Welcome to Hollywood's new movie math.
Thanks to the nose dive in the economy and, even more troubling to the movie industry, declining DVD sales that have propped up the business for years, the studios are hammering down the generous financial deals long enjoyed by the most established stars and filmmakers.
The financial scrutiny once reserved for big-budget movies is now getting applied to the studios' chief staple -- the mid-size picture -- which constitutes the bulk of the films made in Hollywood.
Few movie projects illustrate the new economic reality better than "Morning Glory," a comedy about a grizzled TV anchorman played by Harrison Ford who is hired to co-host a struggling morning talk show for a hard-driving producer portrayed by Rachel McAdams. It's the kind of movie by a noted screenwriter, Aline Brosh McKenna, who hit it big with "The Devil Wears Prada," that until recently a studio wouldn't balk at making.
But Paramount Pictures, the studio behind "Morning Glory," did balk, agreeing to make the movie only under the condition that Ford, producer J.J. Abrams and others cut their fees and adjust the formulas that let them earn profits in the picture.
For years actors, directors, producers and writers have ridden the rising crest of the entertainment business by commanding lavish paychecks as the studios have been willing to pay ever-higher sums for their services. They routinely dictated financial terms to the studios, which had little choice but to accept them if they wanted to make the movie.
No longer. In a sign of the times, Ford and others involved with "Morning Glory" agreed to reduce or defer their compensation to get the picture made. "Morning Glory" was originally budgeted at about $65 million, a risky sum for a comedy featuring an aging star mostly recognized for action roles.
Because the filmmakers and talent are consenting to hold off full payment of their fees, the movie will cost the studio about $40 million after a tax credit it will earn from shooting in New York this spring. That's considered a reasonable bet.
Creative deal making is becoming increasingly common throughout Hollywood as the recession exacerbates the pressures studios already feel on their bottom line. Indeed, Hollywood is watching DVD sales slide with as much anxiety as Detroit is witnessing a plunge in auto sales.
