Universal co-chairmen axed over box office flops

Universal Pictures, the Hollywood studio arm of NBC Universal, has fired two of its most senior executives after a string of flops made 2009 an abysmal year at the box office.

Marc Shmuger and David Linde, co-chairmen of the studio, were responsible for a slate of films that included Funny People and Land of the Lost. But the releases failed to set the box office alight, leaving the studio trailing its rivals. The management shake-up comes as NBC Universal exerts greater pressure on its studio arm. Earlier this year Jeff Zucker, chief executive of NBC, dispatched Lynn Calpeter, the group’s chief financial officer, to Hollywood from New York to examine the poor performance of the studio.

Until then, Universal had largely been left alone by its parent company to run as an autonomous unit. In 2007 and 2008 its films had performed strongly, with the studio recording its most profitable two years.

However, past peformance counts for little in the film business. Universal’s flops this year included Bruno, the Sacha Baron Cohen comedy which earned only $60m. Its biggest failure was Land of the Lost, an expensive comedy that cost more than $100m but earned just $64m.

After a dismal summer, Ron Meyer, chairman of Universal Studios, moved to act, dismissing Mr Shmuger and Mr Linde, his two most senior lieutenants.

He has promoted two studio insiders, Adam Fogelson and Donna Langley, to replace Mr Shmuger and Mr Linde. Mr Fogelson has been appointed chairman and Ms Langley has been named co-chairman. Rick Finkelstein, chief operating officer, has been appointed a “strategic adviser” to the pair. “The depth of experience of these three executives gives me tremendous confidence,” said Mr Meyer. “I trust them to lead this organisation in today’s ever-changing media environment.”

The shake-up comes amid a period of uncertainty about the future of NBC Universal. The group, which includes the Universal movie studio, the NBC network, a thriving cluster of cable channels and a theme parks business, is being eyed by Comcast, the US cable group.

NBC Universal is owned by General Electric, which has held talks with Comcast to create a new venture that would combine the media company with assets held by the cable operator.

One option would see GE buy back a 20 per cent stake in NBC Universal held by Vivendi, the French conglomerate. GE would then spin off NBC Universal and its debts into a new venture with Comcast.