First-dollar gross deals hit cutting-room floor (WSJ)

By Nancy Tartaglione

First-dollar gross deals are hitting the cutting-room floor says today's Wall Street Journal. Not a big surprise in this economy but with studios slashing the number of films they are making, "You can be the hottest thing in Hollywood, but if the economics don't match it, it doesn't mean anything," producer/manager Eric Gold, who represents talent including Jim Carrey, told the paper.

"The days...where the star gets whatever he wants and gets paid through the roof - those days are over, for everybody," Gold said. "The studios are pushing back and they have to play the margins."

First-dollar gross deals, reluctantly accepted by the studios, were less of a problem when it was easier to secure third-party financing for blockbuster budgets and when DVD sales were still flourishing. Now, despite healthy box office returns in the past several months, DVD sales are plummeting and once deep-pocketed Wall Streeters have other things on their mind.

"Starting about six months ago, the studios started to make a unified and determined effort to cut back on these deals," one agent told the Journal. "They're just not going to keep losing vast amounts of money while paying out millions to the first-dollar-gross players."

Paramount, says the WSJ, has cut back-end deals on "Dinner for Schmucks" with Steve Carell and "Morning Glory" with Harrison Ford. "Schmucks" director Jay Roach and stars of the films took such deals that will see them earn a portion of the gross after the studio and its financing partners have recouped costs.

Still, the talent will receive nice upfront payments. Roach and Carell will receive between $10 million to $15 million each while the deferred back-end pacts mean Paramount and its partners shave about $5 million off the production cost of the film, according to the paper.

Universal Pictures made a similar move with Ridley Scott's Robin Hood project. According to people familiar with the film, none of the talent will receive first-dollar gross deals.

And yet, stars won't necessarily lose out with the loss, opines the Journal.

Jim Carrey forfeited first-dollar gross on "Yes Man" in exchange for a sizable back-end deal, which included a 33% ownership stake in the film.

Carrey ended up making about $35 million off the deal - roughly $5 million more than he would have made had he not forfeited his fee, Gold told the Journal.