Tom Cruise's company lands investor after split with Paramount

Tom Cruise's production company has signed a two-year financing deal with an investment partnership after breaking ties last week with Paramount Pictures.

The deal announced Monday between Cruise/Wagner productions and First & Goal LLC — headed by Washington Redskins owner Daniel Snyder — will cover overhead and development, allowing Cruise and producing partner Paula Wagner to run their company and make deals to produce films.

Financial terms have not been revealed, but they do not include funding for film production and distribution.

Cruise's production deal with Paramount had given the star as much as $10 million US per year for salaries, expenses and discretionary spending in exchange for first right to finance or distribute the films.

But tense negotiations broke off when Paramount offered a much lower deal closer to $2 million annually.

The dispute became public last week when Sumner Redstone, chairman of Paramount parent Viacom Inc.,criticized Cruise's public behaviour.

Cruise blamed for losses

In an interview with the Wall Street Journal, Redstone claimed Cruise's jumping up and down on Oprah Winfrey's couch and aggressive defence of Scientology in the past year lost Paramount $100 million US and $150 million US in ticket sales for the actor's latest film, Mission: Impossible III.

Wagner slammed Redstone last week, calling his comments "surprising" and unbusinesslike. She said it was their decision to walk away from a 14-year partnership with Paramount.

Last week, Wagner said her company had secured funding from two hedge funds, a separate arrangement from the deal with First & Goal. On Monday, she declined to comment on those deals.

First & Goal was specifically set up to invest in Cruise/Wagner, as Snyder moves from sports to entertainment along with partners Dwight Schar, chairman of homebuilder NVR Inc., and Mark Shapiro, president and CEO of Six Flags Inc., the amusement park chain where Snyder serves as chairman of the board.

Shapiro, a former ESPN entertainment executive, will oversee the Cruise/Wagner deal.

"We believe that Cruise and Wagner are a terrific investment," Shapiro said. "The track record speaks for itself."

Cruise will continue to be able to star in films produced elsewhere, just as he did under Paramount.

The spat between the star of Top Gun, War of the Worlds and the Mission Impossible movies, and Paramount is the latest example of tension between actors and executives after what Hollywood analysts are calling a down summer for film revenues.

Earlier this summer, a studio head chided Lindsay Lohan for her behaviour on a movie set in a letter leaked to the press, and an ABC deal with Mel Gibson's production company to produce a four-part series on the Holocaust was cancelled after his alleged anti-Semetic remarks during a drunk-driving arrest.