Chasing Stars in Hollywood

Late at night around 10 PM, Michael Eisner and Michael Ovitz, each with their families, left a VIP hall at a Beverly Hills cinema in Los Angeles.

Their cars were already waiting on the street behind the theater.

Listening to their wives and children excitedly discuss the film, the two Hollywood moguls got into one car together. As the vehicle started, they exchanged a few wary glances.

They had just watched the newly released "Wonder Woman."

Unlike their wives and children, who were thrilled by an excellent movie, both Michaels were deeply worried.

Three years ago, "Batman: The Beginning" had successfully launched the DC movie universe with its explosive action designs and advanced CGI effects. This time, "Wonder Woman" clearly took another step forward compared to the previous two "Batman" films and "The Flash."

Ordinary audiences often fail to appreciate the technical sophistication of a film, but the two Michaels, as Hollywood insiders, certainly did.

"Wonder Woman" maintained the exciting action design from "Batman: The Beginning." Additionally, while the film seemed to have many practical scenes, the proportion of CGI was significantly higher than in previous DC superhero films.

For instance, Wonder Woman's Lasso of Truth in many scenes was entirely CGI-generated.

Although it was just a rope, to the two Michaels, who were familiar with Hollywood's filmmaking processes, this seemingly 'insignificant' technical detail was something that other special effects companies in Hollywood outside of Daenerys Effects couldn't achieve.

The film's climax, Wonder Woman's battle with Ares, utilized all-CGI battle scenes that were truly breathtaking.

Hollywood had seen many waves of big-budget films, but usually, the trend would return to more rational productions.

Jeffrey Katzenberg, the head of Disney's film division, had publicly released a memo a few years ago calling for Hollywood to return to low-budget filmmaking. Michael Eisner had originally agreed with this view.

Even the recent surge of DC movie universe films was often seen as a special case by many.

Moreover, high-budget action films led by Sylvester Stallone and Arnold Schwarzenegger had been failing in recent years.

Conversely, even Daenerys Entertainment, aside from its DC movie universe projects, had produced a series of blockbuster hits over the past few years like "Ghost," "The Sixth Sense," "Pretty Woman," "The Bodyguard," and "Home Alone," all of which were medium to low-budget films. Very few had production budgets exceeding $30 million.

However, after watching "Wonder Woman" tonight, Michael Eisner found his previously steadfast beliefs once again shaken.

Big-budget, blockbuster films might indeed be Hollywood's future.

Given Disney's weak foundation in producing such films, Michael Eisner couldn't help but feel deeply worried.

The technical details showcased by Daenerys Entertainment in "Wonder Woman" were beyond Disney's reach in the short term.

Through the production of several DC movie universe films, Daenerys Entertainment had formed an incredibly strong behind-the-scenes technical team, covering everything from action design to CGI production.

Particularly in CGI technology, after watching "Wonder Woman," Michael Eisner felt that Daenerys Effects was three to five years ahead of other special effects teams in the industry. Lucasfilm's Industrial Light & Magic, which created the "Star Wars" series, had now been left far behind by Daenerys Effects.

Although Daenerys Effects maintained a collaborative stance, many of the special effects shots in Disney's summer sci-fi family comedy "Honey, I Blew Up the Kid" were handled by Daenerys Effects.

However, it was foreseeable that small-scale cooperation would be fine, but if Disney wanted to compete with Daenerys Entertainment in large-scale special effects films, relying on their technical resources would be impossible.

Moreover, apart from Daenerys Effects, the current Hollywood, whether Industrial Light & Magic or other second-tier special effects companies, lacked the professional software and technical foundation to catch up to Daenerys Effects, possibly needing at least three years.

Yet, during this catch-up period, Daenerys Effects certainly wouldn't stand still.

Three years later, the gap would still exist.

Therefore, Hollywood studios wanting to produce top-tier CGI scenes would find the easiest path was still to cooperate with Daenerys Entertainment.

Any studio executive with a bit of sense could recognize the potential threat of being at the mercy of Daenerys Entertainment in such collaborations.

To avoid this threat, studios would either have to stay away from special effects films or start from scratch.

As the luxury car navigated the late-night streets of Los Angeles, while Michael Eisner pondered how the studio could break into the special effects film domain, Michael Ovitz had even deeper concerns.

This "Wonder Woman" had a production budget of $80 million, but the core creators' salaries, including the director, screenwriter, lead actors, and key supporting actors — the 'above-the-line' costs — added up to less than $10 million.

Daenerys Entertainment allocated about 90% of the production budget to the filming and post-production of "Wonder Woman."

After CAA creatively proposed the package deal system, throughout the '80s, the 'above-the-line' costs of Hollywood films often accounted for 50% or more of a film's budget.

This had been the most direct reflection of the importance of traditional big-name filmmakers to a film.

Now, while DC movie universe projects might still benefit from the super-hero IP itself, not needing top stars, other big-budget projects following this trend could potentially revolutionize Hollywood's star salary structure.

If blockbuster films relying on special effects could succeed without big stars, studios would be less inclined to hire them, avoiding their various demands and high profit-sharing agreements.

Once this trend formed, current A-list stars, to avoid being sidelined, would have to voluntarily lower their salaries.

Michael Ovitz thought of Daenerys Entertainment's recent negotiations with CAA clients Robert Zemeckis and Tom Hanks for "Forrest Gump."

Because of the extensive special effects required, the budget for "Forrest Gump" would reach about $50 million, clearly a blockbuster level. Due to the high production budget needs, neither Zemeckis nor Hanks could demand exorbitant salaries.

