The Greatest Showman #1512 - Appropriate

Brokerage firms and production companies are both collaborators and competitors. While their cooperation is crucial for tapping into the box office potential of the market, they inevitably find themselves at odds when it comes to profit distribution.

Over the past 30 years, agencies have made three significant attempts to shift the balance of power. The first occurred in the late 1980s, when agencies, led by Harrison Ford's agent, secured higher compensation for actors and stopped being subservient to production companies. This marked the first appearance of "box office appeal" as a major factor.

The second shift came in the mid-1990s, when actors like Arnold Schwarzenegger, Kim Kelly, and Tom Cruise helped create the "20 million club," where actors gained a true stake in the film production process. This elevated them to a position of power within Hollywood and radically changed the status quo.

The third shift took place ten years ago, with Johnny Depp's agent, further driving box office profits and using those to leverage the production companies for better compensation. Not only did salaries skyrocket, but actors also began stepping into executive roles, a level previously reserved for producers.

While these shifts are easy to describe, they are difficult to execute. Brokerage firms need one or more top-tier actors to disrupt the existing power balance. Once that occurs, the entire industry can unite to push for better deals, gaining a slight edge over the Hollywood production system, which is largely controlled by Wall Street.

The Creative Artists Agency (CAA) has been the driving force behind all three of these pivotal moments, particularly the first, where they were solely responsible for driving the change.

Now, all eyes are on Renly.

Renly stands out because he has the potential to tip the balance. Not only is he the youngest-ever EGOT winner, but his cumulative North American box office earnings exceed $1.2 billion, with a global total reaching $2.5 billion. What's remarkable is that Renly hasn't starred in a sequel to any of his major hits. While "Degree and Passion 5" is a sequel, Renly only appeared in the first installment, not continuing in the series.

This means that all his box office earnings so far have been based solely on his individual market appeal. If there's any actor capable of breaking the current pay structure and commanding a salary of $30 million plus box office dividends, it's Renly. Neither Robert Downey Jr. nor Johnny Depp can achieve this, nor can the stars of Marvel or DC movies—only Renly.

It's no exaggeration to say that after his EGOT win, every move Renly makes is closely watched by the entire industry, including production companies. Warner Bros., Universal, and Legendary are all vying for his attention, with Thomas Tour and Ron Mayer working to suppress Renly's pay. Meanwhile, other studios, while eager to collaborate with him, also want to keep his salary in check. This creates a tricky situation, and Universal might play the "villain," suppressing Renly's pay so that other studios can then step in with favorable offers.

Thus, Renly, the "small fry," is receiving an inordinate amount of attention in this ongoing battle between Hollywood's titans. He may even become a pivotal figure in reshaping the entire industry. The name "Renly Hall" now carries immense weight.

Emma Thomas isn't completely in the dark about this situation, but she knows enough. When Christopher mentioned Renly's salary demands, Emma couldn't help but panic. However, after hearing the specific figures Renly is negotiating, Emma's response was more a mix of disbelief and resignation.

It turns out things aren't as complicated as they seemed at first glance. By comparing the remuneration for "Gravity" and "Interstellar," we can see the two key figures at play: Renly's current salary and the one he's negotiating.

In the case of "Gravity," Renly receives 10% of the box office dividends, while for "Interstellar," the production company is offering a base salary of $20 million, with a 3% box office dividend. Renly has countered with a proposal for a $20 million base salary and a 5% box office dividend.

If we focus solely on North American box office numbers, the figures become clear:

For a $100 million box office: "Gravity" pays $10 million, "Interstellar" pays $23-$25 million.

For a $200 million box office: "Gravity" pays $20 million, "Interstellar" pays $26-$30 million.

For a $300 million box office: "Gravity" pays $30 million, "Interstellar" pays $29-$35 million.

For a $400 million box office: "Gravity" pays $40 million, "Interstellar" pays $32-$40 million.

The difference is clear, and it's easy to see the math. If the North American box office falls below $300 million, Renly's current salary is more favorable. But if the box office exceeds $300 million, the production company will profit more.

At first glance, it may seem that Renly has the upper hand, as the risk is lower for him—the base salary plus dividends ensures that even if the box office underperforms, he still gets paid. But in comparison, Johnny Depp and Robert Downey Jr. received far higher salaries for their blockbuster roles. For instance, Johnny Depp earned $55 million for "Pirates of the Caribbean 4," which required a North American box office of over $550 million to be profitable. Similarly, Robert Downey Jr. earned $50 million for "Iron Man 3," which required a North American box office of over $500 million to make the deal worth it.

The distinction with these franchises is that they generate substantial additional revenue from theme parks and merchandise, which make up for any box office shortfalls. Despite this, Renly's salary structure offers much better value for the production companies, and it's no surprise that agencies are hoping Renly will push for higher base salaries, raising the floor for all actors and benefiting the entire industry.

In theory, if the "20 million club" becomes the "30 million club," it could lead to higher salaries across the board for actors. What started as a $10 million base salary could rise to $15 million, and the upward trend would continue, benefiting not just A-list stars but even supporting actors, stuntpeople, and extras.

Ultimately, agencies are pushing for these changes not out of altruism, but to secure better deals for themselves. Renly, for his part, isn't being greedy; he's proposing a reasonable salary that respects the production companies' bottom line while still benefiting actors. If Renly sets a precedent with his "20 million club plus box office dividends," it will set a new standard for actors without jeopardizing the production companies' core interests.

This is a delicate negotiation, like boiling a frog in warm water—gradually pushing the boundaries without making anyone jump out. If Renly's demands are met this time, it will set the stage for further raises in the future, especially if "Gravity" and "Interstellar" perform well at the box office.

Of course, the key variable here is the box office success of these films. If they underperform, the whole system may collapse. But if they succeed, Renly's salary will continue to climb, and the production companies will have no choice but to agree.

What makes Renly's approach truly remarkable is that he doesn't rely on any specific franchise or character to dictate his salary. Instead, his immense appeal is enough to gradually increase his earnings. Agencies are thrilled, but production companies are conflicted—happy for the revenue but apprehensive about the rising cost of talent. Yet, ultimately, the studios will have no choice but to agree.

It's brilliant. Renly's negotiation tactics are sharp, walking the fine line between fair and aggressive, while ensuring the production companies can't refuse his terms. Never underestimate the power of a well-crafted set of numbers. This is the art of negotiation at its finest.

Emma Thomas couldn't help but wonder: Is this number set by Andy Rodgers, or is it Renly's own doing?