COVER STORY : The High Price of Ego in Hollywood : Why do people spend so much on so little? For all the lamentations, bad movies are a matter of relationships and muscle

It’s Saturday night and you’re off to the movies. But you want to make sure your seven bucks are well spent. So you flip through the paper, settling on a movie that looks like a sure bet: Stars who won’t let you down. A producer or director with a familiar name. A potentially entertaining plot. A movie that the studio has hyped as the season’s box-office hit.

Instead, you’re treated to two hours of tortured darkness. Insipid humor. Stilted dialogue. A story with more holes than a crocheted quilt. Or maybe it’s not that bad, but the experience is one big disappointment. You had hoped for more. Much more. Either way, The Question inevitably passes through your lips as the credits roll and you shoulder your way up the aisle: “How did this thing ever get made?”

Ego. For all the studio lamentations about rushed productions, problem marketing, acts of God, changing public tastes or bad creative decisions, the answer is often as simple as that three-letter word: ego.

As summer winds down, studio executives are feeling the combined pinch of skyrocketing movie budgets and sagging ticket sales. Many are taking stock of their business--and they’re troubled by what they see.

During the 1980s, power continued to flow out of the studios and into the hands of a few people who weren’t in a position to lose money when their movies flopped--big-name stars, directors, producers and even their agents. Their stature grew until they became Hollywood’s 800-pound gorillas. The town fed their egos. They could get movies made--even bad ones. They could control productions. They could say no to the studios, but the studios were loath to say no to them.

“It’s the old story about being afraid your children are not going to love you if you say no,” says one veteran executive. “But you know better than your children. You’ve been around a lot longer, you have the experience. And, by the way, it’s your house.”

Sometimes, these gorillas achieved power by virtue of their legendary status. Francis Ford Coppola had been in a creative slump for 15 years, but his first two “Godfather” movies are considered by many to be the finest American films of the last half century. So Paramount handed over the reins on “The Godfather Part III,” and when Coppola decided to cast his daughter in a key role--a decision that many critics said seriously marred the $55-million production--executives were powerless to stop it.

Other times, Hollywood’s larger-than-life figures are merely the heavyweights of the moment. Bruce Willis had two hits--”Die Hard” and its sequel--under his belt, and had supplied the baby’s voice in the popular “Look Who’s Talking” when Sony’s Columbia/Tri-Star studio gave the final go-ahead to his pet project, “Hudson Hawk.” There were skeptical voices inside the company--for good reason.

Insiders recall that the script about an eccentric cat burglar wasn’t in shape when Sony took over in late 1989, having been through the hands of writers as disparate as “Moonlighting’s” Ron Osborn and Jeffrey Reno, “Die Hard’s” Steven E. de Souza, and Daniel Waters, who wrote the quirky little black comedy “Heathers.” And Willis had drafted as the film’s director Michael Lehmann, a young filmmaker who displayed tremendous talent with “Heathers” but had no experience with a big-budget action film.

Moreover, “Hudson Hawk’s” budget was mushrooming even before the cameras rolled. The producer was Joel Silver, maker of “Die Hard,” “Lethal Weapon,” “Commando” and other hit action films, but a man with a reputation for excessive spending. The warning signs were bright.

But by the time Sony’s new studio chief, Peter Guber, took his place in the corporate suite, both Willis and Silver had invested time, energy and emotion in the project. And they had been told yes at least once. (Former Columbia chief Victor Kaufman had greenlighted the project--with a $35-million budget cap.)

“ ‘Hudson Hawk’ was Bruce Willis’ favorite project,” recalled one person involved with the film. “He desperately wanted to do it. Peter (Guber) had to understand that to kill it would destroy any relationship with Willis, and probably Silver. You’d have to have an iron gut to do that.”

And not many studio executives do. “The studios are frightened to death by big stars and their agents,” says Lee Rich, the former MGM/UA chief. “The world does not come to an end if you don’t hire Bruce Willis.” Entertainment attorney Peter Dekom puts it another way. Studios, he says, routinely violate a cardinal rule of management: There’s no deal you have to have.

