The High Cost of Stardom : Lancaster Suit Reveals Role of Insurance in Film Making

At age 67, Spencer Tracy nearly lost his starring role in “Guess Who’s Coming to Dinner.” No insurance company was willing to guarantee the 1967 film’s backers against a financial loss should anything happen to the ailing actor.

That didn’t stop director Stanley Kramer and co-star Katharine Hepburn. They were so determined to make the controversial film with Tracy that they pledged their salaries to guarantee its completion, according to Kramer. Two weeks after finishing his scenes, Tracy died. But he was nominated for an Academy Award, and both Hepburn and screenplay writer William Rose won Oscars.

“Cast insurance”--which protects studios against financial loss when a star dies or falls ill during production--has saved many films from financial and creative ruin. But the need for insurance can also make it difficult for older actors to get work. “When the insurance starts costing more than the actor, you start wondering,” says one top studio executive, who requested anonymity.

Burt Lancaster learned that lesson the hard way when he lost the title role in the upcoming Columbia Pictures film “Old Gringo.” The 75-year-old Lancaster, who has suffered from a heart condition, says that Columbia replaced him with 72-year-old Gregory Peck after the studio found out it would cost too much to insure him. Lancaster, whose allegations are spelled out in a lawsuit pending in Los Angeles Superior Court, has declined to comment.

Columbia also has declined comment, except to express the studio’s high regard for Lancaster. However, sources close to the film say full coverage of Lancaster on “Old Gringo” was difficult to obtain at any price. According to a Dec. 24, 1987, letter signed by Columbia’s lawyer, the studio made “extensive efforts” to secure insurance for Lancaster. That letter is on file as part of the court record.

A key obstacle to obtaining insurance, some sources say, was the physical strain Lancaster would have undergone during the filming last spring in Mexico. The cast worked at high altitudes and at times in searing temperatures. The role of “Old Gringo” also involved extensive horseback riding.

According to a Dec. 29 letter from Lancaster’s attorney, Leon Kaplan, to Jared Jussim, Columbia’s senior vice president for legal affairs, the studio cited high altitudes as a key reason for its inability to insure Lancaster, according to the court filing.

Indeed, the head of the film commission in the Mexican state of Morelos told The Times that she raised the issue in an unsuccessful attempt to convince Columbia to shift production to her region. (Filming instead took place primarily at much higher altitudes elsewhere.)

Cast insurance is not the central focus of the actor’s lawsuit. Rather, he alleges technical violations of his contract with Columbia and is seeking to recover $1.5 million that he says the studio owes him under a “pay or play” agreement. (These types of agreements bind a studio to pay an actor the full contract amount--regardless of whether he or she actually appears in the film--unless there is good cause for breaking the contract.)

But Lancaster’s story is a stark reminder of how cast insurance can affect careers of even the most prominent actors. “If the industry believes that Mr. Lancaster is uninsurable, his career will be at an end,” his attorney, wrote in his Dec. 29 letter to Columbia, in an attempt to persuade Columbia to rehire Lancaster.

For Lancaster, the role of the “Old Gringo” was one of the most important of his distinguished career, according to the suit. A romance set during the Mexican revolution, “Old Gringo” was written by the prominent Mexican writer Carlos Fuentes. Actress Jane Fonda, who stars as an American teacher, was a driving force behind the project and sought outLancaster for the role.

Lancaster had undergone heart surgery in 1983, but since then has appeared in three films, “Tough Guys,” “On the Wings of Eagles” and another Columbia-distributed film, “Rocket Gibraltar.” The latter film, which Columbia purchased but did not produce, is scheduled to open this fall.

Lancaster is now in Iowa for the filming of “Shoeless Joe,” and on Monday he leaves for Italy and Yugoslavia, where he will play the part of a cardinal in the Italian miniseries “The Betrothed.” “He has received insurance on other films, and he continues to have offers rolling in,” noted Diane B. Galfas, an attorney for Lancaster.

Last October, after Fonda offered him the role of Old Gringo, Lancaster, according to his suit, began studying the script and working on the character and the dialogue. He even took riding lessons.

Meanwhile, Columbia announced that Lancaster would star in the film. “As a result (Lancaster’s) reputation in the industry was placed at stake,” his suit charges.

