Mr. Freeze Is Heating Up Hollywood’s Money Race

Arnold Schwarzenegger as Mr. Freeze is giving a lot of people in Hollywood the chills.

Smashing the recent standard upfront fee of $20 million for a marquee star, Warner Bros. reportedly is paying Schwarzenegger a whopping $25 million for just six weeks’ work as the lead villain in “Batman and Robin,” the fourth installment in the lucrative franchise. Filming begins in the fall for a planned summer 1997 release.

Even more troubling to officials at rival studios, however, is that Schwarzenegger has been granted a slice of merchandising revenues that reportedly could bring him an additional $10 million. With gross profit participation, Schwarzenegger could realize a payday surpassing Jack Nicholson’s landmark $50-million-plus score from “Batman”--if “Batman and Robin” is a big hit. And Nicholson’s role required significantly more than six weeks’ work.

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A Warner Bros. spokesman disputed the contract numbers, saying $25 million was too high, that Schwarzenegger’s merchandising take wasn’t much different from what other top stars get and that it was not a precedent-setting deal. A Warners executive acknowledged that the star would take home at least $5 million as an advance against merchandising revenues. (Schwarzenegger’s ICM agent, Lou Pitt, declined comment and the star’s attorney, Jake Bloom, did not return phone calls.)

Still, the deal for now has steered Hollywood executives’ enmity away from Columbia/TriStar Chairman Mark Canton, who launched the most recent round of star salary escalation by paying Jim Carrey $20 million for “The Cable Guy,” and in the direction of Warner Bros. for continuing to drive up the cost of movie-making.

“Warners was griping about Canton and Carrey and now they’re doing the same thing,” said a high-ranking Paramount production executive. “I can’t believe it. This has got to stop. Every time Arnold or Jim [Carrey] get more money, then Tom [Cruise] and all the rest will be demanding the same payday.

“In fact, the salaries are ramping up the budget costs so much that it’s getting to the point where it dwarfs the significance of hitting $100 million on any film.”

“Other studios may be ragging on Warners about this,” said Gordon Armstrong, who heads the Los Angeles-based Entertainment Marketing Group, which advises studios on movie marketing campaigns. “But the folks at Warners generally know what they’re doing. Understand that in this business, rivals may say publicly they want their competitors’ films to succeed. But privately? They don’t want them to succeed, particularly in a deal like this when one studio is driving up costs for everybody else. Why should they? They’re competitors. The key is they’ve all gone through it themselves.”

Schwarzenegger’s deal comes at a time when summer movies without major stars, “Twister” and “Independence Day,” have outperformed even the biggest star-driven hits, such as “Mission: Impossible,” “The Nutty Professor” and Schwarzenegger’s “Eraser.” Meanwhile, star vehicles for Demi Moore (“Striptease”) and Carrey (“The Cable Guy”), both released by Canton’s Columbia Pictures, have seen disappointing box-office results as well as generally sour reviews.

Industry rivals have pointed out that “Eraser,” which has grossed about $73 million since it opened June 21, dropped 50% between its second weekend and its third--largely because its key competition, “Independence Day,” targeted the same action-loving, male teen audience.

On the flip side, talent agents were thrilled with Warners’ move, saying it only helps their business. “When Arnold’s salary goes up, so does everybody else’s and that’s good for my clients,” added one top United Talent agent who represents A-list stars.

In “Batman and Robin,” Schwarzenegger will be part of an expensive cast that includes “ER” star George Clooney as the latest Batman and Chris O’Donnell reprising his Robin role, who are both being paid handsomely. At this rate, actor salaries alone could approach $60 million, equaling the total cost of other big-budget pictures--and that doesn’t even include the rest of the production’s costs.

And while “Batman” is an incredibly lucrative property for the studio--the first three films combined grossed nearly $600 million domestically--the costs of maintaining the franchise keep going up.

“Normally you want to spend less on these kind of costs because they are sequels, and sequels tend to have a falloff in ‘wanna-see,’ ” Armstrong said. “On the other hand, Warners knows this has been a very lucrative franchise, especially since the second sequel did better than the first. It makes a bundle on merchandising using the stars’ images.”

He said the usual percentage for a star is about 3% to 5% of a studio’s net profits on merchandise. Nicholson reportedly got 17.5% “and Arnold’s no doubt will be that or higher,” Armstrong said.

“But Warners undoubtedly feels his name on the marquee is what will bring the audiences back a fourth time around. And if you look at Arnold’s record overall, with the exception of a few films, he delivers.”

Schwarzenegger’s deal will force a boost of perhaps $10 million in the film’s marketing budget, a Warner Bros. executive said.

“When you’re paying people that much, the pressure is so much greater to get the picture open so the advertising push has to be more expansive,” the executive said. “This whole salary issue is getting insane. But Warners is like every other studio. They’ll stop doling out that kind of money when one of these tanks. That’s all it will take.”