(2 of 3)
Since then Disney has acquired Capital Cities/ABC, and with it a TV network, so the rationale for the expanded slate has vanished. But Roth says the strategy didn't work anyway, because the frantic pace eroded the quality of the movies. Disney thought it could attract audiences to all its formulaic pictures but came away disappointed. "Frankly, it's a cynical notion, and anyone historically who gets away from 'The story's the thing' loses money, period," Roth says.
Good story or not, the glut of celluloid also required studios to lavish money on advertising. Not only were there more films to sell, but the battle to grab attention in an overcrowded market became ever more heated. Marketing costs this year jumped an estimated 20% over last year. Chernin says several of his rivals have spent more than $20 million to launch a single film. "It's just mind-boggling," he says. "Two years ago, I don't think anybody had spent more than $14 million."
Does this mean a pay cut for all that high-priced talent in front of the camera? Agents insist that marketing expenditures--rather than their star clients' paychecks--are the real culprits. "The studios better stop chasing an opening weekend where they're spending 80' to make a dollar," says Jeff Berg of International Creative Management. Studio executives agree that marketing costs are crippling the business, but that doesn't mean star salaries don't take their toll. Talent fees have risen rapidly in the 1990s with the help of several accelerants. Until recently unprecedented power rested in the hands of agents--notably those at the Creative Artists Agency--who used their clout to demand ever increasing paydays for their clients. C.A.A. could push the pay envelope because it represented so much A-list talent, from Tom Cruise to Tom Hanks and Steven Seagal to Steven Spielberg.
Former C.A.A. partner Ron Meyer, feeling the sting in his role as head of Universal Studios, obliquely acknowledged the agency's impact at a recent company meeting when he jokingly grumbled, "Agents are screwing up the business." Meyer says he was just kidding--sort of. "If C.A.A. was responsible for anything," he says, "we should be blamed for making it happen [a few] months earlier." He adds that the agency too faced a dilemma. "We didn't want to kill the goose that laid the golden egg, but we also had a responsibility to do the best job we could for our clients." The stars who gave C.A.A. so much clout would have been quick to seek other representation if the agents tried to hold the line on salaries, he notes.
Hollywood inflation was also fueled by the Sony Corp.'s multibillion-dollar incursion into entertainment. Once the electronics giant bought Columbia Pictures in 1989, its management went on a spending rampage that exploded prices for talent and executives. Sony studio chief Mark Canton stuck it to the system yet again last year by paying Jim Carrey an astonishing $20 million to star in The Cable Guy, which has grossed $60 million, of which the studio keeps roughly half. The film cost more than $40 million to make--before marketing costs. "You had the top guys at $15 million, and Mark leapfrogged the marketplace 20% to 25%," says Fox's Chernin.