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A version of this story first appeared in the Dec. 12 issue of The Hollywood Reporter magazine.
In the days leading up to November’s American Film Market, producers of The Man Who Made It Snow raced to close a deal with Jake Gyllenhaal to star as the Jewish engineer who infiltrated the Medellin drug cartel and helped build Pablo Escobar’s empire. But negotiations became hung up on Gyllenhaal’s payday for the $35 million indie film.
Only a few years ago, an actor like Gyllenhaal — who vacillates between full-fee studio movies and low-pay indie fare — might have been willing to work for scale or a mere $75,000. But times have changed. As the traditional indie model has been tweaked thanks to deep-pocketed backers ponying up for bigger-budget movies, stars can demand studio-style fees. Sources say producer Brett Tabor and IM Global agreed to pay Gyllenhaal $3 million plus backend for Man Who Made It Snow (same for director Antoine Fuqua), though a recent lawsuit alleges Gyllenhaal was offered $6 million. Fuqua, Gyllenhaal and Matt Jackson are also producers on the film.
“It’s a balancing act,” says IM Global chief Stuart Ford. “In the box-office universe we live in, theatrical movies need to feel like events. This has led to a pricing polarization of the indie marketplace between the relatively few movies that have ‘event’ potential and the rest.”
The race to “eventize” indie movies with bigger budgets has generated new expectations for stars, who can look to the indie world both for creative fulfillment and a paycheck. Some veterans don’t like the trend. “You have agencies that are packaging films with huge budgets through private equity and foreign sales, so why should stars cut their fees? But it can really screw things up,” says one indie distributor. “There’s this irrational, unlimited sense, and it puts a lot of the stress on the system.”
Many indie films still rely on foreign presales to finance a big portion of their budgets. But international outlets increasingly have become nervous about investing in smaller dramas, even those with stars. They want the scope of which Ford speaks. “That’s why you are getting indie companies busting their ass trying to create big-budget pictures,” says sales agent Brian O’Shea of The Exchange. “There’s very little presales on art house titles anymore.”
With bigger budgets come bigger salaries. Matthew McConaughey earned less than $200,000 upfront (plus backend) for Dallas Buyers Club, but sources say he’s getting at least $5 million for Free State of Jones, an ambitious $65 million Civil War drama directed by Gary Ross. Robert Simonds‘ new indie studio is backing the film domestically, while IM Global is handling Free State of Jones internationally. And McConaughey was paid $3.5 million for Gus Van Sant‘s Sea of Trees, a $25 million indie drama in postproduction. While the actor earned more for studio tentpole Interstellar, those are big numbers for the indie space.
Says another indie executive: “Five years ago, everything was great. Budgets were small, and actors wanted more interesting roles — so if you had a $3 million movie, they’d be willing to do it for $150,000 or $300,000. But many of those films had a hard time at the box office. As an industry, our reaction has been to make more commercial movies, the sort of movies the studios have abandoned. But when you call an agent and say your budget is $25 million-plus, or even $60 million-plus, you are going to have to pay more.”
Helping fuel the new class of indie projects is a generation of flush financiers. Megan Ellison‘s Zero Dark Thirty and American Hustle were budgeted at $40 million. Ken Kao, heir to the Garmin GPS fortune, is backing Sea of Trees and The Nice Guys, a ’70s crime thriller starring Russell Crowe and Ryan Gosling, both being paid more than $7 million. Leonardo DiCaprio earned full freight — about $25 million — for Martin Scorsese‘s $100 million The Wolf of Wall Street, financed by Red Granite Pictures, the production company founded by Riza Aziz, the stepson of the Malaysian Prime Minister Najib Razak, and Joey McFarland. “You can’t compete with patrons like these,” laments a producer.
But the new economics carry plenty of risk. Indie movies with budgets above $20 million or $30 million usually need wide releases, which require hefty marketing spends. And lately there have been casualties. Paranoia, a $35 million thriller starring Harrison Ford, topped out at $13.7 million worldwide after its August 2013 release. Gambit, a $25 million remake starring Cameron Diaz, earned only $10.2 million internationally and went straight to DVD in the U.S. Denzel Washington reportedly was paid $20 million to star in 2013’s $60 million-budgeted 2 Guns opposite Mark Wahlberg (who made $10 million), but the pic took in $75.6 million domestically and $56.3 million overseas — meaning Washington likely made a lot more than the movie’s backers.
“As the studios lay off an ever-greater portion of production financing commitments to third parties,” says Ford, “the boundaries between a big independent picture and a midsized studio picture have become increasingly blurred and increasingly irrelevant for producers, talent and foreign distributors.”
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