Exploiting Hollywood 1980.

Chapter 786 The interests are too great to renegotiate

Ronald did not expect that the news that the pre-sale of "Top Gun" directed by him in the video tape market was a big success, aroused a huge noise that he had never expected.

In the past, the income of movies has been divided into two parts, one part is the income from the theater box office.The other part is the income from the secondary broadcast on the cable TV station.

The latter part of the income, unless otherwise agreed, is generally distributed to the main creative team and members of the three trade union groups according to a small fixed ratio.

They are Screen Actors Guild, Directors Guild, and Screenwriters Guild.

The so-called surplus means that after the TV broadcasts more than ten times, or the income exceeds 1000 million US dollars, a few percentage points of the profit should be distributed to the members of the three trade unions.

This part of the remaining dividends is led by the labor union, which is uniformly collected from the film studio, and then distributed quarterly to the union members who participated in the filming.

Photographers, editors, make-up, clothing, props and other technical jobs have no right to participate in this residual value dividend.

Because Hollywood generally believes that a movie has received excess revenue, which is the outstanding contribution of those artists, not technical workers.

After the rise of television in the 50s, a large part of the income of many old directors, old actors, and old screenwriters depended on this part. The old films they shot were repeatedly broadcast on TV stations, and the remaining dividends were brought.

After going through the struggles and negotiations between the three major labor unions and the Producers Association, including the screenwriters union strike that Ronald experienced when he first entered the industry, and the screenwriters union strike, this ratio has gradually been determined.

As long as the number of replays of the old movie or the income, one of which meets the triggering conditions, the producer will distribute about 3% of the TV station's broadcast income to the three unions.Then let them distribute to their respective members.

It is easy to see that this distribution method is the least controversial to the directors' union with the smallest number.The directors' union stipulates that a film can only have one director's signature, so the remaining 1.2% dividends given to the directors' association belong to the director.

The screenwriters union gets the least percentage of dividends, and the actors' union gets the most money, and they want to increase the percentage of dividends the most.

On the other hand, this dividend method is only effective for those popular movies.If the number of broadcasts on the TV station or the income does not meet the standard, then the creators will not receive any remaining dividends.

Of course, the trade union will not just watch those members starve to death who cannot shoot good works. After the remaining dividends are transferred to the trade union, the trade union will draw a part to enrich the union's pension pool.

For those members with an average level, after retirement, they still have a pension that can be used to maintain their lives.

This distribution ratio is a balanced price obtained after a long period of repeated games between the union, members, and the producer.

But the hit "Top Gun" video tipped that delicate balance.

Who knew that just by lowering the price of videotapes from $80 to about $30, the market would grow tenfold?

The effect of this market size is that the production cost of video tapes has been greatly reduced, from a few dollars to a few dollars a box.The marketing and distribution costs incurred by the producers in order to release the videotapes are also shared among more customers.

Although the retail price has been reduced a lot, the gross profit that the producers get from it has not dropped much.

At this moment, the three trade unions were all irritated. They quickly mobilized their members and began to accept interviews in the media to criticize this phenomenon.

The main creative staff did most of the work, why did the producer take the richest piece of cake?
……

"I think the contract between Tom Cruise and them needs to be renegotiated. In the past, in the part of the video tape, according to the usual content, it is not suitable for the development under the new situation."

Paula Wagner, months pregnant, in flats, with a document, talks to her husband, Nisita.

"Although the legal reason for renegotiation is relatively far-fetched, but just in time for the actor union to speak up intensively, can we use this opportunity to put some pressure on the two producers?"

"You have to pay attention, your client Tom signed a separate sharing agreement with the two producers, not the remaining dividends stipulated by the union. There are a large number of union members who are already dissatisfied with the star's income. If you want to follow the trend of skyrocketing video income and fight for Tom's income, you have to prevent the other party from separating you from other ordinary actors."

"But why is Ronald able to get that 1.2% share?" Paula is no longer Ronald's agent, and she can't share this part of Ronald's income, so she is a little dissatisfied with her husband's attitude.Combined with the hormonal changes of pregnancy, it made her a little pissed off.

