Cruise Fate A Hollywood Harbinger?

Big name breakups are common in Hollywood. But the split between Tom Cruise and Paramount Pictures, a former corporate partner of CBS, is still the talk of the town.

Some movie people think it could affect the balance between stars and studios for years to come.

John Horn, who is covering the story for the Los Angeles Times, told co-anchor Julie Chen on The Early Show Friday: "People are falling into two distinct camps. People who are writing checks are siding with Sumner (Redstone, chairman of Paramount's parent company, Viacom) and people who are cashing checks are siding with Tom Cruise. So, the people who are employing actors think it's good news. People who are agents and actors, themselves, are a little bit worried."

Should they be?

"I think you would have to be a little bit worried," he said. "The real issue is what's called contingent or gross compensation. When an actor makes a movie, they're not just paid an upfront salary. They get a percentage of the film's box office returns.

2"The issue with Paramount was that it was losing money while still paying Tom Cruise big profit checks. In the case of 'Mission: Impossible,' the studio said it made $10 or $15 million on a movie, while Cruise made somewhere between $80 and $90 million because of his contingent or gross compensation.

"Actors, agents have fallen in love with this kind of deal and I think the studios are now pushing back. And I think you can see the studios try to make fewer deals giving such a huge share of profits to their actors before they have broken even."Disney, for instance, did that with "Pirates of the Caribbean" and "Pearl Harbor," and Sony has done it with a Cameron Diaz movie, "Holiday."

"What the studios are saying now," Horn continued, "is, 'We want to recoup our investment before we start paying our actors profit participation. And I think that will be the wave of the future.

"The other wave of the future is overall deals, where actors get $10 million, as Mr. Cruise did, to just sit around the lot and develop projects, are going to be going away very fast."

Redstone, says Horn, did what every studio would like to do to help reign in the cost of expensive actors and, "In his era, actors will go where good material is, so it's not really required that you have an overall deal with an actor.

3"I think what he did that was noteworthy was that he did it in such a public manner, that he said that Cruise's public behavior was costing Paramount money. Generally, the way these things are handled, there's some sort of polite press release where everybody wishes everybody well and you part ways. I think what made this story exceptional is how brutally honest Redstone was in speaking to the Wall Street Journal about why he was going to get rid of Cruise's deal."

Cruise is represented by Creative Artists Agency, one of the most powerful agencies in the business. Chen asked whether CAA was likely to stop doing business with Paramount because of what happened and hold back some of their other big-named stars.

"I think not," Horn responded. "I think there's two different stories. One is the fact that Paramount got rid of Tom Cruise and didn't want to renew his deal. The second is the way in which it was handled. I think any agent would be upset over how it was handled. CAA, because it represents Mr. Cruise, was obviously very upset over how this news was delivered.

"But there are only a handful of employers in Hollywood and, for CAA to say it's not going to do business with Paramount would cut out about 20 percent of the work in town. I don't imagine that's going to happen. I think they're probably angry. But, I think once they come back to the ground, they'll go back and work there."