Are The Stars Worth Their Salaries?

The president of the United States makes $200,000 a year. A Supreme Court justice gets $170,000. The British prime minister earns $123,000. And Charlie Sheen? He takes home $5.2 million.

Granted, William Rehnquist would have bombed in Terminal Velocity too, but something is clearly wrong with this picture. Hollywood is caught in a salary-inflation cycle that’s so out of control it would have Alan Greenspan weeping into his spreadsheets. Even rinky-dink actors are signing seven-figure deals these days, while top stars are pocketing unprecedented eight-digit sums. Just look at the numbers. Jim Carrey: $20 million a picture. Bruce Willis: $16.5 million. Robin Williams: $15 million. Demi Moore: $12.5 million. Kurt Russell: $10 million. George Clooney: $10 million. Keanu Reeves: $9 million. Even Alicia Silverstone is turning out to be not so clueless after all: She demanded and got $3 million for her next movie.

Never before has Hollywood paid so much to so many for seemingly so little — a fact that sometimes dazes even the stars themselves. ”It’s definitely strange to think about,” says Tom Cruise, who just nabbed $20 million to appear in Jerry Maguire, a comedy due next year. ”It’s like we’re living in another galaxy. It seems so unreal that we would make this much.”

Why are the studios writing such gigantic checks? What effect are the big bucks having on the movie business? Where is all the cash coming from? How do we get some? These are the $64,000-an-hour questions.

Of course, movie stars have always made piles of money. Even back in the silent era, Charlie Chaplin signed a million-dollar contract. But over the last few years, the numbers have grown horrific. When Bruce Willis was given $5 million to appear in 1988’s Die Hard, it was considered a shocking deal, an unimaginable amount for a TV star. Today, $5 million doesn’t even buy Chris Farley.

Everyone has a theory about what’s fueling the skyrocketing salaries. Some see it as basic economics: More movies are being made, while the number of stars remains more or less fixed. In other words, increased demand plus finite supply equals an $18 million deposit in Michael Douglas’ bank account. Others point to video and overseas sales, which have pumped so much cash into Hollywood that the studios literally don’t know how to spend it all.

And then there’s the Mark Canton theory, which pretty much pins all the blame on the head of Columbia TriStar Pictures. Last summer, Canton had half of Hollywood choking on their double decaf nonfat lattes when he announced he was paying Jim Carrey $20 million — nearly double what megastars like Mel Gibson and Harrison Ford had been earning — to appear in the comedy Cable Guy (opening June 14). Suddenly, every actor in town was demanding a raise. Even John Travolta upped his asking price to $21 million (he had to settle for $20 million). Not surprisingly, the Carrey deal did not make Canton wildly popular with his counterparts at other studios. ”Columbia is a mess,” says a Twentieth Century Fox executive. ”There’s nothing nice you can say about it. They’ve set something in motion that ratchets up the entire business. They’ll self-destruct the industry.”

To Canton, though, the deal was as straightforward as they come. After all, this is the same guy who gave Arnold Schwarzenegger $15 million for 1993’s Last Action Hero. ??It’s very simple,?? he offers coolly. ??It was a business decision. We paid what we felt was fair market value.??

Oddly enough, paying $20 million to a man who does Tarzan yodels with his butt cheeks could indeed turn out to be a sound financial gamble — if Carrey succeeds in drawing a crowd for the movie, not an unreasonable expectation for an actor whose last four films each made more than $100 million domestically. And that’s really what these supersalaries are all about: They’re insurance policies, the studios’ attempts to guarantee a boffo opening by hanging a big enough name above the title. And when the star comes equipped with his own built-in special effects — as Carrey demonstrated during his Academy Awards shtick last month — the deal begins to look like a bona fide bargain.

??Think of it this way,?? explains Cable Guy producer Andrew Licht. ??Columbia is making its big summer picture for $40 million. They don’t care that half of that is going to the star. While other studios are making big summer action movies for $80 million or more, Columbia has got a very commercial film at a discount. It’s a different way of making movies, for sure. But from my perspective, paying Jim Carrey $20 million was brilliant. Mark Canton is a visionary.??

Perhaps. But there is a flaw to this logic: Big stars bomb all the time. There simply is no such thing as a guaranteed box office draw, no matter how much the studios are willing to pay for one. Just ask Demi Moore (The Scarlet Letter), Harrison Ford (Sabrina), Julia Roberts (Mary Reilly), Sylvester Stallone (Judge Dredd), Sandra Bullock (Two if by Sea), or Kevin Costner (Wyatt Earp). Another problem with these jumbo salaries: They explode the cost of making movies. The current price tag for the average studio film has jumped to $34 million, with an additional $26 million spent on marketing and distribution. No wonder the mood at so many studios is glum, despite a record $5.43 billion in ticket sales last year.

It’s not merely that a handful of actors are hogging all the money — it’s that their hyperinflated salaries tend to raise the pay scale for even second-tier stars. Suddenly, a sidekick like Tom Arnold is making $1.5 million a movie. And the spiraling costs don’t end there. ??It isn’t just the salaries,?? explains producer Dale Pollock, who paid Paul Newman the then-astounding figure of $5 million to star in 1989’s Blaze (and recently paid Ricki Lake a slightly less astounding sum to star in Mrs. Winterbourne, due April 19). ??It’s the perks that go along with it. You need a much more expensive trailer. You end up hiring one, maybe two, assistants for them. Hiring a special driver for them. Hiring their own hair and makeup people. So the ripple costs go beyond the star’s salary.?? Case in point: Cable Guy. ??We originally thought of it as a little $3 million movie,?? says Licht. ??But when you bring in an actor of Jim Carrey’s caliber, he isn’t going to make a picture that doesn’t fit his criteria of quality.??

