Peter Bart and Mike Fleming Jr. worked together for two decades at Daily Variety. In this weekly column, two old friends get together and grind their axes, mostly on the movie business.
FLEMING: The perfect storm of a pandemic that won’t go away and the explosion of studio-owned streaming services has created an ornery environment in Hollywood as studios and talent and their reps clash over a new dealmaking paradigm. This includes deals made back when movie theaters were the main way films made money. Many of these skirmishes are settled in back rooms, but the recent lawsuit filed by Scarlett Johansson against Disney over the day-and-date Disney+ release of Black Widow underscored the distrust in this tense moment. I was away when the lawsuit dropped, followed quickly by a barbed Disney response pegged to Bob Chapek. Much has already been written about it. But did you know, Peter, that when Disney issued that abrasive statement questioning her lack of sensitivity or even recognition of the pandemic, and noting her $20 million Black Widow paycheck, that Johansson was at that moment in the hospital in labor, having her and Colin Jost’s first child? Now, she was just as heavily pregnant when her lawsuit against Disney was filed, and how could Disney know the stork was arriving so imminently. But talk about terrible timing!
Disney Boss Bob Chapek Dismisses Any Conflict With Bob Iger In 'Black Widow' Hybrid Release With Swipe At Scarlett Johansson's Suit
It was reminiscent of when Nina Jacobson got fired from her studio chief job while she was in the delivery room having her baby. Coincidentally, that was also done by Disney, through a different regime, but the optics are similar. Maybe that is why the Johansson rebuke is so uncharacteristic of major studios. It was right to wonder if Disney would have done the same thing had Robert Downey Jr or other male Marvel superhero stalwarts filed suit? Pregnant or not, did Disney make a cold decision it was OK to be bracing with Johansson when her character had been killed off in an earlier Marvel Avengers blockbuster, and her long-awaited stand-alone movie ending with her handing the baton to up-and-comer Florence Pugh? It underscores this tenuous moment where studios and talent and their reps are staking out ground in a new landscape where big salaries will be still be paid upfront with pre-negotiated buyouts. But back-end bonuses are going the way of the first-dollar gross deals and packaging fees for agencies. You can see distrust at ever turn. After Chapek made a totally understandable statement about the 45-day window “experiment” in making Shang-Chi an exclusive theatrical release and not a simultaneous Disney+ premium offering like Black Widow, Marvel chief Kevin Feige had to explain at the premiere after one of the film’s stars, Simu Liu, took exception to the word “experiment.”
BART: So can stars alienate the buyers? Or vice versa? The closest incident to this in my memory related to politics rather than pregnancy. When I approached Jane Fonda some years ago to make a deal on a film that I was producing, she snapped, “No studio would make any deal with me at any price, so forget it.” The year was 1976 and Fonda had gone very public with her position on Vietnam. She was indeed box office poison. I told Fonda to hold tight, then went to Columbia and said ‘I have a comedy starring Jane Fonda and George Segal and am putting up half the money – take it or leave it.” They warned, ‘No one will laugh at a Jane Fonda movie.” But they liked the deal and said ‘yes’ anyway.
They were wrong on the laughs. Fun with Dick and Jane was both funny and successful and Fonda was bankable once again. But it was disturbing to me that political dissent could almost end a career. And this was before the era of #TimesUp or BLM or the “cancel culture.”
FLEMING: But all that was also before the era of first-dollar gross, when talent was king, and studios began to claw back leverage by ending those deals and emphasizing concepts over stars, even before most launched streaming subscription services. Today, conglomerates seem most interested in that growth, and the optics that brings to elevate stock price. I asked a few execs and top reps which was worse: Disney’s sharp rebuke to Johansson and her lawsuit, or WarnerMedia’s blindside of talent when it placed its entire 2021 slate on HBO Max the day those films opened in theaters. Even on movies on which they were minority financiers, like the upcoming Denis Villenueve-directed Dune, which was 75% financed by Legendary, whose principals were highly irate and fearful the day-and-date release would stunt its franchise ambitions for the film. I was told that Disney was worse because it was so personal. Even though WarnerMedia was partly responding to an uncertain theatrical marketplace like Disney was, WarnerMedia spent a fortune easing the bruised feelings of talent whose deals were breached. Disney did some perception patching when it made the Cruella sequel deal with Emma Stone for a premium payday, which Deadline revealed last Friday. In that case, there was no surprise that Cruella was making a release pivot, as Deadline revealed that story last November.
Does all this create a dire future for talent? Hardly. Reps for top actors, actresses and filmmakers feel that despite the brass-knuckle clashes on pre-pandemic deals for films that studios shifted films to their streaming services or sold to streamers, there is an unprecedented boom market going on right now for packages, the likes of which haven’t been seen since the days of the first-dollar gross. There is also a premium on talent friendly executives who know how to make big movies and manage slates.
So another dishy nugget to drop here: tongues are wagging in town after Discovery’s David Zaslav was seen having a drink with Legendary Vice Chairman of Worldwide Production Mary Parent at a public watering hole. Parent might be the most accomplished, talent-friendly executive not currently running a major studio, so those who passed this info wondered if this was merely a social call (Zaslav isn’t supposed to be making moves until Discovery’s takeover of WarnerMedia closes) or whether it portends a stronger relationship with Legendary — out there looking for equity investment, distribution or an acquisition — or whether Parent will be recruited to run the studio, even though her former New Line colleague Toby Emmerich seems in much better shape there than when AT&T undermined him and other Warner Bros execs.