Daenerys Entertainment offered a lowered salary with a share option: a $30 million base salary for Hanks plus a 5% share of the North American box office.

Considering the potential costs and ticket sales, "Forrest Gump" would need to gross $150 million domestically to break even.

Given its plot about a 'fool' crashing through modern American history, even $50 million in box office revenue would be concerning, let alone $150 million.

Choosing to walk away?

That was an option.

Given Robert Zemeckis and Tom Hanks' status, they certainly had enough clout to abandon the project, both being in high demand.

However, considering "Forrest Gump" was personally written by Simon Westero, both were hesitant.

Not out of fear of Westero's retaliation, but because if they gave up and the project succeeded massively, Hollywood might gain two more competitors for resources.

Especially Hanks, a relatively late-blooming A-list star, wouldn't want another similar actor vying for roles.

This was evident from the recent 'oversupply' of Hollywood A-list actresses.

Simon Westero's rise had indeed propelled a slew of Hollywood newcomers.

In just a few years, a diverse array of actresses — Sandra Bullock, Meg Ryan, Valeria Golino, Julia Roberts, Nicole Kidman, Demi Moore — had risen to stardom through a series of blockbuster films.

The newly released "Wonder Woman" was clearly going to launch Famke Janssen as well.

However, while there were many opportunities for these women, truly high-quality resources remained limited.

With too many contenders, the relative value of A-list actresses naturally decreased.

Julia Roberts, having shot to fame with "Pretty Woman," should have commanded a $5 million salary per film. Yet, for last year's "Hook," she only received $2 million for her role as Tinker Bell.

$2 million wasn't much, but if Roberts turned it down, there were always Nicole Kidman, Valeria Golino, or even Meg Ryan waiting for a chance.

If those A-listers weren't interested, there were plenty of second-tier actresses ready to step up.

Had Sandra Bullock, Nicole Kidman, and a few others monopolized Daenerys Entertainment's blockbuster projects from the start, there wouldn't have been so many 'latecomers.'

Tom Hanks now faced a similar situation.

While Simon Westero liked using different actresses for different projects, Daenerys Entertainment remained relatively focused when it came to male actors.

Besides the DC movie universe leads, in recent years, Robert De Niro, Tom Hanks, and Keanu Reeves had become regulars in Daenerys Entertainment films. Additionally, Ovitz had learned that Westero was nurturing Nicolas Cage, Coppola's nephew, who was also set to become a regular.

However, knowing Westero's tendency, Ovitz was aware that if De Niro, Hanks, and others demanded too much, Westero would unhesitatingly replace them.

Daenerys Entertainment had already done this multiple times.

Three years ago, "Regarding Henry" with a $15 million budget grossed over $160 million in North America alone.

A sequel was certainly warranted. However, clearly due to Mel Gibson's high salary demands, Daenerys Entertainment simply scrapped the sequel plans.

With such precedents, the more conservative Robert Zemeckis ultimately agreed to Daenerys Entertainment's offer of a $6 million one-time director fee. Considering his previous works like the "Back to the Future" series and "Who Framed Roger Rabbit," $6 million was quite low for Zemeckis.

Tom Hanks opted for a base salary plus a share deal: $3 million upfront plus 5% of the North American box office.

Last year's "Hook," Sony had granted Spielberg, Hoffman, and Williams a total of 40% of all-channel net profits: 20% for Spielberg, and 10% each for Hoffman and Williams.

Due to "Hook"'s high costs and mediocre box office performance, that 40% net profit share ended up being worthless.

Though the public often hears about stars earning millions from profit-sharing deals, Hollywood stars aren't as keen on such agreements as outsiders might think.

In the industry, post-release share deals are often referred to as 'deferred salaries,' used when studios want to lower project budgets to mitigate risk. Out of the hundreds of films hitting theaters each year, only a few dozen become hits.

Hence, Daenerys Entertainment's direct box office share model was considered generous.

Even if "Forrest Gump" flopped, grossing only $10-20 million domestically, Hanks would still earn from the share.

Following hits like "Big" and "A Few Good Men," Hanks' salary now ranged from $8-10 million.

For the upcoming "Sleepless in Seattle," requiring significant star power, Hanks secured $8 million.

Now, $3 million plus 5% of the domestic box office was a substantial pay cut for Hanks.

Calculating it out, "Forrest Gump" would need to gross $100 million domestically for Hanks to break even with his current market rate.

Even with Westero personally overseeing it, due to the subject matter, "Forrest Gump" reaching $100 million wasn't guaranteed.

Recognizing the risk, Daenerys Entertainment aimed to keep "Forrest Gump"'s production cost at around $50 million.

Had it been a few years earlier, CAA, with enough clout, could have strongly demanded Daenerys Entertainment increase the budget and take on the risk, ensuring the creators' benefits.

Now, with Daenerys Entertainment's growing dominance, CAA lacked the leverage.

Reflecting on "Wonder Woman," Ovitz realized that if special effects blockbusters became the norm, big-name actors' influence in Hollywood would further diminish.

Even recognizing this trend, Michael Eisner found himself powerless.

Unless Daenerys Entertainment suffered multiple significant failures and fell from grace.

Then, Hollywood stars could regain their former power and status.

But was that likely?

Considering Daenerys Entertainment's development in recent years, even if they faced several major setbacks, the conglomerate, having absorbed MCA and evolved into a comprehensive media giant, wouldn't decline in the short term.

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