Paramount Is the Last Hollywood Studio Standing. Its Days May Be Numbered.

Private equity is coming for the Godfather—and Ferris Bueller, Captain Kirk, and Rosemary’s baby, too.

All are part of the film catalog of Paramount Global, the fabled Hollywood studio being courted by PE-backed suitors. Any deal must satisfy the demands of Shari Redstone, Paramount’s controlling shareholder, who just torpedoed a bid by David Ellison’s Skydance Media with KKR and Redbird Capital.

Paramount is on the market because of sagging returns from broadcast and streaming, even as it struggles to service nearly $15 billion in long-term debt. Shares are down 35% this year. Paramount didn’t respond to requests for comment.

Suitors still see plenty of value in Paramount, the last major filmmaker still physically located in Hollywood. In addition to the movie studio and catalog, Paramount owns CBS, MTV, and Nickelodeon.

Ellison had promised to return the company to its filmmaking roots. Others may be looking to sell it for parts. If so, it could be the final act not only for Paramount but also for the auteur-driven studio tradition it helped create. It will be all sequels and superheroes from now on.

The world’s motion-picture capital got its start in appropriately storybook fashion. The first studios were based in New York and did their filming in the “wilderness” of New Jersey across the river. Young director Cecil B. DeMille wanted more authenticity for his new Western, so in 1913 he hopped a train for Arizona.

“Flagstaff no good for our purposes,” he wired back. “Have proceeded to California. Want authority to rent a barn in a place called Hollywood for $75 a month.”

DeMille got the barn, Flagstaff lost out, and The Squaw Man was a hit. It was the first full-length feature film made in Hollywood, and an industry quickly arose there.

Paramount was founded in 1916 through a corporate takeover. It wouldn’t be the last.

“Gigantic Merger of Movies Near Completion,” the Los Angeles Evening Express reported on April 25, 1916. The Wall Street-backed deal was engineered by Adolph Zukor, who started in penny arcades before becoming the original movie mogul. Bringing together several top studios, Zukor named DeMille production chief and signed silent film’s biggest names: Mary Pickford, Douglas Fairbanks, Gloria Swanson, and more, symbolized by 24 stars in Paramount’s logo.

Zukor’s master stroke was gaining control of the only nationwide film distributor, putting his stars on screens from coast to coast. And if a theater wanted Rudolph Valentino’s latest, it had to buy a full year’s worth of Paramount’s offerings, a practice called “block-booking.”

When theaters balked, Zukor bought them out, giving Paramount complete vertical integration, from production to distribution to exhibition. Some cried monopoly, and Paramount—like AT&T and Standard Oil—was pursued by antitrust charges.

“Nothing in the history of popular entertainment compares to the influence this single entity wielded from the end of World War I to 1929,” the film historian Steven Bingen writes in Paramount: City of Dreams.

The Great Depression caught Zukor overstretched. Paramount had 1,000 theaters but few paying customers; $21 million in debt, it went into receivership in 1933.

When Paramount emerged two years later, Zukor lost control, though he retained a figurehead chairmanship until his death at 103.

The new boss was Barney Balaban, a company man, known for operating the first air-conditioned theater. He returned the studio to form, with new stars like Gary Cooper, Mae West, and Bing Crosby making popular films to feed Paramount’s theaters.

Until 1948, that is, when U.S. v. Paramount broke up the studios, forcing Paramount, MGM, Warner Bros., and the others to sell their theater chains. It marked the end of Hollywood’s Golden Age.

Billy Wilder wrote an epitaph for the age with 1950’s Sunset Boulevard, bringing back Gloria Swanson to play aging silent-film star Norma Desmond. Norma admonishes a young security guard, “Without me, there wouldn’t be a Paramount Studios.” But he doesn’t know who she is.

Paramount’s glory days faded like Norma’s after it lost its theaters. Film quality deteriorated, DeMille died in 1959, and the stars were replaced by circling vultures.

In 1966, Charles Bluhdorn’s Gulf & Western acquired Paramount. But Bluhdorn found the studio “moribund,” and the conglomerate’s directors were “grumbling that the beleaguered Paramount should be sold off, either intact, or piecemeal,” Bingen writes.

Into New York flew Robert Evans, Bluhdorn’s handpicked production chief at Paramount. Evans brought with him a promo reel, starring himself and directed by Mike Nichols, to convince the board to give him a chance. He dimmed the lights and rolled the film.

“The money we spend is not going to be on extravagances. The money we spend is going to be on the screen,” said Evans’ projection. Then he previewed films he wanted to make, including Love Story and The Godfather.

The board caved. Those films got made—as did Chinatown, American Gigolo, Titanic, and many cinematic masterpieces—as Paramount survived Bluhdorn, and then Barry Diller, and the 1994 takeover by Sumner Redstone’s Viacom.

Paramount is again beleaguered and deeply in debt. It needs a savior, another Zukor or Evans.

If not, the end may come for Paramount—and Hollywood—as it did for a deluded Norma Desmond, who tells an imaginary director, “All right, Mr. DeMille, I’m ready for my close-up,” before everything fades to black.

Write to [email protected]