LOS ANGELES • Viacom has turned to one of Hollywood's most seasoned and respected executives, Mr James N. Gianopulos, to revive its faded Paramount Pictures operation. But some analysts worry that Paramount is too far gone.
Mr Gianopulos, who turns 65 next month, will take over as chairman of Paramount on April 3, Viacom said on Monday. Mr Gianopulos, the consummate Hollywood insider who is treasurer of the Academy of Motion Picture Arts and Sciences, previously ran 20th Century Fox.
Viacom is counting on him to bring immediate stability to Paramount, which has been in free-fall. The studio, which lost US$445 million (S$620 million) in its last fiscal year, found modest Oscar-season hits in Fences and Arrival. But it has mostly become a bomb factory, releasing last year unpopular films such as Silence, Allied, Ben-Hur, Zoolander 2 and Monster Trucks.
Paramount's previous chairman, Mr Brad Grey, was ousted last month.
Viacom is also betting that Mr Gianopulos has something to prove. Fox edged him aside as chairman last year, deciding to bring in Ms Stacey Snider, who is younger and whom Fox saw as having stronger creative instincts.
Since then, Mr Gianopulos has been eager to rewrite his Hollywood ending. But any turnaround at Paramount is years away under the best of circumstances.
In recent history, rarely has a major movie studio been in such shambles. Among other problems, Paramount has suffered from years of severe underinvestment by Viacom and its absentee owner, the ailing Sumner M. Redstone. Missed opportunities to buy source material for event movies - Marvel Entertainment was a partner until Disney snapped it up for US$4 billion in 2009 - have left Paramount with a shortage of franchises.
Moreover, the few series that Paramount has are weakening. The last Transformers movie, released in 2014, took in 30 per cent less in North America than its predecessor. (The next chapter, Transformers: The Last Knight, arrives in June.) Paramount's ageing Star Trek film series hit a similar snag last year. Its Mission: Impossible franchise is anchored by Tom Cruise and how long he can remain an action star is an open question.
"We don't think Paramount has enough top-tier intellectual property to successfully dig its way out of the profitability hole it finds itself in," Mr Doug Creutz, an analyst at research firm Cowen and Co, wrote in a recent report.
Mr Gianopulos worked at Paramount before.
In the mid-1980s, he was its senior vice-president for business affairs and international operations. It was a boom time. In 1986, Paramount had five of the year's 10 top-selling films at the domestic box office, including Top Gun and Ferris Bueller's Day Off.
But the movie business has changed substantially. With streaming services such as Amazon and Netflix as new competitors for leisure time and US movie attendance flat, studios have veered towards extravagant, effects-driven films that can play on a global stage.
Mr Creutz estimated that 30 movies with budgets of US$100 million or more will be released this year, seven more than in 2015.
Paramount has tried to stay in the game by cutting costs and bringing in outside financing partners, including several from China.
Some of these deals have proved fruitful. Partnerships with Huahua Media, Shanghai Film Group and Weiying Technology helped push xXx: The Return Of Xander Cage to US$162.5 million in ticket sales in China this year.
But outside investment has also proved problematic. Along with limiting risk, the practice limits returns. It can also lead to major internal distraction: Mr Philippe Dauman, who was forced out as Viacom's chief executive in August, had considered a partial sale of Paramount to raise money, throwing the studio into chaos for a time.
Mr Dauman's successor, Mr Bob Bakish, has outlined a turnaround plan for Paramount that involves a greater reliance on partnerships with Viacom cable networks such as MTV and Nickelodeon. The problem is that some of those brands have lost much of their cultural relevance.
In a memo to Viacom employees, Mr Bakish called Mr Gianopulos "a hugely talented executive, with a strategic vision, strong business expertise and deep industry and creative relationships that are second to none". He added that Mr Gianopulos would have "a running start" because of Paramount teams "who are right now exploring new ways to strengthen the studio and position it for success".
A spokesman declined to make Mr Bakish or Mr Gianopulos available for interviews.