Barney Frank cracks wise about the idea that a fee on banks to cover the costs of failed firm resolution will cause an exodous of talent:
He also played down concerns that talent would leave the industry.
“I don’t know where people would go for comparable salaries,” [Rep Barney] Frank said. “I guess perhaps they could star in major motion pictures.”
This brings to mind the little-known fact that real wages for movie stars are actually in sharp decline. Take this look at nominal prices in 1999 and 2009 and you’ll see that almost everything has gone up. A box of Cheerios cost $3.89 in 1999 and $5.15 in 2009. An average cell phone bill was $40.24 in 1999 and $49.57 in 2009. That’s life. Often these prices are declining in CPI-adjusted terms, and in the case of cell phones you’re also seeing a major uptick in quality. But one thing that hasn’t gotten more expensive in the past ten years—even in nominal terms—is hiring Tom Cruise to star in your movie. That’s still $20 million. And nominal giant movie star salaries had already been stagnating at around $20 million for some years before 1999.
What’s more, the LA Times reports that now movie star salaries are declining even in nominal terms:
So today, the actors who used to make $15 million are making $10 million. The filmmakers who used to make $10 million are making $6 million. The writers who used to get a three-step deal, guaranteeing payments on a series of rewrites, now get one. As one prominent agent put it: “In terms of prices and quotes, everyone is in free fall. It’s just brutal out there. The balance of power has totally shifted from our side to their side.”
During this same period, Hollywood has also actually started making fewer films, so the situation facing movie stars is even bleaker than that. Basically a whole series of technological developments have served as negative shocks to the film industry, so while “movie star” is still a very good job to have in the scheme of things, it’s really not what it was back in 1990.
The severe recession is likely to lead to declining real wages for star athletes (in the NBA & NHL the operation of the salary cap will force this to happen, but market pressure should make the same thing happen in MLB and NFL) but we can expect that to reverse when the economy recovers. The outlook for Hollywood is much worse.
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January 14th, 2010 at 1:46 pm
Is this a joke? Who cares.
January 14th, 2010 at 1:47 pm
After seeing Avatar, I think future film stars will be paid by having their scheduling quantum increased.
January 14th, 2010 at 1:55 pm
The fact that they managed to make what may turn out to be the highest-grossing film of all time without using any big-name actors at all, except for sigourney weaver in a supporting role, will also surely not be good for their negotiating power.
January 14th, 2010 at 1:56 pm
The deflationary effect of producing a product which can be downloaded for free while eventually (if its not already) weigh on the film industry as has already happened to music.
Sports, however, operates in an alternate universe, mainly because it happens live and people pay a premium to experience the event as it happens, either on cable TV or in person at the stadiums. This is unlike anything else in the entertainment world.
All of this is why I find Comcast’s purchase of NBC an odd choice. I’d rather buy ESPN, which will be throwing off immense profits forever regardless of what medium we choose in the future to experience it through.
January 14th, 2010 at 2:04 pm
@2, it’s not just Avatar, the top ten US films by gross in 2009 were Avatar, Transformers 2, Harry Potter, Up, New Moon, the Hangover, Star Trek, The Blind Side, Monsters v. Aliens and Ice Age.
Except for Sandra Bullock (maybe Reese Witherspoon’s voice or even Shia LeBeouf if you’re really generous) there’s really not a top-tier star in any of them. I’m not so sure pay has stagnated as much as we just haven’t had any huge new stars in a while. The market has changed significantly since the 90s.
January 14th, 2010 at 2:07 pm
Liberals obsessed with income inequality.
January 14th, 2010 at 2:08 pm
How can you write this? The movie industry just posted its largest profits ever. It is not going through tough times. It’s going through great times. And studios are just walking away with more money than the actors…
January 14th, 2010 at 2:09 pm
The obvious response is “who cares”, and indeed, one person has already said that and more will by the time I finish writing this.
But then, it’s noteworthy how little the LAT blog post says. It drops a bunch of names, but what about all the B-list and C-list actors? Are actors as an industry getting less, or just the actors at the top, or just these particular people, or what? Doesn’t say.
Why did the movie studios finally get tough with talent? And is this really good for the movie business? Bad for talent? Or just a rare sign of fiscal sanity? Keep reading:
Whoever write this LAT article is a deceptive bastard, because none of those questions get answered, AFAICT, and those are the only reasons the anecdata of “actor X got unspecified amount less for movie Y” might be interesting.
