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Hollywood Puts the Squeeze on Talent
LOS ANGELES, Nov. 6 — On a recent trip to New York City, Russell Crowe was asked by reporters why he had dropped out of negotiations to star in a new movie being directed by Baz Luhrmann and produced by 20th Century Fox.
The Academy Award winner, never one to mince words, suggested it was, in part, the money. “I do charity work, but I don’t do charity work for major studios,” Mr. Crowe said.
It seems the needy are not the only ones in Hollywood with their hands out. Movie and television studios, facing escalating budgets, rampant piracy and the uncertain future of new media, are demanding concessions from talent. But as actors, directors and writers feel the squeeze, many are not happy about it.
Worse, the tension is not likely to ease soon. As studios are set to begin contract negotiations with talent in January, all sides are girding for battle.
Hollywood is in the midst of a strategic shift. The average cost to make and market a movie has skyrocketed — to $96.2 million last year, from $54.1 million in 1995 — while lucrative DVD sales have flattened. Major film studios are fending off illegal piracy, which industry executives say accounted for $1.3 billion in lost revenue in the United States last year.
The growth of new media threatens to undermine traditional businesses, while studios are flummoxed about how to take advantage of the new opportunities they represent. And movies and TV also face tough new competition from video games and online social networking sites. Even cellphones have become a favorite diversion among the young.
As in so many other show business debates, money and control are at the heart of the matter. And without solutions to these problems in sight, relations between talent and the studios are more strained than ever.
“No matter how successful you are, you are not invincible,” said Brett Ratner, who directed the blockbuster “X-Men: The Last Stand” and is an executive producer of the television show “Prison Break.” “The studio is writing the checks. It’s all about leverage and who has the power. The goal is to get the biggest deal you can, because you are going to have to give something back to the studios anyway.”
With guild contracts set to expire within the next two years, the animosity is palpable. This summer, 12 writers for the reality show “America’s Next Top Model” went on strike, complaining that the producers would not let their work be recognized by the Writers Guild of America, which would have guaranteed the writers pension and medical benefits. And movie studios are aggressively demanding that actors and directors lower their fees or risk having their movies dropped.
But it is the growing area of new media and technology that has made the relationship between studios and talent most fragile. Mr. Ratner, who also directs music videos, said he wanted to share in the profits from music videos when they were downloaded over services like the Apple iTunes Store. And actors, writers and directors are pressing to be paid fees for shows they worked on that are streamed or sold on the Internet, as well as for new programming on cellphones.
Talent and studios, of course, have clashed before. In 2001, a Hollywood shutdown was narrowly averted. In 1988 writers walked out for nearly half a year, delaying the fall television season. And in 1980, actors took to picket lines to establish fees for films made for pay television channels, like HBO.
But there seems to be a greater urgency now, because there do not appear to be clear answers to the industry’s woes. And entertainment executives seem more determined this time to hold the line. Film studios got burned in the 1990s when popular film actors and directors brokered lucrative paydays for themselves while, in some cases, studios took a loss on their films. Now even bankable stars, like Tom Cruise, are being cut less slack. His 14-year producing deal with Paramount Pictures was severed this summer, although he rebounded last week to become a partner at United Artists.
“It works on an artist’s psyche, ourselves included,” said Brian Grazer, an Academy Award winner who produced the blockbuster “The Da Vinci Code.” “You are faced with a new reality. Do you want to stick to your price and be forced to stand in the parking lot instead of playing on the field? That is cause for conflict between talent and studios.”
Brad Grey, a former talent manager and currently chairman at Paramount, said he did not think relationships with actors were more contentious than in the past. But, he said, leverage had shifted in favor of the studios. The studios will pay top dollar for certain actors, writers or directors, but only if they need them, he said. The rest have to settle for less.
“If indeed you are an actor and you believe you will guarantee box office, then you have the privilege and freedom of arrogance,” Mr. Grey said. “It’s when there is a margin for error that emotion runs high.”
Even Mr. Grazer said a new discipline imposed on talent could be beneficial. But not surprisingly, the industry’s guilds — particularly the Screen Actors Guild and the Writers Guild of America — are defiant.
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“This is trying to grab a little security in an uncertain business,” said Ms. Sluke, who added that she and her colleagues wanted pension and health benefits like those negotiated by the show’s editors.
A spokesman for the CW network, which broadcast the show, said neither the CW nor the producers would comment.
J. Nicholas Counter, who for 25 years has been president and chief negotiator of the Alliance of Motion Picture and Television Producers, said the striking writers might have been more successful if the Writers Guild had been less hostile.
“If the guilds are flexible, these deals could be negotiated,” said Mr. Counter, who was not involved with “Top Model.” “There are more tensions, more pressures on both sides. This is worse than it’s ever been.”
Indeed, it is not the only scuffle involving the Writers Guild. NBC Universal recently filed a complaint with the National Labor Relations Board against the Writers Guild after writers for television shows, including “The Office,” refused to work for Web shows too.
“The posture and rhetoric studios are blaming us for having is that we are being too aggressive and militant,” said Patric M. Verrone, president of the Writers Guild. “But there is a mentality out there that this is a buyer’s market, that we’ll do more for much less.”
Whatever the tensions, many in the industry still prefer to avoid a strike. Said Mr. Grey of the coming negotiations: “From our perspective, tough is fine as long as you get to a reasonable place. Rhetoric is one thing; reality is another.”
Last year, Alan Rosenberg, who starred in the television show “L.A. Law,” was elected president of the Screen Actors Guild, pledging that studios should pay fees for content delivered by new media. It was a particularly appealing platform because guild infighting had left many actors worried the dissension among their ranks made them vulnerable.
So far Mr. Rosenberg has had some success in negotiating terms. Last year, for instance, he said, nonguild actors were being asked to perform in short programs for cellphones based on the ABC series “Lost.” The Screen Actors Guild objected. “They have to come to us first and talk about it,” said Mr. Rosenberg, referring to the show’s producers.
That led to negotiations with Touchstone Television, a division of the Walt Disney Company, which produced the show. Now actors who work on the cellphone program based on “Lost” will get a minimum wage of $425 for their work, as well as other fees if a short program was streamed on the Internet or sold on DVD, according to the guild. (The writers and directors negotiated separate deals.)
“It is possible to work things out and not just react to vitriolic letters,” said Mr. Rosenberg, referring to correspondence from lawyers sent in such disputes.
That said, the Screen Actors Guild is clashing with Disney and other studios over how much talent will be paid for television shows offered for sale by services like iTunes. Recently studios agreed to pay actors a fee similar to those negotiated for DVD sales. The actor’s guild balked, saying it should have been consulted first about the decision to offer shows online. The dispute between the actors and the studios is in arbitration, with actors hoping for a higher fee.
“We don’t consult the guilds on major business decisions,” said Anne Sweeney, co-chair of Disney Media Networks, which was first to offer shows for sale on iTunes. Either way, she added, it was more important that media companies move ahead with online offerings, even if it meant conflict. “There is a far greater risk in doing nothing, than doing this,” she said.
Recently Mr. Ratner, the director, was driving down Sunset Boulevard in Hollywood when he noticed a going-out-of-business sign at Tower Records, the music retailer that once thrived on selling the music of superstars like Prince, Elton John and Madonna. Many here, like him, fear that the problems that plagued the music business are heading their way.
“What happens if the film business is not ahead of the curve?” he asked. “What is going to happen to me? To all of us?”
Mr. Ratner said he had been well compensated as a director. Still, he has urged the Directors Guild of America to look at several issues facing directors, including the fact that they are not paid when music videos they direct are sold on the Internet.
But he is not waiting around to see what the guilds will do or studios will offer either. Mr. Ratner said he was close to announcing a deal with an Internet company to create his own “Saturday Night Live”-style program that he would own outright and distribute online. Then he can bypass studio bosses altogether.
“I could make a lucrative deal for myself,” he said. “This is just the beginning.”
