This summer, nine sequels will open over twelve weekends, including a second Hangover, a third Transformers, a fourth Pirates of the Caribbean, an eighth Harry Potter, and so on. That's a new record for summer franchise domination.* However, there's something very different about this banner year: Only one of these follow-ups — Johnny Depp's Pirates — features a real live, major movie star. A-listers have been losing leverage over the years, but nowhere is this becoming more clear than in the world of sequels. Familiar titles are more important than ever to studios, but they've decided that they can do them without being weighed down by enormous, gross-gobbling paychecks and profit-participation deals. "In the eighties and early nineties, the movie star was the brand," explains Simon Kinberg, producer of X-Men: First Class. "Then in the nineties, visual effects became the brand. Now, the brand is the brand."
The Rise and Fall of the Megastar Megadeal
Back in the eighties and nineties, the glory days of the action star, if an actor could lock onto a franchise, it could subsidize his family tree for generations. Mel had his Lethal Weapon, Stallone had Rocky and Rambo, and Harrison Ford had three annuities: Star Wars, Indiana Jones, and Jack Ryan. Audiences knew what these stars stood for, and studio executives knew their deals painfully well: high salaries and profit participation that got them paid before the studio got paid, and often earned them more than the studio would make on an entire film.
And these blockbusters kept getting bigger. In the late nineties, every time a new action movie would introduce a groundbreaking special effect (Terminator 2's morphing cyborg,The Matrix's bullet time), studios would scream their mantra, "Raise the bar!" Audiences, already jaded by the last monster they saw, demanded ever more astonishing special effects, and moviemakers raced to outspectacle each other. Paired with big movie stars, such a formula got expensive and risky, fast. Recall that Keanu Reeves was paid a whopping $30 million upfront to make back-to-back Matrix sequels, but that his paycheck ultimately amounted to roughly $165 million, as his deal promised him an astonishing 15 percent of the final two films' $1.1 billion (that’s with a "b," people!) in worldwide grosses.
It appeared that something had to go: Either the big stars or the pricey effects. And while stars have become less dependable at the box office, CGI-packed sequels have not. Yes, they often wind up making less than their forebears, but according to a 2008 study published in the Journal of Business Research, they still tend to do much better than non-sequels, which is why studios return to them again and again.
"I wouldn't even pitch an original idea anymore," says Christopher McQuarrie, who, lest we forget, won the Best Original Screenplay Oscar in 1995 for The Usual Suspects. Most recently, he wrote the Wolverine sequel at Fox. "What [studios] want is — through no fault of their own — a piece of pre-existing material that's survived some sort of a litmus test, like a graphic novel. It's kind of ironic, because the number of copies that a graphic novel has to sell to be wildly successful in no way forecasts what or how a movie is going to open. But it creates a visual template on which the movie is based. Someone in marketing can look at that, and say, ‘We're selling this.’ An original piece of material is a complete gamble."
And if a cast gets too expensive, well, Hasta la vista, baby! Reboot or prequel-ize, refresh the brand, expand its universe, and, most important, bring in cheaper actors who won't gobble your profits.
When You've Got a Brand, Who Needs a Name?
The roots of the idea of star replacement can be found in the James Bond movies. (The series' longtime producers, the Broccolis, have always refused to give their spy-of-the-moment profit participation; when Pierce Brosnan started asking, he was retired.) But the idea really took hold as a profitable solution when Fox wanted to do a fifth Alien movie, but it would cost over $20 million to get Sigourney Weaver. Instead, in 2004 they made AVP: Alien vs. Predator for around $40 million with no stars: Including video sales, the film made some $92 million for the studio. Mind you, that's profit, not grosses — which is to say roughly double what Fox made from 2006’s star-packed X-Men: The Last Stand, which costfive times as much. Yes, some prequels fail on every level (Dumb and Dumberer), but they make a lot more when they don't. As for whether they're better or worse without the original stars, ultimately, that doesn't matter: They're cheaper, so there's less pressure to be good.
Kinberg is seeing this trend happen firsthand with two of his projects. He wrote the 2005 hitMr. & Mrs. Smith, which the Fox-based mini-studio New Regency is in the process of rebooting without Mr. Pitt-Jolie or Mrs. Jolie-Pitt: After all, they would command 40 percent of the gross if they returned, assuming they weren’t already booked up through the year 2047. So Fox's idea is to spin it off as something called Mr. & Mrs. Jones — about another pair of married spies with an ampersand — and if it ever gets made, it will star far smaller, cheaper fish.
