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The Economics of the A-List

4:37 PM PST 11/10/2010 by Jay A. Fernandez

First-dollar-gross deals for old-school talent meant they got a substantial cut of the studio's box-office receipts, regardless of the picture's performance. In the new deals, a break-even amount is established during negotiations so that the star's back-end participation only kicks in once the studio has recouped costs up to that break-even number. In exchange, the talent gets a higher percentage than he would have received in the old model.

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