Competing studio executives--relieved that “Hudson Hawk” didn’t happen to them--say its failure will give them renewed resolve to say no to Hollywood’s big egos. But if history is any guide, the lesson won’t last long. “Hudson Hawk” merely stands as a fitting ode to the past decade of filmmaking, when studio executives swore they would never repeat United Artists’ suicidal diffidence during the making of “Heaven’s Gate” in the late 1970s--and then proceeded to turn the keys to their $50-million Mercedes over to producers, stars and directors deemed infallible simply because they had made a handful of hit movies.

Who can forget Fox’s “Rhinestone” in 1984? Young screenwriter Phil Alden Robinson, who would later write and direct “Field of Dreams,” intended his original “Rhinestone” script to be a small movie about a strong-willed Southern woman determined to own a restaurant in Manhattan. When Dolly Parton signed on for the role, Fox executives decided to balance the marquee with a major male star. Sylvester Stallone was interested, but only if he could rewrite the script.

Over Robinson’s protests, Fox agreed to Stallone’s rewrites. By the time “Rhinestone” was completed, it had become the story of a New York cab driver’s miraculous victory in a country-Western singing contest. The movie ended up costing more than twice its original budget, fell flat at the box office and was castigated by critics. How about “Howard the Duck”? Universal Pictures was so eager to be in business with “Star Wars” creator George Lucas that it committed more than $30 million to a live-action adaptation of Steve Gerber’s comic-book creation, even though Lucas was merely serving as executive producer. The 1986 film was co-written and directed by Willard Huyck, whose previous picture, “Best Defense,” had been a disappointment for Paramount two years earlier.

And then there was “Ishtar,” the 1987 film whose title has become synonymous with big-budget flop. (Even some Columbia insiders snickered that “Hudson Hawk” was “Ishtar-hot.”) Warren Beatty wanted to work with director Elaine May on a comedy about two down-and-out singers on the road in the Arabian desert. May’s reputation as a creative genius was surpassed only by her reputation as a perfectionist who drove studio executives to distraction with her long post-production work. For “Mikey and Nicky,” she shot seven times more film footage than is used for the average movie and then took two years to edit it. (Even then, she finished in the face of legal threats by Paramount.)

But in 1986 the combined weight of Beatty and co-star Dustin Hoffman was enough to persuade Columbia to pour $40 million into the production, more than twice the cost of the average movie at the time. “You have to be very careful if you’re going to say no to something of Warren’s because his record as a producer-star is almost 1,000%,” then-Columbia chief Guy McElwaine explained to New York magazine at the time.

Observers close to Disney say the Beatty mystique may have blinded executives there to the weaknesses in “Dick Tracy,” a movie on which the studio--certain it had a hit the size of “Batman” on hand--spent an estimated $100 million to make and market. The film had ticket sales of $103 million in the United States--an impressive hit, but certainly no “Batman,” which made $250 million. (These ticket sales are split roughly 50-50 between the studios and the theaters; the studios can more than double that income through sales to foreign theaters, TV stations and video stores.) In his widely publicized memo to employees early this year, Disney studio chief Jeffrey Katzenberg conceded, “ ‘Dick Tracy’ made demands on our time, talent and treasury that, upon reflection, may not have been worth it.”

Producer-stars the size of Beatty can and do wield enormous power in Hollywood. But studio executives have gotten starry-eyed in the presence of less commanding names. During the past decade, some of the studios lured A- and B-list actors onto their lots with what agents privately called “vanity deals.” Willis had such a deal at Tri-Star. By setting up actors on the lot with promises that they could produce their own projects, studios hoped to get first crack at their acting services. Some actors, like Sally Field and Michael Douglas, have shown a real knack for producing movies. But most arrangements were purely for vanity--a sign that studios not only felt compelled to pay stars huge sums of money, but also to give them production control.

