I’ve found some old stories that shed some light on why Paula Wagner ultimately left as Chief Exec. at MGM/UA:

Wagner to split from MGM

Paula Wagner is in talks to leave Metro-Goldwyn-Mayer’s United Artists label after falling out with the Hollywood studio over the financing and independence of the company.

Ms Wagner and Tom Cruise, her production partner, joined UA almost two years ago after the Hollywood star was fired by Paramount Pictures.

Harry Sloan, MGM’s chairman, gave the pair an equity stake in UA and autonomy to “green light” their own movies. The aim of the deal was to revive MGM and the historic UA label by bringing in two of Hollywood’s biggest names. The move was meant to prove to sceptical observers that Mr Sloan meant business with his plans to turn round MGM, which had fallen behind rival studios and scaled back its production business.

Ms Wagner and Mr Cruise were promised complete autonomy by MGM but the marriage has failed. UA executives hired by Ms Wagner have recently departed the company, apparently at the behest of MGM, which has caused friction.

Other senior executives have also been hired, which has caused a further deterioration in relations between Ms Wagner and Mr Sloan.

In addition, MGM has failed to raise financing to fund its own production slate. UA succeeded in raising $500m in a deal arranged by Merrill Lynch but although the money was to be used exclusively to fund UA movies there have been internal disagreements about whether the money can be spent on MGM films.

These tensions have stalled UA’s own plans, said a person familiar with the situation. Ms Wagner declined to comment. However, the person familiar with the situation said she planned to return to full-time movie production.

MGM also declined to comment. The studio came close to securing its own production fund last year but the plans were hit by the onset of the credit crunch.

Since then the company, which is owned by Texas Pacific Group and Providence Equity Partners, has also held negotiations with Ryan Kavanaugh’s Relativity Media group about a co-financing deal for several MGM films.

Mr Cruise and Ms Wagner will keep their equity stakes in UA. But Ms Wagner will leave her executive role after finishing post-production on Valkyrie , a second world war drama starring Mr Cruise. (ft.com, August 14, 2008)

Tom Cruise’s Production Partner Bows Out

Tom Cruise’s longtime production partner, Paula Wagner, has announced that she is leaving her chief executive post at the new United Artists to pursue projects independently.

She will retain her coownership in UA, the nearly century-old studio that she and Cruise revived after losing their spot on the Paramount lot in 2006, and she’ll continue to work on her films that are already in the pipeline.

“I love Paula—we have worked together and been friends for over 25 years,” Cruise said in a statement Thursday. “I support her in anything she does. Paula is an incredibly smart and talented producer, and I look forward to working together producing films in the future.”

“I’ve truly relished working with my longtime partner Tom Cruise to revitalize United Artists, and I am proud of all that we’ve accomplished in the past two years, reinvigorating the brand and developing such a strong slate of films,” Wagner said in a statement Wednesday.

Wagner owns the UA shingle with Cruise, whose role at the company isn’t expected to be affected, and MGM.

“As much as I’ve enjoyed my time as an executive, I have longed to return to my true love, which is making movies, so that’s what I’ve decided to do,” her statement continued. “I still believe in our vision for UA, and I am confident that [MGM CEO] Harry Sloan and our colleagues at MGM will see that vision through to reality.”

Per Variety, she is expected to step down following the Dec. 26 release of Bryan Singer’s trouble-plagued World War II thriller, Valkyrie.

“This was very hard for Tom. Everyone recognized that Paula has been a disaster. But to his credit, he wanted her to have an exit with honor,” a source told L.A. Weekly’s Deadline Hollywood blog, which predicted the shakeup on Monday.

The “disaster” claim was in reference to the production problems plaguing Valkyrie and the box-office flop that was UA’s first effort, Lion for Lambs, both misfires that were rumored to be affecting the company’s financing deals. (E! Online, August 13, 2008)

So… It seems to me Paula only left after unforseen problems with not making enough money for UA, according to Mr Sloan, and that she will continue to work with Tom for C/W Productions.