LOS ANGELES (Bloomberg) — Actor Tom Cruise and his partner, Paula Wagner, signed an agreement to run United Artists, the film studio founded by actors including Douglas Fairbanks Sr. and Charlie Chaplin 87 years ago.

Wagner will be chief executive officer of the Metro-Goldwyn- Mayer Inc. unit, running day-to-day operations with Cruise, Los Angeles-based MGM said in a statement. Cruise will produce and star in UA movies and be free to make films with other studios.

The agreement provides Cruise, whose films have earned more than $2.9 billion at the box office, a new home after Viacom Inc.’s Paramount Pictures declined to renew his contract in August. Viacom Chairman Sumner Redstone accused Cruise of hurting sales of “Mission Impossible III” with his conduct.

“This is a lot better than anything he had before,” said Bill Mechanic, chief executive officer of Pandemonium, a Beverly Hills, California-based film production company. “Instead of a producer, he’s a studio.”

Cruise and Wagner will own a stake in United Artists and set the studio’s production slate, with authority to approve film productions with some restrictions, MGM said.

Films they have produced include the “Mission Impossible” movies, “War of the Worlds” and “The Last Samurai.”

The agreement also may revive United Artists, which has been used by MGM in recent years as a vehicle for distributing smaller-budget films, including “Capote,” and “Art School Confidential.”

The studio was founded in 1919 by Fairbanks, Chaplin, Mary Pickford and D.W. Griffith as a way to allow artists more control over films.

“If they can focus more on the stories and less on the personality, they could do well,” said Brandon Gray, president of Box Office Mojo.com.

“Tom Cruise as an actor has certainly proven himself capable of picking projects that generate a lot of revenue.”

United Artists developed films including the “Rocky,” “Pink Panther” and “James Bond” franchises. MGM acquired United Artists in 1981 from Transamerica Corp.

MGM will handle worldwide distribution of United Artists’ output under the agreement, according to the statement. MGM is controlled by Providence Equity Partners and Texas Pacific Group along with industry partners Comcast Corp. and Sony Corp. of America.