You take a pay cut!: That’s what Barry Diller, a renowned former Hollywood studio chief, thinks big-name actors should do — at least the ones who are clamoring for pay parity in the movie industry
“The one idea I had is to say, as a good-faith measure, both the executives and the most-paid actors should take a 25 percent pay cut to try and narrow the difference between those who get highly paid and those that don’t,” Diller, 81, recently told CBS News’ Face the Nation.
In other words if Tom Cruise — reportedly the highest-paid actor in 2022 with a salary exceeding $100 million — really wants to narrow the industry pay gap, he should make $75 million.
Diller, who is currently chairman and senior executive of IAC Inc (NASDAQ: IAC) and Expedia Group Inc (NASDAQ: EXPE), continued: “You have the actors union saying, ‘How dare these 10 people who run these companies earn all this money and won’t pay us?’ While, if you look at it on the other side, the top 10 actors get paid more than the top 10 executives. I’m not saying either is right. Actually, everybody’s probably overpaid at the top end.”
The Writers Guild of America has been striking since May 2 and SAG-AFTRA went on strike Friday after each guild’s respective negotiations with the Alliance of Motion Picture and Television Producers (AMPTP) collapsed.
If a deal isn’t reached by Sept. 1, the movie industry will suffer “devastating effects,” Diller warned.
“What will happen is, if in fact, it doesn’t get settled until Christmas or so, then, next year, there’s not going to be many programs for anybody to watch,” Diller said. Subscriptions will get pulled, which will reduce revenue and, once the strike is resolved, “there won’t be enough money.”
Wedbush analyst Alicia Reese told Zenger News that it’s still too early to determine whether the strikes will hurt Netflix Inc (NASDAQ: NFLX), which is scheduled to report second-quarter (Q2) earnings on Wednesday, July 19.
“The strike won’t affect Q2,” Reese said, citing the company’s $3.5 billion free cash flow guidance in 2023. “But it will affect Q3.”
Other studios, where streaming platforms are either losing money or struggling, won’t be as cushioned, she explained. So, it’s no wonder that Walt Disney Co (NYSE: DIS) CEO Bob Iger is worried about the WGA and SAG-AFTRA strikes.
“It’s very disturbing to me,” Iger said. “There’s a level of expectation that they have that is just not realistic. And they are adding to the set of the challenges that this business is already facing that is, quite frankly, very disruptive.”
Iger amassed $65 million from Disney in 2018. That’s more than 1,400 times what the company’s median employee makes.
After a brief retirement, Iger returned to Disney in 2022 with a salary hovering at around $27 million, including bonuses. Recently, he inked a contract extension with $4 million more in possible bonuses, even though Disney stock is down by more than 8% over the last month.
The other studios also put the blame on the actors: The AMPTP, a coalition that includes Netflix, Disney and all the other major production companies, said in a statement that it was “disappointed” by the collapse of negotiations, noting: “This is the union’s choice, not ours.”
Tens of thousands of actors, however, have been busy clapping back at studio brass both on picket lines and on social media.
“How about we all jump into indies now?” Mark Ruffalo said on Twitter.
While conglomerates created an empire of billionaires [they’re] laughing like fat cats,” he said.
One issue is residual payments, especially for writers who can sometimes go long periods of time between projects and earn barely enough to cover a fast-food meal. That’s the case with actors too. “Orange is the New Black” star Kimiko Glenn said on Instagram that she collected $27.30 in royalties for residual payments, despite the enduring popularity of the show.
George Clooney, who likely earns north of $50 million a year depending on the projects he has lined up, said the movie industry is at “an inflection point.”
“Actors and writers in large numbers have lost their ability to make a living,” he said. “For our industry to survive that has to change. For actors, that journey starts now.”
Another pain point is what to do with the ever-advancing AI tech that’s available. Wielding the right technology could trim days, even weeks, off of studio budgets.
IAC’s Diller downplayed the threat of AI in entertainment.
“Yes, you can ingest all this stuff and spit out something that sounds like Shakespeare, but guess what? It is not original Shakespeare,” he said. “And writers will get assisted, not replaced. Most of these actual performing crafts, I don’t think are in danger of artificial intelligence.”
Produced in association with Benzinga
Edited by Saba Fatima and Asad Ali
