In what is believed to be the biggest deal ever made with an actor, Savoy Pictures has agreed to pay Sylvester Stallone $20 million, or potentially an unprecedented percentage of total revenues, to star in a yet-to-be-determined movie in 1996.
According to informed sources, the deal guarantees Mr. Stallone $20 million, or 20 percent of total receipts collected by Savoy from all media worldwide if those revenues exceed $100 million.
Industry insiders say the agreement is staggering and could cause a domino effect in Hollywood, where today's biggest stars command $12 million-$15 million a picture against 15 percent of the distributor's receipts. Mr. Stallone is represented by the same company, the powerful Creative Artists Agency, that handles such high-ticket talent as Kevin Costner, Tom Cruise, Tom Hanks and Michael Douglas.
"It is the biggest deal I've ever heard of," says Joe Roth, chairman of the Walt Disney motion pictures group. He adds: "Sure, this will have a ripple effect on the highest level, because this is the competitive environment that the agencies live in. Now agents will feel a need to go after this figure for their big clients."
Mark Canton, chairman of Columbia TriStar Motion Pictures, says: "I'm a big fan of Sly's, but I've never heard of such a big deal -- it's shocking." He notes: "It not only puts more pressure on agents to deliver big numbers for their clients, it puts pressure on the studios to [determine] how high is high and when is enough enough."
Agents insist that their big clients in the right movies guarantee a certain amount of revenues -- thus they are entitled to a bigger piece of the total revenue, which has grown dramatically, primarily due to the demand in foreign markets. However, studio executives say they don't buy that argument.
"It's not about revenues -- it's about margins and the margins are getting more narrow because the cost of making and marketing movies has gone up so much," contends Mr. Roth. Its detractors in Hollywood criticize the 3-year-old New York-based Savoy -- a publicly held production and distribution company that has been beset by such box-office flops as "Exit to Eden" and "Serial Mom" -- for spending too much on talent and material.
Eyebrows were raised earlier this year when the company made an unprecedented "first-dollar gross" deal with screenwriter Joe Eszterhas and a $2 million-plus deal for Tom Clancy's "Without Remorse."
Some observers say that the company -- which released its first batch of films only over the last 15 months, including the critically acclaimed "Shadowlands" -- has hardly had time to prove itself.
Mr. Stallone, who reportedly received $12 million and $15 million, respectively, for his last two movies, Warner Bros.' "The Specialist" and Cinergi/Hollywood Pictures' upcoming summer's release "Judge Dredd," collected a flat fee of $25 million for the 1990 sequel "Rocky V."
Because U.S. distributors such as Savoy typically split a film's box- office gross with theater owners 50-50, Mr. Stallone's forthcoming movie for Savoy would have to gross more than $200 million at the box office before his percentage would kick in. The actor would then get 20 cents on every dollar thereafter.
The "play-or-pay deal," which guarantees the actor his fee even if Savoy does not go forward with the project, is not tied to a specific movie, but to a "slot" that the star has committed to in 1996.
The actor will not be able to make a movie for Savoy until 1996 because of existing movie commitments next year -- first to Warner Bros., then to Cinergi. He still has an open slot for another movie in 1996.