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Warner Bros. co-chairmen Robert Daly and Terry Semel were seen in the industry as Canton's sharpest critics. But this month they agreed to pay Arnold Schwarzenegger $25 million to appear as Mr. Freeze, the villain in the next Batman installment. Some executives are complaining that Warner is compounding the cost problem. Daly says the deal makes sense because Schwarzenegger's presence will boost the film's grosses, particularly overseas. Arnold is also taking "a lot less" of the film's gross profits than usual--he generally gets up to 20%--as well as a reduced share in profits from Batman-related merchandise. The studio already has $50 million in guarantees from licensees. "Arnold will make more money out of doing Eraser than he will on Batman," says Daly.
Rather than raising the salary bar in the business, Daly says, "this was not a groundbreaking deal." But he acknowledges that he is "very worried" about the perception, even within the industry, that Warner has raised the stakes yet again. "Some of the agents in town who [understand] the deal--they have a client problem," he says. "The clients think the price is $25 million, which is not true."
Studios admit that attacking the cost of top talent will be next to impossible. "The weakest studio sets the marketplace," Chernin says. "Whoever is the most panic- driven will hike up the costs." Instead, they will set their sights on mid-level stars without a proven ability to attract crowds. "Michael Keaton (Multiplicity) or Alec Baldwin (Heaven's Prisoners)--they better deliver the goods," says a studio chief.
Paramount boss Jon Dolgen says studios will make more films together to share costs and spread risks. TriStar is teaming with Disney, for example, on Starship Troopers, an expensive sci-fi epic directed by Robocop's Paul Verhoeven that is taking the same July 4 slot occupied so successfully this year by Independence Day.
Starship Troopers boasts no major stars. But such films could do as much damage as those packed with expensive talent. Even as he enjoys the success of Independence Day, Chernin is concerned that so many of the summer's hits were driven by special effects. Next summer will bring even more. "You're looking at the Batman sequel, the Jurassic Park sequel, Starship Troopers, Speed 2, Titanic and two volcano movies," he says. Such pictures routinely cost $100 million or more to make even without major stars.
Like Godzilla rampaging through Tokyo, the gigantic cost of big-event pictures has shaken the old studio dynamic in which the blockbusters covered the tabs of smaller flops. While a film like Independence Day generates a multimillion-dollar profit, the big pictures often don't clear enough anymore to make other problems disappear. That means studios will have to scrutinize smaller films more carefully. There are no easy answers, says Chernin, and no radical solutions available. The bottom line, says Universal's Meyer: "You have to choose well and be lucky."