Maybe you’ve all heard or read in the news the fact that Paramount and Tom Cruise’s production company have parted ways. Paramount claims they dumped Tom but Tom/Paula Wagner denies that and says they couldn’t come to an agreement. Because I think you should know both sides I’ve collected some articles about this.

New York Times:
Fired or Quit, Tom Cruise Parts Ways With Studio
LOS ANGELES, Aug. 22 — Citing Tom Cruise’s yearlong metamorphosis from pure box-office phenomenon to pop-culture punch line, Viacom’s chairman, Sumner M. Redstone, said Tuesday that Paramount Pictures was ending its 14-year relationship with the actor’s production company.
Mr. Cruise’s representatives insisted that they had not been fired but instead had quit and had already lined up $100 million in financing to produce movies on their own.
Either way, the parting of the ways was anything but amicable. And it came as the latest sign that the media conglomerates that control Hollywood are growing impatient with the megastars who earn the highest salaries. (…)
Mr. Cruise’s third installment of the “Mission: Impossible” series has earned nearly $400 million worldwide and could earn half again that much from DVD sales. But its weak opening weekend in May left Paramount executives believing that the negative attention and mockery of Mr. Cruise had hurt the film. Worse still, Mr. Cruise’s rich chunk of the profits could leave the studio barely breaking even.
After weeks of negotiations to extend a production deal, Mr. Redstone said Tuesday that Paramount had given up. “As much as we like him personally, we thought it was wrong to renew his deal,” Mr. Redstone told The Wall Street Journal, which first reported the studio’s decision on its Web site. “His recent conduct has not been acceptable to Paramount.”

One person who had been briefed by Viacom executives said the studio did not want to renew the contract for a production deal that had been reported to cost as much as $10 million a year. “It was a huge reduction in the size,” according to the person, who spoke on condition of anonymity. “The issue was the cost of his overhead and his executives. All the studios are getting out of these kinds of relationships.”
But Paula Wagner, Mr. Cruise’s partner in Cruise-Wagner Productions, said in an interview Tuesday that she and Mr. Cruise had, sometime “in the last few days,” told their agents at Creative Artists Agency to inform Paramount that they were terminating the contract talks.
Ms. Wagner said that she and Mr. Cruise had already obtained commitments from two hedge funds, one in New York and one in Los Angeles, for $100 million in revolving credit to make movies, and that they had begun looking for a new distribution deal.
“This is something we’ve dreamt of, to have an independently financed production company, where we can decide the films that we make, from high-concept to more personal pictures,” she said. “I think we’re in the forefront of a trend.”

As for Mr. Redstone’s allusion to Mr. Cruise’s conduct, Ms. Wagner fired back, “I have no answer for a stupid statement.” She speculated that Mr. Redstone was “trying to save face,” having learned from Wall Street chatter of Mr. Cruise’s hunt for alternative financing. (…)
It is still unclear how Mr. Cruise’s agency, Creative Artists, will respond to Paramount’s public slap at one of America’s most visible stars. The agency is the most powerful in Hollywood, and a decade ago a studio would have risked war by publicly denigrating a client like Mr. Cruise.

Rick Nicita, Mr. Cruise’s agent — and Ms. Wagner’s husband — did not respond to a call for comment. A spokesman for Creative Artists did not immediately respond to a request for comment.

Eric Weissmann, a Hollywood lawyer since the 1950’s, said that what was most surprising about the Paramount-Cruise split was that the studio could simply have decided not to renew the contract. “They don’t have to give a reason, and to go public is highly unusual,” he said. “This is not a way to get Tom Cruise to cut his fee down. This is cutting the ties.”

While Paramount’s decision was a shock to the Hollywood status quo, the way in which it was revealed was another sign that movie studios are playing rougher with stars they once coddled, one senior movie studio executive said.
Most recently, ABC canceled a production deal with Mel Gibson’s company for a mini-series about the Holocaust after he made anti-Semitic statements while detained for drunk driving. And the head of Morgan Creek Productions wrote a scathing letter scolding the actress Lindsay Lohan for unruly behavior during a movie shoot; the letter was quickly leaked to the news media.
“I think the press has become the weapon of choice for these people,” said the studio executive. “These companies are sick of being pushed around. This is indicative of a huge paradigm shift in the industry in terms of what constitutes a star and how much power a star has.”

Digital Spy:
Hollywood players shocked by Cruise move
Hollywood powerbrokers Jerry Bruckheimer and Steven Speilberg have apparently been left in disbelief at Paramount’s decision to break its links with Tom Cruise.

Spielberg heads Paramount’s DreamWorks and worked with the actor on Minority Report and War of the Worlds, but was not consulted about the move beforehand.
The director’s representative Marvin Levy told New York Daily News: “[He] had no advance knowledge of [Paramount boss] Sumner Redstone’s position…The story broke when Steven was on an airplane. He found out when the plane landed.”
A source at another studio added: “He’s the heart and soul of DreamWorks. If you have Steven Spielberg, you want his blessing.”

Pirates of the Caribbean producer Jerry Bruckheimer has also commented on the situation. “It’s not what I would do,” he stated. “[Cruise is] one of the biggest stars in the world, and that hasn’t changed.”

There are sources that claim Redstone’s wife had a hand in this; Monsters and Critics for one says the following:
The wife of Viacom Chairman Sumner Redstone reportedly played a role in the actor`s firing from Paramount Pictures this week, it was reported.
Cruise committed one of the biggest sins for an employee — he upset his boss` wife, TMZ.com reported.
One of Redstone`s justifications for axing Cruise was that his behavior had alienated female fans, the New York Post said. His wife, Paula Fortunato and others were dismayed by Cruise`s insane attack on actress Brooke Shields after she went public with her battle against postpartum depression, the New York Post reported. However, a Paramount spokesman denied Fortunato vowed to boycott any of Cruise`s future films. ‘It is true that Mrs. Redstone disagrees with Tom Cruise`s views, but she and Mr. Redstone see every Paramount film,’ the spokesman said.