Kinberg’s X-Men: First Class is a more tangible case of casting downward while maintaining a healthy brand. It centers around the familiar characters of Magneto and Professor Xavier, which justifies its marketing under the X-Men brand, but it's a prequel, which means it stars all new actors, mostly up-and-coming. They won't strain the budget, let alone take a piece of the gross.
“The reason why they didn’t make another X-Men after The Last Stand is that it would have been too expensive,” insists Last Stand’s director, Brett Ratner. “For that matter, that’s why another Rush Hour 4 probably won’t get made, either: It’d be too much to pay me, Chris [Tucker], and Jackie [Chan] to come back.”
Fox declined to comment on its development, but a studio insider familiar with the development of X-Men: First Class agrees with Ratner's assessment, explaining, “The success or failure of these movies is in the back-end participation.” If you pool the paychecks of First Class stars James McAvoy, Michael Fassbender, Jennifer Lawrence, and Nicholas Hoult, they likely don't add up to what it would cost to get, say, Mark Wahlberg, who usually commands $10 million and 8 percent of the gross.
Okay, so you've cast a talented, gorgeous unknown as your lead. What happens when the reboot succeeds wildly, and the once guppy-sized star becomes a really popular whale? Again, the new Hollywood math favors the house, not the players. One talent agent notes the story of Chris Pine: After appearing as Captain Kirk in J.J. Abrams’s reboot of Star Trek for Paramount, which was the highest-grossing film of the summer of 2009, he became highly sought-after by every studio in town. But Pine’s ability to be considered for even bigger roles, such as the lead in Universal’s reboot of The Bourne Legacy, has been hampered by the contract Paramount negotiated with him to do Star Trek. For example, they wanted him for their reboot of Tom Clancy's Jack Ryan franchise, and per that original contract they had the right to make him do it, and he came relatively cheap. And for a star plucked from total obscurity, such as Thor star Chris Hemsworth, Marvel could easily have demanded four or five such options. These newbies have very few cards to play: Ridley Scott wanted Michael Fassbender for his Alien prequel, and when the actor's agents pressed for a better deal, they were surprised that the director and the studio were more than willing to cast someone else. Suddenly, Team Fassbender was forced to backpedal furiously; the last offer was just fine, thank you. Yes, eventually these actors will serve out their contracts and demand more cash, but by that point the franchise will probably have burned itself out, and, hey, time for a reboot!
Everybody Into the Pool! But This One Isn't Olympic-Size
Now, the studios aren't entirely counting stars out. They can still help a movie: The Fast and the Furious series was stalling until Vin Diesel came back for the fourth installment. And when they added The Rock for the fifth, it became the biggest entry yet. And for all of the money Fox is saving by making X-Men: First Class with a cheaper cast, they're also paying Hugh Jackman movie-star money to do another Wolverine sequel. (Though they're keeping costs down: A source tells us that the targeted budget for The Wolverine was $90 million.) The key to keeping superstars in your blockbuster is something called "the pool," which drastically reduces the profit participation of big stars so that the studio is no longer left paying tens of millions of dollars to an actor for a movie that never made the studio a dime.
The pool was designed about four years ago, when the DVD market started shrinking. Without that afterburner, studios were far more dependent on the box-office gross, of which the stars were grabbing an enormous chunk. The pool is a set percentage of the gross put aside to be divvied up by the film's heavy-hitters after the movie breaks even; this as opposed to the first-dollar gross they used to get, through which they got paid even before the studio did. But neither is it net profit, which became a joke because it never existed: By factoring in everything from marketing and advertising costs to interest and distribution fees, studios claimed there was never a profit to share.
The pool kicks in after the strict physical costs of the production (agreed on by all parties) have been recouped; this way the studio makes sure they won't lose money on a blockbuster. And, the pool never exceeds 25 percent of the gross. One producer familiar with Marvel's dealings says that this is how they can afford to make The Avengers, with its many big names; the actors' claim on the pool is reduced because they don’t work as much. "Maybe a big star like Robert [Downey, Jr.] gets only three or four points of the pool," says our source. "But he only works for three or four weeks.”
As Ratner explains, “Marvel’s model is: We’re not paying gross to anybody. And it’s not just Marvel; it’s all the studios. They don’t want to pay gross. We used to get paid before they could recoup. The studios don’t want to do that anymore. They have these new rules. They were tired of losing money, but seeing an actor walking away with $50 million.”