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How to make it in the movie industry

How to make it in the movie industry–From cash up front to ”back end” deal, a primer for earning potential

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So you’ve busted out of waiting tables and are on your way to stardom. Congratulations. But it’s not all Cristal at the Chateau from here — you’ve got to bone up on some basic Hollywood deals. And when you’re riding atop that contractually stipulated phalanx of Sherpas to carry you to the set, remember the little people, okay?

Cash Up Front
Perhaps the three most beautiful words in Hollywood. ”Guaranteed money is always better than money based on the performance of the movie,” says Jeremy Zimmer, who sits on the board of the United Talent Agency. ”Why? That’s like asking why two plus two equals four.” Still, get ready to kick yourself if the movie turns into a surprise hit and your costar starts buying tropical islands with money made from a…

Back-End Deal
In which a star takes some cash up front (sometimes less than his or her usual fee) and also signs on for a share of the box office take. This means they get a percentage (or ”points” in biz-speak) of the gross of the picture. Zimmer explains: ”If a star’s salary is $20 million against 10 percent of the gross, when $200 million comes in, the star starts receiving 10 percent.” But watch the fine print: While gross points — which are calculated from the first dollar the movie earns at the box office — are great, net points suck. ”Net points only pay out after all costs and expenses are subtracted,” says Bill Block, copresident of Artisan Entertainment, who notes that given creative studio bookkeeping, ”talent [with net points] will only see money with low-budget pictures that explode, like Blair Witch.” Sometimes, though, even gross points pale in comparison with the treasure that can be mined from ancillary profit sources, such as toys. Taking a cue from Nicholson’s astounding deal for Batman, George Clooney, Arnold Schwarzenegger, and Val Kilmer all struck gold by sharing in merchandise sales when they signed on to the franchise.

Working for Scale
So how could Paul Thomas Anderson afford Tom Cruise’s $20 million asking price for Magnolia? Simple. He couldn’t. Cruise ”worked for scale,” taking a huge pay cut to play the potty-mouthed inspirational speaker. ”And it worked,” says Block. ”He got an Oscar nomination.” The term itself is actually deceptive: Scale technically means accepting a Screen Actors Guild-mandated $596-a-day minimum for a starring role, but is more generally used to describe a very low salary. Also, working for scale doesn’t prohibit a star from getting gross points, which means that a $20 million bigwig who’s working for peanuts on a labor of love could take home untold millions for a runaway hit.

Tit for Tat
It happens all the time: Big stars sign on for big-budget junk in order to make their pet projects at the same studio. A textbook example is Sandra Bullock, who agreed to do 1997’s Speed 2: Cruise Control for Twentieth Century Fox in order to get Hope Floats greenlit. It’s ”an expression of clout,” says Block. ”Stars apply it toward an artistic end, one that’s satisfying.” And in this rare case, it was satisfying for the studio as well — Bullock’s little pet project actually outgrossed the bloated boat sequel $60 million to $49 million.

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