Death of the Fat Producer Deal
The traditional first-look relationships have fizzled (along with first-class tickets!) as even the biggest names suffer amid a nervous studio environment.
You aren't going to get me to talk about how awful the studios are!" says one veteran producer before launching into a tirade on the subject. "The studios just don't respect what producers do. They'd rather not have them around. … Studios have way too many executives and waste way too much money on that."
Says another producer who ranks among the Hollywood elite: "The bigger the movies get, the more executives feel they're producing them. I believe there are more executives being dispatched to locations than ever before. … When the executive says 'my' movie, it drives you crazy, and it's happening more and more."
With the movie business undergoing a historic realignment as DVD revenue has shriveled and new technology has not yet generated cash to take its place, the issues facing the business are squeezing the top rank of producers, including those who still have generous deals with studios -- on paper. It's trickle-up economics, and those who have long been used to having their voices respected are finding that sometimes -- ouch -- their calls aren't even returned.
Some believe that life has changed forever in the movie business, while others -- noting that studios are making increasingly homogeneous movies -- are hoping that eventually it will become clear that audiences crave something different and that producers are the ones with the experience and skill to develop and execute original, sometimes even great, material.
Evidence of the pressure studios are imposing on big-name producers is everywhere. Jerry Bruckheimer just underwent what he described to THR as the most difficult negotiation of his career with Disney to launch The Lone Ranger with Johnny Depp. Ron Howard and Brian Grazer of Imagine have seen their rich deal at Universal cut back and the studio pull the plug on their ambitious fantasy Western The Dark Tower, based on a series of books by Stephen King. A-list producers Frank Marshall and Kathleen Kennedy just departed from Sony after two years without a green light. Even the industry's ultimate 800-pound gorilla, Steven Spielberg, has had struggles raising money.
Some of the industry's most successful producers say the studios are making them feel, as one puts it, increasingly "irrelevant." And a top executive at one studio acknowledges that in many cases, they have a point. "I wish I could tell you they're wrong or they're being babies," he says. "But [their complaints] are legitimate. And it doesn't feel like it's to the benefit of the movie business. But studios are more involved in movies because the stakes are so high. You get pressure from the bosses to be sure you're managing the projects well -- but that used to be the producer's job."
And that's from an executive at a studio that is considered relatively respectful. Not all are. There seems to be broad agreement among high-level producers that Fox has long been the most contentious with producers, even before the economics became so challenging, largely due to a strong-arm culture created by studio chief Tom Rothman. Disney, with suppliers such as Marvel and Pixar and its focus on branded entertainment, now makes few movies of its own and scarcely seems to need producers. Paramount and Universal also seem largely indifferent, except for a clutch of stars like J.J. Abrams (who, notably, is a filmmaker himself). Sony and Warner Bros. -- in that order -- get the highest marks.
"Even when they're f--ing you, they're apologetic," says one prominent producer. "Fox, Paramount, Universal -- it's simply: 'This is what we're doing. Sorry we forgot to tell you.' "
Says producer Laurence Mark (Julie & Julia): "Sony's the only studio that sort of harks back to the old studio days. Amy [Pascal] deals with the big picture. She's happy to make bold moves. They have great relationships that pay off." Notably, Sony has made The Social Network and Moneyball with powerhouse producer Scott Rudin -- films that other studios would have been unlikely to make. (In fact, one producer says he has heard executives at other studios make snide comments about Sony's decision to take a chance on Moneyball.) But some with ties to the studio say even Pascal has had to trim her sails in the current environment.
"The studios trust a smaller and smaller number of producers," says Marshall Herskovitz, president emeritus of the Producers Guild of America. But he adds that he got that memo long ago. "I don't have a deal anymore," says Herskovitz. "Am I upset? Yes. But there's no point in crying about it." Instead, he says, he and many others have adapted: "Every producer I know has had to learn about independent financing. It may be that these tectonic shifts are finally hitting people who thought they were invulnerable, but most people have adapted. Producers have moved into television and new media and looked for other ways to finance features because that's what producers do. They're coping." (One producer says he has, like many others, sought opportunities in television, but even that is a struggle. "Suddenly you're going from office to office, peddling TV," he says. "There's a little bit of a Willy Loman aspect to it.")
"We can yell our heads off, but we collectively need to adapt to changes in the business," says current guild co-president Mark Gordon. "The world is changing, and we have to change with it."
Perhaps nothing illustrates more vividly the difference between then and now for producers than the Imagine experience. Last decade, Universal was giving Howard and Grazer a hefty $17 million a year in overhead as well as fees of $2 million up front against at least 5 percent of gross (more if Howard was directing). The partners even had two "put" pictures -- meaning they could force projects into Universal's pipeline -- though they never exercised that option. Their deal has since been trimmed to $8 million-plus a year, according to a knowledgeable source, but when the time comes for renegotiation (it runs through 2013), they are sure to face further pressure.
