Main Event: Reps vs. Studio Execs
By Carl DiOrio, March 5, 2007
A top exec from Universal had some bad news for the talent attorneys sharing the dais.
“There was a time, maybe only five years ago, when there were a lot of stars who could open a big movie, but today you could count them on one hand,” Universal Pictures co-president Jimmy Horowitz said Friday. “So we just can’t afford to (pay talent) the way we once did.”
Studio execs and talent reps jousted before a packed house at UCLA’s McGowan Hall to open the 31st annual UCLA Law School Entertainment Symposium.
Sure, big-name talent still manages to wrangle megabucks deals, but the terms often are quite different than the recent past, Horowitz said. Studios are resisting giving backend compensation with first-dollar gross except for the most sought-after actors and directors, he said.
Such pullbacks follow repeated instances in which overly lucrative backend deals hurt studios, said moderator and former Paramount executive E. Barry Haldeman, currently of the law firm Jeffer, Mangels, Butler & Marmaro.
“I saw at Paramount (that) very often the talent would make more money than the studio,” Haldeman said.
Paramount Vantage executive vp Jeffrey Freedman, said the studio’s specialty unit commonly uses backend terms to compensate marquee talent it wants to attract to its lower-budgeted pictures. But the unit almost never gives away lucrative terms like first-dollar gross, which could see talent getting paid a percentage of revenue even before the studio is assured of breaking even on a release, Freedman said.
Actors’ upfront compensation is always modest, he added.
“I don’t pay any actors more than half a million bucks,” Freedman said. “It becomes a matter of whether they want to do the movie or not. It truly does.”
CAA’s Sheldon Sroloff complained that too often talent begins negotiations believing a film will be released through the main studio, only to find the project placed with its specialty division with compensation limited accordingly.
“To me, it’s bait and switch,” Sroloff said.
Alan Wertheimer, an entertainment attorney with Jackoway Tyerman Wertheimer Austen Mandelbaum & Morris agreed that the situation can be difficult to navigate for talent and its reps.
“To the extent they can characterize everything as a specialty film or a labor of love, it’s in their interest to do so,” Wertheimer said.
Pay-or-play clauses, guaranteeing talent paydays whether a picture is completed, also sparked barbed exchanges between the panelists.
Uni’s Horowitz said studios generally demand conditions for granting pay-or-play, like talent’s waiving the right to final script approval.
But Thomas Hansen of Hansen, Jacobson, Teller, Hoberman, Newman, Warren & Richman noted there’s a difference between demanding and getting.
“Usually what happens (is) we fight about it until the conditions go away,” Hansen quipped, to the panelists’ and audience’s amusement.
An exception involves directors regularly agreeing to a cap on the production budget in order to secure pay-or-play, he acknowledged.
In another opening-day session of the two-day event, SAG president Alan Rosenberg and WGA president Patric Verrone said the spread of product-integration deals with TV advertisers has given talent another negotiating headache.
“Product integration, as opposed to product placement (is) when it pushes the envelope to the point where it is the star of the show,” Verrone said.
It’s understandable that networks would look for new ways of attracting advertising dollars in the DVR age, the labor duo said. But they argued that talent should have the right to consult on product integration and opt out of participating when necessary.
“It’s also a matter of compensation,” Rosenberg said. “For one thing, it’s taking a job away from the actor who would normally be getting compensated for doing that endorsement (as a commercial).”
SAG and the ad industry are conducting a joint study to identify new means of compensating talent in such situations, he said, and in other new circumstances such as when entertainment content is distributed via the Internet and or mobile platforms.
Moderator and attorney Ivy Kagan Bierman of Loeb & Loeb noted talent contracts increasingly bear language that could force talent into participating in product integration.
But Rosenberg and Verrone said the matter will be a topic for negotiation in the guilds’ next round of film and TV contract talks to ensure talent’s voice in the creative process.
“We’re looking to be part of a collaborative process,” Verrone said. “(But) Columbo doesn’t drive a Maserati.”