Click to Skip Ad
Closing in...
Kristen Stewart Is First American Actress Nominated for César Awards in 30 Years; 'Saint Laurent' Leads with Ten Kristen Stewart Is First American Actress Nominated for César Awards in 30 Years; 'Saint Laurent' Leads with Ten How They Sustained the Times Square Momentum in 'Birdman' VIDEO How They Sustained the Times Square Momentum in 'Birdman' VIDEO 6 Things to Know About Sexy Sundance Breakout 'Diary of a Teenage Girl,' Part of Sundance's Women's New Wave 6 Things to Know About Sexy Sundance Breakout 'Diary of a Teenage Girl,' Part of Sundance's Women's New Wave Sundance Raves About Ewan McGregor as Jesus and the Devil in 'Last Days in the Desert' Sundance Raves About Ewan McGregor as Jesus and the Devil in 'Last Days in the Desert' Filmmakers, Give Us Your Numbers! Sundance and Cinereach Unveil The Transparency Project Filmmakers, Give Us Your Numbers! Sundance and Cinereach Unveil The Transparency Project Top Ten Takeaways: Polarizing 'American Sniper' Speeds Past $200 Million; Lopez Trounces Depp Top Ten Takeaways: Polarizing 'American Sniper' Speeds Past $200 Million; Lopez Trounces Depp Arthouse Audit: Panic Time? 'Mommy,' 'Red Army,' 'Black Sea,' 'Cake,' 'Duke of Burgundy' All Disappoint Arthouse Audit: Panic Time? 'Mommy,' 'Red Army,' 'Black Sea,' 'Cake,' 'Duke of Burgundy' All Disappoint 2015 PGA Winners: 'Birdman' Steals 'Boyhood''s Awards Season Thunder 2015 PGA Winners: 'Birdman' Steals 'Boyhood''s Awards Season Thunder Watch: Nicole Kidman Talks 'Strangerland' at Sundance (Exclusive Video Interview) Watch: Nicole Kidman Talks 'Strangerland' at Sundance (Exclusive Video Interview) Sundance Acquisitions Market Heats Up with 'The Bronze' and 
'The Witch' Sundance Acquisitions Market Heats Up with 'The Bronze' and 'The Witch' Sundance: Netflix Inks Four-Picture Deal with Duplass Brothers Sundance: Netflix Inks Four-Picture Deal with Duplass Brothers Early Reviews Portend Sundance Breakout in Stylish Historical Horror 'The Witch' Early Reviews Portend Sundance Breakout in Stylish Historical Horror 'The Witch' Sundance: 5 Things to Expect From Alex Gibney's Damning Scientology Doc 'Going Clear' Sundance: 5 Things to Expect From Alex Gibney's Damning Scientology Doc 'Going Clear' Sundance Reviews: 'The Bronze' Is "Potty-Mouthed," "Vinegar-Spirited," Racy Gymnast Comedy Sundance Reviews: 'The Bronze' Is "Potty-Mouthed," "Vinegar-Spirited," Racy Gymnast Comedy 'American Sniper' Writer Jason Hall Addresses Concerns About Clint Eastwood's Controversial War Pic 'American Sniper' Writer Jason Hall Addresses Concerns About Clint Eastwood's Controversial War Pic Martin Scorsese Breaks Long-Awaited 'Silence,' Set to Begin Filming This Month Martin Scorsese Breaks Long-Awaited 'Silence,' Set to Begin Filming This Month Watch: Meet the Women of 'Birdman' (Exclusive 4-Minute Featurette) Watch: Meet the Women of 'Birdman' (Exclusive 4-Minute Featurette) Watch: Hitchcock's Thwarted Holocaust Documentary Comes to HBO Watch: Hitchcock's Thwarted Holocaust Documentary Comes to HBO Best Actor Oscar Predictions 2015 UPDATED Best Actor Oscar Predictions 2015 UPDATED Oscar Predictions 2015 Oscar Predictions 2015

Hollywood Confronts New Austerity

Photo of Anne Thompson By Anne Thompson | Thompson on Hollywood August 4, 2009 at 4:27AM

Patrick Goldstein calls around to nail down the new austerity hitting Hollywood. And Kim Masters details pay cuts for Denzel Washington and Tom Cruise, as well as how cost-cutter Disney is trying to deal with spendthrift producer Jerry Bruckheimer, the exemplar of Hollywood's old ways.
0
Thompson on Hollywood

Patrick Goldstein calls around to nail down the new austerity hitting Hollywood. And Kim Masters details pay cuts for Denzel Washington and Tom Cruise, as well as how cost-cutter Disney is trying to deal with spendthrift producer Jerry Bruckheimer, the exemplar of Hollywood's old ways.

Ask anyone, and they'll tell you nobody's getting the money they used to. The numbers the studios used to pay talent were insane. The studios always had the power to dial it back, but only when their revenues started slipping with DVD sales did they start pulling in their spending. And the Writers Strike did not help things, writes Goldstein:

Studio chiefs say that in the old days -- meaning five years ago -- everyone was enjoying boom times. Year after year, DVD revenues kept soaring. In an up market, it was easy to be generous with back-end profits, since it looked like there was plenty of profit to go around. The studios didn't mind if the talent got rich, just as long as it wasn't at the studios' expense. But times have changed.

"Two years after you'd made a movie, you'd look at the P&L [profit and loss] statement and the numbers always turned out better than they were when you'd greenlit the movie," says one top studio executive. "Even a movie that you'd thought was a break-even proposition turned out to be nice moneymaker. But now it's the complete opposite. The DVD revenues keep going down. You look at a movie two years later and the numbers aren't anywhere near where you'd originally projected them. When the Walt Disney Co. reports earning losses in back-to-back quarters, it's very compelling evidence that the entire business is in trouble."

The steep downturn in the DVD market, where revenues are down close to 25%, might have been enough in itself to prompt studios to get tough with talent. But with marketing costs still skyrocketing, with the collapse of the capital markets leading to far less money pouring in to help studios assemble film slates, something had to give. According to another popular theory, the writers strike turned out to be incredibly bad for talent -- notably writers -- since the months of enforced production stoppages gave studios a rare opportunity to sit back and analyze their business, a process that had especially disturbing consequences for talent.

This article is related to: Headliners, Hollywood, Studios, Cash Crunch, Tom Cruise, Disney


E-Mail Updates