In the winter of 1982 Eddie Murphy closed a deal with Paramount Pictures that looked like a risky proposition for the studio. On the strength of the box-office hit “48 HRS.,” Murphy was signed to an exclusive three-picture deal and advanced $1 million for his next movie.
Murphy had a home, but had Paramount given the house away?
Obviously not. The gamble paid off handsomely. Two of Murphy’s movies, “Trading Places” and “Beverly Hills Cop” have grossed about $400 million. Last year Paramount renegotiated the contract and inside sources at the studio said that Murphy now gets about $6 million per picture plus a piece of the profits. For “Beverly Hills Cop II,” which starts shooting next month, Murphy received about $8 million in salary alone, according to sources at Paramount.
In recent weeks, Tri-Star Pictures has been busily trying to duplicate that box-office magic by signing TV’s “Moonlighting” co-star Bruce Willis to an exclusive deal. According to sources close to the situation, Willis will receive about $4 million per picture if the deal goes through.
But those kinds of star deals are rare exceptions in Hollywood today. Unlike the 1940s and early 1950s when studios had actors under contract and simply assigned them to pictures, actors today have much greater leverage.
Murphy is one of the rare A-list stars with a purely exclusive deal, which means that by contract he cannot make a movie for any other studio. When Sylvester Stallone recently signed a 10-picture deal with United Artists, it was announced that it was not exclusive and that Stallone was free to go on making “Cobra” and “Rambo” sequels for other studios.
But while actors have shied away from exclusive arrangements, such deals are much more commonplace among producers. The typical “in-house” exclusive deal works like this: A producer--or team of producers--is provided a salary, an office, an expense account and other perks. In exchange, the studio gets to hear all of the producer’s ideas and has final say on whether the movie will be made. In addition, if the studio green-lights a picture, it takes a distribution fee and a cut--generally about half--of the movie’s net profits, in exchange for financing the movie.
In effect, the producer who agrees to such a deal is like a salesman who works on salary and commission as opposed to the salesman who works on commission alone. For that reason and others, the exclusive deal is not for everybody. “It’s a quid pro quo,” said Daniel Melnick, (“Footloose,” “All That Jazz”), who now has his own independently financed production company and can make movies with whatever studio he chooses. “You give up freedom and a better back end (profit participation) for the security of a weekly paycheck.”
Don Simpson and Jerry Bruckheimer may be Hollywood’s highest paid producers with an exclusive deal. Simpson, a former president of production at Paramount, teamed with Bruckheimer in 1982. Together, they have produced “Flashdance,” “Thief of Hearts,” “Beverly Hills Cop” and “Top Gun,” three of which were top money makers for Paramount.
According to Simpson, such exclusive deals usually favor the producer, who gets the full use of the studio lot and all of its attendant marketing and distribution services. “Basically, when you are a producer under contract, all you have to worry about is getting up, driving to work and going to bed at night,” Simpson said. “The trade-off for having a nice home and a nice car is that you can’t get nearly as rich as you would if you could afford to be totally independent.”
Being exclusive can also lead to some frustrating creative roadblocks. According to Simpson, Jeff Katzenberg, the former president of production at Paramount and now chairman of Walt Disney Studios, told Simpson that Paramount had decided not to make “Top Gun.” Once that administration “passed,” Simpson and Bruckheimer could not take the movie to another studio. “Believing in ‘Top Gun’ as heartily as we did, to be told they wouldn’t make it was a crushing blow,” said Simpson. “Fortunately, it was the first thing approved by the new administration (studio Chairman Frank Mancuso and President Ned Tanen).
Of course, few producers have the clout or track record of Simpson and Bruckheimer. And, for the less experienced, the exclusive deal can seem like a godsend. David Bombyk, who co-produced “Witness” and “Explorers,” was one of about a dozen producers who agreed to exclusive deals at Walt Disney Productions when Michael Eisner and Katzenberg took over the reins there. Bombyk, who did not produce anything for Disney while he was there, recently left Disney to become president of the Geffen Film Co. “Because you can only take projects to them, you are almost a part of the staff. It’s to their advantage to use your talents, and in this case they made me feel like part of the family.” (Several of the projects Bombyk worked on are now going to be produced at Disney.)
Producers who don’t want to be exclusive can also opt for what is known as a “first look” deal in which the studio pays for the right to hear the producer’s ideas first, but the producer is free to set up movies elsewhere if the studio passes. It would seem to the producer’s advantage to be able to shop his wares all over town, but Bombyk and others say that is not always the case. “Inevitably, what happens is you wind up spending 20% of your time in meetings and 80% of your time driving between the various lots,” Bombyk said. “By making this kind of deal (exclusive), there is a basic understanding of taste and the way you do business. You are forming a pact.”
But being exclusive doesn’t guarantee anything.
At Disney, part of the problem, according to insiders, is that executives prefer to make movies from ideas they have conceived or discovered. “These producers go in and pitch (suggest stories) over and over again, and they (the creative executives at Disney) don’t say yes to anything,” said one recently departed Disney production executive.
“There is one producer there who has literally pitched about 30 times and never got a yes. They brought these producers on the lot but they don’t always trust their judgment. The philosophy is, ‘You’re going to do what we want to do.’ ”
That kind of attitude frightens off a lot of veteran producers who think they have accomplished what they have by trusting their own creative instincts. “The problem with exclusive deals is, at the core you are little more than an employee of the studio,” said Aaron Russo (“Trading Places,” “Partners”). “The only real benefit is picking up a weekly paycheck, and for that you don’t need the movie business. For that you can sell your soul.”
The biggest problem for producers like Russo is that, under these deals, the studio always has the final say. If it doesn’t want to make the producer’s movie, the film is not only out of the game at that studio, but it can’t be made anywhere else. “It’s hard to like yourself if you don’t respect yourself,” said Russo who is now forming his own independently financed company in Purchase, N.Y., of all places. “It’s difficult to respect yourself if you can’t choose the films you are going to make.”
Brian Grazer (“Splash,” “Night Shift”) has never had an exclusive deal with one studio and probably never will. Grazer reduced the dilemma to its simplest form. “If it works on creative, communicative and emotional levels, then you are the recipient of a lot of money, which is a good thing. If it doesn’t work, then you are trading everything you own--your creative powers--for freedom and money. You are giving up all leverage and you could wind up paralyzed.”
And that, in the fast-moving movie business, is not a good thing.