THE ‘RAMBO’ REPORT: SUCH A DEAL

Sly Stallone grabbed headlines with his $12-million fee for “Over the Top” and snared more when it was announced he’d get $16 million for “Rambo III.” But he’s decided to drop the up-front bucks in favor of a percentage of the film’s gross, admitting that he’s smarting from fan and media “backlash” over his huge “Over the Top” salary.

Which means that “III,” moving from the Dead Sea to Tel Aviv today, will no longer carry a budget in excess of $45 million. Exec producer Andy Vajna, chairman of producing Carolco Pics, said that a still-big $31 mil is more like it.

“Sly believes in this character and this film,” explained Vajna. “Not taking a salary was his idea. He felt a salary of that size would be a burden on the production when what he really wanted to concentrate on is just getting the movie made.”

Stallone told us he’s got a “pretty heavy” cut of the gross, but also that he wants to be “a team player.” He said he’s now on what amounts to a per-diem contract, and “III” is basically “a labor of love.”

But it could turn out to be a labor of profit. He puts the gross from “II” at over $350 mil worldwide.