But then, there’s the “pick the lesser evil” thing. No one likes rich actors, but everyone except for crotch-sniffing brown-nosers really hates big-time producers, moguls, corporate suits, etc. Think of it like that, and seeing Will Smith take a pay cut for the money to merely line the pockets of some real-life Les Grossman becomes a tragedy.
January 14th, 2010 at 2:09 pm
Cry me a river. Poor Hollywood stars. At least athletes have a proven demonstrative skill and if you don’t get hurt and are really good you can make it; whereas with Hollywood actors, there are so many hacks out there making millions while really talented actors struggle to get roles, or languish in dinner theatre. I feel no sympathy for the Hollywood Stars. Other working actors who wait tables, tend bar and otherwise hustle to make ends meet, yes and even for the ones in commercials who only get the occasional spots but those big-headed creeps? THBPT
January 14th, 2010 at 2:12 pm
You forgot to control for hunkiness. Tom Cruise of 1999 was more attractive than Tom Cruise of 2009
January 14th, 2010 at 2:15 pm
I have to wonder if the long logo parade of production companies that precedes almost every film has anything to do with it.
Films can work without big stars, but Hollywood might consider paying more for STORIES in the future.
January 14th, 2010 at 2:17 pm
Isn’t the decline in real wages for movie stars, or really, celebrities in part because of the changing role of celebrities? Movie studies don’t expect that actors are going to derive all their income from making movies. Celebrities/actors – especially female ones – are expected to do a lot of promotional work, advertising/endorsement deals, “design” fashion/products, etc.
January 14th, 2010 at 2:20 pm
I’d pony up a significant amount of scratch to get him to stop wearing that ridiculously stupid hat.
January 14th, 2010 at 2:21 pm
I don’t think that I have the numbers exact, but I seem to recall the ‘opening weekend’ for ‘Call of Duty Modern Warfare 2′ was about $500M. I don’t know all the ins or outs of Hollywood pay scales, except that Hollywood is every bit as down and dirty greedy as Wall Street is, but I cannot imagine that stuff like that cannot be having an impact, though it might be aimed more at TV than movies.
January 14th, 2010 at 2:27 pm
Movie studies don’t expect that actors are going to derive all their income from making movies.
I don’t see why “I don’t want to pay you, you have other sources of income” would be an effective negotiating tactic.
January 14th, 2010 at 2:28 pm
It’s ironic that Hollywood is so liberal given that its culture and economy so strongly reflect the values liberals are supposed to loathe. An obsession with money, status, power, popularity. “High school with money,” as someone once described it.
January 14th, 2010 at 2:30 pm
Here’s a real hit to Star Power: I had to check who that was a picture of.
I thought it was a mash-up of Redd Foxx and Obama.
January 14th, 2010 at 2:32 pm
I refuse to feel sorry for anyone who makes more than $1 million a year.
January 14th, 2010 at 2:33 pm
The major movie stars get points now, not just a check. With the ever-expanding global marketplace that means a major star can make $50 million on a single picture. Matt has no idea what he’s talking about here.
January 14th, 2010 at 2:34 pm
“I don’t know where people would go for comparable salaries,”
I know it is off topic, but Barney Frank is a moron. They will go to hedge funds, PE firms, etc.
January 14th, 2010 at 2:42 pm
I know it is off topic, but Barney Frank is a moron. They will go to hedge funds, PE firms, etc.
Barney Frank has a sarcastic turn of humor, which I think flew right past you. In any event, he’s a lot funnier than any movie politician I’ve seen in a couple of decades.
January 14th, 2010 at 2:45 pm
Hollywood aside, talent leaving the financial services industry is a feature not a bug. What the industry needs is new blood. Wall Street earnings are largely the result of carry trades, cheap money (fed rate is effectively zero) and
the bailouts of both AIG and the GSE’s. At some point, probably not while Barnanke is in charge, rates will go up again. The banks are living in an alternate universe where rates never go up, housing prices never fall and they are the only people in the world who can do what they do. The sooner they are brought back to reality the better. If one were to take a flamethrower to the upper management of these banks, there would be plenty of bright people to take their place and the new guys would have the added benefit of not being responsible for biggest financial crisis the world has seen since the great depression.
January 14th, 2010 at 2:45 pm
As others have said, movie star drawing power isn’t what it used to be. Often, for summer and holiday tent-pole movies in particular, it’s the concept that’s the star, not the actor.
