Paramount cuts ties with Tom Cruise

updated 5:27 p.m. ET Aug. 23, 2006

NEW YORK - The latest high-profile Hollywood breakup is between Tom Cruise and his studio.

Sumner Redstone, whose company owns Paramount Pictures, said the studio would sever its 14-year relationship with Cruise’s film production company because “his recent conduct has not been acceptable to Paramount.”

“As much as we like him personally,” the Viacom Inc. chairman told The Wall Street Journal, “we thought it was wrong to renew his deal.”

Cruise’s partner, Paula Wagner, said negotiations on a new contract simply fizzled.

The deal in recent years paid Cruise and Wagner up to $10 million a year to develop films and operate an office on the Paramount lot, the Journal said Wednesday. It was reported that Cruise and the studio had been discussing a less lucrative deal.

The studio had offered the pair $2 million a year, plus a $500,000 discretionary fund during each of the next two years, the Los Angeles Times reported Wednesday. It cited sources with knowledge of the talks who didn’t want to be named because of the sensitivity of the matter.

In the past year or so, the usually guarded actor came under intense scrutiny after he jumped up and down on Oprah Winfrey’s couch while proclaiming his love for Katie Holmes, openly advocated Scientology, and criticized Brooke Shields for taking prescription drugs to treat postpartum depression. The religion founded by science-fiction writer L. Ron Hubbard opposes psychiatry and its medication.

Redstone estimated that Cruise’s off-screen behavior cost his latest movie, “Mission: Impossible III,” $100 million to $150 million in ticket sales, even as he praised the film as “the best of the three movies” in the action series.

“It’s nothing to do with his acting ability, he’s a terrific actor,” Redstone said. “But we don’t think that someone who effectuates creative suicide and costs the company revenue should be on the lot.”

Wagner told The Associated Press that agents for Cruise/Wagner Productions stopped negotiating with Paramount over a week ago and have since secured independent financing, effectively taking any contract-renewal deal off the table.

Slideshow   Top gun A look at Tom Cruise's career and relationships.

“For some reason, Paramount has chosen to negotiate in the press,” Wagner said, calling Redstone’s announcement “surprising.”

“It’s not really the most businesslike approach,” she said. “We’ve had virtually no dealings with Mr. Redstone.”

Each of the actor’s last seven films have generated more than $100 million. And the collaboration between Paramount and Cruise/Wagner Productions, based on the Paramount lot since 1992, has produced $2.5 billion worth of business, Wagner said.

Wagner said she and Cruise had been considering independent financing for their company “for a long time.” She said the company has already obtained commitments from two hedge funds, whose names would be announced soon.

“For us, this is a very new and exciting direction. We look forward to working with all the studios.”

Key facts about actor Tom Cruise — In June 2006 Cruise took the No.1 spot on Forbes magazine’s annual list of the world’s 100 most powerful stars. In the last 10 years all but one of his movies have grossed more than $200 million worldwide. His top-grossing movie was ”War of the Worlds” (2005), which topped $590 million around the world. — In May 2006, a USA/Today poll showed his public approval rating had slipped to 35 percent. Many of those polled cited his blunt criticism of actress Brooke Shield’s treatment for depression and of psychiatry in general. — In 2005, he became the butt of jokes for a manic, couch-hopping TV appearance declaring his love for girlfriend Katie Holmes on the Oprah Winfrey show. — Hollywood’s highest accolade — an Oscar — has eluded Cruise, despite three acting nominations for his roles in “Magnolia”, “Jerry Maguire” and “Born on the Fourth of July.” — As a teenager, Cruise planned on becoming a Roman Catholic priest. In 1990 he converted to the controversial Church of Scientology, becoming one of its most high profile advocates, and credited it with helping him overcome dyslexia and finding “inner peace.” — Twice married — to actresses Mimi Rogers and Nicole Kidman — Cruise is currently engaged to actress Katie Holmes, with whom he had his first biological child, Suri, in April 2006. Source: Reuters

MORE FROM MORE NEWS AND OTHER FEATURES

‘Bruno’ football photos irk L.A. school chief

‘Bruno’ football photos irk L.A. school chief Academy toughens rules for best song Oscars doubling best-picture nominees to 10 Six Transformers that could use an upgrade ‘Transformers’ roll out with $112M weekend Newsweek: Best picture noms who could have been Fox brings human element to ‘Transformers 2’ Jar Jar again? 2 Transformers raise race issues ‘Transformers’ director rips studio in memo Shia LaBeouf brags about ‘Transformers’   Add More news and other features headlines to your news reader: