Hollywood turns off the money machine

Tom Cruise

Hollywood stars are being forced to take pay cuts as the major studios pull the plug on big-budget projects.

Last year's box office takings are down 5.2 per cent, and the cost of making movies is soaring because of added expenses for digital enhancement and international marketing.

So studios are refusing to meet stars' big-money demands, and several high-profile films about to go into production have suddenly disappeared from view.

Studios have noted that only three of the 10 highest-grossing films last year - War of the Worlds, Charlie and the Chocolate Factory and Mr and Mrs Smith - were star-driven.

The rest of the hits - including Star Wars: Episode III - Revenge of the Sith, Harry Potter and the Goblet of Fire and The Chronicles of Narnia - had few stellar names or fat salaries.

All this year's Oscar nominees for best actor - Philip Seymour Hoffman (Capote), Terence Howard (Hustle and Flow), David Strathairn (Good Night, and Good Luck), Joaquin Phoenix (Walk the Line) and Heath Ledger (Brokeback Mountain) - worked for rock-bottom wages.

The last of the big paydays went to Lord of the Rings director Peter Jackson, who was paid a reported US$20 million ($32 million) plus 20 per cent of the gross for King Kong.

Now studios are making sure that they get their cut before any stars or directors take money from the film.

Sony refused to approve the romantic comedy The Holiday until Cameron Diaz agreed to a "cash break-even" deal. Even Tom Cruise, who usually gets about 25 per cent of his films' gross profits, agreed to take a much lower cut for Mission: Impossible 3 when Paramount threatened to cancel the film because of its bloated budget.

Brad Pitt is another who has taken a big cut in pay, from his customary fee of up to US$30 million down to US$1.4 million for his latest, The Assassination of Jesse James.

Former Twentieth Century Fox chairman Bill Mechanic describes it as a long overdue rationalisation.

"In the past, you paid someone a lot of money to star in a movie, then you spent a lot of money to make a movie, then you lost money."

Another studio executive said: "Movies no longer need big star names to make money."

Paramount shut down Believe It or Not, a film to star Jim Carrey and believed to have a budget of about US$220; another Carrey film, Used Guys, was rejected by Fox when the budget passed US$165 million.

As the budget of its long-planned American Gangster crept towards US$150 million, Universal paid US$27 million to Denzel Washington to meet its "pay-or-play" contract - meaning the actor gets paid regardless - rather than go ahead with making the film.

Silence surrounds the Universal horror film The Bell Witch, which was to go into production soon and for which Reese Witherspoon was apparently to receive US$44 million.

"Hollywood has always thrown ungodly sums of cash at top-tier actors, who ostensibly provide a kind of bomb shelter for the studios picking up the tab," said Entertainment Weekly.

"It was a strategy that worked well enough until it didn't ... Now studios are trying to add a new step to their budget calculations - common sense."

- INDEPENDENT