Months ago, Grey was one of several movie industry executives who publicly rallied to Cruise's defense to insist that his status and popularity were undiminished.

They were reacting to a USA Today/Gallup poll in which half of those surveyed registered an "unfavorable" opinion of the actor. Many cited his off-screen behavior during the past year, including his outspoken defense of his religion, Scientology, and his blunt criticism of psychiatry and actress Brooke Shield's treatment for postpartum depression.

Cruise also became the butt of jokes for his manic, couch-hopping appearance on "The Oprah Winfrey Show" last May to declare his love for actress Katie Holmes, who recently gave birth to Cruise's first biological child, a daughter they named Suri.

"As much as we like him personally, we thought it was wrong to renew his deal," Redstone was quoted as saying in the Wall Street Journal report e-mailed to reporters. "His recent conduct has not been acceptable to Paramount."