Frank Mancuso: Hollywood's Top Gun

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The story line could easily support a high-tension adventure thriller: call it Indiana Jones and the Temple of the Celluloid Gods. A major Hollywood motion-picture studio dangles over a financial precipice. Suspense mounts. The studio's grip is slipping. Will a rescue come in time? Yes! No! Wait! A dark and dashing film executive comes running! With amazing speed and savvy, he and a band of executive sidekicks fashion socko new feature films and perform brilliant marketing acrobatics. Finally, the studio swings across the threatening void. On the other side it finds -- what else? -- a king's ransom!

That spine tingler of a script is, with a certain amount of cinematic license, akin to sweet reality at the 55-acre Hollywood studios of venerable Paramount Pictures, a subsidiary of Gulf & Western. A year ago, the company that distributed one of the first Hollywood feature-length movies (The Squaw Man, 1914) was close to the ropes, its revenues sagging and its film larder practically bare. Today, in the words of Gordon Crawford, senior vice president of Capital Guardian Research, a Los Angeles investment-management firm, "they're having the greatest year of any company in the recent history of the movie business."

Indeed they are. As Paramount prepares to celebrate its 75th anniversary in 1987, the studio's The Golden Child, starring Comedian Eddie Murphy, is the hot Christmas movie, raking in $11.6 million in its first weekend at 1,667 theaters -- despite mixed reviews. Paramount's astonishing Australian import, "Crocodile" Dundee, has just finished its twelfth week as a top grosser, having earned more than $103 million at 1,495 theaters. Headed in the same direction is Star Trek IV: The Voyage Home, which has earned $47.5 million in three weeks. Well ahead of them all is Paramount's Top Gun, which has taken in $168 million since its May 16 release, making it the year's best seller. With only a week or so left in 1986, Paramount has grossed $569 million at the box office, almost 21% of the North American movie market. The studio's closest rivals, Columbia Pictures, Walt Disney Productions and Warner Bros., have each won only about half that.

Paramount's triumph comes at a time of sharply increased competition in Hollywood. After a slow start, 1986 turned into a solid box-office year for mainstream cinema; receipts are expected to hit $3.1 billion. Those dollars have been spent on an unusual number of widely released movie offerings: 130 features in 1986, vs. 105 in 1985.

Overall, studio profits reflect the general bounty, and nowhere is that more true than at Paramount. The company's earnings for 1986 are expected to exceed $110 million on estimated revenues of over $925 million. That compares handsomely with an anemic $75.1 million profit on revenues of $864 million in 1985. Paramount's television business is also booming, along with "follow- on" sales of movies to cable TV and other outlets. The company's overall prospects have helped Gulf & Western's stock rise from its year low of 47 3/4 to last week's close of 65.