"Ronald helped shoot the Pepsi commercial at the beginning of the video. In fact, if it weren't for the outstanding effect of the Super Bowl commercial he helped Pepsi shoot, it is very likely that Pepsi will not add an additional subsidy of $6 per box of video this time.

This Top Gun videotape was pre-sold for more than 100 million boxes for the first time. It is difficult to say to what extent it is due to Ronald's additional contribution.I think the two producers may have picked up a big bargain. "

Nisita helped his wife open the door with one hand, and helped her get into the car by holding her waist with the other.Paula's age is already an advanced maternal age, and she is going to the doctor for a checkup.

But Paula is very precious in action, but he doesn't back down in words, "So, Paula, you'd better not make Tom feel like comparing himself with Ronald, it's not good for his future acting career."

"I understand that it's best for Tom to appear in Ronald's movies in the future, and this time Top Gun has improved Tom's status too much.

I'm just a little pity, seeing the huge market potential of video tapes, the seven major studios in the future will not be so easy to talk about. The two lucky ones, Don Simpson and Jerry Bruckheimer, are really lucky. "

……

"This is a black and white contract, why, do you want to abide by it?"

With his mouth crooked and a big cigar in his mouth, Don Simpson asked the manager of Pepsi's marketing department with a smile.

"When we signed the contract, we predicted the sales volume of 50. Now that the pre-sales have exceeded 100 million, it makes no sense for us to give a subsidy of six dollars per videotape."

The marketing manager of Pepsi, answered politely over there.

Originally, Pepsi had already spent six dollars in marketing expenses for each video. After seeing Ronald's Super Bowl commercial, which brought a lot of heat and discussion to Pepsi for a long time, the Pepsi people were a little bit concerned about Ronald. superstitious.

So they upped the ante once again, giving each video a $26.95 subsidy.In other words, Pepsi will subsidize "Top Gun" six dollars for every videotape sold at a price of $[-].

However, the sales of the videotapes were unexpectedly booming, and the pre-sales had already exceeded 100 million boxes before the sales started.

Pepsi's original marketing budget could not include this additional subsidy at all.So this time, the marketing manager in charge of this project, together with the lawyers from the legal department, came to negotiate with the two producers.

"Why do you think this way? Every time our video tape is sold, it is a marketing medium for an event.

Every viewer who watches the videotape will watch the 1-minute commercial in its entirety. This is an effect that you cannot achieve on any TV program. "

Bruckheimer didn't want to fall out with the big benefactors, and he thought of some reasons from their point of view.

"We have paid a uniform subsidy of six dollars for each video tape, and this additional six dollars is estimated based on the estimated sales volume of 50 boxes.

Therefore, this part of the direct subsidy to the producers of "Top Gun" must be stopped when the sales figures continue to rise. "

"What you mean is to ignore the original intention of the contract in black and white, and then look for the business logic behind the terms. Do you expect that judge to judge like this? Is there any?"

Don Simpson doesn't believe that there are judges who ignore simple clauses.

"Of course there is. Whether you sue in Los Angeles or New York, we are sure to win the lawsuit. In addition, if you do not agree to set a sales cap for the video subsidy, we will let the court issue a temporary injunction to temporarily ban the video. sale.

This means that your sales channels can no longer continue to pre-sell videotapes. "

Several senior lawyers from PepsiCo's legal department standing in the back row stepped forward in unison, putting a lot of pressure on the two producers.

"Who do you think you are? If you say you can, you can? If you say you can't, then you can? Huh?"

Don Simpson didn't pay much attention to this tough statement. In Hollywood, which star didn't need such tough coaxing and intimidation to be intimidated?

I have long been familiar with this kind of game that is bigger than the hole card.

"Because we are Pepsi, if we say yes, we will."

The leading lawyer took another step forward and was almost at Simpson's side.

"In addition, you are fighting with two people this time. We have already contacted Paramount, and they are also very interested in the sales of the video tape."

