The Fall Of Frank Mancuso

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By Newsweek Editors

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Once, it seemed, he could do no wrong. But Paramount's chief drove the studio to disarray.

For five years he was the studio chief with the golden touch, a winner whose reputation in Hollywood seemed neatly summed up by the title of one of his hits: "The Untouchables." Inheriting a near-decimated movie studio in 1984, Frank Mancuso turned Paramount Pictures into the most successful shop in town. He churned out a string of blockbusters including "Fatal Attraction" and "Top Gun." He was a polished figure known as both Gentleman Frank and The Godfather of Hollywood, a patriarch who talked lovingly of his Paramount "family." "Frank is Hollywood," says one admiring ex-colleague. "Everybody loves him."

Not everybody. On Monday, March 18, Mancuso was abruptly informed by his boss, Martin Davis, that Stanley Jaffe--a Paramount producer--would be promoted above him as chief operating officer of Paramount Communications Inc. Paramount says Mancuso was invited to stay on but quit; Mancuso charges he was fired. The departure ended a 30-year career with the studio. On March 21, Mancuso filed a $45 million lawsuit against Paramount, alleging breach of contract.

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According to conventional wisdom, Martin Davis had struck again. Seven years ago he drove out a production team still considered one of the most talented in Hollywood history: Barry Diller, now chairman of Fox, and Michael Eisner and Jeffrey Katzenberg, the duo who later revived Disney. It was said that Davis had felt outraged that the "Killer Dillers" were earning more publicity than he was. This month Vanity Fair ran a story entitled WHY HOLLYWOOD HATES MARTIN DAVIS that accuses Davis of again "wreaking havoc" by engineering Mancuso's exit.

NEWSWEEK, however, has turned up evidence suggesting the opposite may be true: Mancuso himself wreaked havoc with Paramount, and Davis had to take drastic action. Despite some surprise hits, such as "Ghost," Mancuso presided over a truly rotten year at the movie studio. "The Two Jakes," "Flight of the Intruder" and "The Godfather Part III" performed far below expectations at the box office. Paramount recently reported a $7.3 million loss in the first quarter of fiscal 1991. Even worse, sources say, what began as a productive marriage between Paramount and Hollywood's top talent has deteriorated under Mancuso's passive leadership into feuding and bitter recriminations. "To watch what was a thriving, potent company being disassembled is sad," says an ex-Paramount employee.

(Although many Hollywood players agreed to speak about Paramount, few were willing to go on the record; it's a tightly knit community, and people are terrified of being viewed as indiscreet. Mancuso turned down requests for an interview, but through his attorney insisted he enjoyed strong relationships with his talent and maintained tight controls on all his films.)

It didn't start this way. Mancuso arrived at the studio from New York in the fall of 1984, replacing Diller as chairman after a stellar career as Paramount's president of marketing and distribution. Mancuso lacked moviemaking experience yet had a knack for selling product. He had spliced film clips with concert footage and packaged the reels as MTV videos, earning wide publicity for "An Officer and a Gentleman." He seemed to know every cinema owner in America. And, says Robert Towne, a longtime Mancuso associate and the scriptwriter of "Chinatown," "Frank had a wonderfully commercial sense and a keen appreciation of serious material."

In Hollywood, Mancuso made one particularly smart decision: he hired Ned Tanen as his president of production. A combative producer with terrific instincts and a dozen Rolodexes' worth of contacts, Tanen had previously been at Universal, where he helped discover George Lucas and Steven Spielberg. At Paramount, Tanen kept his streak going. He made "Fatal Attraction" and "The Untouchables." He got along with the tempestuous Eddie Murphy, who's had an exclusive deal with Paramount since 1983; Tanen "green-lighted" "Coming to America." The studio was also bolstered by the sequels to "Star Trek" and "Raiders of the Lost Ark" and finished first at the box office in 1986 and 1987.

Yet foreshadowings of trouble were present. Throughout the Tanen years Mancuso remained Reaganesque in his affable detachment, although his image was one of a hands-on leader. In contrast to Tanen, the ultimate schmoozer, Mancuso rarely socialized with industry figures. Eager to be well liked, he relied on underlings to play the bad cop. Once Mancuso ordered an executive to inform Spielberg that the release date for a movie he'd produced, "Young Sherlock Holmes," had to be changed. Spielberg complained to Mancuso, who meekly backed down, Tanen dismissed his boss as "the booker from Buffalo." Whenever Mancuso threatened to block a project or argued that a star's deal was too rich, "Ned grabbed his car keys and his dirty red script bag and said, 'Frank, when you want me to run the studio, you can call me at home'," remembers one colleague. "Frank caved in."

The problems at Paramount began after Tanen resigned in November 1988, claiming he was burned out. As "Untouchables" producer Art Linson puts it, "For me, the rudder fell off the ship after Tanen left." Mancuso, yearning for a more hands-on role, was hungry for a summer blockbuster; he struck a long-term deal with Don Simpson and Jerry Bruckheimer, the brash team who'd put together "Top Gun." The arrangement was widely regarded as the most lucrative in Hollywood history. It allowed them to make five "put" movies-free of supervision-and gave them an unprecedented 17 percent of gross profits. In late 1989 Mancuso and the pair agreed to make "Days of Thunder," the stock-car-racing film which had become a pet project of Tom Cruise. Mancuso gave them nine months to write, shoot and edit the movie. In the rush to finish, the movie's budget ballooned to $58 million; when "Thunder" performed disappointingly at the box office, Paramount executives demanded that the producers return $9 million. They refused, and the studio threatened to "make life tough," say sources. A few months later Simpson and Bruckheimer left in disgust, signing a new deal with Disney.

