Hollywood How To: March 2018

Dwayne Johnson, the former pro wrestler, is a rare breed in the entertainment business, a truly bankable movie star. Photo: Mario Anzuoni/REUTERS

A rarely-seen Hollywood term sheet shows Hollywood’s newest superstar will command more than $20 million—plus a cut of profits

By Ben Fritz
In an age when bankable global movie stars are rare and original ideas that can compete with franchise-driven blockbusters are even rarer, “Red Notice” hit Hollywood like a body slam.

The planned action movie starring Dwayne Johnson attracted some of the highest bids of any new movie project in Hollywood in years, according to people with knowledge of the matter.

Ultimately Comcast Corp.’s Universal Pictures bought “Red Notice” based on a 30- to 40-minute pitch, agreeing before the script had been written to make it at a cost of up to $160 million and to pay Mr. Johnson more than $20 million, these people said.

The Wall Street Journal obtained a copy of a term sheet for “Red Notice,” providing a rare level of financial insight into what one of Hollywood’s few remaining global superstars can command for himself and those involved in a film he commits to make.

Pay Day

In a proposal for the in-development movie ‘Red Notice’ that closely mirrored the final deal, Dwayne Johnson would earn $22 million to star, plus profit sharing or bonuses for its performance at the box office.

Salaries

Dwayne Johnson $22 million

$1 million social-media support*

$21 million base pay

Rawson Marshall Thurber $13.75 million†

$750,000 rewrites

$8 million to direct

$5 million to write

Producers $3.8 million

Profit share‡ 50% of profit shared by talent

Johnson 30%

Thurber 10%

Producers 10%

Box-office bonuses‡

$25 million

For each $25 million world-wide box office after movie grosses 2.5 times its budget

$1 million each Johnson, Thurber and producers

Note: Final terms were close to but not identical to those in this proposal, according to people with knowledge of the deal. *Creating and sharing promotional content for social-media platforms †Maximum salary. If writing is shared, salary is reduced by $500,000. Rewrites are up to $750,000 ‡Profit participation and box-office bonuses are "against" each other. The talent gets one or the other, whichever is bigger.

“The terms were very aggressive,” said an executive at a studio that bid unsuccessfully on “Red Notice.” Instances when a studio would pay such generous terms these days are “very rare,” he added.

In the 1990s and early 2000s, bidding wars for hot, original ideas were common, as were $20 million-plus paychecks for A-list stars such as Julia Roberts and Will Smith. That has cooled, however, as studios focus on making movies off the franchises they already control, such as Walt Disney Co.’s Marvel, Warner Bros.’ Harry Potter and Fox’s Avatar. In addition, fewer stars can draw audiences to virtually any film by their name alone, resulting in reduced paychecks.

Among the rare recent exceptions are stars tied to popular franchise characters, like Robert Downey, Jr. as Iron Man.

Mr. Johnson, 45 years old, a charismatic muscle man who rose to fame in professional wrestling as The Rock, has reached the pinnacle of the movie business. His recent hits include “Jumanji: Welcome to the Jungle,” “San Andreas” and several “Fast and Furious” sequels. His only recent miss was “Baywatch.”

He will star in “Rampage,” a film set for release in April that is adapted from a videogame, and July’s action film “Skyscraper.”

He has agreed to fit “Red Notice” into his busy schedule by late 2019, which means it could be released in 2020.

Writer-director Rawson Marshall Thurber pitched his original idea for “Red Notice,” an international cat-and-mouse thriller for which few plot details could be gleaned, to Mr. Johnson over dinner last year in Vancouver, British Columbia, while the pair were making “Skyscraper,” said a person close to the film. Mr. Thurber directed Mr. Johnson in the 2016 comedy “Central Intelligence.”

In February, Mr. Thurber, producer Beau Flynn and an executive from Mr. Johnson’s production company, Seven Bucks, took their pitch to numerous studios. After all expressed interest, they sent a term sheet detailing their financial requests.

Universal didn’t agree to all of the points on the document obtained by the Journal but was close on most, said people with knowledge of the deal.

The term sheet calls for Mr. Johnson to be paid $22 million and 30% of the movie’s profits or box-office bonuses at key benchmarks—whichever number is higher. If the film is a blockbuster like “Jumanji,” which has grossed $922 million world-wide, that could add tens of millions to his paycheck.

Mr. Thurber would receive more than $12 million to write and direct and 10% of the profits or the same box-office bonus as Mr. Johnson.

The producers, including Mr. Flynn and companies controlled by Messrs. Johnson and Thurber, would receive $3.75 million and the same additional payments as Mr. Thurber.

Among the studios interested in “Red Notice” were Time Warner Inc.’s Warner Bros., Viacom Inc.’s Paramount Pictures, Sony Picture Entertainment, and Netflix Inc. Because Netflix movies don’t earn much box-office revenue and it doesn’t share profits, the streaming company likely would have had to pay more than $200 million for “Red Notice,” said a person close to the film.

Legendary Pictures is expected to co-finance the film, reducing Universal’s risk, but also its potential profits.

Write to Ben Fritz at ben.fritz@wsj.com