Paramount Reorgs Licensing, Direct-to-DVD; Lays Off 53

Consumer products folded into LeeAnne Stable's film promotion unit, while direct-to-home entertainment placed into Tom Lesinski's digital division; Hal Richardson to oversee digital distribution of theatrical titles

Paramount is laying off 53 workers and consolidating its licensing/consumer products and film-promotion divisions, the studio announced on Thursday.

Paramount is also restructuring its direct-to-DVD productions and folding them into its digital division, while moving digital distribution of theatrical titles under its TV distribution operations.

Studio officials say the consolidations will save Paramount about $10 million annually. The moves reflect the retrenchment of Paramount following its divorce from DreamWorks, with the studio now producing and distributing fewer films.

Under the restructuring, Paramount's licensing and consumer products unit will be merged with the motion picture promotions department overseen by LeeAnne Stables (pictured right), executive VP of worldwide marketing partnerships.

With DreamWorks leaving the Paramount fold, and the studio increasingly reliant on output deals, the move probably stems from the fact that Paramount simply has fewer properties these days off of which to build a consumer-products business. (Though this would seem to leave cash on the table for the fan-beloved 'Star Trek' merchandizing.)

The lucrative "Iron Man" property, for example, is merchandised by Marvel, while sibling licensing giant Nickelodeon Consumer Products oversees merchandising for "The Last Airbender."

Meanwhile, the development and production of feature films made for DVD and digital platforms — a business that's also in steep decline amid DVD's free fall –will be consolidated under Tom Lesinski, president of Paramount Digital Entertainment.

The distribution of motion pictures on digital platforms will now be handled by Hal Richardson, president of Paramount Pictures Worldwide Television Distribution.

Here is the full text of the internal memo sent to studio employees announcing the shakeup:

To: Paramount Employees
From: Frederick Huntsberry and Rob Moore
Date: Sept. 30, 2010

We wanted to inform you of a number of changes we are making to better manage our overall business, as well as make our reporting structure more rational and efficient. Effective today, we are restructuring four of our divisions and realigning the responsibilities of several senior executives. The key changes are as follows:

· Licensing and Consumer Products will now be merged into Motion Picture Promotions and overseen by LeeAnne Stables, Executive Vice President of Worldwide Marketing Partnerships.

· The development and production of feature films made for home entertainment and digital platforms are being consolidated under Tom Lesinski in his role as President of Paramount Digital Entertainment.

· The distribution of motion pictures on digital platforms will now be handled by Hal Richardson, President of Paramount Pictures Worldwide Television Distribution.

This realignment will result in a staff reduction of 53 positions worldwide. The new structure outlined above will advance our ongoing goal of eliminating redundancy, rationalizing similar business lines, and optimizing our work force and cost structure.

The hard work and talent of the employees whose positions are affected by this change have greatly enhanced our company, and we sincerely thank them for their efforts.

In today’s environment, companies must make smart choices about how resources are deployed. The restructuring we are announcing today consolidates our operations in a way that is consistent with how more of our customers are exploring multiple facets of the film experience. Paramount as a company simply must keep evolving and refining its operations.

We salute your efforts in making 2010 a great year thus far, and we have no doubt that it is now even better positioned to continue on that successful path.