Of course, some studios try to keep a lid on costs. For one thing, they’ve learned to cut back on luxuries, like costars with recognizable faces. ??You end up paying a lot for the star and are forced to hire everyone else for scale,?? complains Pollock. ??You end up with no-name people in the supporting roles. It’s become an enormous problem.?? Especially for the no-names, the only ones in Hollywood whose salaries haven’t gone up. ??The middle-class working professional actor in this industry is getting squeezed,?? says the Screen Actors Guild’s new president, Richard Masur. ??The top levels are sucking all the money up, and everybody else is jammed in at the bottom. If it continues, it will destroy the working heart of the business.??

??It’s having an effect in the quality of the movies that are being made,?? agrees entertainment attorney David Colden. ??Movies used to be made when the material was ready to be produced. Today the studios are greenlighting a movie as soon as they can entice a marquee actor and an A-quality director. That’s all the validation they need, whether or not the movie is ready to be made.??

Some insiders insist that the status quo simply can’t continue. Sooner or later, they predict, a salary crash is inevitable. ??They’re going to hit the wall,?? says veteran producer Albert Ruddy (The Godfather). ??It’s got to happen in the near future. It gets to be impractical at a certain point.?? Already there are some modest signs of studio rebellion: Paramount recently turned down Nicolas Cage’s demands for $9 million to appear in the action flick Face Off (he agreed to $6 million). And New Line Cinema recently sniffed at Julia Roberts’ asking price of $12 million to play a nurse who falls for young Ernest Hemingway in In Love and War. The studio went with Sandra Bullock instead, at the red-tag rate of $10.5 million (she’ll get a raise to $11 million — more than what Two if by Sea grossed — to star in the upcoming Speed sequel).

On the other hand, Roberts bounced back and bagged a $12 million deal for TriStar’s My Best Friend’s Wedding (which is more than Mary Reilly‘s entire gross). And she isn’t the only one coasting on her previous box office successes. Sylvester Stallone hasn’t had a blockbuster since 1993’s Cliffhanger, yet last summer he cut a three-film, $60 million deal with Universal. And Sharon Stone, who keeps signing fat contracts even though she hasn’t had a hit since Basic Instinct, picked up another $6 million to star in next month’s death-row drama Last Dance. ??I’ve had offers of $10 million, $12 million, and $14 million,?? brags Stone’s manager, Chuck Binder. ??There’s no plateau.??

Naturally, there’s one group of people who aren’t all that broken up over the stupendous rise in star salaries — the stars. ??It’s great!?? gushes Tom Arnold. ??When it goes up for guys making $20 million, it goes up for guys like me. I’m very grateful.??

??I’m all for it,?? cracks Steve Martin, who picked up $7 million to do Sgt. Bilko. ??It’s good for the arts.??

Even a Serious Thespian like Jodie Foster seems unfazed by the trend — perhaps because she’s being paid $9 million to star in Robert Zemeckis’ science-fiction thriller Contact. ??It’s silly to talk about,?? she says. ??Actors are the only thing that can open a movie. A Tom Cruise film opens on 2,500 screens, and in exactly two weekends the studio has made the money they paid him. Put Joe Schmo in a movie for 25 cents, and the film won’t make a dime.??

In fairness to the stars, they aren’t the only ones in Hollywood rolling in cash these days. Studio bigwigs have also been raking it in — and not just in salaries and bonuses. Sony reportedly paid its former executives Peter Guber, Jon Peters, Frank Price, and Mike Medavoy $100 million in buyouts a few years ago, just to get them off its lot. (Guber, who as the studio’s chairman was responsible for some of its biggest flops, is now back with a hugely lucrative production deal.) Plenty of directors have been doing well too: Last fall Alan J. Pakula signed a plum $5 million deal to film the cop drama Devil’s Own (partly because he was the only director Brad Pitt and Harrison Ford — who’ll be taking home a combined $30 million — could agree on). Even lowly screenwriters have been cashing in. Astonishingly, Joe Eszterhas was paid more than $3 million for typing Showgirls.

Of course, not everyone has been greedy. A few pricey actors have even been willing to keep budgets low by forgoing huge upfront payments in exchange for a piece of the profits (which sometimes turns out to be even more lucrative — it’s how Tom Hanks ended up making $60 million for Forrest Gump). Other stars, including Willis, Travolta, and Cage, have taken steep pay cuts to work on low-budget, high-status flicks. Stallone, for one, just signed to do a Miramax movie called Copland for less money than he spends on cigars in a year. It’s Cheap Chic — a cool way of announcing to the world how serious you are about your craft.

Still, when Not Ready for Big Time Players like Adam Sandler and Chris Farley are getting offered up to $6 million, it’s time to start scanning the skies for the Four Horsemen of the Apocalypse. Even some actors are beginning to turn off to the trend — sort of. ??It’s out of control, inflated, bloated, and grotesque,?? concedes Sandra Bernhard. ??But I wouldn’t mind making a million for doing a movie myself.??

— Additional reporting by Rebecca Ascher-Walsh, Bill Higgins, Beth Johnson, Dave Karger, Gregg Kilday, Jessica Shaw, and Anne Thompson