Slate has a new series called Hollywood Economist by Edward Jay Epstein, and this morning's article is a great look at the Governator's outrageously lucrative Terminator 3 contract. To paraphrase some of my favorite lines from Shakespeare in Love, with Geoffrey Rush as the hapless producer Henslowe whose feet are tied up over coals by the scheming financier Fennyman, played by Tom Wilkinson, who has just decided to extract Henslowe's debts from a new play by one William Shakespeare:
Geoffrey Rush: But what will we pay the actors?To sum it up, Schwarzenegger used his absolute indispensability to the project to extract both a large base pay (~$30 Million) and 20% of the gross receipts for all profits after forcing a more sensible definition of what was profit. Despite my antipathy to the Governator, I'd normally shrug and say its his lucrative image to milk for what it's worth.
Tom Wilkinson: A share of the profits.
Rush: But there are never any profits. . .?
Wilkinson: Exactly.
Two points gave me an icky feeling: Schwarzanegger's bull-dozed definition only applied to him and actually further decreased the possibility that anyone else (like writers) would ever see any royalties. Secondly, it's not Schwarzenegger who got paid but a made-up company that's his tax front, Oak Productions, which then lent his services to the movie. I can imagine all kinds of great tax breaks Schwarzanegger could get from that--Oak Productions might be able to hold the money in some low-tax manner and then dole it out "to" him at an optimal rate. Or just buy him all kinds of perks and write them off as expenses? Who knows. It's kind of disgusting since of course the average salaryman or woman can't afford that kind of financial gymanstics to lower their tax rate, while Schwarzanegger could pay the maximum load and still be sitting pretty, and now of course, Schwarzanegger's political allies use that salaried resentment to push through taxcuts that probably benefit him a lot more than the average wage-earner. I suppose you can't expect anything else, but it's hardly heroic behavior.
The other three items in the series, so far, are pretty fun too: Michael Moore's profits on Farenheit 9/11, Eisner's Career at Disney, and the use of German tax shelters to finance most big budget movies. Epstein is the author of a "The Big Picture: The New Logic of Money and Power in Hollywood," and it's hard to tell if these tidbits are new material on top of that or what. The series does amount to an ad for his book, and I'd like to find reviews of it to form a more educated judgement. Epstein does seem like a bit of an odd character, based on his website, complete with several pages devoted to 9/11 mysteries. He seems to be a fan of the theory that it was state-sponsored, and the state was Iraq. Still, it's all very interesting reading.
