In 2013, a little before the release of Dhoom 3, I interviewed Aamir Khan for The Hindu. I said that this seemed to be a project that was more about getting the numbers, and he replied: "No film is a preordained hit. But yes, the chances of success in this case are high. And like any project, I chose this one because I loved the script. I listened to the narration and I was excited by it. And then we go back and work out the economics – how much we can spend, and so on, so that we can ensure profits for everyone down the chain, the exhibitors, the distributors, everyone. My interest in numbers is limited to the fact that I want my films to make back the money invested in them."
Other Bollywood superstars — Shah Rukh Khan, Salman Khan, Akshay Kumar — charge a flat fee and then take a share of the profits. Aamir told me that his model was to take a basic amount of money, per month, to keep the household running during the film's production. Otherwise, every bit of money he makes would come from the back end. (I don't know if he still follows this practice.) So yes, this is risky if the film flops, like Thugs of Hindostan did. But that's the exception, and he can afford to take the hit. Forbes reported that the actor made something like Rs 300 crore from Dangal, which was a stupendous success not just in India but in China, too. And even if the film had not released in China, the India profits alone had made Aamir something like Rs 200 crore.
I was reminded of my conversation with Aamir when the IT department released a statement about Vijay's salary: Rs 50 crore for Bigil, Rs 80 crore for Master. Another news source said that the actor's next film, for Sun Pictures, will fetch him Rs 100 crore. Now, this is nothing compared to what Aamir Khan made from Dangal, and you could argue that if any Tamil star deserves it, it's Vijay, whose last three films have grossed a ton of money: Wikipedia states that Sarkar and Mersal made Rs 260 crore worldwide, and Bigil made Rs 300 crore. Translation: #ThalapathyRocks. An actor with a huge fan base and the capacity to sell huge numbers of tickets around the world is getting a huge salary. So what's the problem, then?
The "problem" is that the salary in the Tamil film industry is paid upfront. The system of charging a flat fee and then taking a share of the profits does not exist here, which means that (1) the hero distances himself from the box-office performance of a film sold largely on his name. This is not an issue if the film makes more money than was spent on its production and distribution, but if it doesn't, the people down the chain, like producers and distributors, get burnt. (The hero, on the other hand, remains unaffected.) And (2) with the upfront payment (to the hero, or to a big-name director) the cost of the film skyrockets even before a frame has been shot.
I reached out to industry people (none of whom wanted to be named, understandably) — and the rest of this piece is culled from what they had to say. The interest on film financing is something like 36% — it's one of the highest rates — and if production is stalled by, say, the Coronavirus factor, the cost keeps escalating. Why, they ask, is the system so streamlined in the Hindi, Telugu and Malayalam industries? Why, for instance, is the Hindi film industry able to enforce the uploading of films two/three days before the day of release. (Only the digital key is pending, and that is given on the day of release.) But here, the debts keep mounting and the finances are such a mess by the release date that, many times, no one knows if a film will be out even when the ads in that Friday's newspaper scream: "FROM TODAY…"
There is an ethical/moral aspect to all this, which is this question: Should a hero or a director put himself on the line and say, "This film is being sold on my name, and so I will take a big salary only from the back end, i.e. only if the film makes a profit!" But forget this. Many said that financial dealings in Kollywood are so murky — and there are so many non-white transactions — that no one really knows the real numbers a film makes. So heroes are (understandably) reluctant to get into the back-end model.
But the bigger issue seems to be that the thing Aamir Khan said — "so that we can ensure profits for everyone down the chain, the exhibitors, the distributors, everyone" — just does not seem to be a concern here. What we have in Kollywood is the complete ascendance of the hero, at the cost of every other stakeholder, including the producer, without whom there would be no movie. Till about the 1990s, when reputed and respected production houses like AVM were still making films, the hero was allotted some 25-30 per cent of the film's budget. Now, it appears to be 75 per cent. So even if the film ends up making a profit, it's not much, because the actor has already taken most of these profits with him (as his salary), thus hiking up the prices down the line.
