In March, Amy Pascal was scrambling. The producer’s overall deal at Sony Pictures — greenlit by the studio’s former chairman and chief executive Michael Lynton — was set to expire in three months, and there was little chance that current film chairman Tom Rothman would renew a 4-year-old arrangement that saw Pascal earning significant backend compensation on movies she produced. The deal had led to a $10 million windfall on 2018’s Spider-Man spinoff Venom, according to multiple sources, and with two guaranteed release slots every year, Pascal essentially was guaranteed an eight-figure income for her services. Even more disconcerting for the Sony film chair turned producer, there was little appetite elsewhere for a similar contract.
One month later, Pascal moved her deal to Universal. But what wasn’t mentioned in press coverage at the time was that her new pact is a significant downgrade from her Sony deal. Sources say instead of $10 million a year for overhead and discretionary buying, the Universal setup is in the $1 million to $2 million range annually. The guaranteed release slots are gone.
“No one else was knocking down her door,” says a source familiar with the dealmaking. “No one was willing to pay those Spider-Man fees.”
Even in the era of deep-pocketed streamers and what many have described as a content bubble, the golden producing parachute is becoming extinct, coinciding with overall pushbacks on non-writing film producers — both the powerful and journeymen. In quick succession, Matt Tolmach, a former Pascal lieutenant, exited his first-look film deal at Sony (a source says it was the Venom and Jumanji producer’s choice to let the deal lapse, opting for free agency, and he will remain with the studio for TV), while Neal Moritz was dropped from future Fast & Furious movies, beginning with spinoff Hobbs & Shaw, after making the first eight movies of the Universal franchise (he still has a film producing deal at Paramount). And in perhaps the most glaring sign of the times, X-Men gatekeeper Simon Kinberg — whose Fox film producing deal was one of the richest in Hollywood (he took home $40 million on Deadpool alone) — isn’t staying on after Disney’s acquisition of Fox (his deal quietly ended in 2018, and he was dropped from future X-Men films as Marvel Studios president Kevin Feige takes over Fox’s Marvel properties).
The message rippling through the community was clear. Producers, at least on the movie side, are seen as expendable.
As the major studios move to increasingly tentpole-heavy slates, producers are being squeezed like never before. The trend reflects America’s broader disparities: There is the one percent, consisting mostly of writers like J.J. Abrams, who is in final negotiations on a $500 million deal at WarnerMedia that covers both film and TV, followed by a dwindling pool of top-tier non-writing producers like Lorenzo di Bonaventura (Paramount) and David Heyman (Warner Bros.), who still boast sizable overhead deals with major studios even if backend is shrinking. Then there’s everyone else. All the while, the once-thriving middle class is fading fast.
“It sure helps to have a franchise,” says di Bonaventura, who produces the Transformers movies as well as nonfranchise hits like The Meg. “It helps you through any eventual down cycles.”
Perhaps seeing the writing on the wall, talent agencies are discouraging high-end producers from renewing their traditional studio deals so they can have multiple buyers competing for intellectual property and land progress-to-production contracts, largely absent at the major studios. After all, Disney is down to making one or two original movies a year, while Netflix is churning out 40-plus. Right now, the streamers are leading the charge, but neither Netflix nor Amazon is doing film producing deals at the same pace as the traditional studios once did. Netflix currently carries 10 producing deals that would qualify as film-centric, including those with Matt Reeves’ 6th & Idaho Productions and Adam Sandler. Amazon has three including Nicole Kidman’s Blossom Films.
Kinberg, for one, says his Fox exit was by design. Among his upcoming projects are the independently financed thriller 355, which sees him taking an ownership stake in the Universal-released film that he also is directing, and a War of the Worlds series for Apple. “It’s a good time to be a producer when there’s such a proliferation of platforms, streaming and who knows what’s next in technology,” says Kinberg, who also produced The Martian, a film that was based on an obscure self-published book that went on to earn $630 million worldwide. “There’s a lot of panic and confusion out there, but there’s more opportunity than ever before.”
Still, the landscape is proving to be particularly rocky for the so-called noncreative producer, the ones who don’t generate or write material. “Unless you’re a Simon Kinberg type with an established track record, studios don’t want you,” says one agency partner.
The tenuous plight of the producer has been intensifying for some time, since the height of the profession back in 2003, when DVD sales were strong and the seismic quake of the 2007-08 Writers Guild strike hadn’t yet cleared the stables. As studios grappled with ways to cut costs during the strike, they extricated themselves from their pricey producer relationships, all in the name of efficiency. That trend was exacerbated by the downsizing of the studios’ average annual film output. For instance, in 2007, Paramount released 25 films a year. Now it is down to nine. As a result, the first-look deal and its accompanying perks, including “put pictures” — that coveted guarantee of having at least one movie on the calendar per year — have never rebounded. Consider Disney, which had 24 first-look film producing deals during the 2003 peak. Now it is down to seven.
