James Cameron's 12-picture deal -- The ''Terminator 2'' director's agreement with Twentieth Century Fox sparks controversy

It’s a whole new payday for Hollywood’s top directors, and they’re all looking forward to cashing in, thanks to maverick writer-director-producer James Cameron, the man who made Terminator 2: Judgment Day a $500 million global blockbuster. Cameron and his partner, producer Larry Kasanoff, last month forged a landmark five-year, 12-picture deal with Twentieth Century Fox, valued at — coincidentally enough — $500 million. And the agreement, a Hollywood rarity that gives the director the copyright to his own movies, is already creating seismic shifts in the way the town works.

”It’s the most important deal of the year,” says entertainment attorney Peter Dekom. ”It guarantees Fox high-quality product with OPM: Other People’s Money.” Dekom means that in return for greater freedom, Cameron and Kasanoff will partially finance their projects by raising money from other investors. ICM chief Jeff Berg, who guided the agreement, thinks ”the economic structure that Jim and Larry have put in place” will become a model for others to follow.

Who will want in? Well, for starters, directors like Tim Burton, Oliver Stone, Richard Donner, Adrian Lyne, Paul Verhoeven, and Ridley Scott, heavy hitters who command $4 million to $5 million per film, but now want the ability to green-light movies and get more flexible financing-in essence, more clout.

Who doesn’t want in? Steven Spielberg and George Lucas. Their deals are already so rich, they don’t need much more. Last week, the only woman director approaching this fancy neighborhood, Barbra Streisand, was finalizing a more traditional deal with Sony Entertainment, reportedly for $40 million. Encompassing both her film and music projects, it pretty much frees her of Cameron-envy.

Will new deals be cut soon? Probably, because studios are very interested these days in sharing the risk on big-budget movies. Here’s how it works:

Under the Cameron-Kasanoff deal, Fox agrees to put up a percentage of the production costs on a dozen movies (four of which Cameron will direct) in exchange for the right to sell them in North America. Lightstorm, the company owned by Cameron and Kasanoff, will keep merchandising rights and raise the rest of the production money from eager foreign distributors.

While Fox would rather retain control of the financing and the profits of these movies — Lightstorm will, after all, grab the lion’s share of the rewards — Fox chairman Joe Roth is happy with the exclusive deal. ”We’re playing for a very profitable return,” he says. ”Given that we can’t have the whole thing, this is the only kind of game Jim wanted to play.”

Yes, other studios are already bellyaching about Cameron’s choice arrangement. One rival studio chief predicts that it will all go sour as soon as the director goes over budget, as he often does. But for Cameron and Kasanoff, the quid pro quo is perfect. ”We’ll share the risk and responsibility (with Fox),” says Kasanoff, ”and if we pick right, we reap more of the rewards.”