Tom Cruise Partner Paula Wagner Out At United Artists, Studio Toast

Monday, news broke that Jeff Kleeman, executive vice president of production at United Artists, was leaving the studio. We didn’t report it because we didn’t think it would have the dire repercussions that Nikki Finke jokingly predicted: “Will the last person to leave United Artists turn out the lights?”

But now CEO and co-owner Paula Wagner, who helped relaunch the studio with her longtime producing partner Tom Cruise, is also out, returning to producing movies. Apparently MGM can’t fire her because she was, and still is, a co-owner of the studio.

Nonetheless, now United Artists has basically been reduced to Tom Cruise, who was never really that hands-on in his management of the studio. Reportedly, Wagner had trouble greenlighting films, which threatened the $500 million in financing United Artists received from Merrill Lynch.

Nikki Finke: I’m told specified start dates and release dates haven’t been met, so UA could lose a goodly portion of that credit line. The only solution is now for MGM to step in and immediately greenlight two UA motion pictures by the trigger dates. But Wagner’s camp is trying to spin this as MGM usurping UA’s independent authority so that MGM boss Harry Sloan can finally get his hands on UA’s money since he hasn’t been able to score financing of his own.

Look, the fact is that every financing deal works a little differently because of the bars set, but basic requirements need to be met: a certain number of movies must be in production by a certain time, etc. But UA under Wagner was way behind on the timetable dictated by its financing, I’m told. “Paula wasn’t greenlighting movies, so she was about to lose a lot of the money. Her camp is trying to say MGM screwed up. They didn’t, she did. Now MGM can get UA moving on at least two movies, and make sure they’re released by a certain date, to keep the financing intact,” an insider confided to me.

This certainly would answer the question of where MGM would get the money to fund its rebooted production slate. But why would MGM keep UA on life support? It makes more sense for MGM to absorb UA, take the $500 million from Merrill, and put it to good use. After all, MGM already has a slate of films in development, and making UA part of the parent company would help absorb losses from Lions for Lambs and, most likely, Valkyrie, which just got moved up on the release calendar. It will now come out this Christmas, where it will likely be buried by the glut of potential award nominees.

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