Marquee names make the world go round in Hollywood. A trio of stars attached to a movie can push a project--however troubled--through a hesitant studio bureaucracy. Competing studios passed on “Family Business,” despite the involvement of director Sidney Lumet because they considered the story weak. But when Creative Artists Agency attached Dustin Hoffman, Sean Connery and Matthew Broderick to the project, Tri-Star couldn’t resist. The movie proved disappointing, critically and commercially.

Often, studios get so mesmerized by the sparks Hollywood’s big names throw off that they cannot see when a combination of talent and material is wrongheaded. Columbia was so anxious to maintain its relationship with “Ghostbusters” star Bill Murray that it indulged his desire to play a dramatic lead in the remake of “The Razor’s Edge.” Even though the movie cost very little to make, it was a critical embarrassment--and a disaster at the box office.

Hollywood’s gorillas don’t have to be in front of the camera to cause studio executives to wilt like August wildflowers in their presence. A handful of directors can have the same affect--”stars” like Steven Spielberg or Lucas or Coppola. Who’s going to interfere when Sydney Pollack joins forces with Robert Redford on another period-piece love story? Not Universal Pictures. But even magic combinations like that one aren’t infallible. After spending an estimated $70 million to make and release Pollack’s “Havana,” audiences yawned and some critics dismissed it as a weak imitation of “Casablanca.”

From the beginning, Warner Bros. executives had reason to be worried about one of the past year’s biggest box-office bombs, “The Bonfire of the Vanities.” Several directors had turned down the job, saying it was impossible to bring Tom Wolfe’s best-selling novel to the screen. And the one director who did want it, Brian De Palma, wanted to turn Wolfe’s fictional commentary on New York’s racial strife into a black comedy with an unlikely cast. Warner executives were won over by the De Palma name (yes, he had mostly done shock films but his off-center vision had turned “The Untouchables” into a hit) and his passion for the project. They didn’t realize they had an expensive turkey on their hands until the lights came up on the first test screenings.

Screenwriters routinely complain that bad movies get made because studios are so star-struck they forget about the script. Often, a studio will greenlight a movie simply because a big-name star or director is attached--regardless of whether there is a decent screenplay, or any screenplay at all. Then they rush the project through development and into production to accommodate the schedules of their stars. That means sending a script through two, three or even four writers for fast revisions.

“When a studio greenlights a bad script, I become like an emergency-room surgeon: The patient’s probably going to die, but you do everything you can to save him anyways,” says one script-doctor who makes $100,000 for two-week attempts to whip projects into shape for desperate studio executives. Because the script goes through so many hands, this writer adds, “I see things get worse in development as often as I see them get better.”

Sometimes, studios will greenlight a project that is no more than an idea, simply because of the names attached. Columbia wanted to make a movie with TV’s most popular star, Bill Cosby, so executives gave the go-ahead to “Leonard: Part 6” even though there was no script at the time. “Leonard,” released in 1987, was so bad that even Cosby warned audiences to stay away.

In 1989, the reaction of Paramount executives to a pitch for “Days of Thunder” by the same team that made “Top Gun” probably went something like this: “Don Simpson & Jerry Bruckheimer. Tom Cruise. Tony Scott directing. ‘Top Gun’ on a raceway. Fine, go do it. But finish in time for summer.”

Shortly after it went into production, stories surfaced about excessive spending, delays on the set and problems with the story. Paramount executives complained to colleagues that they were bullied by producers Simpson and Bruckheimer when they tried to control spending and add input to the direction of the project. Defenders of the pair say the studio rushed “Days of Thunder” into production before it was ready and then complained when it went over budget. Whatever the case, the movie was enough of a disappointment to become one of the factors behind the departure of Simpson and Bruckheimer from the Paramount lot several months later.

