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Polone: Why the Simpsons Salary Standoff Was a Sign of the New Hollywood Economy

Fox won't let The Simpsons keep it from its cash.

In 1998, the six members of The Simpsons' regular voice cast went public with their demands for more money from 20th Century Fox Television, and Fox finally gave in. When it happened again in 2004 and 2008, David pounded Goliath in every match-up, and eventually the actors' salaries each reached what I hear is $11 million a year, including deferred payments. But that was a different time: This month, after 20th threatened to cancel the show unless the actors cut their pay, the voices acquiesced and accepted a $200,000-per-episode reduction in pay, bringing them down to $6.6 million a year. Because in this era of nationwide cost-cutting and political posturing about living within one's means, even a giant behemoth like News Corp. can speak of fiscal responsibility and come out looking like the little guy with a slingshot. This game of chicken provided a POV into how the large companies that run Hollywood intend to treat those who create their product in the future.

The recent standoff started with Fox saying that keeping the show going beyond this 23rd season depended on the cast taking a 45 percent pay cut. That may seem severe, but it really isn’t these days; everybody is seeing their accustomed pay shrinking, including me and many other producers, whether in TV or films. Our profit participations are less lucrative because the revenue pie from which we used to take a healthy slice has shrunk: DVD sales and rentals for feature films have declined, international sales are dropping, and television syndication revenue has also diminished. But still, I and most others seem to have accepted that though the golden goose hasn't made it out of intensive care, at least it isn't dead yet, so we aren’t complaining much.

But 20th Century Fox Television's claim that they "could not produce future seasons [of The Simpsons] under its current financial model" because of these six was ridiculous, and stated publicly solely to influence the negotiation. The truth is they could continue paying the actors, they would just rather make more money. That is what TV studios do, just like McDonald’s wants to make more money selling Big Macs by cutting costs any way they can. If they can figure out a way to pay less for the same bun, they’ll do it. In the case of The Simpsons, the voice actors are the bun.

From what I've heard, The Simpsons currently generates about $1.5 million per episode from syndicating the show to independent stations and cable networks after their initial runs and reruns on Fox. (These deals usually allow the off-network buyer rights to air the shows for four or five years.) This price is set for what's known as the first cycle, which lasts until the show goes off the air, after which a price for a second cycle is set based on how the show did during the first. Since The Simpsons has performed exceptionally well in reruns, the studio's price for cycle two will be at least as much as the first. (And that's just a piece of the windfall that 20th has made from this show: There's also the money the network paid for the episodes' original airings, DVDs, downloads, and sales and merchandising revenue from foreign territories — The Simpsons is a hit all over the world.) Even with ratings down from the show's peak, The Simpsons is an annuity that will continue to pay off regardless of whether it's canceled or not. But the $1.2 million or so per-episode reduction that Fox was asking from the actors is much less than what they’d lose if they did cancel the show: By continuing on to Season 24 and beyond, they will have more episodes for which to charge $1.5 million a piece. So when 20th said they “could not produce” additional episodes, what they meant was they really wanted to make what they already were scheduled to make … plus $1.2 million.

When looking for places to cut on a hugely expensive show like The Simpsons, the actors are about the only logical targets. Animation is expensive and 20th can't start shipping the work abroad because they did that from the beginning. Yes, they have a big writers room, but given the number of episodes produced each year and the fact that so many stories, jokes, and ideas have already been written into the nearly 500 extant episodes, it's all the more important to have a large and talented staff. Having represented many of the writers on the show when I was an agent and manager, I know they're not paid that much more than they could make elsewhere. And since situation comedies have had a resurgence of late with shows like New Girl, Big Bang Theory, and Modern Family, funny writers are more sought after than they have been in some time. If threatened with a big pay cut, most would probably take other offers. And you won't get original Simpsons executive producers James L. Brooks, Matt Groening, and Sam Simon to trim their enormous shares of the show: The profit participation they negotiated 24 years ago, back when deals were much better, has probably yielded $1 billion between them at this point. From my experience, people who have accumulated that kind of wealth and who also have a contract tying them to the life of the show are pretty much impossible to push around in a negotiation.

So, the clear (and possibly only) choice was to take a public stance that the actors were the problem with the show’s business model. And unlike past years, when fans rallied to support the people who gave voice to the entire town of Springfield, this time it was easy for 20th to point a finger of disapproval at six people who make eight figures per year, all for talking into a microphone for what I understand to usually be two to six days a month. Those actors will never have an opportunity to make so much for so little work again: In the new entertainment economy, it's likely that no actor ever will, even at this new reduced rate. Now, the corporations have all the leverage; I'm reasonably sure it was someone inside the network or studio who released the information about how much they would make if the show were canceled just to make it clear how little they cared if the show kept going or not.

At the end of the showdown, noted lefty hater of the rich and corporate Harry Shearer made a public statement about how he had offered to cut his salary even more than 20th wanted in exchange for a small share of the profits. He was roundly rejected. He also made mention of the billions that the profit participants and Fox and 20th Century Fox Television were making and how small in comparison his compensation was. His statement fell pretty flat and Fox ignored him. While the actors on the show are truly brilliant, they didn’t create the show, nor did they take any financial risk for it. Thirteen years ago, during the first renegotiation dust-up, it looked like a big corporation taking advantage of a group of earnest little guys who weren’t getting their share. Today, those little guys don’t seem that distinct from their corporate masters, as they are making too much when so many are making too little.

Finally, it all ended with a whimper. Fox’s scheme worked perfectly and the show will continue for two more years. The actors (as well as all of their agents, managers, lawyers, business managers, ex-spouses, and others who also benefit from this gig continuing) probably breathed a sigh of relief, knowing that even at a 30 percent lower rate, they have the best jobs in television; maybe in the world. The only question I have is: When are the contracts up for the cast of Family Guy?

Gavin Polone is an agent turned manager turned producer. His production company Pariah has brought you such movies and TV shows as Panic Room, Zombieland, Gilmore Girls, and Curb Your Enthusiasm.