January 14th, 2010 at 2:46 pm
What #19 said. The nominal salaries earned by a Major Movie Star are paid up front against a share of the gross receipts of the film — which is to say, if you paid $10 to see Pursuit of Happiness, and Will is getting $2 of that less the original $15 million acting fee (and less what he pays his E-meter operator, but I digress). This is a huge amount of money on even an unsuccessful film.
Where actors (and writers and directors) are beginning to get concerend is in DVD and secondary market sales, where they get nothing above royalties (which is peanuts compared to their standard theatrical backend deal).
January 14th, 2010 at 2:47 pm
The major movie stars get points now, not just a check. With the ever-expanding global marketplace that means a major star can make $50 million on a single picture. Matt has no idea what he’s talking about here.
Major movie stars have gotten points for years, since Mike Ovtiz “revolutionized” the industry back in the 90’s.
What going is is what was allued to in an earlier comment: Concepts, not stars, put asses in the seats nowadys. Sure, movie stars are important (i.e. Robert Downey Jr. as Iron Man and, more to the point, as Sherlock Holmes) but with the triumph of Avitar, concepts will rule the days for the all-important, tentpole mega-blockbusters (More than $250 mil internationally)
January 14th, 2010 at 2:52 pm
Just another pro-boss, anti-labor post from MY. He really does hate unions, doesn’t he?
January 14th, 2010 at 2:57 pm
“I know it is off topic, but Barney Frank is a moron. They will go to hedge funds, PE firms, etc”
Haha!!!
Hedge Funds and PE’s don’t need John Mack or Vikram Pandit unless they bring their money along. In fact, what the government should have done before the bailout is make these guys leverage their entire net worth if they wanted to stay in charge. I bet that idea would have had few takers among the guys who testified yesterday. Again, their leaving these banks would be a feature not a bug. That idea would have been a business opportunity for someone else assuming they chose to leave rather than risk their own capital. Besides, if a hedge fund goes belly up, a bunch of rich dudes and a few poorly managed pension funds get hurt. The pain is localized. Not even this government would have much of an appetite for bailing out Private Equity firms or Hedge Funds.
January 14th, 2010 at 3:00 pm
I don’t see why “I don’t want to pay you, you have other sources of income” would be an effective negotiating tactic.
Actually, it is effective for people dealing with movie stars and other celebrities — getting better exposure can result in them earning even more money later from other sources. That’s why actors will often work for substantially less money to do movies that are likely to win awards or trade off pay for higher billing or opportunities to be cast opposite a higher profile actor. (Dakota Fanning is an excellent example of this.)
January 14th, 2010 at 3:26 pm
What does banking have to do with talent? Absolutely nothing.
Of course Hollywood doesn’t have much to do with talent either these days, too much nepotism. Oh well.
autoit 0.245804232312366
January 14th, 2010 at 3:34 pm
I didn’t know Wil Smith starred in Newsies.
January 14th, 2010 at 3:46 pm
“whereas with Hollywood actors, there are so many hacks out there making millions while really talented actors struggle to get roles, or languish in dinner theatre.”
It doesn’t matter how talented you think you are. It matters whether anyone is willing to pay for what you do.
Mike
January 14th, 2010 at 3:48 pm
I know it is off topic, but Barney Frank is a moron. They will go to hedge funds, PE firms, etc.
That would be great actually.
Hedge funds risk their own money. Getting swashbuckling risk seekers out of the commercial banking business would be the best thing to happen to the economy since the internet.
However, I doubt hedge fund managers are dying to pay the “geniuses” at AIG to do quant work. They have their own quants and if they need more, they can hit up any graduate physics/math/electrical engineering department in the country.
January 14th, 2010 at 4:16 pm
What Shine said. The share-of-box-office deals have been around for a while. And only a handful of stars have the clout to get get such a deal anyway. This is something different. As Matt and others suggested, it reflects the growing importance of effects-driven blockbusters to movie studio profits, and the declining relative value of actors and writers.
January 14th, 2010 at 4:36 pm
Stars havent been Stars for years. Is Brad Pitt a star? No, hes a battery hen. A lot of them are uninteresting pseudo-personalities. John Wayne, Bogart, Mitchum, Eastwood, Nicholson, Brando, etc. were stars. Even a good actress like Nicole Kidman isnt really a star. Even Will Smith isnt worth it anymore. This might keep the good character actors from getting squeezed the way theyve been. 90% of the writers make no more now than they did 20 years ago. Trailer writer-producers very often the most talented part of the production team have seen their wages stagnate. The one tiny group thats making millions more than before are the TV teaser-trailer voice-over guys. The Voice of Doom barons. They get treated like Royalty.
