Newsflash! Hollywood Should Stop Giving Away Money


Can Hollywood save itself? In a sizzling Hollywood Reporter op-ed,
Tinsletown attorney Schuler Moore says four things must happen: force actors in long-term deals, battle TV stars who try to wiggle out of contracts, dump the residual system, and move to DVD and VOD distribution on the first day of a movie’s release.

Moore, who works out of law firm Stroock & Stroock & Lavan represents serious Hollywood money so he knows of what he speaks.

On actors’ deals he points out:

The studios “make” stars by putting them in successful films, and they take the financial risk, so it is nuts to let the actors reap the reward by charging studios more than $20 million plus a massive share of gross on later films. If the studios implemented this approach and focused on grooming and creating their own stars, they could hold down their production costs and, more importantly, avoid the massive giveaway of gross they now incur.”

And on enforcing contracts:

“Often once a TV series has become successful, the actors all get “sick” or find some other excuse to breach their contracts, and everyone caves in to the extortion and ups their compensation. It is time to hold actors to their contracts — including the longer-term agreements I advocate — and sue them when they breach…But after a few actors lose cases for millions of dollars and get enjoined from working elsewhere, they just might start honouring their contracts, and the industry can get back to business and bring costs down.”

Coming in the middle of contentious negotiations with the Screen Actors Guild, Hollywood’s talent might swallow a little harder after reading this piece. They’re not accustomed to hearing about this kind of cost-cutting.

Welcome to the New New Economy.