I don't understand why actors don't negotiate on observables like total box office receipts rather than numbers that can be gamed. That said I'm going to be purely speculative and venture a guess:
I'm suspicious that actors and actresses actually are not that interested (as a group, I'm sure there are plenty of exceptions) in getting paid from residuals and actually prefer to get a big check rather than a smaller check with bigger payments later. I think philosophically though they feel entitled to an equity stake, after all how much of the success of a blockbuster movie is due to the stars that are in it i.e. they bring significant brand value. So they deserve a fractional share, but don't necessarily want to get paid that way for risk and time preference reasons. So we get a mutually agreed upon fiction where the actors get a big check AND a huge chunk of the profits which in practice will be zero since we'll account away the profit, yet we still respect the enormously significant contribution of stars to blockbuster pictures by giving them an imaginary equity stake. It seems that actors and actresses tend to act less like capitalists and more like star employees and so in practice their compensations looks more like what you'd expect from the latter than the former.
Actors would be "fools" to not take a pre-determined, set amount, according to Eddie Murphy. Due to "Hollywood Accounting", many successful movies don't show a profit and this don't pay a percent of the profits to actors.
In the end I think much of the power lies with the studios, as they have more capital, and are closer to the customer. Blockbusters can easily create stars, but stars usually cannot - without major studio backing - create blockbusters.
This is absolutely true for the first movie, I wonder how much it applies to the seventh. I think Daniel Radcliffe would have a not of negotiation power in discussing salary for Harry Potter 7 part 2; there's a bit of a hold up problem. Also there's more than one studio and they do compete for talent, although you always have to look out for gentlemen's agreements a la Apple.
I'm not sure this is true. The likelihood is that the contract for all the movies was signed before any of the movies, such that Radcliffe would be contractually obliged to finish the series, rather than holding development hostage at the last minute.
This is true of the first five films, but the later ones were separately negotiated
"Radcliffe found himself playing the lead role of Harry Potter in the anticipated family film, Harry Potter and the Philosopher's Stone, based on J.K. Rowling's popular novel, and signed on to star in the first five movies.
Once his contract was up, he signed another contract for $50 million to star in the final two films of the series."
I'm glad Wil Wheaton is so vocal about his distain for the industry practices. He holds a lot of respect in many "geek's" minds and is a good spokesperson for many people to get behind. If enough people start raising questions then hopefully we can see more public debate regarding these practices from the general public.
Devil's advocate: would Wheaton be speaking out in this way if he were more successful actor?
I don't for a second mean to talk down his accomplishments- he's an author, blogger and even TV personality these days- but now that he doesn't rely on his acting career he can talk out against Hollywood accounting. I would imagine that other middling-successful actors would worry about doing that, as Hollywood could easily refuse to hire them and destroy their career.
I guess what I would like to see is someone like George Clooney, Brad Pitt, etc. speak out about this kind of stuff. They're big enough that I don't think Hollywood could shut them out, and they're also successful enough that I don't think Hollywood accounting affects them so much personally. But they could speak out on behalf of lesser known actors.
For example, on paper, Harry Potter and the Order of the Phoenix lost $167 million dollars. How bad is that? Well:
"Order of the Phoenix is the unadjusted 15th highest-grossing film of all time, [...] The film opened to a worldwide 5-day opening of $333 million, fourth all-time, and grossed $939 million total [...]"
But you have a point. The people who aren't that successful can't afford to rock the boat. But the people who are successful have less incentive to want to, because it no longer affects them as badly. They can demand cash up front and worry less about the alleged financials of the work.
> They're big enough that I don't think Hollywood could shut them out,
Most of us on this board are probably too young to remember the blackballing of (accused) communists in the 50s and 60s, but that put a permanent end to the career of some fairly big stars of the time. The context is somewhat different, but I think if the (perceived) threat is big enough that there isn't really any actor that's too big to shut out.
I don't know about that. Being labelled a communist resulted in you being seen as a threat to national security. The obvious parallel today is a terrorist, but I'm pretty sure that any attempt to portray George Clooney as an extremist terrorist would fail.
any attempt to portray George Clooney as an extremist terrorist would fail.
True that would probably fail.
However you could say that $ACTOR is a film pirate, and is publicly supporting the pirates, they are publically critizing the anti-piracy campaigns that are affecting this industry, you don't want to hire a star who speaks out about the film industries like that do you? Why don't we all agree that $ACTOR's politicial beliefs make them unsuitable to be the face for $FILM_COMPANY.