“If you focus just on motion pictures from major studios, yes, the business has changed in the last 10 years, and there are probably fewer big overall deals,” says Matt Kline, an entertainment lawyer at O’Melveny & Myers. “A lot of factors contribute to that: expense, changing approaches to management and some deals that some would argue went awry.”
The studios’ cutting back on output has proved to be a factor in subsequent deal slashing, but the rise of branded event-size movies also has hurt those who don’t have their own financing or ties to intellectual property.
“The reality now is that Disney and Warners try to focus exclusively on franchises. That’s half the slate,” notes a production exec. “Then there are the remakes. And then, in Warners’ case, a Christopher Nolan movie. Who needs producers for that?”
On the flip side, as the old-fashioned movie producer may have lost his or her place at e. baldi, the seat is being kept warm by the television producer.
“Given all the different platforms out there, particularly the way TV has changed so much and there is such great storytelling going on, I actually think overall there are more producers working and more people are doing more interesting work than ever before,” says Kline.
That point was echoed by one producer with a major studio deal, who acknowledged that first-look pacts are harder to come by for those working in features, but “for TV, it’s triple what it used to be. No, make it 10 times more.”
That might be so, but the nine-figure deals are the exclusive domain of such writer-producers as Ryan Murphy, Shonda Rhimes, and David Benioff and D.B. Weiss, all at Netflix. The film component of these deals is largely an afterthought given that this type of talent is being courted more for their series prowess. Furthermore, a typical deal at a streamer, particularly Netflix, doesn’t include backend compensation. However, the streaming giant will buy out an A-list producer’s backend based on a formula that factors in the budget and what the movie would likely do at the box office. A knowledgeable source says Netflix paid producer Joe Roth close to eight figures as a backend buyout for the fantasy The School for Good and Evil, which is in preproduction.
The shift of resources toward the making of serialized content is leaving less to go around for overhead film deals, making it more difficult for a new generation of producers to break in. “It’s harder to start a new [film] company because of deals that have little or no room for paying [staff],” grumbles one junior producer.
The grooming of the next generation is a concern for even seasoned producers, some of whom see the corporatization of the studios as squashing any producer dissent.
“Studios don’t want to be challenged; they like consensus,” says one studio producer. “But then, that’s reflected in the vanilla product you will get.”
The days of vanity deals also are on the wane. One source pointed to the fact that Judge Reinhold still carried a deal at Paramount not that long ago. Reese Witherspoon, for one, lost her deal at Universal in 2008 amid the strike (the actress has no current film deal despite such producing credits as Gone Girl and the upcoming Natalie Portman starrer Lucy in the Sky, though she is very active in TV). Margot Robbie and Michael B. Jordan are among the exceptions (both are based at Warners).
The convergence of factors has left most producers looking for outside money to finance development. And though many are successful — Raine Group made a $100 million-plus investment in Imagine Entertainment after the Ron Howard-Brian Grazer-led shingle lost its once-lucrative deal with Universal — there are only so many distributors who can release a film theatrically. Several notable indies have imploded in recent years (The Weinstein Co., Broad Green, Open Road), while others are holding on by a thread (STX, Annapurna).
“Every independent producer right now is facing the exact same battle,” says producer Matthew Baer (Unbroken). “The problem isn’t about raising money for good independent screenplays. The problem is how are the films going to be distributed? Who’s interested in paying the money to market the movies? So the distributors are getting cold feet about picking up good movies and you’re left with a gigantic heartbreak, which is even the case when you’ve made a genuinely good movie.”
Others are looking at this moment in Hollywood with some guarded measure of optimism because the three biggest studios — Disney, Warner Bros. and Universal — will soon be launching their own streaming services, prompting a renewed demand for feature content to feed the pipeline, albeit with nontheatrical features. That means a need for producers to fill the void. Universal has actually begun adding to its roster, with Phil Lord and Chris Miller (Spider-Man: Into the Spider-Verse) providing the most recent example.
“We are in a moment of transition,” says Chris Bender, who has a first-look deal at New Line and whose banner also includes a successful management division. “Traditional studios are entering the streaming platform space and they are going to have to increase content to be competitive. And for that, they are going to need producers, for ideas and to oversee production.”
In fact, Bender believes that one of the hardest jobs for producers is knowing what area to focus on. “While I’m waiting for major studios to figure out their streaming strategies, do I focus on Netflix or HBO Max or Quibi?” he asks. “As a manager, we see talent going to work in ways we didn’t pre-strike. So, I feel this odd mix of excitement and concern.”
The Disappearing Producer-Studio Deals: Then and Now
As Disney goes, the rest of the industry typically follows. So it should cause alarm among producers given that the studio has slashed its roster of film producers with first-look deals from 24 at the height of such deals in 2003 down to a current seven. Sony also has trimmed the fat, moving from 29 in 2003 to eight now. Though Warner Bros., Paramount and Fox have held steady (the latter now under Disney’s domain), their lineups are expected to dwindle in the future, particularly Fox’s, as deals expire. Universal is the only outlier, with the same number of deals now that it had in place in 2003. Here are some of the producers who can still call a major studio a home.
This story first appeared in the Aug. 12 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.