BART: You asked earlier, what does all this mean for talent? I would advance the proposition that talent and their reps should worry about quality as well as deal. A filmmaker friend posed this question to me the other day: “There are zillions of shows out there but aren’t most of them instantly forgettable?” I would cite his name except that he promptly added, “I realize that’s a stupid question.” Really? It’s being asked often enough to pass the “stupid” test in my book. And there are some glib theories: Studio decision-making is overstructured and confusing. The pipeline is so jammed that good ideas are suffocated by zealous showrunners. Schedules are so constricted that writers claim they are underpaid and overworked. I was amused when the [incoming] head of the Writers Guild, Meredith Stiehm, complained “it’s the wild west out there. You can do anything you want, but at the financial end it’s an emergency room.”
So here’s my theory: The quality of Hollywood’s creative output perversely rises or falls in inverse relationship to the capital flowing through the system. When the deals steal the show and the dealmakers become the stars, the quality of the work plummets. I will never forget talking to Mike Nichols the week he finished The Graduate. He told me, “I think I made a better movie because, just before the shoot, they cut my budget and I had to find a more creative way of doing things.”
FLEMING: It has always been difficult to make good content and for every Ted Lasso, CODA or Dune there are too many forgettable series and films, especially now when so much content is being generated that you can’t find a soundstage to shoot on. When I said there is a boom market, here is what I meant. If you come to the table with a package that is fully baked with a good script, director and cast, there is a very good chance of making huge money. I’m talking life-changing paydays that can approach or surpass $100 million for top talent. While film writers often seem to get left out of the largesse, this can filter down to them. The massive Antoine Fuqua-Will Smith $120 million-plus Apple TV+ deal for Emancipation included $4 million for the spec script by William N. Collage. It doesn’t even have to be a $200 million deal; it is becoming not uncommon for a $20 million-budget movie to sell to a streamer for $35 million, meaning all of that overage goes to the participants, which takes the place of gross deals, with no risk those funds won’t materialize if the movie is bad. This happens so often now — the $450 million-plus deal that Netflix made for two Rian Johnson Daniel Craig sequels to Knives Out might be one of the most lucrative pacts ever made, this side of the deal that left George Lucas with the merchandising and eventual ownership of Star Wars. It is reminiscent of the time when studios were paying millions of dollars for spec scripts and books, and I was writing about a newly minted millionaire writer or author several times a month. One of the most recent examples of smart packaging was the Apple TV+ acquisition of Argylle, a 007-type movie that Kingsman’s Matthew Vaughn is directing and producing, starring a strong ensemble led by Henry Cavill. That deal was $200 million, covering budget and a lot of upfront and pre-negotiated back-end deals. I’ve written similar nine-figure deal stories made by all the streamers. Peter, do you recall how first-dollar gross deals came into being and do you imagine that studios will have to get on board with paying more?
BART: It was part of the syndrome of the ’90s, that transformative moment when dealmakers became the heroes. Filmmakers had briefly come to power in the ’60s and the releases of the ‘60s would never have triggered millions of subscribers for a Disney+ or Paramount+ or Netflix — think Midnight Cowboy or Easy Rider. Filling theater seats by the ’90s had become an anachronistic mission. There were new revenue streams to chase. A new breed of investor lured by video and cable was offering billions to take over the established labels — figures like Steve Ross or Rupert Murdoch who likely had never seen a movie. And the talent offers reflected this new infusion. Stars were asking and getting their first-dollar gross deals. Filmmakers like Spielberg and Coppola were marshalling money to launch their own slates and devoting their energies to sequels. Spec scripts had taken over. But here was the bad news: By and large the megamovies of the ’90s were expensive and pedestrian.
FLEMING: But now the ’90s have become the 2020s and studios are being routinely outbid by streamers for the shiny new packages, but they don’t have to be excluded from this party. I’ve heard that because Warner Bros was cool to what Todd Phillips wanted to do with the DC character Joker, Phillips gambled similar to what he did on The Hangover. I have heard Phillips made about twice the $50 million he was paid for The Hangover, after Joker became a billion-dollar gross film. If studios get filmmakers and talent to take the risk with them, the prospect of reward in theatrical success might be an advantage to their model, for artists willing to take a gamble.
The other thing that dealmakers tell me they began doing even before the Disney-Johansson skirmish is, they are making deals with three different scenarios. One covers films that follow the traditional theatrical window; the second is for a day-and-date theatrical/streaming release; the third one is for a straight-to-streamer release window. Agents cannot risk being embarrassed or looking like they haven’t thought of every scenario, after many studios acted in their corporate interests and flipped or reassigned films to streaming. I’ve noticed that some recent indie film packages have factored in the uncertainty of whether a distributor will acquire a film with the intention to go theatrical, and then flip it to a streamer. There were overtures from studio specialty divisions for the Alexander Payne-directed The Holdovers with Paul Giamatti at the recent Cannes Virtual Market. But the decision was to make a deal with Miramax, which provided the budget to make a film that will be shopped for distribution when it is done and when the leverage is greatest and can ensure Payne gets the theatrical release he covets. Miramax will share in that windfall. I expect this to become more commonplace.
BART: So what’s the endgame? If the deals continue to soar but the product loses its audience, will the onetime filmgoers turn to other pursuits? Like gaming? That’s Netflix’s next chapter, the financial gurus are saying. Gaming is what the gurus are really interested in anyway.
FLEMING: Netflix has spent too much on content and 70 films a year to take its foot off the gas pedal. The two sides will find a balance in this game. Remember, true talent and great content is never in high supply and there is plenty of money to pay for its, even in speculative ventures involving the likes of Reese Witherspoon and LeBron James, who got massive deals for companies that didn’t have many tangible assets to speak of.
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