The following month, a doctor approved by Columbia’s insurance carrier examined Lancaster. According to the suit, despite Lancaster’s 1983 surgery, his heart was “normal” and his cardiac condition “appears stable clinically at this time.” Attorney Kaplan says in his Dec. 29 letter that the doctor told Lancaster “his blood pressure and heart rhythm were as good or better than in his previous examination.” (Medical examinations are routinely required for any actor or director to be covered by cast insurance.)

Lancaster didn’t have a clue that cast insurance would pose a problem after that examination, according to the suit. Columbia certainly didn’t tell him of any obstacles, he says in his suit. So on Dec. 13, he left for Mexico City to begin rehearsals on the film.

One week later, Lancaster’s suit says, Columbia told Lancaster’s representatives that the studio planned to cancel its contract with the star because it couldn’t obtain cast insurance on him at “customary rates and without exclusions.” Peck was hired instead, and Lancaster lost the role.

Lancaster’s is not the only career affected by cast insurance. Many studio executives and producers say that a question uppermost in their minds when they hire older actors is whether they are insurable.

According to industry sources, Universal had trouble securing insurance for 79-year-old Jessica Tandy on “Batteries Not Included” (though she was eventually insured), and the late Jackie Gleason was uninsurable after “Nothing in Common,” when his health, poor for years, declined even further.

“Insurance companies are scared to death of a lot of older actors,” says Robert Looney, a North Hollywood broker of entertainment insurance.

Age is not the only issue: Industry sources also say cocaine and other forms of drug addiction have made certain actors uninsurable.

Cast insurance is one part of a whole package of film insurance that studios purchase, covering everything from film ruined by faulty processing to legs broken by tripping over cables. A total insurance package typically costs $1.60 to $2.25 for every $100 spent on production, says Bob Mitchell, vice president of the entertainment insurance brokerage Truman Van Dyke Co. “Old Gringo” reportedly will cost $24 million, putting its total insurance costs in the half-million-dollar range.

Cast insurance normally covers those who are considered indispensable to a film. “Generally you insure the principal players and the director,” said Mitchell.

There is a surcharge for actors younger than 9 or older than 65, said Bill Hudson, a broker with DeWitt Stern of California. An actor or director with such serious health problems as cancer or heart ailments could tack another several hundred thousand dollars onto insurance costs, according to insurance brokers. And sometimes an insurance company will refuse to protect a studio against the recurrence of a pre-existing health condition.

The location of the filming also determines a film’s cast insurance bill. “It’s cheaper to film here than it is in El Salvador,” said Hudson.

Studios have found cast insurance well worth the investment. Among the films rescued by cast insurance was the 1959 biblical epic “Solomon and Sheba,” in which Tyrone Power originally starred. After the bulk of the film had been shot in Spain, including expensive crowd scenes, Power collapsed from a heart attack during a sword fight, at the age of 45, and died shortly thereafter.

United Artists collected $1.2 million from the insurance company, recast Yul Brynner in the starring role and completed the film--leaving in place some of the distant shots and rear views of Power.

In 1984, Lloyds of London paid $4 million to MGM/UA, enabling the studio to complete “The Way You Are” after production had ground to a halt because star Kristy McNichol fell sick during filming in the French Alps.

In 1981, Columbia collected about $3 million from its insurance carrier when it was forced to cancel production of “No Small Affair” after director Martin Ritt collapsed from exhaustion.

The most publicized example of insurance coming to the rescue of a film was Douglas Trumbull’s “Brainstorm.” Its star, Natalie Wood, drowned off Santa Catalina Island in 1981, when she was just two weeks away from finishing the film.

MGM shut down production. But its insurer, again Lloyds of London, was convinced that the film could be finished, and balked at paying the studio’s $15-million insurance claim. Lloyds pressured MGM to resume production--offering to pay $2.75 million to complete the principal photography. Filming resumed two months later.

Lloyds then agreed to invest an additional $3.5 million in the film for its special effects. By the time the film opened in September, 1983, Lloyds had become the first insurance company in Hollywood history to own a piece of a movie. But “Brainstorm” was no blockbuster: It opened with weak box-office sales.