Inside Tom Cruise's shocking split with Paramount: With Viacom's CEO citing the star's ''recent conduct'' as a reason, Cruise's camp fires back. What's next for the actor?

By Daniel Fierman
August 23, 2006 at 04:00 AM EDT
Tom Cruise: Armando Gallo/Retna

Fourteen years. Ten movies. $1 billion.

That impressive streak was brought to an end on Tuesday, when the news broke that Tom Cruise and Paramount Pictures were no longer in business together. There had been rumors that a divorce was brewing ever since Mission: Impossible III underperformed at the box office, earning $82 million less than the previous installment. But the split became public when Sumner Redstone — CEO of Viacom, Paramount’s parent company — told The Wall Street Journal that the studio’s long-standing pact with Cruise/Wagner Productions had been terminated due to the superstar’s erratic behavior. ”As much as we like him personally, we thought it was wrong to renew his deal,” he was quoted as saying. ”His recent conduct has not been acceptable to Paramount.”

It was a shocking rebuke from one of the most powerful men in the media industry — and a move that signaled that the studio’s ever-escalating battle with talent over salaries (and behavior) is reaching a boiling point. Although Viacom sources confirm Redstone’s account of events, it wasn’t long before the Cruise camp fired back. According to a Cruise/Wagner rep, the company broke off talks with Paramount over a week ago and is setting up an independent operation with the help of outside financing. ”This has been a dream of Tom and mine,” Cruise’s longtime business partner Paula Wagner told the Journal.

No matter who is telling the truth, the $1 billion question is obvious: What’s next? It’s too early for a definitive answer, but it seems something radical is in order. One possible route: comedy. We’re not kidding. EW has learned that in the past few months, the actor has been meeting with Judd Apatow, co-writer and director of The 40 Year-Old Virgin and producer of Anchorman and Talladega Nights, to bounce around ideas for a film. Yes, 10 years after Jerry Maguire, the Mission: Impossible III star could be ready to show us the funny again.

”He’s quietly one of the great comedic actors in the country,” Apatow says, citing Risky Business, Jerry Maguire, and Rain Man as ”some of my favorite movies of all time…. We’ve had great conversations — I hope something real comes out of it,” Apatow adds. Working with a guy who loves him might make a lot of sense for Cruise, because at this point he seems to need all the fans he can get. (Additional reporting by Josh Rottenberg and Adam B. Vary)