The Number$

Everyone knows actors and directors make a lot of money, but few can fathom exactly how much.

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I have a modest proposal for the reform of the American motion picture business. It is my theory that the majority of the audience today is bored and bewildered by the immense roll of credits that comes at the end of every film. This is a concession to vanity that has lost control. To replace it, however, I am suggesting a few brief title cards to explain the deal that the several leading participants had on the picture. Especially when they have just suffered a stinker, I think most people will wait to see that so-and-so got $20 million or 7.5 percent of the gross. The audience response to this news might even be the beginnings of a corrective.

It may be that for this new system to work properly the audience needs a little education in movie economics. But that is no bad thing, and hardly out of place in a world where many people are more inclined to read the box-office charts on Monday than the reviews on Friday.

So let me spell out something that may or may not be universally known. In the so-called Golden Age of Hollywood, actors and directors worked under contract to one studio or another. The real stars were paid a lot of money--like several hundred thousand dollars a year--in return for three or four pictures. More or less, they were assigned to those pictures, and suspended if they declined to turn up on the first day of shooting. They had nothing like profit participation in their movies. All the profit (and the loss) went to the studios and the distribution companies. What that meant was that on a picture like Gone With the Wind --the epitome of movie success--Clark Gable, Vivien Leigh, Olivia de Havilland and Leslie Howard were paid to make the picture. When it boomed (and that boom goes on still--60 years of profit), they had no claim on more money.

The stability of that system ended in 1950. Actors then were subject to a very high income tax on their earnings. The agent Lew Wasserman devised a system for his client James Stewart whereby, on Winchester '73, the actor received no salary but would get a portion of the profits from the film. The IRS agreed that that income was subject not to the regular income tax, but to capital gains tax. Executives had been employing this escape throughout the war years--and it meant the difference between being taxed at as much as 90 percent or 25 percent. It also allowed an actor to spread his income over several years. And on that one film Stewart is said to have earned $600,000, far more than he commanded as salary then.

It was a brave, enterprising resort: the actor took a real risk--if the picture bombed, he might get nothing at all, for his percentage was on the profits. But the scheme was very attractive to other stars and Stewart's deal quickly became a model. Now come forward 10 years and see the extraordinary transition that occurred--it is a model of the breakdown of Hollywood, and even of the loss of sanity.

In 1961, Marlon Brando made Mutiny on the Bounty. Brando was then at his peak, the star of a string of successful pictures. And Metro-Goldwyn-Mayer regarded him as essential to their remake of the Charles Laughton-Clark Gable picture. So it was that Brando was able to command this deal (and this kind of deal maybe deserves to appear before the movie--as a warning): Brando would receive $500,000 as salary, $10,000 a week in expenses and $5,000 a day for every day the picture went over schedule. Plus 10 percent of the gross.

What is the gross? Every dollar returned to the distributor by theatres. The net, in contrast, is the profit calculated after the gross income has had all the expenses that inspired accountants can think of removed. On most pictures today, actors, directors and even writers are contracted to receive a percentage of the net profits. And many pictures never get into net profit. But a few very potent stars can command points off the gross: thus they start earning more as soon as the picture opens.

There's something else I didn't tell you about Mutiny on the Bounty. Brando's contract gave him script approval. I'm charging nothing, but there were people on the set of that very troubled film who felt that Brando's extreme hesitation and unease with the script added significantly to the delays in the schedule. So it was, counting his salary, expenses and daily penalty clause, that Brando took away about $1 million.

As it happened, the film was a mess and a failure. It had cost about $20 million, and it never came close to covering that sum, let alone the extra money it took to market and promote the film. Nevertheless, it did take in about $10 million at the box office, and that meant, by contract, that Brando was due another $1 million.

Come further forward, and full credit/deal information might reveal that Steven Spielberg made 2.5 percent of the net profits on Jaws and 17.5 percent on Close Encounters of the Third Kind. Grant then that for weeks after E.T. The Extra-Terrestrial was released, Spielberg was earning profits at the rate of $500,000 a day. Remember that we have not yet itemized Jurassic Park or the Indiana Jones pictures, and you can begin to see how Spielberg was worth a billion dollars by the time he was 50.

That is real money, and it churns away all the time in the world behind the screen. Yet, the writing of movie history continues to ask how good James Stewart was in Winchester '73 and Rear Window --and whether E.T. is better than Schindler's List. It's natural for us to enjoy such debates, but the real history of Hollywood will not exist until someone adopts the simple, blunt advice, "Follow the money."

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