Don Simpson's face changed, and the son of a bitch went to Paramount for an alliance.Paramount's executives have long been very dissatisfied with the fact that the two of them have received most of the revenue from the video tape business.

In the future, videotapes will become an important source of income for the seven major studios. They all understand that the big sale this time is not because of any special features of "Top Gun", but because of the pricing this time, which just found the audience's favorite. acceptable price range.

Then in the future, as long as we continue to price in the price range of 30-40, we can bring new popular movies and classics in the film library to the market on a large scale.

After "Top Gun", the producers who cooperated with the top seven in film distribution could no longer get such good conditions as them.

Even with the terms this time, it's not that Paramount didn't think about going back on its word.If they join forces with Pepsi, no matter how powerful they are compared to the two producers, they may lose.

Moreover, the two parties can also make external moves to set up obstacles on the issue of video tape sales.In this way, if the momentum of pre-sale is blocked, it will make a lot of less money.

"We can talk to you about the terms of this subsidy again."

Bruckheimer quickly pretended to be the good guy in the game of good guys and bad guys, and offered an olive branch to the other party to make concessions.

The two parties negotiated new terms, and within three days after signing the new supplementary terms, the pre-sale figures reached were still within the scope of Pepsi's subsidy.

After the pre-sale, and the sales figures after the official launch, Pepsi will no longer subsidize them with a subsidy of six dollars per box.

"It's much better than expected." The two producers were there to settle accounts.

In the first two weeks of pre-sale, the sales momentum is the strongest, and the pre-orders have exceeded 100 million boxes.After three days, this number will rise to close to 120 million boxes.

This part of the video tape, just the direct subsidy of Pepsi, can earn 700 million yuan.

"What a good business! We are so lucky, hahaha!"

There is nothing unacceptable to the two of them. Even if there is no subsidy for the subsequent sales, it will still be a huge income. Many Hollywood producers may not be able to earn so much money in their lifetime.

"Let's continue the party, continue to be happy, and ask if Ronald is free. The agent we are looking for this time said that we can find beauties from the New York Elite Modeling Agency."

Don Simpson decided to put the unhappiness behind him and continue to revel in the daily Orgy convention in the wine pool and meat forest.

……

"Ronald, you are the lucky star of our director. This time I was able to renegotiate the terms of the remaining dividends with the Producers Guild, thanks to your 'Top Gun'." A white old man, well dressed, with a bit of hair Sparse, but neatly combed, sitting behind the desk and said to Ronald.

The white old man sitting in front of Ronald is a famous director in Hollywood. He once won the Oscar for Best Director with "General Patton" and Franklin Schaffner who also filmed a generation of sci-fi masterpiece "Planet of the Apes" .

He has just been elected as the president of the American Directors Guild in the general election.

When Ronald received the new ID card of the Directors Association last month, he saw the signature of the new president, Schaffner.

"It's a coincidence, I don't have any credit for it. No one knew before that the $30-$40 videotape was the one that would bring the most money to the movie."

Ronald replied modestly.

In fact, if it weren't for him, there would be other films. Other producers revealed this, but I just got lucky and happened to step into this opportunity.

"Humility is a good quality, especially for famous directors." Born in 67, Schaffner is [-] years old. Looking at Ronald, the new director of his nephew, he is pleasing to the eye.

"But don't be too modest, what you bring to the directors' association is not only more residual dividends, but also gives us more bargaining power in front of the studio.

Also, the number of new members joining the Directors Guild is currently decreasing.We've got a bunch of old guys my age getting pensions.

You have opened up the video tape market, and our Directors Association can also receive a lot of dividends, which can be added to the pension pool. "

Schaffner was elected as the president by many retired old directors from the golden age of Hollywood.

One of his important policy programs is to develop more financial resources so that these old brothers and old guys can live a more decent retirement life.

"What? The number of new members is decreasing now?"

Ronald asked the president after hearing what he was interested in.

"Yes, there are a lot more commercial directors, but their first-level members can't pay much dues. The number of film directors and TV directors who can pay large dues and bring dividends, and the number of newcomers who have joined the directors' union in recent years It's all going down slowly."

