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Paramount Scoop

Thursday, 11 Jan 2007 | 11:52 AM ET

UPDATE: Gail Berman met with Fox Executives on Thursday – presumably about coming back to Fox in some capacity.

Here's the scoop on Viacom's Paramount--its new streamlined structure may be the change it needs.

So, President of Paramount Pictures, Gail Berman, "resigned"... and Co-President of Production, Allison Shearmur, will also "step down" (fired)... and now the studio will be restructured into four labels that each report directly to Paramount Pictures chairman-CEO Brad Grey.

DreamWorks' co-chairman, Stacey Snider, will produce eight pictures a year for the studio. MTV Films/Nickelodeon Movies (led by President Scott Aversano) and Paramount Pictures (run by Co-President of Production Brad Weston) will each deliver four films a year. Paramount Vantage's President, John Lesher, has ten lower-budgeted films in his slate for 2007.

Paramount was notoriously chaotic--with notoriously aggressive Gail Berman making things difficult for Grey and Weston and Shearmur sharing a job. Now they're being very clear about who does what, and which label makes what kind of film.

My Hollywood insiders tell me Gail Berman is starting her own film and TV production company. I've heard it described as "cross platform," which likely also includes Internet. We should see a press release soon.

I'm skeptical, but my sources are saying that Berman left on her own--resigning because she's overseeing just a fraction of the number of films than when she started at Paramount. But she does have two years left on her contract, so I think it's safe to say that she saw the writing on the wall and felt like she was getting pushed out--it's hard to believe she's actually leaving millions on the table.

She has an undisputed reputation for being difficult to work with--pissing off people she worked with, both internally and externally--and of course her background is in TV, not film.

The insiders say that the top guys were pretty surprised--she only revealed she was leaving within the past week. It sounds like the mood is one of relief--she and Grey weren't getting along, and her absence "simplifies senior management politics." (That's putting it lightly.)

And what about Paramount Pictures and it's four pictures a year? From what I hear, since Sumner Redstone unceremoniously fired Tom Freston, his replacement, Philipe Dauman, has given a subtle new mandate to do more commercial films. Obviously, it's too soon to see the impact of that, but with Paramount Pictures holding number five studio marketshare, a new approach makes sense.

And now, Brad Grey is overseeing yet ANOTHER transition for the studio that has suffered through enough chaos (the split of CBS and Viacom, the purchase of DreamWorks SKG, and Sumner Redstone's unexpected firing of Tom Freston). Grey is working to show he's hip to the Internet, a key way for him to hold onto his job through this transition.

If we can assume that Freston missing the MySpace deal was the one factor contributing to his firing, then I'd guess that Grey signed this deal to distribute Paramount pictures through Apple's iTunes is one serious grande jeste.

Wal-Mart , Paramount's largest retailer, has good reason to be seriously opposed to the studios distributing online: if shoppers have an easier shopping alternative, Wal-Mart will no longer be able to use its low-cost way to drive traffic through its stores.

Wal-Mart opposition is the reason why no studio, other than Disney (which had no choice because Steve Jobs is its largest shareholder), distributed movies online until now. So it's a risky move, and surely indicates that Paramount has struck some sort of deal with Wal-Mart to get the go-ahead to do this.

Among other things, this Paramount deal sends Redstone the message that Grey, unlike Freston, is all about the digital future.

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.