Hollywood Stars

Hollywood Stars

Hollywood Stars

A cheat sheet for the news.
Nov. 9 1996 3:30 AM

Hollywood Stars

Ransom, a movie that opens Nov. 8, cost $61 million to make. Nearly a third of that, $20 million, went to its star, Mel Gibson. Gibson worked for three months, earning almost $0.3 million a day. For six weeks on the set of the next Batman movie, Arnold Schwarzenegger has been paid $25 million, or $833,333 a day--plus, if the film succeeds, he will get another $10 million or so from merchandising revenue. Nobuyuki Idei, the new president of Sony--whose major films last year featured expensive stars and either flopped or broke even--has declared that his first priority for Hollywood is to liberate it from the tyranny of stars. Why do stars get paid so much money? Are they driving Hollywood out of business?

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The upward creep of stars' salaries, and producers' complaints that it was wrecking the movies, have both been going on since the film industry began. In 1910, aspiring film mogul Carl Laemmle wooed actress Florence Lawrence away from Biograph (where D.W. Griffith was a director) with higher wages and a promise to make her a star. Until then, there were no movie stars. Feature films carried no acting credits, and producers forbade movie magazines to print cast lists. The reason was precisely the fear that actors and actresses known to the public by name would exploit that recognition to demand higher wages. They did, especially during the late 1910s and the 1920s, when a leading lady like Mary Pickford could command the then-astronomical sum of $10,000 a week, plus an annual bonus of $340,000.

During the studio era of the 1930s and '40s, talent costs were kept artificially low by a code negotiated between producers and actors at the depth of the Depression as part of FDR's National Recovery Act. (The NRA was later ruled unconstitutional, but the Hollywood Code survived). The code gave the five major and three minor studios draconian power over stars. These included a seven-year exclusive right to their services, the right to cancel their contracts every six months (the stars had no such right in return), the right to dock them for turning down a role in any movie of the studio's choice, the right to predetermine salary increases, and so on.

In 1948, an antitrust suit brought by the federal government forced the studios to give up ownership of movie theaters. Without a guaranteed outlet for their product, the studios no longer could afford to keep stars on permanent retainer. At that point, stars seized control of their own careers, and the talent agent became a major Hollywood player. The agents' triumph was not complete, however, until the late 1980s and early 1990s, after all the studios had been bought by larger, mostly international corporations, and colorless corporate executives replaced the larger-than-life moguls of the studio era. Michael Ovitz and a few other agents were able to use their clients' star power to demand a package deal--star plus screenplay or some other element of production--which the studio was forced to accept, in toto. Ovitz's Creative Artists Agency became the single most powerful institution in Hollywood.

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O vitz left agentry last year to become No. 2 to Michael Eisner at Disney, and Ovitz's No. 2, Ron Meyer, also has left CAA, leading some Hollywood savants to declare the agency era over. Meanwhile, though, the triumph of the agent and the package deal is, perhaps, the main reason that stars' salaries are as high as they are. But it is also true that the demand for stars' services is also at an all-time high. Even television programming this season is dominated by movie stars (Ted Danson, Mary Steenburgen, Michael J. Fox, Rosie O'Donnell). Several television executives told Variety recently that they would not produce any new shows unless they could sign top film stars to them.

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Hollywood stars are benefiting from the larger economic trend of growing inequality. Not only is the gap between executives and janitors growing; so is the gap among executives. In the case of stars, the main reason is marketing: Studios have found no better way to bring in audiences than through the lure of popular stars, who often command followings in specific age groups and can therefore help target a film to teen-agers, middle-aged women, etc. And securing viewers is an increasingly difficult task. Audiences are shrinking, partly as a result of competition from videocassettes, cable and pay TV, the Internet, and other forms of new technology. Films stay in theaters for less time than ever before; therefore, more films have to be made; and therefore, more money has to be spent distinguishing one film from another. The cost of marketing a movie is up 47 percent since 1991, according to the Motion Picture Association of America, to an average of $18 million. Advertising movies before they open is crucial but tricky, since each film is essentially a brand-new product with no identity in the marketplace other than its stars'. Word-of-mouth takes too long to kick in and hurts more films than it helps, and no one knows the names of directors anymore (except, perhaps, for Steven Spielberg's). As a result, the value of stars' fame has increased.

Adding to the demand for stars with recognizable names is the foreign market. Sales overseas now account for half or more of a film's gross. Waterworld, for example, was considered a flop in the United States because it only grossed $88 million on a $175 million budget. Worldwide, though, it grossed $260 million. TheCable Guy, for which star Jim Carrey was paid $20 million out of a $60 million budget, is also expected to turn a profit abroad. But selling a blockbuster overseas requires the services of A-list talent; foreign audiences are even less willing than American ones to accept second-tier stars.

Hollywood executives are attempting to reduce stars' influence. This spring, Disney announced that it would cut its production by half. Several studios followed suit. Studios will also try to substitute for expensive star vehicles more animated films and explosive special-effects movies such as Twister and Independence Day--the biggest box-office successes last year, with grosses of more than $200 million apiece.

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M eanwhile, following the lead of Clint Eastwood, Robert Redford, Ron Howard, and Jodie Foster, more and more actors are using their cachet to become directors and producers, often of smaller, artier movies that might not otherwise attract either funding or an audience. Mel Gibson won an Academy Award for directing last year's Braveheart, as did three actors (Christine Lahti, Griffin Dunne, and Jeff Goldblum) for directing short films. This year, the actors-turned-directors (or producers or writers) included Tom Hanks (That Thing You Do!), Steve Buscemi (Trees Lounge), and Al Pacino (Looking for Richard).

It is not the first time that actors have tried to seize the reins of production--that was in 1919, when Mary Pickford, Charles Chaplin, and Douglas Fairbanks joined forces with William S. Hart and D.W. Griffith to form United Artists, a distribution company meant to compete with the larger film companies, which were churning out formula films and treating most actors and actresses as hired hands. United Artists, however, was plagued by inept management and a lack of resources, and never became a power player. This time, actors and actresses have Hollywood over a barrel, and they may just succeed in becoming the next generation of auteurs.