Caving in to Hollywood’s heavyweights has become an expensive pastime for the studios. Salaries for stars--and that includes directors and producers, as well as actors--have skyrocketed since the time Columbia jolted the town by paying Beatty and Hoffman $5.5 million each for “Ishtar.” Moreover, these stars usually bring along an expensive entourage of personal assistants and lifestyle demands. (Upon hearing the “Ishtar” salaries in 1985, a star the size of Beatty quipped to a reporter: “Whatever they’re paying, they’d better add in $10 million for ego.” )

These stars also automatically qualify for larger investments in their film projects, however misguided. After a couple of decades in the business, Dan Aykroyd probably deserves a chance to write and direct his own movie, so Warner gave him a chance with “Nothing but Trouble.” But at an estimated $30 million? For a comic ditty about a New Jersey speed trap? Kevin Costner spent only $18 million to make his directorial debut with the epic-looking “Dances With Wolves,” and he had to raise the early financing himself. “Nothing but Trouble” flopped on its release early this year.

Even Willis and Silver concede that they were taking a giant creative risk with “Hudson Hawk,” which featured such antics as Willis and co-star Danny Aiello breaking into song and falling off balconies into living-room sofas. As Silver noted: “ ‘Hudson Hawk’ was a feathered fish, neither fish nor fowl . . . I just think the audience didn’t respond to the material. It’s not a crime.” They and other filmmakers should be afforded the liberty to take those kinds of risks. But at a cost of $58 million?

It’s not just big egos that make a project hard to stop. It’s also the big bucks that go along. Before the cameras even roll, a studio might be committed to millions of dollars in “pay or play” contracts--that is, a guarantee to the stars that they will receive their salaries regardless of whether a project goes forward. A million or so has probably been invested in the script, especially if it was bought on the spec auction market. And other costs are incurred in scouting locations and designing sets. (Tri-Star had invested $1 million in “Hudson Hawk’s” gold machine--the opening-scene joke--before cameras rolled.) Often, these costs are incurred so a studio can figure out if it wants to go forward, but just spending that money helps lock a project onto the release schedule.

“The stakes are so high that by the time the deal is made and the package is put together, the primary players can’t afford to say no. They’ve invested too much,” says Thomas Schatz, author of “The Genius of the System,” a book that examines the studios during Hollywood’s Golden Era. “The deal gains so much momentum that it takes on a life of its own,” Schatz adds. “It would take an M-1 tank to stop it--and I’m not even sure that would work.”

Even as Columbia/Tri-Star chief Guber moved cautiously forward on “Hudson Hawk” during his first months in office, the price of killing it mushroomed to $12 million, according to insiders. But compare that to the cost of making it. All told, Sony’s studio will lose nearly $40 million, even after revenues from foreign theaters, worldwide video and TV come in, according to calculations by Lisbeth Barron, entertainment stock analyst with S.G. Warburg & Co. Even for the Japanese, that’s an expensive introduction to the vagaries of Hollywood.

There have been cases where studios swallowed those losses rather than go forward with a production. On the first go-around with “The Two Jakes,” for example, Paramount chief Frank Mancuso pulled the plug a couple of days into production, when the project bogged down over director Robert Towne’s refusal to direct producer Robert Evans in a lead role. Paramount wrote off between $3 million and $4 million, and revived the project--without Evans’ acting services--three years later.

But those cases are rare. Most of the time, studio chiefs go forward on expensive projects even if they’re feeling a little queasy by the time the camera rolls. “You get in too deep, so you don’t want to write it off,” explains a former studio executive. “You think, ‘How bad can the thing be?’ ” After filming starts, studio executives might be better off staying in the office with their feet up on the desk. Ranting and raving about overspending is one thing; getting any changes made is quite another. “Once a camera turns, no one has power like the people in front of it,” says Jere Henshaw, executive vice president of Cannon Pictures. “Every day you photograph, you dig yourself in another $100,000 to $200,000. So it becomes almost impossible psychologically and financially to fire actors. And if you whip out the battle ax, it gets real ugly. From the studio executive’s point of view, it’s not supposed to be personal, but from the actor’s point of view it is personal.”

