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The Honolulu Advertiser
Posted on: Wednesday, February 17, 2010

Cruise only the latest A-lister to take a cut in pay

By Claudia Eller
Los Angeles Times

Hawaii news photo - The Honolulu Advertiser

Tom Cruise

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LOS ANGELES It's hardly a secret that Tom Cruise is no longer Hollywood's top-gun star.

The 47-year-old boyish-looking actor has had a rough stretch, from an embarrassing jumping episode on Oprah Winfrey's couch to the clunker "Lions for Lambs." Many believe that his controversial career has peaked.

Now, in order to revive his big-screen role as dashing secret agent Ethan Hunt in Paramount's "Mission: Impossible IV," Cruise consented to a deal that would have once been unthinkable: He's forgoing a preferential slice of the movie's ticket sales, the sine qua non of clout in Hollywood.

Cruise will still earn a handsome payday. He will be paid $20 million of his $25 million fee upfront to star in and produce the fourth "Mission" film, which is scheduled to hit theaters Memorial Day weekend 2011.

But he won't collect a hefty "first dollar" cut of box-office receipts that entitles stars to skim a movie's revenues before the studio earns back its huge investment and gets a fee for distributing the film, according to people familiar with the deal. If that seems sensible, it wasn't always the case.

Cruise's pay structure illustrates the "new normal" for Hollywood's A-list actors and filmmakers, who no longer can command the super-rich deals that awarded them swollen payouts on movies even when the studios lost money. With once-reliable DVD sales that propped up movie profits in a swoon and other pressures bearing down, the studios are no longer willing to accept second financial billing to the talent.

"Over the last 25 years, agents were getting better and better deals for their clients because the studios were star-dependent," said Jeremy Zimmer, a partner at United Talent Agency. "Now, there's a complete retrenchment where the studios are less star-dependent and making fewer movies, so they're more willing to walk away unless a deal makes sense for them."

A Paramount spokesman declined to comment about financial aspects of the "Mission" sequel.

To be sure, stars like Cruise can still make a killing if their film turns into a blockbuster. In exchange for forgoing a cut of ticket sales, the studios grant a bigger share of the potential profits.

Cruise wasn't the only one who accepted Paramount's terms on "Mission." The same take-it-or-leave-it deal applied to filmmaker J.J. Abrams, a producer of "Mission" whose career is on the rise. For its part, Paramount wanted to keep its "Mission: Impossible" franchise which has generated about $1.4 billion in worldwide ticket sales continuing and relaunch it for younger audiences and hard-core fans. It was just unwilling to do so under what it regarded as the onerous terms that undermined its 2006 sequel, "Mission: Impossible III."

Although that movie clocked global box office sales of $400 million worldwide, DVD revenue of $200 million and an additional $100 million in television sales, the studio barely broke even. Cruise, guaranteed 22.5 percent of the studio's gross receipts, walked off with $80 million, leaving Paramount with nothing to gain from its $180 million production investment, said people with knowledge of the matter.

Studio chairman Brad Grey and vice chairman Rob Moore weren't about to let that happen again. This time, Paramount plans to make "Mission" for no more than $150 million, and co-finance the picture with David Ellison's Skydance Productions. The film is to begin production in late summer.

Paramount adopted the financial blueprint for "Mission IV" from other recent movies, including its upcoming "Morning Glory," which Abrams directed, and last summer's sequel "Transformers: Revenge of the Fallen," which yielded a huge payday for Paramount and director Michael Bay.

If "Mission" is a smash, Cruise will likewise make a bundle after Paramount recovers all of its production and marketing costs and collects a distribution fee.

Beyond any financial windfall, Cruise's involvement in the new "Mission" marks a significant turn in his decades-long affiliation with Viacom Inc.-owned Paramount that ended abruptly in August 2006. Back then, Viacom chairman Sumner Redstone banished Cruise and his 14-year-old production company from the studio's Melrose Avenue lot, castigating the actor for his aggressive promotion of Scientology and occasional outbursts.

Redstone believed Cruise's drop in popularity cost Paramount $150 million in receipts from "Mission: Impossible III." Two years later, around the time Cruise made a scene-stealing cameo as a foul-mouthed movie mogul in Paramount's "Tropic Thunder," the actor and Redstone had a lunch to patch things up at the Polo Lounge at the Beverly Hills Hotel.

The way things are going, it's possible that Redstone could end up escorting Cruise down the red carpet at the premiere of "Mission: Impossible IV."