The day the blockbuster went bust

Editor’s Note: The following article is scheduled to run in Daily Variety on June 2, 1998.

WITH THE BIG SUMMER MOVIES of 1998 about to open, Hollywood is waiting nervously to see the box office reaction to what talent agents are calling the Great Lockout. The initial results of this alleged lockout are readily apparent: Not one major star will appear in any summer movie this year, and topline TV talent like Jerry Seinfeld and George Clooney will be absent from the upcoming fall network lineup.

In an antitrust complaint filed in December 1997, the top talent agencies charged studios and networks with staging a series of surreptitious meetings during which a lid was applied to all talent salaries. According to the agents, led by Jeffrey Berg of ICM, major companies secretly agreed that no star would be offered more than $5 million for a film role or more than $ 300,000 per episode for a series commitment.

Though corporate “suits” uniformly deny that any such secret agreements were made, not one of the top stars such as Tom Cruise, Arnold Schwarzenegger or Brad Pitt has received an offer during the past 10 months.

The so-called Great Lockout, if it actually occurred, was doubtless prompted by the dire box office results of the ’97 slate of $ 100 million movies. Indeed, one studio chief told Daily Variety, “It’s mayday for megapics. We just can’t afford them any more.”

GIVEN THESE SETBACKS, industry insiders have been predicting some form of “correction,” but none expected what’s now shaping up as a superstar boycott. The fallout has been widespread:

  • Schwarzenegger announced he has set up a superstar cooperative to finance projects that the studios now disdain. It will pay upfront salaries of $ 20 million to star talent. So far, however, Schwarzenegger has been unable to pull together the financing. Cruise declined to join the Schwarzenegger cooperative, announcing that he will instead retire from acting. “I have decided to fund a foundation to bring deep thinkers together to think deep thoughts,” Cruise said. Arguably one of their first assignments should be to figure out the plot of “Mission: Impossible.”

  • Mario Kassar, the renegade former chief of Carolco, was the lone producer to defy the boycott, offering $ 35 million to Mel Gibson to star in a sequel to “Cutthroat Island.” Within a week after making the offer, however, Kassar found himself served with an indictment from the Internal Revenue Service, and was promptly deported by Immigration and Nationalization authorities. From his new home in Liberia, Kassar released a statement declaring that “the United States is no longer hospitable to free-market entrepreneurs.”

  • Among the talent agencies, Creative Artists Agency seemed most devastated by the so-called lockout. The entire corps of “Young Turks” announced they were leaving the agency business to enter a monastery in Tibet. Given this power vacuum, Michael Ovitz announced his return to CAA, declaring, “I have discovered that we’re really agents, not corporate ‘suits.’ “

Assessing the problems at CAA, Ovitz said, “We need to apply zero-base strategy in re-engineering CAA to augment value lines and enhance branding.” Upon reading this statement, six other CAA agents announced they were leaving to enroll in the Harvard Business School.

AMID ALL THIS TUMULT, the studios nonetheless now seem poised for a promising summer. The average negative cost of all films this summer has plunged to $ 25 million, half of what it was last year. There’s a preponderance of character-driven films featuring unknowns, some of which have received a warm critical response. “The air is crackling with new ideas and new approaches to filmmaking,” Michael Eisner said. “It reminds me of 1968.”

Like the other company heads, Eisner adamantly denies that any secret agreements have been made ruling out superstar salaries. “That’s much too intelligent an idea for any of us to support,” Eisner declared. “If we began to deal seriously with the cost spiral, next thing you know, people would expect us to deal with corporate succession.”

Reached in Washington, Jack Valenti, head of the Motion Picture Assn. of America, took a longer-range view. “As Prince Machiavelli reflected near the end of his life in 1527, ‘To engage in tactics of conspiracy reaps a harvest of ignominious apostasy.’ ” No one at the MPAA could explain precisely what Valenti meant by this, however.

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