Opinions about the public announcement, the way this was handled by Paramount/Mr. Redstone are given in the article by Fox News:
The shocking Tom Cruise-Sumner Redstone feud escalated into a full-blown War of the Words Wednesday, with Cruise’s camp slapping back at the media mogul, saying he’s the one who has lost his mind.

Bert Fields, the powerful Hollywood lawyer who represents Cruise, told The Post that 83-year-old Redstone “was a mighty mogul once who has self-destructed in front of everyone.”
Those fiery comments came a day after Redstone, who controls Paramount Pictures’ parent company Viacom, publicly bashed Cruise for the actor’s bizarre off-screen behavior. Redstone said Cruise’s personal conduct “has not been acceptable” to the studio.
Fields defended Cruise’s oddball behavior — and said the real losers are the shareholders in Viacom.
“What was his personal conduct?” Fields asked. “Jumping on a couch on Oprah Winfrey because he’s in love with Katie Holmes? That really deserves the death penalty? Or speaking out against mood-altering drugs for children? That’s a real reason for the shareholders to be deprived of billions of dollars?”
Over his career, Cruise’s movies have raked in close to $3 billion in ticket sales in the United States alone.

All of Hollywood was picking its jaw off the floor Wednesday after the bitter parting of ways between the star and his longtime studio home — but no one’s jaw dropped farther and faster than Paramount boss Brad Grey’s. “Redstone decided to make this announcement totally independent” of Grey, said one source close to the matter. This source said the studio boss was “caught off-guard” by Redstone’s comments, made Tuesday to a Wall Street Journal reporter before boarding a plane to Aspen to give a speech.

Paramount was in chaos Wednesday, as executives worried that Redstone’s remarks would drive away other movie stars from the studio.
“People in the company are upset about this because it makes Paramount seem like a less talent-friendly place,” said a source.
Paramount and Viacom had no further comment Wednesday. Both Grey and his boss, Viacom CEO Tom Freston, planned to make the announcement in a more graceful way, said a source.

Even if the principals weren’t speaking on the record Wednesday, plenty of people in their orbits were. Redstone’s comments, which severed a lucrative 14-year relationship between Cruise and Paramount, rattled many Hollywood executives, who said they could not recall an executive so publicly dressing down such a megawatt star. “I think it’s reprehensible,” said one high-level executive at a rival studio, calling Redstone an “old fart.”
“Tom Cruise hadn’t hurt anybody but himself,” this person said, “and he can make a comeback. We’ll all be in business with him if he comes with the right script.”

A source close to Redstone fired back, saying, “He’s blunt. He says what he thinks. Maybe in Hollywood that’s a rarity.”

The Cruise camp, already under siege for the actor’s increasingly weird behavior over the last year — everything from going bonkers on Oprah’s couch to ranting to NBC’s Matt Lauer about antidepressant medication — quickly responded to Redstone Tuesday evening.
Paula Wagner, Cruise’s partner in the film company Cruise/Wagner Productions, called the remarks “offensive” and “undignified.”
“Whatever remarks Mr. Redstone would make about Tom Cruise personally or as an actor have no bearing on what this business issue is,” Wagner said. “There must be another agenda that the studio has in mind to take one of their greatest assets and malign him this way.”

A source close to Redstone insisted Wednesday that the issue had nothing to do with money. Reports claimed Paramount would have kept Cruise on the lot had he lowered his price, said to be close to $10 million annually plus a hefty cut of the box office.

news.com.au adds:
Richard Lovett, the president of Creative Artists Agency, which represents 44-year-old Cruise, told the New York Times: “Paramount has no credibility right now. It is not clear who is running the studio and who is making the decisions.”
But Redstone said he had “sent a message to Hollywood” to “just say no”. “We are overpaying for stars,” he said. “‘The system’ means the stars get it all, and the studios are lucky to stay alive. That system will not exist at Paramount.”

AccessHollywood has an interview with Paula Wagner about this:
“Let me just say this and this is my final statement — what Paramount Pictures has said and done is patently insane and irresponsible to shareholders,” Paula insisted. “And when you consider that Tom Cruise earned Paramount Pictures $1 billion in the last year and the $400 million made by ‘M:I:III’ makes it Paramount’s number one film of the year… something is wrong.”
“You have a personal feeling underneath it all… You know this town very well and you have dealt with these people for many, many years in what was mostly a very happy 14-year relationship. What do you think?” Billy asked.
“I think that what we’re doing right now is that we are on the threshold of the future of what this business is because when a film studio such as Paramount Pictures decides to attack and make personal what, in fact, are business issues it’s disgraceful that somebody who says they want to end a business deal makes it personal,” Paula said. “That’s the height of unprofessionalism and it’s one of the reasons why we feel that people and artists in the industry will think hard about working with Paramount Pictures in the future.”

And Paula also went on to say that the rest of Hollywood has taken notice of the way Paramount handled the situation.
“The creative community, frankly is up in arms about the fact that this is what a studio would do to a serious actor who has made as many movies and done as well as he has,” she added. “The creative community in Hollywood is outraged about this and I don’t think this is going to stop here… A bigger issue that’s coming out is what is going wrong with Paramount’s studios? Are we watching the destruction of Paramount?”

But does Tom or Paula have plans to sue Paramount?
“Is that an option?” Billy asked.
“I can’t answer that question,” Paula replied.
“Is it definitely on the table?” Billy followed up.
“I can’t, I wouldn’t venture forth there,” she answered. “I think that their behavior today is indecent, disrespectful and offensive.”