Hollywood Salary Cap Proposal?

Consider the following number, 100 million. That's the average number of dollars you'd need to make and release a movie in the United States today. It's also a problem. Ever wonder why this summer's big releases all have the number three in their titles? Shrek 3, Spiderman 3 and Pirates of the Caribbean 3 are the direct result of the enormous cost of making movies. This cost is the reason there are so many anemic movies being produced. It seems like the reverse would be true. In most arenas, if you spend more you get a higher quality product. It would make sense that movies would be the same - but they are not.

A reduction in production costs is one solution to breaking out of the current Hollywood cycle of formula movies, sequels and lowest-common denominator films that are flooding the marketplace, and one of the simplest ways to accomplish this is a reduction of star salaries - in short a salary cap. Other forms of entertainment use a salary cap to level the playing field. Football, baseball, basketball all use salary caps to keep things competitive - why shouldn't Hollywood? A proposed salary cap is simply one way to reduce costs and make Hollywood films more creative. Rather than using money to create a blockbuster, studios can use creativity. Rather than spending their way to respectability, studios can earn it. Here's how the enormous costs of stars affect movies today.

Star Salaries
Star salaries have gotten so large because studios look at stars as a way to hedge their bets. With so much money riding on a single movie, the presence of an A-list star will guarantee a certain return on the investment. The star system has been in effect since the days when the "Biograph Girl" was given a name. Pioneering movie producers knew that certain stars drew viewers. Movies need superstars. Just like sports need superstars. They generate an aura of importance. They make an ordinary game, an ordinary movie an event. And events sell tickets. Stars realize this, and if you want them, you have to pay. This creates a spiral effect.

Salary Spiral Effect
The more money a star makes the more money the movie must make to cover that 25 million dollar plus percentage of gross salary. This raises the cost of the movies, which creates a greater need to use stars to guarantee strong opening box office receipts to recoup the money spent on the film. This greater need fuels star salaries because the greater demand for stars drives their prices up, which in turn drives up the price of moviemaking, which makes studios want more stars to hedge their investments. The spiral effect continues unabated because the more you pay a star, the more the movie costs which increases the demands that a star be in the movie.

How Salaries Affect Story
Once you have a star attached to a movie, it becomes an easier sell. But now you have spent $20 million on a star without having shot a frame of film. A star is not enough to guarantee a profit. Stars just help a movie recoup its cost. You also need a story. The story should preferably be one that offends the fewest people possible. It needs built-in name recognition to cut down on marketing costs. So what you get are movies made from best-selling novels, comic books, amusement park rides, video games, and sequels - anything that has name recognition. If you can pair up some big stars to a well-known name, you can almost guarantee a return on investment. The problem here is that somewhere along the line, the story gets lost in the shuffle. It doesn't matter that the star is unsuited to the role; you can tailor the story to fit the star. The story becomes a slave to the deal, and as a result, the story suffers.

The Trickle-down Myth
Of course Hollywood still releases smaller movies with riskier stories. In theory, the profits derived from big budget blockbusters are used to turn out smaller films. But studios still use virtually the same system to make these films as they do their bigger-budgeted counterparts. Also, the higher cost of producing big budget films has resulted in higher ticket prices. For the average consumer, the result of high ticket prices means that consumers are less willing to spend money on tickets to see a film they haven't heard about. In other words, smaller films cost the same to see as big budget movies. When movies cost a couple bucks, consumers were more willing to take a chance on a movie they may not have heard of. But when it costs upwards of $20 just to walk into the theater, consumers become more conservative in their choices, opting to wait until the movie is released on DVD. This leads to lower attendance, which in turn raises ticket prices, which leads to even lower attendance, which results in even higher ticket process and so forth.

So now, not only do you have star salaries driving up the cost of production, but you have these leviathan budgets driving up ticket prices. The result of which you see in your local theater - a spate of sequels and movies based on proven formulas and franchises.

The problem with movies today is not a lack of creativity or original ideas, the abilities are there. They come through every once in a while. The problem is the high cost of moviemaking, which dooms original ideas due to the inherent risks involved with unproven, original ideas. One way to stop this spiral effect is through a salary cap. I know it's tough to get by on less than $20 million a year, but maybe, just maybe it would be worth the price.