January 14th, 2010 at 4:46 pm
When watching Avatar I kind of pictured actors being replaced completely by models and CGI in the future.
January 14th, 2010 at 4:50 pm
There could be a lot of things going on, here is a list in no well thought out order:
(1) Perhaps the ratio of quaranteed versus at risk pay is varying. A fee is quaranteed, at cut is “at risk”. The relative sizes could be changing.
(2) If the stars “need” the exposure because it brings them other opportunities, then the negotiating balance has changed.
(3) If high tech special effects (which are done by off-lot teams of nerds) are becoming the new stars, then that changes the balance significantly.
(4) Perhaps the distribution of pay is becoming less unequal. I wonder if anyone measures Gini coeficients for industries?
I’m not so sure times haven’t gotten tough. One of my co-workers son’s is starting a career in hollywood image processing. A year ago he was gloating that the movie industry is recession proof. Now he says it is very hard to find work.
January 14th, 2010 at 5:04 pm
When watching Avatar I kind of pictured actors being replaced completely by models and CGI in the future.
For every movement there will be a backlash against that movement. If mainstream movies become too heavy with CGI, someone will come along with a new version of Dogme 95 or whatever and bring back the use of real actors.
January 14th, 2010 at 5:15 pm
I think it depends on how they bridge the Uncanny Valley.
January 14th, 2010 at 5:19 pm
People of color have it pretty rough in the off-camera guids of the bizness. Breaking in for one thing is an immense obstacle. In 23 years I’ve yet to meet a non-white teaser-trailer copywriter for example. And, more than a few make low to mid six figure money per annum.
January 14th, 2010 at 5:30 pm
[...] Chait and I both likes it when Barney Frank dismissed concerns that a bank tax would drive talent out of the [...]
January 14th, 2010 at 5:57 pm
When watching Avatar I kind of pictured actors being replaced completely by models and CGI in the future.
Well, that’s already happening in crowd scenes. Instead of actual human extras, they use digital ones. And as the cost of CGI continues to fall, the use of digital actors will no doubt expand. But I think there’ll always be a big market for real human actors in leading roles.
Perhaps studios will also start to use CGI to make their leading men and ladies look more attractive as they age. They’ve been airbrushing actors’ faces on magazine covers for years. I remember a DVD commentary in which the director casually remarked that they had used CGI to remove some unfortunate tatoos from Angelina Jolie.
January 14th, 2010 at 8:15 pm
Shine said-
To be fair, I think Lew Wasserman and his client, Jimmy Stewart, get the credit for this (I think the first show they worked this out on was “Bell Book and Candle,” or maybe “Man from Laramie”…)
It sorta depends on the genre… I’ve maintained that for the past 20-30 years we’ve simply been making variations of “Die Hard.” Our comedies play like any scene from “Die Hard” with William Atherton or Reginald VelJohnson, our science-fiction films have, after a renaissance, returned to their 60s-era schlokiness, with a dash of “Die Hard” action. Female genre pictures are still innocent of this, but these are still heavily star-driven enterprises.
Action films have a very specific marketing strategy and production style, and if you can figure out how to make and sell an action film, you can pretty much apply that to everything.
January 14th, 2010 at 8:56 pm
So let them go to hedge funds, PE whatever. You don’t pay huge sums of money to morons for destroying lives and their country for greed and stupidity.
January 15th, 2010 at 11:58 am
No Mike, it doesn’t matter what people are willing to pay to see you do. What matters is whether a studio is willing to gamble to pay you in the hopes that people will pay to watch you act. My point was that there are plenty of people, say critics, theatre goers, small theatre directors, other actors, who will recognize someone’s talent but if they say don’t look right or catch a casting director, or agents eye they aren’t going to get a break. If you are really good looking and have a nice voice, whatever sex you are you are much more likely to become a hollywood star if you are in the right place or the right time, irrespective of your talent. But you could have tons of talent, gone to Juliard, gotten rave reviews on Broadway, but if you aren’t good looking enough or even if you are good looking but don’t get seen by the right people, you aren’t going to be a star. No way you can tell me that there aren’t sucky actors who are big stars, and excellent actors who are in obscurity. No way.
January 15th, 2010 at 5:11 pm
In the US, from about 1800 to 1910 that was NOT life. A loaf of bread cost you the same in 1900 as it did in 1800.
How can this be?
It’s the result of fiat currency vs. commodity-backed currency.