So studios become slaves to the actor who won’t come out of his trailer unless the script is rewritten again, or the actress who decides she doesn’t like the camera angle on her face. During the contentious filming of “The Marrying Man,” Kim Basinger wanted to leave the set to visit her guru in South America. Disney sent legal papers threatening heavy financial penalties, and she finally relented. But the studio paid a price for its battles: In publicity tours for the movie (which flopped at the box office), Basinger and co-star Alec Baldwin harshly criticized Disney.

One top executive insists that studio executives have no power during production unless they’re willing to fire people, including the filmmaker. But directors, like stars, are rarely fired. Even the regime that currently runs Disney, which has a reputation for being heavy-handed, has fired a director only once during its seven years in power. (Henry Winkler, better known to TV audiences as “the Fonz,” was dumped from “Turner and Hooch” for what the studio vaguely described as “creative differences.”)

Obviously, Paramount executives couldn’t fire Coppola when he decided to cast his daughter in “Godfather III.” Coppola was “The Godfather” and Paramount chief Mancuso had spent 16 years trying to persuade him to make a final installment of what many consider one of the greatest film stories ever told. Besides, Coppola is a name that critics and movie fans precede with “great artist.”

So Mancuso and Paramount president Sidney Ganis tried friendly persuasion. Each of them flew to Italy to try to talk Coppola out of his decision to hire Sofia Coppola after Winona Ryder’s last-minute exit for health reasons. But Coppola wouldn’t budge. The production went on, and when the movie was released, her performance was soundly flogged by critics. Analyst Barron says the film ultimately will be profitable, but Paramount was disappointed in its box-office performance.

On “Hudson Hawk,” Willis was not only the star of the film but also was given a credit as co-creator of the story, a job that he took seriously enough to call shots during filming. Silver and Willis say the budget overruns on the film were due to the complications of shooting in Italy, where bureaucratic red tape and slower-paced crews caused unexpected delays. Tri-Star executives--particularly former studio chief David Matalon, says Silver--were “very involved” in the production of the film.

“The notion of making a big movie is always very collaborative, the studio being the first member of the collaboration and then moving from there to the various creative elements,” Silver says. “With a big-budget movie there is always a lot of studio opinion about how the movie should proceed, and there was constant concern over the budget (on ‘Hudson Hawk’), which is a valid concern. We were in another planet shooting the movie in Italy. There were language problems. There were cultural problems.”

That may be true. But while Willis and Silver portray the production as a collaboration, others on the set have described it as a tug of war between these two aggressive personalities and a young, relatively inexperienced director. “We had three or four directors there half the time--Bruce and Joel and Michael and anybody else who had an idea,” co-star James Coburn told a Premiere magazine reporter during production.

Coburn blamed the delays on constant rewrites of the script during the shoot. And writer Waters was quoted in the same story as saying that the attitude of Willis and Silver about the last third of the script was always, “Don’t worry, we’ll figure it out.” In a later interview, Silver disputed allegations that rewrites added to the cost, insisting that filming began with a finished script in hand.

The cash register may also have kept ringing each time Willis insisted that several versions of individual scenes be shot. As he told the Premiere reporter: “We wanted to shoot every possible funny option we could economically, and go back and decide later in the editing.”

Where was the studio in all this? Tri-Star chief Mike Medavoy, who was barely in office long enough to find his way to the studio commissary by the time filming had started in July, 1990, has publicly kept his distance from the film--even before its disappointing release--and still doesn’t want to talk about its production. Matalon, who has since left Tri-Star, also declines comment.

The studio released a statement saying only this: “ ‘Hudson Hawk’ was a film that had great elements. It had a script that everyone liked and a combination of creative people that we really believed in. In view of the investment that the company had already made in the picture, and with those key elements in place, it made sense to go forward.”

So far, while audiences may bemoan the surge of lousy, high-profile movies, losses at the box office--even the magnitude of “Hudson Hawk’--have not proven financially fatal. That’s largely because today’s studios are cushioned by revenues from ancillary markets--TV, video and foreign theaters. “Bonfires,” for example, appears to be gaining a new lease on life in video stores.

