When Sylvester Stallone recently was guaranteed $60 million by Universal Studios to star in just three films, consumers were left to wonder how he could command such a princely sum, given the erratic box-office performance of his last few movies.
That's domestic box office--the one published in newspapers each week. What is often overlooked is that Stallone's popularity around the world almost guarantees that every one of his films will sell more than $100 million worth of tickets outside the United States ("Judge Dredd" being a recent exception).
Stallone is a beneficiary of the sizzling overseas market that now accounts for more than half of all tickets sold to American-made studio films. The trend has driven up salaries for established performers and created new superstars--some of whom aren't necessarily viewed that way by American moviegoers.
"Over the past five years there's been greater attention paid to the international marketplace," says Bill Mechanic, president of 20th Century Fox Filmed Entertainment. "Because if a film works overseas, it really works."
Even a relatively established area like Britain has doubled ticket sales over the past decade as a result of a theater-building boom. And with each passing year, new markets emerge, most recently Eastern Europe, Korea and Turkey.
So while Bruce Willis' $15-million salary for "Die Hard With a Vengeance" seems excessive if you look only at its $100-million U.S. revenues (at a cost of $90 million), the investment seems more rational when considering the expected overseas grosses of between $225 million and $275 million.
(After theater owners take their split, the studios collect only about 43% of foreign gross revenues, compared with about 55% in the United States.)
Films like "Die Hard" and "Waterworld" will gross almost as much in Japan as they did in the United States, which has twice Japan's population. As the film industry's balance of trade becomes more and more favorable, actors and their agents are demanding a proportionate--some say disproportionate--share of a project's revenue potential.
Studios now keep close tabs on an actor's track record overseas and in what kind of films he or she delivers best. "In the right kind of vehicle, the right actor can bring a whole lot more to the bottom line of a movie," says Joe Fisher, executive vice president of Universal's motion picture group.
And it's not just the major action superstars like Stallone and Arnold Schwarzenegger who wield this cudgel--although action is still the most foolproof genre overseas.
Charlie Sheen recently walked away with a $7-million salary largely because he is such a presence in Japan. Sharon Stone, who has had only one U.S. box-office winner, can take home $7 million for "Diabolique" because her foreign profile is strong based on "Basic Instinct" and "Sliver," which were both major hits overseas.
Similarly, Kurt Russell's $10 million for "Escape From L.A." is a reward for the strong foreign box-office performance of such recent films as "Stargate" and "Tombstone." Both Russell hits were presold in overseas territories--which means distributors pay a cash advance for the movie.
"Having someone like a Stallone [or a Russell] can mean you get a higher advance," says Hy Smith, executive vice president of international marketing for United International Pictures, which handles the overseas release of all Paramount, Universal and MGM/UA films.
The bigger the star overseas, the bigger the advance, which can sometimes put a film in the black even before it's completed. The practice, perfected by such international production companies as Carolco and Cinergi, however, doesn't work without a star or star package to anchor it.
"You can earn an extra $10 million to $30 million with the right star and the right package," says entertainment lawyer Nigel Sinclair. And combining the right names can be a one-plus-one-equals-three proposition.
Another reason stars carry so much clout abroad is because the advertising of movies is far less dependent on television than in the United States, making it harder to get the concept of a movie across.
So, as in the days of the American studio system, it is the star that studios rely on to bring people into theaters. "It's easier to sell a star on a one-sheet than a concept," Mechanic says. Also, actors and directors who tour extensively for their films--something Schwarzenegger has developed into a fine art--help their cause overseas.
"Someone like [Kurt] Russell has earned his passage. He's great in TV interviews," Sinclair says. "People will go see a movie simply because he's in it."
Similarly, Sheen is a familiar face in Japan from his promotional work and his appearance in local television commercials. But Don Groves, Pacific bureau chief for Variety, holds the true overseas clout of some stars in question.
He points out that even though Denzel Washington is now paid $10 million per picture after several movies that have been hits around the world, results on "Crimson Tide" have been mixed.
And, he adds, Hugh Grant's $7-million salary is based largely on the $200-million-plus gross of "Four Weddings and a Funeral" internationally (compared with about $50 million in the United States). "Can he follow up on it with 'Nine Months'?"
Initial estimates of "Nine Months' " potential abroad are no higher than $50 million, especially since domestic U.S. comedies rarely travel well (slapstick farces, such as the Jim Carrey movies, being an exception).
But "While You Were Sleeping" actually exceeded expectations and should gross at least $80 million overseas, matching its domestic take. Sandra Bullock gets the credit for that.
Two key factors could work against the continued salary escalation. Two major agents, Michael Ovitz and Ron Meyer, are now on the other side of the table, as top executives for Disney and Universal, respectively.
More powerful than even a dozen resolute studio bosses, however, is global economics. A recent surge in the dollar's value overseas ate into UIP's take on "Waterworld" by 20%.