Monday, 7 November 2011

Hollywood Babble On & On #833: Overpaid Overexposed & Just Plain Over

Yesterday, I wrote a post about Forbes' list of Hollywood's most overpaid stars.  Click the link and read it if you haven't already, I'll wait.



Okay, you're back.  Brilliant, wasn't it?  Anyway, enough about that post, let's get on with this one...

In response to my post, reader Blast Hardcheese commented:

Artist's Conception of Blast Hardcheese writing his comment
An interesting list. Only one (Ms. Barrymore, alas) can be said to actually lose money. It would be interesting if Forbes gave some idea of what the minimal 'reasonable' ROI should be for a major Hollywood star. Would it be a 10/1 return, or what?

As far as one of the best for money, my initial WAG is Signourney Weaver. I think pretty much everything she's been in recently (Galaxy Quest, Avatar) did well, and I can't imagine her commanding a $10M+ salary.

Now I'm going to try to look at some of the points that Senor Hardcheese brought up in his comment.

First is the concept that Drew Barrymore is the only one that actually loses money.  Because you see there are a lot more factors to consider beyond the star's salary and the rate of return they can muster.

There are other things to consider when considering if a star earns or loses money for a picture, you have to look at these factors:

1. The up-front salary.  (What Forbes based most of their calculations on)
This photo has nothing to do with this post.

2.  The ancillary costs of having that star involved. (These are the perks, that include travel, hotels, entourage, trailers, food, not just during the shooting, but during the publicity phase, and all those other things that aren't part of the "salary" but still cost real money, and in the case of some stars millions.)

3.  The star's piece of the back end, if any.  (A lot of the heavy hitters demand a get a "dollar one" piece of the box office revenue.  That means from the first dollar spent, the studio has to give anywhere from 5%-25% to the star. That's before the studio accountants can pass it through their various machinations.)

Then you put all of them together to figure out...

4.  The potential negative impact that star may have on the production.  Did this film lose money, not so much because of the star's appeal, or lack thereof, but because they were just too damn costly.

So the potential is there for some, if not all of the others on the list, to be major money losers, depending on the contents of their contract.

Now Blast Hardcheese asks if a 10/1 return on investment would be considered good.

I think it's a good place to start, but I doubt it will even be considered.


To answer that we must dive into the murky depths of Hollywood business again.

You see in almost every other industry salaries are determined by the vicissitudes of the marketplace.  Costs that negatively effect the profitability of a good or a service usually get chopped.

But not in Hollywood.

You see Hollywood is heavily insulated from the vicissitudes of the market by two important factors...

1. The studios usually have very large, very deep pocketed parent companies.

2.  The movies they make are usually resold over and over again in a variety of formats.  TV, home video, streaming/downloads, direct-to-brain transfer, so they expect to get at least something back in the long term.

This insulation means that pay related decisions are often based on factors that have little, or nothing, to do with the market.

That's right, I'm talking POLITICS.

Not the "voter for this guy or that guy" kind of politics, I'm talking about that my definition of politics. Meaning factors are being used in the decision making process that have nothing to do with the actual pros and cons of any of the options around said decision.

So you get people getting big bucks for having their mugs on a lot of magazine covers, or for having an agent with a lot of clout, or if they can get you a good seat at the next big fashionable fundraiser.

Very little weight is given to a star's ability to put bums in theater seats.

Now the insulation is getting scratched off Hollywood's business practices.  Box office is down, again, and home video is looking wobbly with people losing interest in a lot of today's movies and stars, and piss-poor marketing of yesterday's movies and stars.

Will this cause someone in Hollywood to seriously crunch the numbers and set some standard to determine a movie star's true market value?

I don't know, the insulation's pretty thick, but it's bound to wear out eventually, and then, someone might prove Blast Hardcheese's guess is right, and that Sigourney Weaver just be worth every penny she gets.

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