Home / Industry / Media /  Box office duds are beginning to show on star salaries

The stars are just not shining bright enough for Hindi film producers. A spate of big flops is driving producers to renegotiate steep salaries of A-list actors who have not fired at the box office in the last few months.

Older stars like Akshay Kumar as well as younger actors like Varun Dhawan, Ranveer Singh, Ayushmann Khurrana and Tiger Shroff may have to take a 20-30% cut for their next few projects, producers feel, as that money is better spent on scaling up production quality and visual effects. The reduction is expected in the upfront fee rather than in revenue shares after the release. Even OTT (over-the-top) streaming platforms are rationalizing rates for films based on box-office performance, instead of paying high acquisition fees ahead of release.

“This is the primary conversation in all production houses at the moment. Given that all the films that are releasing now were signed a year or two ago at prices that worked then, there is a sense that cost correction needs to start happening now," said a senior studio executive, who declined to be named.

The math is just not adding up for Bollywood’s star system. Over the past few months, actors like Akshay Kumar (Bachchhan Paandey, Samrat Prithviraj), Ranveer Singh (’83, Jayeshbhai Jordaar) and Ayushmann Khurrana (Anek, Chandigarh Kare Aashiqui) have seen their films trip badly at the box office. Kumar’s Samrat Prithviraj was made at a budget of 200 crore and finished at 54 crore. Singh’s Jayeshbhai Jordaar was made at 87 crore, and managed 16 crore. Some of these losses can be made up for by sale of satellite and digital rights.

While older, established stars like Shah Rukh Khan, Salman Khan, Aamir Khan and Ajay Devgn co-produce most of their films, taking a share in profits rather than an upfront fee, the younger stars are paid direct remunerations; some like Kumar take a combination of both. Till this box-office slump prompted a rethink, actors like Tiger Shroff, Varun Dhawan or Ayushmann Khurrana would charge 30-35 crore for a film, while someone like Kumar would make 150-180 crore, including a share of the box-office revenues. Mint reached out to the managers of the actors, but they didn’t respond to queries on possible pay cuts.

Spectacles such as RRR and KGF: Chapter 2 have brought in mega box-office numbers, but producers know they cannot bank on such a success every quarter or even every six months. Much of the enthusiasm that has to do with pent-up demand among audiences will gradually wane. “The other challenge is that OTT platforms too are backtracking if the film doesn’t find a draw at the box office unlike earlier when they were more enthusiastic about simply picking up the biggest titles. And, frankly, nobody knows what will work at the box office, the situation is very dicey right now," the executive cited earlier said.

How long this rationalization will last or not depends on the individual star’s box-office performance and status in the coming months. “Many stars hike rates post one hit. Also, this is an unorganized industry. One producer not paying them as much won’t mean others won’t either," the executive said. But if some producers decide to pick the movie over star value, it might lead to some big-scale films being planned with new faces, much like Hollywood’s model with the Marvel films, the person pointed out.

There is definitely a significant amount of uncertainty in the producer, actor and director community, said Shibasish Sarkar, chief executive officer, International Media Acquisition Corp. While there is no definition of what is a good film anymore, there is some sense that larger-than-life spectacles are drawing crowds to cinemas, said Sarkar, who was group CEO at Anil Ambani-owned Reliance Entertainment, and has worked with stars like Akshay Kumar (Sooryavanshi) and Ranveer Singh (’83).

“If that scale and spectacle need to be evident (on screen) for the theatre-going audience, there needs to be an increase in production value and visual effects. You can’t cut corners on that. The only way that the overall budget then reaches a feasible figure is if the talent cost comes down," Sarkar said.

Movies like RRR, KGF, and Baahubali show that audiences come to cinemas to forget about reality, Sushmita Sinha, senior manager, client servicing at digital agency TheSmallBigIdea agreed. “Viewers now have access to OTT platforms and are exposed to a lot of international movies or shows. Directors know this very well, which is why we see so many movies trying to give the audience an experience rather than just a storyline," Sinha said, calling mega-budget films key for the film business in the future.

Unlike investment in visual effects or production standards, star fees do not add to the experience of a film, producer Vinod Bhanushali pointed out. “Only the producer cannot be exposed to risk. If he continues to make losses, how will he back and invest in other films? How will the industry run?" he asked

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