Hollywood A-listers hit by recession

Friday, April 3. Hollywood actors are starting to feel the pinch as struggling film studios cut costs by reigning in the excessive pay packets they offer to even the hottest stars.

In a bid to recession-proof its finances, Paramount Pictures has become one of the first studios to re-evaluate how much it pays its actors, and scrapping the practice of paying stars a percentage of a film's box office profits. Such deals - referred to as 'first dollar' gross deals within the industry - often allowed actors to make more than $20m a movie even if it performs badly.

As reported in The First Post last year, these contracts could backfire on studios, leaving them out of pocket while film stars lined theirs. Eddie Murphy benefited from such a deal in Meet Dave, which cost Twentieth Century Fox about $70m but took in only $11.8m at the domestic box office.

As a result, 'back-end' deals, which offer actors a portion of the gross after the studio and its financial backers have recouped their costs, are increasingly becoming the only deal laid on table when it comes to negotiations.

According to reports in the Wall Street Journal, Harrison Ford has accepted Paramount's 'back-end' deal for his upcoming role in the comedy Morning Glory, as has Steve Carell (pictured) in Dinner for Schmucks. Both actors will still be well paid but Paramount will be able to save around $5m in production costs thanks to the back-end deals. And it's not just the film's stars who are having to forgo their usual fee – Dinner for Schmucks director Jay Roach has also been offered a back-end deal.

Universal Pictures is following Paramount's lead and will reportedly offer Russell Crowe the same sort of deal for his starring role in the currently untitled Robin Hood epic, scheduled for release in 2010. Directed by the award winning director Ridley Scott, sources close to the project affirm that 'first-dollar' gross deals are a definite no-go, even though the film will star a host Hollywood's highest-paying stars.

But while film studios are clearly looking to save money, it's not all doom and gloom for Hollywood’s finest. First dollar gross deals may be a thing of the past, but actors won’t be squeezed too much, as Marvel Entertainment discovered recently when it offered Mickey Rourke a paltry $250,000 to play the Russian villain in Iron Man 2. It's unclear what The Wrestler star said to the deal but reports in Variety confirmed in March that the actor's salary will now be "better than that".

LAST UPDATED 1:12 PM, APRIL 3, 2009