"Oh? That's why new directors don't join the union? Or?" Ronald was a little surprised.

"For movies released in America, all directors are unionized. Of course, except for that freak Lucas. His own Lucasfilm handles his own distribution business."

Schaffner sighed, if Lucas could return to the Directors Guild, he would be able to get a lot more dividends.

"The current production cost is already very expensive. When you joined the membership, there was still a miracle of 200 million to make a movie. Now the lowest low-budget movie needs 600-800 million to make.

Without the training of low-budget films, film directors have no chance to enter the industry.I only now feel how many qualified members Roger Coleman's New World Films has sent to Hollywood and the directors' union.

It's a pity that drive-in theaters are also declining nationwide, and his exploit films worth hundreds of thousands of dollars are not doing well at the box office. "

"Fortunately, I entered the industry early. If I enter the industry now, I have to wait another ten years? Is it possible to get the guide tube for the first time?" Ronald secretly called luck.

The first movie "Rock High School" I participated in was a small cost of hundreds of thousands.The director's first "fast pace" is a small cost of 300 million.

If it was now, and suddenly gave 800 million to a new director, Ronald asked himself, he might not have such confidence in himself who had never made a feature film back then.

"I will convene senior members of the union and discuss with lawyers how to negotiate with the producer association to include the videotape in the ranks of the remaining dividends.

We're going to mimic cable TV and set a bottom line for sales.For any movie that has sold more than a certain amount of videotapes, a part of it needs to be allocated to our directors' union.

I'm also coordinating positions with the two actors' unions (the Screen Actors Guild, and the Television Actors Guild), the Writers Guild.

In short, everyone acknowledges your affection this time, and directors who make hit movies in the future will have an extra income. "

"Haha, I'm very happy to bring you some benefits." As a member of the directors' union, Ronald also gave himself a lot of support back then, and he was very happy to be able to repay him."

"When it's time for the meeting, you can come too, and let the old guys meet you." The more Schaffner looked at Ronald, the more satisfied he became.

"If I'm free, I will definitely come. You know, I'm not like you in the era of big studios. I have the opportunity to observe and learn from the big directors. I really hope to have the opportunity to communicate with other directors, and it is best to be by their side. Look at their experiences making films."

"Ha, good. There are still some old men in our directors' union who can satisfy your request. Billy Wilder is an old friend of mine, and he must also want to meet you very much."

……

Ronald, who returned home, received a call from Eddie, the general manager of Daydream.

"Ronald, the president of the Producers Union, Nick Conte called me and he invited us to join the Producers Union of America as Daydream Films."

"Hey? That's the alliance of the management... No, I'm the management now."

Ronald realized that he opened Daydream Films by himself, and also got involved in the distribution business. Now he is a proper investor.

"Yes, you are already the employer, my boss.

The Alliance of Motion Picture and Television Producers (AMPTP) is a loose alliance that negotiates bonus contracts with major labor unions.

The seven major studios are members of the alliance, as are several mid-sized studios, such as Heimdell Films for Terminator, Orion Films for Oscar regulars, and De Laurentiis Films for the Italian. industry, and dozens of small producers like us.

This is different from the more official film association "MPAA". The Producers Union is mainly a loose organization, and it is joked that it was established for signing contracts.

Nick Conte used to teach at the Law Department of Stanford University and worked as a labor lawyer for many years. Now he is in charge of negotiations for the entire league and major trade unions.

So this time, he came to invite us to join, plus coordinate positions. "

"Oh, this... I'm a member of the Directors' Union and the Screenwriters' Union. Now if I join the Producers' Union, which side should I stand in the negotiation?"

"Hehe, usually in your situation, you have to avoid all discussions and negotiations." Ed has already inquired about the details, and Spielberg is similar to him, and he automatically avoids every negotiation.

"That's okay, you can go to a lawyer to look over the documents, and we will join as soon as possible." Ronald realized that in the future, the remaining dividends of the films produced by Daydream will be transferred to the three major labor unions as soon as possible.

For some tricks in operations, it is better to join the alliance early and learn them honestly.

(End of this chapter)