Can Bollywood Afford its Superstar Salaries?

Will a director stretch their budget to accommodate a star? Or will a star reduce their asking fee to work on a film that appeals to them?
Can Bollywood Afford its Superstar Salaries?

In a rare moment of candour for an actor, Kartik Aaryan recently revealed he was paid Rs 20 crore for 10 days of work on Ram Madhvani’s Dhamaka (2021). Coming from an industry in which stars' paychecks are only whispered about, Aaryan’s admission on an episode of India TV's Aap Ki Adalat was a welcome change. Still, it prompted a sobering thought. Last year, James Cameron's Avatar: The Way of Water and the Hindi dub of Prashanth Neel's K.G.F: Chapter 2 dominated the Hindi cinema landscape with estimated box office receipts of Rs 471 crore and Rs 435 crore respectively. Ranbir Kapoor-starrer Brahmastra, the highest grossing Hindi film of last year, just about recovered its Rs 400-crore budget. Films such as Aamir Khan's Laal Singh Chaddha and Ranveer Singh-starrer Cirkus underperformed at the box-office. All this prompts the question: How much are actors’ massive paychecks really costing Bollywood?

At the Film Companion Producers’ Roundtable 2021 in December 2021, Karan Johar admitted he had seen most actors raise their price through the pandemic. “They’re riding on digital money. Almost all actors are charging more today than they did two years ago. And it’s not just a 10% rise, but a 100% rise in some cases,” he said. With theatrical distribution shut over 2020 and most of 2021, most OTT platforms went on an acquisition overdrive, trying to populate their sites with as many familiar faces as they could so as to increase their subscriber base. With the handful of platforms interested in the same films, the resulting bidding war became a prime opportunity for stars to increase their fees.  “If anyone thought that this streaming boom was a sustainable way forward, they need to get off their merry-go-round,” says Vikram Malhotra, founder and CEO of Abundantia Entertainment Pvt. Ltd. (the studio behind Jalsa and Ram Setu). “Sure, you got a price because there was a demand-supply gap, but if you thought that that was going to be a steady reality, then who’s to blame? It’s an error to begin with.”

At the same producers’ roundtable in 2021, Nikkhil Advani revealed that he had negotiated a paycheck of Rs 135 crore. Now, however, the director, whose Emmay Entertainment has been working on shows such as Mumbai Diaries: 26/11 (2021) and films such as Satyamev Jayate 2 (2021), says that while one might be tempted to judge Aaryan's enviable salary in comparison to his limited work hours on Dhamaka, it's important to see it within the larger context. “Ram Madhvani is known to shoot multiple set-ups. He’s one of the most efficient filmmakers out there. If he gets the work done quickly and efficiently, then why should Kartik charge less than he would for any other feature film?" While he adds that the economics of a ‘commercial’ film have always been skewed towards the (usually male) star, he says that it’s not a phenomenon limited to Hindi cinema.

Malhotra also thinks it's unfair to single out the leading men as the ‘bad guys’ in this scenario. “Each film has its own economics, something that the people underwriting its finances fully understand while writing the cheques. There’s no one-shoe-fits-all solution to this," he said. "These so-called ‘excessive’ salaries are being paid, so clearly the economics is making sense for someone. No one’s putting a gun to a producer’s head to shell out 'X' amount. You pay when you know you can make it back.”

Which raises the intriguing question: How exactly are these salaries calculated? COP = SDM, Advani explains. Cost of production must equal the revenues from the Satellite (S), Digital (D), Music (M) rights. "If you don’t have that recovery sorted, don’t make the film,” he adds. It's a concise formula, but one that's harder to apply practically, especially when elements such as time invested in developing a project, or the filmmaker's keenness to work with a particular star, must also be factored in. It eventually boils down to who wants it more - Will a director stretch their budget to accommodate a star? Or will a star reduce their asking fee to work on a film that appeals to them?

Advani lists actors who were considerate when it came to negotiating fees — Arjun Kapoor for Sardar Ka Grandson (2020), Sidharth Malhotra for Marjaavaan (2019), and John Abraham for Batla House (2018).” When the director approached Akshay Kumar for Airlift in 2016 and told him that he wouldn’t be able to afford his fees, the actor understood. “So he came on board as a producer. He took a nominal fee upfront and came in with the same risk as I have.” Airlift ended up making an estimated Rs 231 crore at the box office.

The Khans, Kumars, Devgns and Roshans have been known to negotiate their fees depending on the cost of the film and sometimes opt for a profit-sharing deal, which pays off with a film’s success. In interviews, Aamir Khan has explained how he’s stuck with the profit-sharing model, a move that was reported to have benefitted him with Dangal (2016), netting him Rs 175-plus crore. So if Roshan’s investment in a War (2019) pays off thanks to a box-office run that recovered nearly 2.5 times that of its hefty Rs 170-crore budget, the same actor's salary ends up burdening a Vikram Vedha (2022), which, at a budget of Rs 100 crore, earned Rs 80 crore at the box office. “This is the producer’s mistake. They thought they were going to end up with War’s box office. Vikram Vedha is a talky gangster drama, not a War or Pathaan in terms of action set-pieces. It was the producer’s failure to evaluate their project,” says a Bollywood insider, who did not wish to be identified.  

Web shows, which have consistent above-the-line (talent) and below-the-line (cost of shooting and salaries of technical crew) costs are easier to budget for than films, says Advani, who puts the total cost of production (for feature films) at 60% ATL and 40% BTL (but argues that these figures should be flipped). This disparity is what offended Zoya Akhtar, who, at the producers’ roundtable, said that producers ended up spending more on their actors’ salaries than on the making of the film. 

As long as a star’s fee has been factored into the recovery of the project, however, Malhotra doesn’t mind. “If you’re dealing with sentiment, a star’s availability of dates or simply a ‘feeling’ that the number will be recoverable at some point, that’s where the trouble begins,” he says. “It’s where logic goes out of the window.”

What now? Advani is predicting that the euphoria of Pathaan’s success could inspire a ‘Bollywood is back!’ sentiment, as a result of which actors – even those who aren’t involved with the film – will raise their price. “If you are this confident in your ability to deliver a box-office opening, then we’re more than happy to share the spoils. You make money when we make money,” says Advani.

A Bollywood insider who didn’t wish to be identified, says the notion that star salaries are sinking Bollywood is an inaccurate one. "People are searching for, and finding, the new equilibrium,” they said. At the same time, it remains to be seen if the dozen high-profile flops through 2022 will result in stars introspecting. “Would I like the star’s remuneration to be in a more sane space? 110%,” adds Advani. “I’d also like there to be parity between male and female actors’ salaries. We’re far from getting there, but I’m hopeful.”

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