1. Watch Johnny Depp Films Today.
The so called Studio system was now dead. Power shifted to the individual actors, who
became BRAND NAMES in their own right.
Two developments began in the 1960’s. The Hollywood studios would be taken over by
corporations, and then reacquired by giant multinational corporations seeking world-wide
influence. The second development was that the stars began to exercise their power. Giant
multinationals like Sony, Newscorp, and Viacom hated the fact that stars had so much
power. In the last ten years, A-List actors like Tom Cruise, Johnny Depp, and Robert Redford
started to receive profit participations, which the studios only gave begrudgingly.
At first it didn’t matter because Hollywood accounting is such that somehow the studios could
always show a loss on the movie. The stars got wise to that very quickly, and started taking
front end participations, a percentage of the ticket when movie goers bought their tickets. In
my 35 years on Wall Street, I participated in financing many movies, and I have to tell you
that nobody ever made money on the backend. No matter how big the movie, somehow the
movie always lost money when it came to the backend participations.
We have now reached a point where the giant multinationals that control media on a world
wide basis are fed up with what they are putting up with on behalf of brand name stars. Mel
Gibson as you know has run into trouble on the West Coast with his drinking, and purported
anti-Semitic remarks resulting in Disney canceling a Holocaust series with Gibson’s
production company.
Now Tom Cruise has had a falling out with Sumner Redstone, and Viacom. Publicly
Redstone has stated he doesn’t like some of Cruise’s actions in the last year. This doesn’t
make sense. Normally when a studio breaks with a star, there is no public statement. None is
required to be given, and they just part ways. This is more personal.
It is rumored that Viacom had offered Cruise a $2 million production deal, down from $4
million in the previous deal, plus a $6 million fund for the development of movie projects.
Here’s the real deal. Tom Cruise did “Mission Impossible III” for Viacom, the movie grosses
near $400 million world-wide. Cruise had negotiated as a fee, 25% of Viacom’s gross
revenue on the movie.
This is the way it works. The movie does $400 million. The theaters get half, and Viacom
gets half, that’s $200 million apiece. Cruise gets 25% of Viacom’s half, that’s $50 million. In
the end Viacom gets $150 million, and Cruise gets $50 million. Sounds great for Viacom
doesn’t it. Not really, Viacom must pay for the movie which had to be $150 million plus
advertising. Viacom gets zero, and Cruise still gets $50 million. This is why Sumner
Redstone of Viacom is annoyed, and Cruise is sitting on top of the world.

2. In the end Redstone will last laugh, why you ask? There’s still Hollywood accounting to deal
with. Remember that all the original Hollywood studios were sold off into the hands of
multinational corporations (MNC’s). Do you really think the MNC’s bought the studios for the
theater gross? Absolutely not. Find Films