Morever, today’s studios are owned by increasingly global conglomerates for whom movie losses seem to cause no more pain than an ugly case of indigestion. The hurt was more severe a decade ago, when losses from “Heaven’s Gate” helped bring down United Artists. “For the old studios, these losses could have ruined the entire year,” said one former studio boss. “Now these companies are so big that when you take a $40- to $50-million loss, the repercussions are smaller.”

Big egos have always been a part of the Hollywood landscape. But during Hollywood’s Golden Era in the 1930s and 1940s, more firm-handed studio executives kept them in check. Directors and actors worked under long-term contracts, and the studios hired and fired at will. “It was like a football game,” says Henshaw. “The studio would say get in there and relieve so-and-so, and report back to the coach when you’re done.”

Some of the industry’s greatest talents--directors like Orson Welles, actors like Bette Davis--bridled under that system. And even today there are plenty of cases were studios can be accused of riding roughshod over legitimate creative flow. Some directors complain about the studios’ reliance on public opinion research to shape the story lines of movies; others accuse the studios of pandering to the lowest common denominator in the audience.

But film historian Schatz insists that today’s studio executives could take a few lessons from the old moguls, who rarely relinquished final control over a film, and didn’t hesitate to exercise that power. “I don’t want to wax nostalgic,” Schatz says. “Obviously we’ve been able to forget the second-rate movies. But if you look at the cream of the crop, year in and year out, (the 1980s) pale by comparison. Today, if there are half a dozen good films from a critical perspective--let alone commercially--we’re doing well.”

Studios might also do well to emphasize the roles of writers and their scripts. Some of the best movies in recent years started off as great scripts--and that was what attracted talented actors and directors. “The way you get better movies is by hiring good writers and letting them do their own thing,” insists one successful screenwriter.

Studio executives talk a good game these days about changing their ways--emphasizing material over stars, stories over elaborate special effects, and saying no to 800-pound gorillas with expensive and misguided ideas. Some insiders worry that “Terminator 2” could reinforce Hollywood’s worst tendencies. Here was a case where Carolco Pictures said yes to expensive ownership rights on the story ($10 million); yes to an enormous star salary (Arnold Schwarzenegger’s compensation includes a $14-million jet), and yes to director James Cameron’s ambitious special effects. And each of those decisions paid off: Cameron made an entertaining movie that has dominated the U.S. box office this summer, and is certain to be a big hit overseas.

Still, Hollywood’s top decision-makers are acutely aware that the business of movie making involves luck--and Carolco just received a healthy dose of it. The decision to go forward on “Terminator 2” always seemed sound. But analysts say the decision to spend an estimated $90 million on it--even though the bulk was covered by overseas sales--could have caused serious financial damage to Carolco if the movie had flopped.

So, as the summer comes to a close, it is the failure of “Hudson Hawk”--not the success of “Terminator 2”--that remains uppermost in the minds of studio executives. “We’ve all been playing Russian roulette,” acknowledges one top executive. “When ‘Hudson Hawk’ came along, the gun fired. With ‘Terminator 2,’ the chamber was empty.”

Steven Bach concluded “Final Cut,” his inside account of the “Heaven’s Gate” fiasco, with this thought: “Perfection implies discipline, and there can be no art without it.” If he’s right, maybe the artless “Hudson Hawk” really will remain an inspiration to Hollywood studio chiefs.

HOW CLOUT WORKS: FOUR CASE STUDIES

Howard the Duck--Universal was so eager to be in business with George Lucas that it committed more than $30 million to the film, even though Lucas was merely executive producer.

Ishtar--The Columbia film bent under the combined weight of stars Dustin Hoffman and Warren Beatty and director Elaine May. The result was a $40-million flop.

Rhinestone--When Sylvester Stallone joined the project, he insisted on rewriting Phil Alden Robinson’s script so that it focused on him as much as Dolly Parton. It bombed.

Hudson Hawk--The film was a pet project of Bruce Willis (with co-star Danny Aiello, left). The studio was loath to reject his project. It cost $58 million and was a financial disaster.