Breaking the bank: are Hollywood stars getting paid too much?

Marvel was surely expecting a hero’s welcome over the weekend when they announced that Robert Downey Jr would be returning to the Marvel Universe, and at San Diego Comic-Con, at least, that’s what they got. Crucially, Downey won’t be playing Tony Stark, whose endpoint in Avengers: Endgame would be left untouched, but rather Dr Doom, a major comics villain who will menace the Avengers (whoever they may be) in at least two upcoming mega-movies, due out in 2026 and 2027. The nerds went nuts: giving them more of what they love while also preserving canon?! What could be better?

In the days that followed, however, it was Thanos-level inevitable that details of the financial arrangement allowing this glorious return would swirl around the news. Though hard figures about these deals are rarely officially released, Variety includes some anonymously sourced speculation about what Downey and his hand-picked directors, the Russo Brothers, are getting for this endeavor. The Russos, also returning for the first time since Endgame, are said to be getting $80m for the two movies, with Downey allegedly receiving much more, in addition to a litany of expensive perks. All of this from the company that Downey himself had to badger into paying for gym memberships for the other Avengers! Even if these numbers are exaggerated, Downey seems certain to be breaking records for an upfront movie salary.

Star paychecks have garnered headlines for ages; Downey’s payday arguably bookends a roughly three-decade period kicked off by Jim Carrey becoming the first actor to be paid $20m up front, to star in the 1996 comedy The Cable Guy. Though that movie also became Carrey’s first box-office failure as a 90s leading man, the $20m figure stuck. For many years, it was considered the benchmark for an upfront single-movie salary as stars joined the “$20m club” that would come to include Tom Cruise, Will Smith, Leonardo DiCaprio, Julia Roberts and Sandra Bullock at various points, among others.

That’s not to say no one was ever paid more – but often bigger checks were used to lure stars into sequels that wouldn’t make sense without them. That’s how Mel Gibson, Johnny Depp and Arnold Schwarzenegger hit the $30m range for films in the Lethal Weapon, Pirates of the Caribbean and Terminator series. Throughout the years, $20m still felt like the mark of a true top-tier star; Jennifer Lawrence, for example, allegedly hit that mark for her 2016 movie Passengers, a full two decades after Carrey broke the barrier.

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But as the star market seems to have fallen in recent years, in favor of brands and IP, some upfront payments have still counterintuitively surged, sometimes past that $20m mark. A major reason is executives going all-in on streaming, a nebulous revenue generator that therefore offers less in the way of residuals, ancillaries and profit-sharing. Back-end deals that can pay off huge – boosting Keanu Reeves on the Matrix sequels and Bruce Willis on The Sixth Sense from around $15m per picture to over $100m – can’t exist on a Netflix movie that has no back end to speak of. So Leonardo DiCaprio allegedly gets $30m instead of $20m for his recent streaming-funded movies. Perhaps recognizing that a quick zip to streaming has diminished the prospects even of proper theatrical releases, some newer stars have been able to up their asking price. Though reports always vary, it sounds as if Ryan Gosling got somewhere around $12m for The Fall Guy, which underperformed earlier this year. Zendaya got $10m to produce and star in Challengers, a smaller-scale film and really her first-ever wide-release leading role as an adult.

Is that too much for stars whose biggest successes were carried by Barbie and Spider-Man? At very least, these figures cast further doubt on the sincerity of studio heads during last year’s Hollywood strikes, when, for example, the Disney chief executive, Bob Iger, called the actors’ and writers’ demands “unrealistic”. In retrospect, he must have meant unrealistic in light of his need to pay Robert Downey Jr the price of several entire moderate-budget films to not even play Iron Man. At the same time, there is arguably a degree of complicity from stars, assisting in the death of mid-budget movies they claim to want by taking so much money for themselves.

Really, it becomes a question of what exactly is worth top dollar in a movie budget. The unofficial rule of thumb used to be that an actor’s salary would be worth it if the movie in question pulled in that amount or more on its opening weekend. Studios were paying, essentially, for a head start; even in their heyday, most stars couldn’t compel everyone to see absolutely anything, but they could convince a lot of people to check something out. To some extent, the movie has to do the rest. By this metric, Carrey’s $20m for The Cable Guy wasn’t all that ludicrous. Back in 1996, just about $20m worth of customers did show up on the first weekend of a poorly reviewed, deliriously off-putting dark comedy, just because Jim Carrey was in it. They didn’t much like what they saw, and the movie fell off, but Carrey’s presence did the job, even if the movie he made did not. Similarly, while The Fall Guy underperformed and Challengers was only a modest hit, it’s hard to imagine either of them making the same money without Gosling or Zendaya – unless, of course, they were replaced with even-bigger stars who would have probably cost more money.

Maybe that’s a sign that everyone making more than $5m a movie is overpaid, and in the grand scheme of things, of course that’s true. Public school teachers deserve more; nurses deserve more. But in the rarified and expensive world of film-making, at least there’s a rough, if imperfect, calculus: it seems likely that some of the nearly $100m worldwide gross of Challengers came from people who wanted to see Zendaya. She has fans, and that movie probably earned her some more. Contrast that relatively simple exchange with the common practice paying through the nose for super-rushed special effects work, which still doesn’t fairly compensate the effects artists, and often results in a crummier movie.

The real problem, though, probably isn’t on the creative side – because executives like Disney’s Iger and Warner’s much-loathed David Zaslav haven’t seen their particular versions of back-end deals dry up with the box office. While their base salaries typically aren’t movie-star level, their yearly compensations ride stock and bonuses to levels that dwarf many name actors (who also have more agents, managers and other staff to pay). In the end, that’s really what makes Downey’s new Avengers payday seems more obscene: with all of this money and its accompanying perks lathered on top of the half-billion dollars he’s said to have already earned from Marvel, he’s gone beyond a highly paid actor. He’s become a CEO version of himself – playing Tony Stark all over again, this time in real life.