"Even Imagine is going to get cut back severely, and Imagine is at the top of the heap," says a source familiar with the production company's dealings. "Universal used to do everything Imagine wanted. Now they don't."
On paper, producers like Grazer and Howard still have enviable deals. But such pacts are now hollow shells. Even top producers are told that if they want a green light, they will have to accept reduced terms. "[The studios] behave like it's a gentleman's sport, and if you were really classy, you'd refuse to be paid," says one. "They feel more comfortable than ever saying, 'We're going to make the movie, but we're withholding 60 percent of your fee, and if you go over budget, we have the right to use [that money].' " Compare that to the good old days of first-dollar gross, adds this producer, when "you'd get unexpected checks for a couple hundred grand for a movie that bombed."
"By the time you get a movie made, they've beaten you back on your deal [and] taken control of the script," says another well-known producer. As for managing the film while it's in production, he adds: "They don't care if you show up or you don't show up -- until they get into trouble. Then the executive turns to the producer and says, 'Solve it.' "
One studio chief says that picture seems exaggerated to him, but he understands that life certainly has changed. "There are few things harder than having something and watching any piece of it taken away," he says. "But it's happening because the reality of the business is extraordinarily complicated and difficult right now. Regardless of what it was like 10 years ago, you have to adjust your expectations to reflect the current reality."
A-list producers have lost more than clout: They have lost those delectable perks that are the stuff of industry legend. There are no more lavish budgets for decorating offices. "Once upon a time, they insisted you travel first class because you were, in some way, representing the studio," says one veteran. "Now, fine, you can go on a pogo stick. You can go JetBlue. I'm not saying it's a horrible hardship, but 10 years ago, it wasn't happening."
Marshall, who is producing The Bourne Legacy for Universal, says many producers are getting squeezed in ways that affect more than their lifestyle. Without backing from the studio, acquiring and developing material is far more difficult. "That is completely different from four or five years ago," he says. "The studios are trying to develop stuff inside and not involve the producers. And that may be a mistake because we're the ones who have to make it work."
But many producers feel that the studios don't care if it is a mistake because they are so averse to risk. One well-known producer says he has a top screenwriter working on spec because if studio money were involved, there would be too much pressure to turn the material into something that is "middle-of-the-road and as marketable as possible." In the past, the producer might have been able to shield the writer, but now the studio gets heavily involved.
In many cases, he adds, the producers enjoying the most success with studios are those who don't challenge the system. "They have no talent in the making of movies," he says bitterly. "They go out with executives; they woo executives; they party with executives. They can be counted on not to cause any problems. They'll do the dirty work."
But Michael Shamberg, who produced Contagion with his partner, Stacey Sher, for Warners, says he finds those comments "offensive." Producers are making a mistake, he argues, if they take an antagonistic approach to executives. "You've got to be very sensitive to their needs," he says. "They're risking their jobs. The idea that studios are adversaries is bullshit. Producers who don't think the studio is their partner have the wrong equation."
Shamberg continues: "The gravy days are over, and if you can't do the heavy lifting, you shouldn't be a producer. You can still get your stuff made -- you simply have to solve the problem of finding money to make your films. It's just a more complicated formula. But in success, you will be well rewarded."
A studio executive echoes Shamberg's point. "If we have a hit movie, I'll get a nice bonus, and I'm grateful," he says, "but the producer can make $30 million." A producer counters, however, that rewards of that type are rare to nonexistent these days, and he often has to lay out money to acquire and develop material but doesn't get paid unless a movie gets made. And that might take years, if it happens at all.
Some producers hold out hope that the pendulum might be swinging back a little -- if not in terms of money and perks, then at least in terms of respect. They say the studios' desire to minimize risk has led to a string of increasingly safe -- and uninteresting -- films. Studios have noticed with alarm that young people under 25, who are critical drivers of box office, seem to be rejecting Hollywood movies -- with some exceptions, such as the Transformers films. Without them, grosses are diminishing. Some in the industry are joking grimly that a $20 million opening is the new $60 million opening.
"We could be at this point where the movies are so terrible that it's almost like the centralization is now strangling creativity," acknowledges one executive. "Either it's going to get to the point where things improve, or we'll just get a reality-TV version of the movie business, aiming for the lowest common denominator."
To Herskovitz, passion is the key to getting a response from the audience, and producers have that passion. They should use it to their advantage without necessarily expecting that the studios will help achieve their vision. "Most producers are on their own and have to be pragmatic about how they get their movies made," he says. "For the last 10 years, there's been a lot of bad news for producers. The profession has taken great steps to turn that around, and I actually see things getting better. The real story is this amazing adaptation and growth and perseverance. That's what I see going on."
But another producer admits it's hard not to look back. "We try not to talk about the good old days because that's not serving us," he says. "The good old days are gone."