As stated before you, this is already a rather well-known practice. What I would like the public debate to be about is how exactly do these people manage to get away with what is essentially fraud and why law enforcement continues to ignore it?
Almost every case I've heard of where an actor or director sued the studio for cooking the books; the studio loses. Why is this not considered a criminal practice? If I were an IRS agent, flying-spaghetti-monster forbid, I think I would make a call to the studio after one of these cases to ask about auditing those cooked books.
Of course, I've heard stories of studios keeping one set of books for the government and another set for people they owe money. Which goes back to that whole fraud thing.
Also, it's not just the movie/tv industry that does this. Just about any major industry that involves a content creator having a relationship with a content distributor you likely see the distributor stealing from the creator.
I believe that they spend all of their money on other companies that they own. i.e. Like a TV station where a lot of advertisement is done. Those TV stations have to pay taxes of the money earned. Even if money is lost by the film the contracting companies still have to make money (or their employees), and those are the ones that pay taxes. As long as they report where all the money is going it probably is not a problem.
Somebody eventually makes some money and as long as that money pays taxes the IRS is probably OK with it.
Knowing that this is how the game is played the actors just have to ask for a big pay check so that it works out the same at the end, more or less.
For years now I've assumed that's why A-list actors get such huge paychecks upfront, because they know they'll miss out if they're supposed to get percentage on profit.
But advertising costs has been one of the "excuses" I've seen why a movie fails to make money. I find that doubtful since the majority of advertisement spending is at the beginning of a movie's lifespan. Many movies continue to generate revenue years after theatrical release due to sales outside of movie tickets such as DVDs or streaming licenses.
In the end, I still have to wonder why such practices are continued to be ignored when they seem so suspect to begin with. Don't forget that the IRS is probably willing to spend a million dollars to squeeze that extra thousand bucks out of you, so I doubt they would just be OK with what they get.
If run correctly a Ponzi scheme can last a long time. As long as you can keep new people paying into the scheme then it keeps going. Ultimately the scheme falls apart when either someone takes a good hard look at the books or people quit paying in.
The key is to not let anyone realize it's a scheme to begin with. Hollywood accounting isn't quite like that since almost everyone understands that they do it.
By the studio "losing," in the majority of instances it's because the studio settled. They don't want to actually have this kind of stuff exposed and proven in court.
I'm too lazy to dig them up but I'm pretty sure these practices have been proven in court. I want to say the lawsuit against Newline by Peter Jackson did go to court and the court found that Newline did in fact hold money back from Jackson by a rather large amount. But it's been a while and I'm hazy on the details.
Regardless, as we've said, this is already a rather well-known practice so it's not like it has to be proven that much anymore.
I find this a curious statement. I don't necessarily (dis)agree but how can it be proven? What if Piracy really does have a huge impact on sales? I see his point but it's a gesture of disapproval not an actual point because piracy and the supposed resulting lost sales have no quantifiable measure.
The reason I think piracy doesn't have an impact on sales is because the film & music industry still exist.
It's more than 10 years since Napster was shut down. More than 10 years of internet piracy. So how come the film & music industry are still around? If they are losing so much money, why are they still able to finance new films? Why are there still highly paid actors? If they are losing that much sales and revenue then they would have no money! They haven't been getting any bail outs, so they are still a successful industry.
If piracy was a problem, it would have shut down some music/film companies by now. It hasn't, ergo piracy cannot be that big a problem.
I'm suspicious that actors and actresses actually are not that interested (as a group, I'm sure there are plenty of exceptions) in getting paid from residuals and actually prefer to get a big check rather than a smaller check with bigger payments later. I think philosophically though they feel entitled to an equity stake, after all how much of the success of a blockbuster movie is due to the stars that are in it i.e. they bring significant brand value. So they deserve a fractional share, but don't necessarily want to get paid that way for risk and time preference reasons. So we get a mutually agreed upon fiction where the actors get a big check AND a huge chunk of the profits which in practice will be zero since we'll account away the profit, yet we still respect the enormously significant contribution of stars to blockbuster pictures by giving them an imaginary equity stake. It seems that actors and actresses tend to act less like capitalists and more like star employees and so in practice their compensations looks more like what you'd expect from the latter than the former.