Gimme the money

The film business - As the summer blockbusters limp into cinema box offices, Boyd Farrow urges Holly

The biggest myth in Hollywood - hardly a town shy about manufacturing legends - is this: the bigger the movie, the bigger its star. In fact, in the top 20 all-time worldwide box-office chart, there is only one star-driven film: Forrest Gump, with Tom Hanks, clinging on at number 20. Outperforming that are: three episodes of Star Wars; three Harry Potters; the Lord of the Rings trilogy; three 'toons; three sci-fiers; a superhero flick and its sequel; and Jurassic Park. Berthed in the top spot is Titanic, a film that informed cinema-goers of Leonardo DiCaprio's existence, rather than the other way around.

In most movies these days, the story, or the sheer spectacle, is the "star". Arguably the technical wizardry, and not Hanks's drawling simpleton, was the draw for Forrest Gump. Last year, a mere six of the top 20 US films were star vehicles, the highest being The Bourne Supremacy with Matt Damon, in seventh place. So far, of the 50 highest-grossing films of 2005, only 12 can be called star-driven.

It is precisely because there are so few legitimate stars - names which can actually "open" a movie - that this endangered species is so fabulously rewarded. Often, the eye-popping salaries these "brands" earn are behind-the-sofa change, compared to the tens of millions they earn through "first-dollar gross participation" - the box-office and DVD spoils, siphoned off before the studios have even recouped their production and marketing costs.

And with so few roadworthy star vehicles out there, studio chiefs do cartwheels simply to be in "the Tom Hanks business", say, even if the back-end deals involved mean the resultant motion picture may not turn a profit for years, if ever. As Walter Parkes, former head of Steven Spielberg's DreamWorks studio, sighs: "Executives green-light pictures just so they can say, 'We're doing so-and-so's next picture.' It enhances the company's image. They know the figures don't add up, but signing on the dotted line keeps them in a job for another year."

This is why Godzilla-sized rumblings were heard in Tinseltown when Variety suggested the incoming regime at Paramount Pictures had tweaked the terms negotiated by the world's biggest box-office star, Tom Cruise, to produce and act in next year's Mission: Impossible III.

First-dollar gross deals have been responsible for many an industry insider choking on their bagel as weekend figures have been tallied. Studios need to deliver "event" movies, but they still begrudge mortgaging their future profits to the talent. Naturally, stars and directors insist that they merit the bonanzas because they put their equity, in the form of their reputations, on the line. They play hardball because they believe - probably correctly - that the studios under-report grosses from the world's more far-flung corners, and stiff them on DVD royalties.

Studios usually pay participants out of a pool limited to 20 per cent of DVD revenues, a formula hatched in the 1980s when Hollywood, jittery about the newfangled home video devices, claimed that it needed the 80 per cent share to break even. With DVD revenues now eclipsing box office, the talent feels short-changed, while the studios kvetch - again, correctly - that they do not break even until the final DVD tallies are in.

The practice of working for a percentage of a film's grosses began in the early 1950s, when cash-strapped Universal Pictures gave James Stewart "net points" in lieu of a salary. The payment came from Universal's cut of the gross, after revenues had been split 50-50 with the cinemas. These days, most stars get a salary on top of whatever back-end deal over which they have dug their heels in. As percentage points creep up, Hollywood has seen its potential profits crumble, especially as production and marketing budgets continue to head north.

It is generally accepted that studios have a ceiling of 25 per cent of box-office grosses that they write off for talent, but when a tent-pole picture (one which holds up the rest of the studio) has a star actor, famous director and a powerful producer, this can be a stretch. The Depression-era boxing drama Cinderella Man is taking a pounding at the box office, even before the back-end deals of its star Russell Crowe, director Ron Howard and co-producer Brian Grazer are factored in.

Variety estimates that although global box-office takings for Meet the Fockers passed $515m, Universal broke even only just before the film's DVD release in the US, because 27.5 per cent of the gross went to the stars and the director, Jay Roach. Last year's Polar Express, budgeted at $100m-plus, enjoyed a global box-office haul of $283m but Warner Brothers won't break even - although the co-producer Steven Boyd met production and marketing costs - until its DVD release in November. Its star Tom Hanks and producer/director, Robert Zemeckis, have already received almost $50m. It is believed a similar first-dollar deal of 30-35 per cent has been struck for Hanks and the director Ron Howard for the upcoming Da Vinci Code.

Furthermore, with studios battling to keep gross points at 25 per cent, the big-gest stars have, on occasion, bludgeoned them into cutting separate DVD deals, under which they get 50 per cent or more of DVD revenue counted towards the gross. The remuneration for Peter Jackson, director of The Lord of the Rings, for scripting, directing and producing the upcoming King Kong remake comprised a $20m pay cheque, plus 20 per cent of the gross and a chunk of future DVD grosses.

Paramount's new get-tough policy on Mission: Impossible III sends a message to Hollywood at a crucial time. Since February, the weekly US box-office receipts have been consistently lower than they were last year - the first time this has happened for such a long stretch since 1985 - as one tent-pole movie after another has sagged, or collapsed. Halfway through the year, the US box office is down almost 10 per cent on 2004, while Europe's box-office grosses, now worth more than those for the US, are down roughly 20 per cent. The year's biggest global hit, Star Wars: episode III - revenge of the Sith, mostly benefited the series creator George Lucas, who bankrolled the whole shebang and contracted 20th Century Fox to handle distribution for a fee.

For now, US studios are more than buttressed by the extraordinary success of DVD: overall box office might be down, but revenues are up. However, the studios and Wall Street are grimly aware that Hollywood's biggest revenue stream is already slowing down. DVD Exclusive magazine reports that disk sales jumped by 71 per cent between 2001 and 2002, but are up only 17.5 per cent so far this year.

In an attempt to appease their corporate parents, thrifty studios are already exploring other ways to clamp down on stars' profit participation. These include working with fewer gross players on each film; locking the talent into sequels and spin-off deals before its stock rises; and gambling on younger directors. Paradoxically, even though M:I-3's budget will be trimmed by roughly 10 per cent - a chastening experience for Cruise as producer - he could end up pocketing more money than he did for M:I-2. His production outfit Cruise/Wagner got 30 per cent of M:I-2's gross, of which 7.5 per cent went to the director, John Woo; the director of this latest film, J J Abrams, making his big-screen debut, will get no gross points.

The big titles expected to raise studio spirits in the run-up to Christmas include a Harry Potter, a couple of 'toons, King Kong, and the first instalment in the en-visaged Chronicles of Narnia trilogy. And as one respected producer wryly puts it: "I cannot afford stars in my movies, especially if the movies are big hits."

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