The deal to put Cruise and his producing partner, Paula Wagner, in charge of United Artists was announced Thursday by MGM.
"The truth is that the name United Artists has been relatively meaningless for decades. It's just been a corporate name with no vestige of its original significance," said critic and film historian Leonard Maltin. "Tom Cruise is one of the most powerful stars in the world. He's making the same move that his forebears did 85 years ago."
United Artists was founded in 1919 by Charlie Chaplin, Mary Pickford, D.W. Griffith and Douglas Fairbanks.
Under the deal, Wagner will be chief executive and Cruise will have full control over United Artists' film slate, expected to be about four films a year, according to MGM. They will be part-owners of United Artists, able to make anything from $100 million action flicks to lower-budget films, with Cruise free to pick and choose among films at rival studios.
Wagner said she views it as an "opportunity to take a brand that is classic and bring it into the present. It has such an illustrious past, we have a tradition to respect and uphold and at the same time help and nurture this brand to evolve into something for the future."
Cruise and Wagner were cut loose from a 14-year producing deal with Paramount in August. Sumner Redstone, chairman of Paramount's parent company, Viacom Inc., had blamed Cruise's odd antics over his romance with Katie Holmes (jumping on Oprah's couch, for example) and his Scientology preaching for undermining box-office returns on the actor's summer release, "Mission: Impossible III."
United Artists' early releases included Chaplin's 1920s and '30s classics "The Gold Rush," "City Lights" and "Modern Times"; Griffith's 1924 epic "America"; Fairbanks' 1920s action adventures "The Three Musketeers" and "Robin Hood"; and 1929's "Coquette," which earned Pickford the best-actress Academy Award.
"These were the box-office titans of their day, giving the public what they wanted in terms of the huge popcorn pictures but also being able to express their artistic side and get movies made that mattered historically," said Tom O'Neil, a columnist for the awards Web site theenvelope.com.
The last United Artists movie Cruise appeared in, 1988's "Rain Man," won Oscars for best picture, co-star Dustin Hoffman and director Barry Levinson. Cruise was not nominated.
The "Rain Man" era was something of a last hurrah for United Artists, which had a stream of hits, classics and Oscar winners behind it, including "Some Like It Hot," "Rocky" and "Annie Hall."
The studio operated as an artist-centered company in the decades after its founders' heyday, with United Artists' releases including a long string of James Bond movies starting with 1962's "Dr. No." The United Artists logo will appear before the latest Bond film, this month's "Casino Royale," though the franchise now is in the hands of a consortium that bought MGM in 2004, including Sony Corp. and Comcast Corp.
MGM acquired the company in 1981, a year after United Artists was driven to the financial brink with one of the costliest flops ever, "Heaven's Gate." From 1967 until then, United Artists had been owned by Transamerica.
For a few years before MGM was bought out, United Artists had been relegated to art-house duty, releasing small in-house productions and low-budget film acquisitions. It had some solid successes with such critical favorites as Michael Moore's Oscar-winning documentary "Bowling for Columbine," the African drama "Hotel Rwanda," the foreign-language Oscar winner "No Man's Land" and the quirky comedy "Ghost World."
Rick Sands, MGM's chief operating officer, said he is unconcerned that Cruise's public behavior might affect United Artists.
"We believe Tom is a terrific creative force," Sands said. "If you look at his track record, he's generated huge box office, and we believe the relationship of being a partner is different from a studio-actor relationship."
Earlier this week, Redstone fired more harsh words at Cruise.
"He was embarrassing the studio. And he was costing us a lot of money," Redstone says in the December issue of Vanity Fair, the New York Post reported on Tuesday.
Redstone says his wife's opinion of Cruise played a part in his decision not to renew Paramount's deal with Cruise's production company, Cruise/Wagner Productions, the newspaper reports.
"Paula, like women everywhere, had come to hate him. The truth of the matter is, I did listen to her ..." Redstone says. "His behavior was entirely unacceptable to Paula and to the rest of the world. He just didn't turn one (woman) off. He turned off all women, and a lot of men."
Back in August, Redstone said Cruise's wild behavior, such as jumping on Oprah Winfrey's couch as he proclaimed his love for Holmes and stepping up his advocacy of Scientology, was "creative suicide."
"When did I decide (to fire him)? I don't know. When he was on the 'Today' show? When he was jumping on a couch at 'Oprah'? He changed his handler, you know, to his sister (LeAnne Devette) — not a good idea," Redstone says.