Warner Bros. Has Pissed Off a Lot of People in Hollywood Over Its Decision To Release Its Slate of 2021 Films on HBO Max

Yesterday, we shared some news regarding Legendary Entertainment being upset over the fact that Dune and Godzilla vs. Kong will be released on HBO Max. Director Christopher Nolan also slammed Warner Bros. for its 2021 release plan, and director James Gunn reportedly wasn’t happy about it either because of his film The Suicide Squad.

Well, it turns out that WB managed to pretty much piss off everyone in Hollywood! Actors, directors, agents, and studios are reeling from the news. Those who were informed of WB’s decision only found out a couple of hours before the announcement. Then there was a ton of talent that found out like the rest of the world.

While there’s been a lot of talk about how this could affect movie theaters, things are a lot messier behind-the-scenes in Hollywood as agents, talent, and production companies are trying to figure out what this means for them and if they will get the money they’re owed.

Reports from The New York Times and The Hollywood Reporter have offered some insight on what is going on in Hollywood right now as major agencies and talent management companies are looking to cut ties and go to court with Warner Bros. It’s explained that WB was considered the “best home for talent”, but that’s changed now.

Apparently, Gal Godot and director Patty Jenkins worked out a deal with WB over Wonder Woman 1984 before they made the announcement on that film. It’s said that they got a “nice upfront paycheck.” No one else got that same courtesy and people are wondering why. NYT reports:

The surprise move left agencies on a war footing. Representatives for major Warner Bros. stars like Denzel Washington, Margot Robbie, Will Smith, Keanu Reeves, Hugh Jackman and Angelina Jolie wanted to know why their clients had been treated in a lesser manner than Ms. Gadot. Talk of a Warner Bros. boycott began circulating inside the Directors Guild of America. A partner at one talent agency spent part of the weekend meeting with litigators. Some people started to angrily refer to the studio as Former Bros. “For the longest time, Warner Bros. has been known as the best home for talent, and that has been a significant competitive advantage,” Michael Nathanson, a founder of the MoffettNathanson media research firm, said in a phone interview. “With this move, they alienated the very talent they have worked so hard to attract. These aren’t engineers you can just replace.”

As you might expect, a lot of these people feel betrayed and taken advantage of by the studio and it’s very possible that some actors and directors are going to be unwilling to work with the studio in the future. One agent told THR:

“Warners was the quintessentially talent-friendly, filmmaker-friendly studio. Now Warners isn’t the first place, second place or third place you want to go.”

Some of the other talent who aren’t happy with the situation include Dune director Denis Villeneuve, who “is said to be among those who felt most strongly that a traditional big-screen release was essential for his film.” Then there’s In the Heights director Jon M. Chu, “who along with Lin-Manuel Miranda went through an intense courtship with multiple suitors for In the Heights and who had turned down a huge Netflix offer for Crazy Rich Asians because he cherishes the communal theatrical experience,” and they are “shell-shocked” by the news. Then, of course, there’s James Gunn “was not pleased when the studio followed its shocking announcement by floating a lackluster formula for compensating him and other profit participants in the film.”

It all really just boils down to money. When actors, writers, directors, and producers make a movie they get two separate checks. There’s the guaranteed upfront payment they receive, and then there’s a percentage they get that comes from a portion of ticket sales after a studio has recouped its costs. NYT explains:

If a film flops, the second payday never comes. If a film is a hit, as is often the case with superheroes and other fantasy stories, the “back end” pay can add up to wheelbarrows full of cash. That money trickles down through Hollywood’s financial ecosystem to agents, lawyers and managers — funding Pacific Palisades mansions, the latest Porsche and $1,000-per-person Urasawa dinners.

It is unclear whether Warner Bros. has a legal requirement to renegotiate back-end arrangements for the 17 movies, as it did with “Wonder Woman 1984” heavyweights. Mr. Kilar said in a phone interview on Friday that, while these changes might be jarring to those who expected one thing for their movie and were now getting something very different, the end goal was to honor talent relationships as the studio had done in the past.

I’m sure many of you won’t feel sympathetic about the idea of Hollywood celebrities not getting their multi-million-dollar paychecks. But, there are a few stars from films like Dune who agreed to lower their upfront fees to reduce the production costs of the films, and instead opted to get a bigger cut of the back end from the box office take. So, the agents of the talent are scrambling to get a fair payday for the latent that they represent.

The way the plan is currently set up with WarnerMedia. HBO Max will pay “Warner Bros. a licensing fee for the 31-day concurrent rights. The fee will be equal to the studio’s portion of ticket sales in the United States. (Ticket sales are generally split 50-50 between studios and theaters).”

Because of the way that this is set up, agents see WarnerMedia acting in self-interest and they believe that the company has an obligation to “maximize value for the profit participants — to make a good-faith effort to see what prices other companies might have paid for the Warner Bros. movies before selling them to itself.”

Warner Bros. has definitely found itself in hot water over their 2021 HBO Max release plan and it’s safe to say that their legal team is going to be facing a nightmare work when all the lawsuits coming rolling in.