Dear Gossips,
One of the side-effects of the streaming era is the increasingly combative relationship between movie stars and studios when it comes to salaries. Top-tier talent doesn’t just get paid up front, they get a bite of the back-end ticket sales, and a percentage of home video/sales. That’s why celebrities started spinning out more and more endorsement deals in the 2000s, why the idea of A-listers like George Clooney doing coffee commercials became less something to do in foreign countries and hide from the folks back home—it used to be called “Japandering” for that reason. It's what set off the avalanche of lifestyle brands, celebrity liquor companies, celebrity makeup lines, and most recently, celebrity skincare. In the 2000s, the advent of on-demand viewing killed home video revenue, and celebrities scrambled to make up the difference. Now, streaming is killing digital revenues, and celebrities are…fighting back in court.
We already saw it with Scarlett Johansson taking on Disney over Black Widow profits reduced by a day-and-date release on Disney+. And now a group of A-listers are accusing Paramount of, basically, being really sh-tty at business and costing them money. Per Fortune, Tom Cruise, Sandra Bullock, and the Jackass guys are supposedly mulling legal action because Paramount, who released their movies this year (Top Gun: Maverick, The Lost City, and Jackass Forever, respectively), has a streaming deal with little-used platform Epix, and the A-listers think Paramount isn’t getting enough money from Epix, as compared to similar deals held by other studios and streaming services.
Getting into the weeds a little bit, studios strike deals to license their films to streaming. Sometimes, it’s self-dealing, as in Disney sending their movies to Disney+, or Warner Brothers to HBO Max. This is causing its own problem as talent representatives increasingly—and, probably, correctly—think studios are using these in-house deals to “hide” home release/digital profits (Hollywood accounting strikes again). But the Paramount-Epix thing is particular in that Paramount doesn’t own Epix—they used to have a stake, but do not currently—they just have a licensing deal with them. Despite having Paramount+ in house, Paramount also has a deal to send their movies to Epix. And Epix, so Cruise et al think, isn’t paying enough for those movies.
Comparable deals exist between studios like Universal and streamers like Amazon, but because Paramount has their own platform to support, they had to strike a new deal with Epix in 2020 which allowed them to pull back some of their own titles for Paramount+. The problem is that just after Paramount and Epix struck their new deal, Sony struck a licensing deal with Netflix, and Universal with Amazon and Peacock (which is owned by the same parent company as Universal, so that’s technically self-dealing), and both Sony and Universal got more from their streaming partners than Paramount got from Epix.
I cannot imagine Epix has that much cash, because who uses Epix? But Cruise and his cohort are basically accusing Paramount of making a bad deal and costing them money in downstream revenue. Cruise, in particular, is projected to make around $100 million from his various Top Gun-related payouts, but part of that recipe is his cut of streaming licensing. If Paramount made a crap deal that’s paying substandard rates, that cuts into his bottom line. Now, I understand we’re talking about extremely rich people making slightly less money, and no one has any sympathy for that. I’m not asking you to care that Tom Cruise might make slightly less millions, but I DO think it’s worth watching how this plays out.
As with ScarJo and Disney, we’re seeing ever more cutthroat behavior from talent when it comes to defending their slice of the pie. At every level of the industry, people are still figuring out how to make money off streaming, but what is becoming increasingly clear is that unlike when previous technology shifts have reduced talent income, this time, the talent is not going to accept the changes and find some new wares to hawk instead. This time, they’re fighting to keep their toes on the rung and not get shoved off the ladder. And, frankly, I want to see this lawsuit. I want to see Tom Cruise, Sandra Bullock, and Johnny Knoxville sue Paramount for being bad at business. It would just be funny.
Attached - Top Gun: Maverick star Miles Teller leaving the gym yesterday in LA.
Live long and gossip,
Sarah
