Tom Cruise, Sandra Bullock say Paramount is cheating them out of millions
After years of losses and underwhelming performance, the movie studio Paramount Pictures has delivered its best box-office results in a decade.
The first five movies it released in theatres this year all opened in the top spot, culminating with Top Gun: Maverick, the highest-grossing film of the year so far.
But not everyone is celebrating.
Many of the stars and producers of these movies, including actors Tom Cruise and Sandra Bullock and the creators of Jacka**, believe they are going to miss out on millions of dollars because of a deal between Paramount and cable channel Epix.
Movie stars, producers and film-makers often get a cut of the profits from their movies, including a share of digital sales and licensing to third parties. Those paydays can amount to tens of millions of dollars on a big movie like Top Gun: Maverick, starring Cruise, or millions on a smaller-scale hit like The Lost City (2022), starring Bullock.
Profit participants in Paramount movies believe their earnings are below what they should be because the studio is receiving less from Epix than other studios are getting in similar deals, according to several people familiar with the conversations.
Representatives for the talent have met Paramount to ask for extra money, said the people, who asked not to be identified because the talks are ongoing.
While no one has threatened a lawsuit yet, lawyers are assessing their options.
One possibility is that Hollywood labour unions will take action. Guilds also collect residuals on these movies, and Paramount's deal with Epix means they, too, may have also missed out on millions of dollars relative to what they get from other studios.
The guilds declined to comment. Representatives for Cruise, Bullock and Jacka** star Johnny Knoxville did not respond to requests for comment.
In a statement to Bloomberg News, Paramount said it has not had an ownership interest in Epix for five years, and that "our agreements are entered into at market rates".
Lawyers and agents have always bemoaned "Hollywood accounting", in which studios overstate costs and disguise profits so as not to share proceeds with financial partners.
Both sides would rather avoid a lawsuit, but there have been some big cases over the last decade.
AMC Networks was forced to pay US$200 million (S$282 million) to one of the creators of The Walking Dead (2010 to 2022), while Fox settled a multimillion-dollar dispute with the participants in the show Bones (2005 to 2017).
Workers worry that the rise of streaming services has made it even easier for studios to hide their profits from talent by self-dealing.
Most studios used to license their films to premium cable networks like HBO, but now they license them to streaming services, often ones they own.
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