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Marketplace

How film actors’ pay gets calculated

Nova Safo Apr 10, 2015
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When Sony Studios was hacked late last year in connection with the film “The Interview,” a trove of internal documents was released online. One of the damaging revelations was that the studio was paying some of its actresses less than their male co-stars.

The revelation generated headlines about women’s pay. But, it also brought to light the disparities in what actors are paid, and the complex calculations that go into determining those salaries.

“It’s a calculus you go through on each film,” says Peter Sealey, former head of marketing at Columbia Pictures, who now runs a marketing firm.

Amy Pascal, the former studio chief at Sony Pictures who was fired in the aftermath of the hack, spoke at a women’s conference in San Francisco in February, and said one of the fundamental elements of what determines actors’ salaries is, simply, negotiation.

“I run a business. People want to work for less money, I’ll pay them less money,” Pascal said in a public interview with audience. “I don’t call them up and go: can I give you some more?”

Some actresses are definitely not working for less money. They are the rarefied few in the $20-million-and-up-club, like Angelina Jolie and Sandra Bullock. They both can command huge salaries and even percentages of movie profits or revenues.

But there are many other actors who do not have such clout. And yet, Pascal’s advice was blunt.

“The truth is that what women have to do is not work for less money. They have to walk away. People shouldn’t be so grateful for jobs. People should know what they’re worth and say no,” Pascal said.

But walking away may be less of an option for most actors, because the salary calculations studios do, Sealey says, which change their formulas based on recent trends.

The calculation of an actor’s worth in a film “involves a lot of variables,” Sealey says, “but principally it is: how much of a draw will that actor or actress be for your target audience?”

The bigger the audience the studio believes an actor can attract to movie theaters — especially during the all-important opening weekend, which can help determine the long-term earnings trajectory of a film – the higher that actor’s salary might go.

But that correlation has a number of additional variables that can affect salary. Among them are the film’s budget and what role that film plays for a studio’s bottom line. If it’s a tentpole film, Sealey says, “where it’s important to a studio’s long-term health… the price of the actor goes up.”

A major tentpole, like the James Bond franchise, is supposed to make so much money that it covers the bombs the studio makes and boosts the bottom line. The last Bond film, “Skyfall,” made $300 million in the U.S. and $1.1 billion globally. 

Conversely, non-tentpole films might have lower budgets and lower salaries — no matter an actor’s star power. But for the big-budget fare, salaries can reach the heights which Daniel Craig reached in “Skyfall:” $17 million. The film itself reportedly cost $200 million to produce. Craig’s salary probably also had something to do with the fact that he had been Bond before.

“If you’re trying to get somebody to repeat a past success, obviously you wind up paying them more,” says Mike Medavoy, a film producer who headed up Orion and TriStar pictures in the ’80s and ’90s.

Repeating past successes, if done in a particular genre, can help actors establish a brand and help them boost their salaries, Medavoy says.

“Liam Neeson is a perfect example of that,” he says. 

Neeson made $1 million for “Taken,” but by the second sequel, with a track record of box office success behind him, Neeson raked in $20 million. The film itself made $300 million, most of it overseas.

“At this point, about 65 to 70 percent of the revenue comes out of foreign and not out of the domestic market,” Medavoy says. Which means that an actor with strong appeal in foreign markets can demand a higher salary.

Actors’ appeal is also calculated with other revenue streams in mind — home video, Internet, TV, etc. Even an actor’s social media presence — whether they have a large Twitter following, for example — can help determine their salary, says entertainment lawyer Jonathan Handel.

“That’s something that talent reps can use in arguing for a given salary,” Handel says, “How that translates into dollars is probably a dark art.” 

While actors can do a lot to boost their worth, Handel says there is a countervailing trend among studios. They’re making fewer movies, and relying more on special effects and comic-book characters.

“You know if you’re casting a Spider-Man movie, it’s mostly about Spider-Man and not about the particular actor,” Handel says.

Compare that to the 1990s, when movie budgets ballooned and actors’ salaries went up along with those budgets. Handel says the decades since have seen a big shift and “the power that actors and their representatives used to have has diminished.”

In aggregate, that’s meant smaller salaries, except for the biggest of the big name actors, he says.

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