It was typical of the confusion raging at Paramount: even while overblown budgets blew more out of control, Mancuso was ordering his staff to "hang tough" with stars, producers and agents. Rather than massaging his stars' giant egos, Mancuso decided to rein them in-although he was reluctant to confront them himself and usually relied on subordinates. "Mancuso and his underlings had a very Sicilian mentality," complains one top Hollywood agent. "Anyone who worked outside of Paramount was considered a bad guy. The agents, the artists were the heathens trying to sack Sicily."

Had Tanen been running the show, he might have finessed matters. But Tanen had been succeeded by Sidney Ganis, a former top marketing executive; he lacked Tanen's authority and experience dealing with star egos. When Tom Cruise demanded that his Paramount contract be renegotiated from $5 million to $8 million for "Days of Thunder," Ganis said no; Cruise arranged a meeting in his New York hotel room with Mancuso, who finally capitulated. By then the damage had been done. Ganis's authority had been further undermined, and "they ended up paying Cruise the money and making an enemy," says an insider.

While Mancuso's team alienated some Paramount stars, rivals were eager to pamper them. Chief among them: Jeffrey Katzenberg, the driven chairman of Disney Studios. At Paramount in the early 1980s, Katzenberg had been so ambitious that he and his wife took Lamaze classes in his office so he wouldn't be away from his phone. After moving to Disney he stayed close to his friend Eddie Murphy. Although he earned about $10 million a movie at Paramount, Murphy compared his deal unfavorably to that of Sylvester Stallone; he felt neglected and wanted out of his exclusive contract. Katzenberg offered him a shoulder to cry on. One Friday night Ganis paid a visit to the set of "Harlem Nights"-and ran smack into Katzenberg outside Murphy's trailer. Ganis berated Katzenberg on the phone the next morning. Katzenberg was equally avid in pursuit of Tom Cruise. After Paramount angered Cruise by refusing him use of the company jet for a preproduction trip on "Days of Thunder," the Disney chief sent his own studio's plane to pick up the star.

At Paramount, insiders felt a growing sense that Mancuso was in over his head. He was becoming reelusive, absorbed in two projects that he'd dreamed of making for years, despite the reservations of such colleagues as Tanen: Jack Nicholson's disastrous "The Two Jakes" and Francis Ford Coppola's "Godfather III." Meanwhile, another problem was festering--Art Buchwald had filed a lawsuit against Paramount, charging that "Coming to America" had been stolen from an idea he had submitted in 1982. Some Paramount insiders urged Mancuso to settle the suit; his legal and business staffs insisted on fighting, and it grew into a fiasco. A judge declared the movie had come from Buchwald's concept, declared the contract the studio had signed with him "unconscionable" and ordered Paramount to pay Buchwald his fair share. Paramount will appeal the ruling.

While the budgets of some movies skyrocketed, other projects abruptly shut down. In one case, studio executives spent six weeks luring Kevin Costner into a $40 million film called "Ghost in the Darkness," which Mancuso and Ganis had approved. The process involved repeated tetea-tetes with Costner in the editing room where he was cutting "Dances With Wolves," plus meetings with his agent, Michael Ovitz. After Costner committed, the executives repeated the process with director Brian De Palma. Halfway through those negotiations Paramount deemed the project too expensive and put it on hold. All the parties involved were irate.

Mancuso was under pressure from Davis, who had grown exasperated by "Godfather" budget overruns and the disappointing performance of Paramount's summer slate, including "Another 48 Hrs." and "The Two Jakes." Last fall Mancuso squeezed out Ganis and replaced him with David Kirkpatrick, a Disney executive formerly with Paramount. With a mandate to cut costs, Kirkpatrick infuriated directors and producers in a series of confrontations. "Kirkpatrick was a little tyrant," says producer Linson, who quit the studio and signed with Warner Bros. (Kirkpatrick won't comment.) Stanley Jaffe was also incensed. Jaffe had produced several successful films under an exclusive deal with Paramount, including "Fatal Attraction" and "The Accused." Now Jaffe wanted to direct "School Ties," a drama about a Jewish teenager who brushes against anti-Semitism at a boarding school in the 1950s. Kirkpatrick vetoed the project, and Jaffe stormed off to New York to complain to Davis. Jaffe received a promotion-and Mancuso was history. Davis and Jaffe have refused to comment,

What is Paramount's future? Despite two years of turmoil the studio has some promising summer films, including Mike Nichols's "Regarding Henry." For now, Jaffe's priorities are to find a replacement for Mancuso-NBC Entertainment chairman Brandon Tartikoff is the front runner-and repair Paramount's relationships. In his first forceful move, he freed Murphy from his exclusive deal with Paramount. The star now can make one movie for another studio for the life of the contract. Some in Hollywood say that Jaffe, regarded as a combative moviemaker in the Ned Tanen mold, will need years to bring Paramount back up to speed. The sad legacy of Frank Mancuso is a studio that, many sources say, is as chaotic and demoralized as it was after the Killer Dillers were forced out seven years ago.

Mancuso's regime was marked by an erratic approach to the studio's biggest talent. Paramount's chairman gave Francis Ford Coppola unprecedented freedom to make "The Godfather Part III" but sent underlings to haggle over salaries and perks with Murphy and Cruise. Both felt undervalued by the studio.

During Frank Mancuso's last two years, Paramount was buffeted by powerful Hollywood personalities. Jeffrey Katzenberg's friendship with Eddie Murphy angered studio executives, producers Don Simpson and Jerry Bruckheimer scorned top management and Stanley Jaffe precipitated the chairman's ouster.

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