Paramount studios announced today that they’ve severed ties with Tom Cruise after a 13 year relationship due to his “unacceptable” behavior. Strangely, Cruise’s agents claim that they terminated negotiations with Paramount after turning to a pair of hedge funds to finance Cruise’s future projects. Clearly, there’s more to this story: as my fiancee said, Tom Cruise could declare himself the spiritual leader of a small group of zebras and studios would still bank his movies if they believed in his money-making appeal. The real question is why would hedge funds want to get involved? Didn’t they see this?
A year ago, the Boston Globe wrote about how hedge funds are beginning to poach on venture firm’s traditional turf by financing early stage companies. I suppose a certain amount of “mission drift” is normal, but today’s move seems wacky.
