoming his production partner.) Knowing that Mr. Cruise and Ms. Wagner would need to exit the Paramount lot in a hurry, Mr. Sloan offered them office space on the 11th floor of the MGM tower. Over the next two months, the three conducted a series of private meetings at Mr. Sloan's office and home that involved contingents of lawyers and agents. What emerged was what Ms. Wagner describes as a hybrid between a studio and a production company. Rather than the overhead deal they had at Paramount, Mr. Sloan proposed establishing an autonomous studio within a larger studio -- a structure akin to the relationship that Mr. Spielberg's studio, DreamWorks, now has with Paramount, but with real ownership attached. ''We all answer to somebody about something,'' Ms. Wagner says. ''It's really the number of people you answer to. In this structure, Tom and I really answer to ourselves.'' According to people involved in the talks, the question of whether Mr. Cruise, whom Mr. Sloan did not know previously, was past his prime or a loose cannon came up, particularly among MGM's private equity investors. But Mr. Sloan concluded that Mr. Cruise was still a bankable star and filmmaker. Kelvin L. Davis, a partner at Texas Pacific who serves on MGM's executive committee, said he came away from his initial meeting with Mr. Cruise impressed by his business acumen and his curiosity about the financial goals of his prospective backers. ''One of the things Tom said to me that impressed me early on,'' Mr. Davis said, ''was that he thought his artistic performance, his acting abilities, were best displayed when he felt a real sense of partnership with those who he was doing business with.'' After weeks of preliminary negotiations, Mr. Cruise met with Mr. Sloan in his office for the first time last October. During a meeting that lasted four hours, Mr. Cruise did not jump off the bronze sofa he was sitting on. Rather, he listened intently as Mr. Sloan proposed giving UA some of MGM's franchise films to produce and suggested that its first project be the next ''Terminator.'' Mr. Sloan recalls that Mr. Cruise responded, ''Let's not do something derivative'' for a first film. ''Let's do something original.'' Since then, a partnership has been struck and Mr. Sloan has been to Mr. Cruise's gala wedding in Italy. Mr. Sloan says he is convinced that Mr. Cruise has both the movie-making ability and the work ethic to make a success of UA. ''He is driven, professional and a total perfectionist,'' Mr. Sloan says. ''I thought he was me in a lot of ways.'' Mr. Sloan calls his venture with Mr. Cruise an ''interesting experiment'' that he might extend to other dormant MGM brands like Orion Pictures. He also says that other artists could unite with Mr. Cruise and Ms. Wagner as equity owners of UA. ONE of the lingering questions about UA is how well Ms. Wagner will fare in putting out four to six films a year, when she and Mr. Cruise previously averaged just one movie a year as producers aligned with Paramount. It is also unclear how Mr. Cruise will manage his loyalties and time among the many professional roles he juggles both inside and outside of UA. Last month, for instance, the Hollywood trades reported that he plans to make a comedy with Ben Stiller as the co-star at 20th Century Fox. Mr. Cruise isn't saying. But the answer to questions about his commitment may lie in another meeting he and Ms. Wagner held in Mr. Sloan's office just a few days before the deal was announced last November. The centerpiece of the meeting was a four-hour pow-wow with Jonathan M. Nelson, the chief executive of Providence Equity, whose 29 percent stake in MGM makes it the studio's single largest shareholder. According to two people who would not agree to be named because it was a private meeting, Mr. Nelson was there to scope out Mr. Cruise's intentions for UA before signing off on the deal. At the meeting, Mr. Nelson declined an invitation to read the script for ''Lions for Lambs,'' these people said. But he was reassured by other things he saw. Like Mr. Sloan, Mr. Nelson was impressed by Mr. Cruise's sense of purpose and the fact that the star had never responded publicly to Mr. Redstone's lambasting. Instead, it became clear that Mr. Cruise had chosen a different way to fire back at the Viacom chairman: he was determined to let his results be his revenge. Directory: ~hesterj -> Entrepreneur Entrepreneur -> Byline: By armand limnande section: Section mm; Column 0; T: Men's Fashion Magazine; Pg. 76 Length Download 4.36 Mb. Share with your friends:
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