Behind Scorsese's 'Killers' Apple Deal: $200M+ Budget, "Low-Risk" for Paramount

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The studio balked at a script change that flipped Leonardo DiCaprio's role: "Smaller scale, same budget."

There is no denying the enduring allure of Martin Scorsese, the rare director whose career has remained vibrant over decades. Add Leonardo DiCaprio to the mix and any project becomes almost irresistible, as is clear from Apple's recent decision to plunk down give-or-take $200 million for the dark period piece Killers of the Flower Moon. (Those involved may quibble with that number but if history is any guide, it's low.)

Yes, Scorsese and DiCaprio are hard to resist, except it turns out that even pre-pandemic, Paramount did resist this movie — or at least the version that the filmmaker and star are determined to make. As the studio pulled back, Apple struck a deal to cover the hefty budget while Paramount distributes the movie in theaters worldwide. Apple subsequently will stream it.

For Paramount, elements of the arrangement will ensure that it faces no financial risk but also very limited upside. The deal instantly makes Apple a big player in the prestige film business and may also signal that going forward, the streaming service will compete by embracing the kind of full-on theatrical run that auteur directors crave but that Netflix cannot and will not provide.

Long before the pandemic shut Hollywood down, Paramount was tentatively prepared to back Killers of the Flower Moon, based on the David Grann nonfiction book about the 1920s murders of Osage Nation Native Americans.

After Imperative Entertainment bought the rights to Grann's book in 2016, DiCaprio and Scorsese joined the project and it was shopped to Paramount. But the studio wanted the budget — then about $180 million with a tax credit from New Mexico — pared down to about $150 million. No one actually believed that Scorsese actually would have stuck to that number, but at least it would have let studio execs fantasize that costs might be kept in check.

Sources say things changed when the director and his star decided to revise the script. Originally DiCaprio was playing the good guy working for the then-nascent FBI. In the revised version, DiCaprio would portray villain Robert De Niro's nephew, torn between love and the evil machinations of his uncle. A source with knowledge of the situation says Paramount felt that turned the film into a moody and less commercial character study — "smaller scale; same budget."

While a huge wager on the film no longer seemed like such a good idea, relinquishing a Scorsese movie was so painful for the top Paramount executive team that one studio insider told me, as this drama unfolded, "We're not making it but we're not not making it."

At this point, it's hard to imagine even a more powerful old-school studio risking tens of millions on a Scorsese period piece. But what do petty money worries mean to Apple, which agreed to ante up for the version Scorsese and DiCaprio are determined to make?

While Scorsese has had his deal at Paramount since 2006, the studio has not financed any of his movies in full or in part since the 2010 film Shutter Island. That mountain logo may appear on the screen, but Paramount merely distributed Hugo, Wolf of Wall Street and Silence, all of which were financed by others. The backers of Hugo and Silence lost a bundle, and the scandal and court action swirling around the source of that Wolf of Wall Street financing is still playing out.

The Irishman was so expensive that the late Brad Grey passed despite his love of his association with Marty. After all, says a knowledgeable source, Scorsese had gone more than 100 percent over budget on Silence. Only Netflix would take on The Irishman, and whether the streamer thinks it got its money's worth is known only within its secretive walls. (Netflix supposedly was in the mix for Killers, but it's hard to say whether the streamer's heart was really in that battle.)

Once Scorsese and DiCaprio revised Killers of the Flower Moon, Paramount empowered DiCaprio's longtime manager, Rick Yorn, to shop the project. No doubt the studio hoped no one would tackle it, which might persuade Scorsese to come back to the original idea and the hoped-for budget. (And Paramount likely would have sought a financing partner.)

Now Apple is not only paying the budget in full but says it will be the "creative studio" on the project, which means executives there will get a first-hand sense of the complete impossibility of controlling Scorsese. Note that AppleTV+ chiefs Zack Van Amburg and Jamie Erlicht are television guys without film experience.

The movie will get a full theatrical release around the world, presumably with a standard window (though the definition of standard window could change by the time the movie is finally made). Paramount will front marketing costs, but Apple will make sure it gets all that money back either from its share of box office or, if necessary, by making up any shortfall. Apple will also cover costs associated with developing the movie.

Meanwhile, Paramount will get a distribution fee based on the film's box office performance. Even if the film does exceptionally well, such fees are hardly enough to keep the lights on at a major studio. Wolf of Wall Street grossed $392 million worldwide and Paramount netted about $20 million, says a source with knowledge of the situation.

As for the Killers deal, "It's a super low-risk way for Paramount to keep some rights in the movie," this person says. "But it has no upside. You're investing a ton of time. Marty and Leo are demanding. It will take the same energy as opening a tentpole [that Paramount would own]. Then the upside is $10 million or $20 million. It's an interesting use of time and money."

But a studio insider takes a more sanguine view, noting, "It's a low-risk way to be in a Scorsese movie," he says. "And if it's an Oscar movie, you're on the invite list."