Are Actors Overpaid?

hollywoodGuest blogger Castor Troy writes:

Are entertainers, among which include film actors, overpaid? Many have heard about the outrageous paychecks Will Smith, Tom Cruise, or Reese Witherspoon take home for one single movie while the average American works 5 or 6 days a week for merely $40,000 a year. Although Hollywood studios have not received any taxpayer bailout and hence, can do whatever they want with their money, it is fair to look into the issue but without the currently prevalent populist agenda. Personally, I couldn’t care less that some actor or athlete is making tons of money because they are not fleecing anyone at gunpoint. People have to understand this is not the same thing as, for example, US taxpayers having to bail out Wall Street bankers who then give themselves huge bonuses that completely dwarf the amount of money entertainers are making. My point is I don’t want to see some angry uncivilized rant in the comments, so consider yourself warned.

The road to become a working actor is full of potholes as well as the dead bodies of previous people who tried and failed. Actors often begin their careers for peanuts, right out of college and juggling a regular job and their dreams of breaking into the industry. There are fewer “new” actors breaking out into Hollywood major studios movies than new players making it into the professional sports leagues each year. For those few lucky ones who actually find themselves cast in a major studio film, 14-18 hour days are fairly common and principal actors have to memorize massive quantities of lines which can be changed at the last minute. Some actors may completely immerse themselves into their role, both physically and psychologically for weeks or months at a time. Successful film actors also give up a lot of personal privacy and are under constant scrutiny. Imagine trying to be nice to everyone even though strangers are constantly invading your personal space or asking all kind of things from you. Finally, the income stream can be irregular and careers can be relatively short. No one says it is easy, however, does this justify a Will Smith getting $25 million+ for a movie? This is without adding very significant back-end compensation for every dollar the movie makes at the box office that some upper-end movie stars and directors often command.


To answer that question, one has to understand the concept of value. Movie stars are commodities in high demand because the participation of a  Tom Cruise or a Julia Roberts guarantees that a movie will be seen by many more than if Joe Schmoe is the lead actor. Joe might be a perfectly good actor but he just doesn’t fill the seats and let’s face it, there are hundreds if not thousands of Joe Schmoe’s out there but only one Tom Cruise. The reality is that most of the money is made by a few select movie stars–a few dozen people really. For every Sandra Bullock, there are dozens of actors who are making very little money. A recent statistic showed that 75% of SAG members earned less than $7,500 a year from acting and only 4% made more than $50,000 a year.

This is where the distinction between movie stars and actors comes from (at least from my standpoint) for recognizable names in the industry. Some do it for the money and others don’t. Even relatively big names who sign up for independent films take major pay cuts– they can make as little as $2,800 a week (union minimum scale). Now this would still seem like fairly comfortable compensation in the real world but one has to be aware that most actors only work a few weeks a year and hence their stream of income can be quite inconsistent. Additionally, agents take a cut, publicists have to be paid and other significant fees and expenses that come with being in the business have to be taken off. As you can see from a financial standpoint, it becomes very easy to distinguish the bigger names who want to be actors from the ones who want to be movie stars. Now, you know why some movie stars keep signing up for hopelessly bad major studio movies ala Sandra Bullock. It pays!


Hollywood studios are already working hard to bring down compensations for actors and the economic crisis gave them the perfect excuse to start slashing salaries. A perfect example of this is Scarlett Johansson for her role in Iron Man 2. Although Johansson is arguably not a marquee icon, she is a recognizable household name and a salary in the lower 7-figures would have been very common for her even only a couple years ago. Remember that Kirsten Dunst received $7 million for her role in Spiderman 2 in 2004. Guess what Johansson received for Iron Man 2, a movie forecast to easily beat out Spider Man 2 at the box office? A paltry $400,000–and Marvel Studios initially bid only $250,000! Now don’t get me wrong, $400K for a minor role with 15 or 20 minutes of screen time is not bad at all in our realm of reality. Nevertheless, in the realm of Hollywood where Iron Man 2 is expected to gross close to $1 Billion worldwide, that’s akin to a slap in the face.


Nevertheless, I am surprised that this took so long to happen. Let’s face it, the main attraction of Iron Man is Robert Downey Jr., and beside him, the rest of the cast is nearly completely disposable. The vast majority of people could not care less who plays who in the grand scheme of things. If Johansson had declined, literally dozens of other starlets would have lined up to take the role and they would most likely offer the exact same things she does: disposable eye candy and God knows there is plenty of that in Tinseltown. Simple supply and demand. Lower end movie stars and actors are certainly being pressured in terms of compensation, but it remains to be seen whether the upper-echelon Hollywood movie stars are getting the same type of pay cuts.

So, the better question may be: Are Hollywood’s biggest movie stars overpaid? This discussion ties in in with my previous post about whether Hollywood movie stars are a dying breed where we saw that the highest paid talent were also some of the least bankable in the industry. After all, this is a rhetorical question because the money does have to go somewhere. If a movie makes millions and it doesn’t go to the actors, it would go to the studio executives. It would be nice if DVDs or movie tickets were cheaper but let’s face it, that’s never going to happen.

So, what do you think? Are Hollywood movie stars overpaid? It’s your turn to voice your opinion on the matter!

Castor Troy is the author of Anomalous Material, a blog about movies and filmmaking. For more information or to contact him, visit his website.