And if the film flops? It sets off a chain reaction. The producer who sells the film for a high price to the distributors may end up safe — but those distributors? Some of the people I talked to say that, sometimes, "settlements" are made in private, so news about the losses doesn't spill out in public. (The hero's "image" is thus preserved.) Other times, the distributors exert pressure on the production company's (or the star's) next film, asking for concessions. Almost everyone agrees that this is an unhealthy system — especially at a time when Tamil Nadu theatrical revenues are dwindling.
The formula suggested is this: budget your film so that the "costs" are taken care of by streaming rights, satellite TV rights and overseas rights — so that the theatrical revenues are all profit. That is the Bollywood model. That is why, even when a Zero flops, the stakeholders are not left stranded because Shah Rukh Khan's salary is not built into the cost of the film. If the film didn't do well, it simply means this hero will get less money from the back-end, while the distributors' losses are curtailed. The setback becomes a small one, something that can be dismissed as "It's all part of the business!"
Another suggestion that came from several people: if the star wants a huge salary, let him make the film a home production. (Akshay's Kumar's Hari Om Entertainment produces a lot of his films.) Then, he takes whatever he wants, and external producers are not left bearing the brunt. Almost everyone I spoke to made a point about how the clout of the producer has fallen. Earlier, they put together films with passion, and they were an integral part of a triangle that included the director and the star. Today, with the exception of a few top producers, the rest run after stars for "projects" (or "packages") that — on paper — are purely business propositions: X actor + Y director = Sounds promising! Let the borrowing begin!
The problem isn't with a proven star like Vijay. Even with Vijay's salary, Master looks like a very profitable proposition. (Someone in the trade showed me the math.) The problem is that if one hero inflates his asking price, the others down the line do so, too. It's about perception. It's also a bit of ego. No one wants to be the hero that producers flock to because "he's affordable". The other problem is that, when so much money is given to a star, there's very little you can afford to shell out for the actual production. So you aren't able to hire a quality supporting cast — or, you ask them to slash their rates for the "privilege" of working in a big movie, and the exposure it will fetch them. You come down hard on the technical departments, which is why many recent films that have advertised themselves as being made on a monster budget leave you wondering where the money went. (Rhetorical question: to the hero, of course.)
This might be detrimental to the stars themselves. One person I spoke to gave me an interesting anecdote. When Rajesh Khanna was at the top, Dharmendra was a hit machine, too. But he did not hike up his rate to the astronomical levels that his colleague did, because he wanted everyone to benefit from his films. They did. And Dharmendra's stardom had a much longer shelf life. I was repeatedly told that, in Hindi cinema, producers know the "valuation" of a star. That is, based on previous data, they know exactly how much a hero's film is likely to make in each territory, and this determines the hero's salary. (It probably helps that the heroes, too, seem to be realistic about their "worth", taking pay cuts when films flop and hikes with hits.)
But in Kollywood, the producer's hands are tied. There are a few tried-and-tested producers who can dictate terms and say things like: "Listen, you just don't have the kind of market to demand the salary you want!" (Even if they don't say these exact words, they can get the message across.) But there are so many fly-by-night operators who simply have a ton of cash (note that I said "cash", and not "money") and dream of making a movie with a big hero. If they cannot fork up what the hero asks, then they've lost the chance. Another producer (one of the people I spoke to used the term "sucker") is easily found. But again, why is this a problem only with the Tamil film industry?
One respondent said it's because the stars here are like gods, and there's an inbuilt craze for their films, unlike, say, an Akshay Kumar — for him, if the buzz isn't good, the film may have a "soft" opening. But here, with the top three stars (Vijay, Ajith and Rajinikanth), an earth-shattering opening day is guaranteed. But the same logic could be extended to Telugu cinema, too — their heroes are also gods. Plus, their theatre-going population far exceeds that of Tamil Nadu, which means more numbers of tickets being sold even for flop films. What explains the relatively reasonable salaries of the leading men over there, with the wealth being shared down the line? No one here wants to ask this question. Because if you do, you may lose the hero you are after, the person pulling the strings. He is, today, the sole puppet master.