'Man of Steel': How Jon Peters Could Earn $15 Million -- for Doing Nothing
The studio mogul-turned-producer, blocked from working on the set, nonetheless scored a Kryptonite-proof check thanks to Hollywood's early adopter system.
This story first appeared in the June 28 issue of The Hollywood Reporter magazine.
At the June 10 premiere of Man of Steel in New York, more than a few chuckles could be heard when executive producer Jon Peters' name appeared onscreen. As Warner Bros. insiders knew well, the hairdresser-turned-studio-mogul-turned-producer had no active role in the blockbuster Superman reboot.
But it's Peters who is laughing all the way to the bank. Despite being sidelined by Warners -- a decision the studio made three years ago before Christopher Nolan boarded the project as lead producer -- the former Columbia Pictures chief with the unmistakable mane will receive 5 percent of Warners' gross receipts from the movie. If the film hits box-office targets -- it opened to $200 million worldwide in its first weekend and is projected to reach $700 million -- Peters could reap a super payday of between $10 million and $15 million, say knowledgeable sources. (Peters declined comment.)
How is that possible? Credit what might be called Hollywood's "early adopter" system of financial rewards, where players who give key pushes to projects at a nascent stage often reap huge windfalls down the line -- even if they have long since exited.
From 1993 to 2006, for instance, Peters played an important role in bringing the moribund Superman franchise back to the big screen, with the final five years devoted almost exclusively to 2006's Superman Returns. For his efforts, he received a full producing credit from Warner Bros., his first since 2001's Ali. Peters enjoyed a first-dollar gross deal -- a Hollywood rarity for a producer, especially one with only two credits in the past 12 years -- so even though the Bryan Singer-helmed film mustered just $391 million worldwide, Peters took home about $7 million, say sources.
Fast-forward seven years and Peters is poised to double his paycheck thanks to Man of Steel. But unlike in the case of Superman Returns, Peters played no active part in the Zack Snyder-directed tentpole. He just gets paid.
Of course, Peters isn't the first producer to enjoy a windfall from a project on which he did little or no work. Harvey and Bob Weinstein will earn more than $15 million for last year's $1 billion-grossing The Hobbit (the brothers' deals were inked back when they were running Miramax Films and controlled rights to The Lord of the Rings). When they agreed to let Peter Jackson set up the property at New Line, they negotiated to receive 2.5 percent of first-dollar gross from a Hobbit film.
Similarly, early Tolkien rightsholder Saul Zaentz has earned a nine-figure payday for Jackson's LOTR and Hobbit films despite no hands-on involvement. Steven Spielberg has enjoyed first-dollar gross on a number of projects to which he contributed little except his name, including Paramount's Transformers megahits and Sony's Men in Black franchise, the third installment of which was released in 2012, nearly two decades after Spielberg lieutenants Walter Parkes and Laurie MacDonald began developing the property.
Other examples include comic book fan Michael Uslan, who optioned Batman rights in the late 1970s and eventually sued to receive a credit on future movies. He's been an executive producer (receiving a fee but no backend) on all three of Nolan's Batman films.
Still, several top dealmakers say these so-called "free payday" deals are rare -- particularly those that involve first-dollar gross -- and when they do occur they often involve franchise properties that studios are seeking to redevelop. Furthermore, Hollywood simply is mirroring other industries like Silicon Valley, where those who provide early seed financing or manpower are compensated if a venture goes forward, even in an unrecognizable shape or form.
"Most projects don't result in franchises, so those who jump in early and risk their time, creativity or capital are often rewarded if the projects continue," says attorney Peter Nelson, who reps Jackson. "There is the usual tension between the financier or studios who want to reward those who currently contribute and those who make those earlier contributions."
In the case of Peters, 68, his ability to continue milking the Superman cash cow dates back decades. Long before he ran Columbia with Peter Guber, the pair were partnered as producers who parlayed the success of Flashdance into a lucrative Warners deal. A source familiar with their deal characterizes it as "one of the old-time first-dollar gross deals. Not bullshit points. Real money."
Peters and Guber also controlled Batman rights, and thanks to their success with the 1989 Tim Burton-helmed blockbuster Batman, those rights became particularly valuable. When Peters and Guber left Warners to run Sony, they sold off future rights to Batman for millions. But after Peters was fired by Sony in 1991, he returned to his role as a producer and signed an overall deal with Warners on terms nearly as lucrative as his pre-Sony deal. Because of his experience with Batman, the studio asked him to redevelop the Superman franchise, which was languishing after 1987's Superman IV: The Quest for Peace.
Peters spent years trying to mount a Superman movie, with everyone from Brett Ratner to McG as director. Discarded storylines included the caped hero pitted against Batman or being killed off altogether. Singer's Superman Returns finally made it to the multiplex in 2006, and Peters' deal stipulated that he be attached to any sequels and remakes.
When it came time for Man of Steel, a source says Warners initially tried to cut out Peters, claiming the movie would be new and not a remake, but the studio eventually agreed to include him. And because of Peters' previous deals, the financial terms were A-list: seven figures up front plus a slice of backend.
Peters had additional leverage. Sources say that under his deal, he stood to receive a "produced by" credit, but because Warners didn't want him to take an active role, it engaged in a separate negotiation that resulted in Peters taking an executive producer credit -- and keeping his backend. "We had a number of producers on the movie," explains Warners film chief Jeff Robinov. "Knowing what my expectations were for Jon's services, I asked him to take the role of executive producer, and he agreed."
A source close to Peters says he was not allowed on the set, which left him "very disappointed," adding, "Ego-wise, it was a blow for him." But Warners disputes the notion that Peters was banned and insists he was invited to the premiere, but he couldn't attend because he was having surgery.
Now, with a Man of Steel follow-up likely, will Peters (and his backend deal) be involved as well?
"Involved? No," says a source close to the dealmaking. "But Warner Bros. will honor whatever his contractual rights are."
Stephen Galloway and Borys Kit contributed to this report.