Even when facing Walt Disney, one of Hollywood's Big Six companies, and the industry's golden producer Jerry Bruckheimer, with the box office success of "Pirates of the Caribbean: The Curse of the Black Pearl" as a prerequisite, Matthew, Johnny Depp, and Keira Knightley all held the advantage in their contract renewal negotiations.
For main actors like them who appear on screen, their negotiating leverage is even much greater than that of director Gore Verbinski.
Having finally secured a hit film that is poised to become a series, both the actors and their agents naturally want to earn as much as possible.
However, Disney Pictures and Jerry Bruckheimer Films, as the production and investment companies, naturally want to keep salaries low to avoid astronomical budgets for sequels.
While sequels to hit movies often succeed, no one can guarantee 100% success, and higher investment also means higher risk.
Matthew was unaware of the specific negotiation details for Johnny Depp and Keira Knightley, but his own negotiations with Disney Pictures, handled by Helen Herman, had been difficult, with the only real point of contention being the amount of his salary.
Helen Herman initially asked Disney Pictures for a $12 million salary for Matthew, which Disney Pictures naturally could not agree to, as Johnny Depp's salary would certainly be no less than Matthew's, and Keira Knightley's would not be far behind.
If Matthew's asking price of $12 million were accepted, it would inevitably trigger a chain reaction in salaries; Johnny Depp's star power and character popularity are higher than Matthew's, so his salary would definitely be a tier higher, and Keira Knightley is now also a second-tier actress, holding the title of female lead, and even if actresses generally earn less than actors, it would still amount to a very substantial figure.
With the salaries of just three main actors exceeding $40 million, Disney Pictures would find it difficult to bear.
Moreover, this was only the asking price for the second film; although the second and third films were shot back-to-back, actors and agents wouldn't be foolish enough to demand the same salary for the third film as for the second. The third film's salary would definitely be an increase over the second's, which is normal industry practice and something Disney Pictures couldn't refuse.
Helen Herman's asking price for the third film's salary was $16 million!
That's right, she demanded $16 million from Disney Pictures for Matthew. If Disney Pictures agreed, Matthew's income would undoubtedly place him in the A-list.
Such an offer was, of course, unacceptable to Disney Pictures.
Therefore,
The salary negotiations between the two sides had been a protracted tug-of-war, with bargaining and haggling lasting for three months.
Just like labor-management negotiations, money always remains the key factor.
After three months of back-and-forth, Matthew's side, represented by Helen Herman, finally reached an agreement with the co-producers, represented by Disney Pictures.
Then, Matthew signed the agreement.
This was an actor's contract over a hundred pages thick, with clauses detailing everything from eating and drinking to sleeping, and the core of it, naturally, was the compensation.
To reduce upfront budget and investment risk, Disney Pictures proposed paying Matthew with a base salary plus back-end participation, with the base salary set at $8 million, which fully met Matthew and Helen Herman's expectations.
Given Matthew's star power and actual appeal in the industry after the box office success of "Pirates of the Caribbean: The Curse of the Black Pearl," it was very reasonable for him to receive a $6 million salary in a commercial film with a relatively ample budget. However, when starring in a sequel, salaries automatically increase by about 20%, making $8 million perfectly fair and reasonable.
However, the first film in the series was so successful that it gave the lead actors the leverage to demand higher prices. Although Disney Pictures was reluctant, they appropriately agreed to Helen Herman's condition of "reducing the base salary but including back-end participation."
However, the sharing percentage was very low: one percent of the box office revenue once the North American box office reached the break-even point, two percent if it exceeded $300 million, and a maximum of two percent.
Then came the salary for the third film. The calculation method for the third film's salary was more complex; Matthew himself took a long time to understand it after seeing the contract, even with Helen Herman's simplified explanation.
To put it in Helen Herman's concise words, Matthew's salary for the third film was directly tied to the box office performance of the second film.
His base salary was $11 million, and if both the North American and global box office of the second film exceeded that of the first, it would automatically increase by $3 million.
There was also back-end participation, with the threshold for both parties remaining the break-even point. If the film's North American box office reached the break-even point, the participation would be the same as for the second film, with the difference being the addition of a special clause!
If the North American box office of the second film exceeded $400 million, Matthew's participation percentage would break through the two percent cap and reach three percent.
There were also other revenue-sharing agreements, such as for television, DVD, and online streaming, but the percentages were all very low, none exceeding one percent.
Of course, at the time of signing the agreement, the contract clearly stated the cost figures, using Disney Pictures' already announced budget as the standard: the second film's budget was $225 million, and the third film's was as high as $250 million.
Lowering upfront salaries and appropriately incorporating back-end participation was the desired outcome for Disney Pictures, as it could effectively control investment scale, reduce unnecessary risks, and firmly tie the stars to the project.
Similarly, this was also the result of Matthew and Helen Herman's numerous discussions. While it seemed like a concession, with a reduction in the guaranteed upfront salary, Matthew knew that the "Pirates of the Caribbean" series had more than three films, and these two sequels must have been hugely successful.
He and Helen Herman requested a North American box office share, not a North American box office profit share. North American box office figures are compiled by numerous authoritative organizations and publicly announced by the North American Theater Owners Association. Even if the North American box office share percentage is significantly lower than profit share by several multiples, there is no need to worry about Disney Pictures manipulating the profit figures.
The latter two sequels were also produced by Disney Pictures, with promotion and distribution handled by Disney Pictures and Buena Vista Pictures, a subsidiary of Walt Disney. Many expenses were simply transfers from one hand to the other, making it very convenient for Walt Disney to do whatever they wanted.
The Hollywood Big Six companies have excellent reputations, but when they decide to exploit someone, they show no mercy.
Under normal circumstances, it's not difficult for a Hollywood star of Matthew's caliber to participate in the film's back-end revenue, but demanding a North American box office share is very difficult. However, "Pirates of the Caribbean: The Curse of the Black Pearl" was too successful, and the characters played by Matthew and Johnny Depp were too popular, putting Disney Pictures in a relatively passive position during negotiations.
Additionally, Helen Herman also gathered some information regarding Johnny Depp and Keira Knightley: Johnny Depp's salaries for the two sequels were $15 million and $20 million respectively, while Keira Knightley's were $4 million and $5 million.
As for whether the two had back-end participation, that was a trade secret, and Matthew and Helen Herman didn't know.
Just like Matthew's contract, aside from the base salary, the back-end agreements were all confidential clauses, and he couldn't disclose them casually to outsiders.
From the salaries, it's also clear that Matthew, Johnny Depp, and Keira Knightley were in three different tiers. Johnny Depp, being the most popular and highest-ranking, received A-list star treatment. Matthew, due to the sequel, could be said to be upper-second-tier.
Keira Knightley is also second-tier, but Elizabeth Swann's reputation is not great, and she is a female actress, so these figures basically reflect her true worth.
Even as second-tier actors, it's normal for female stars to earn half as much as male stars. Unequal pay for equal work between genders is a Hollywood norm, and actresses generally receive less favorable treatment than actors.
Take the $20 Million Club, for instance; only Julia Roberts has achieved it in Hollywood history, and yet, when she subsequently filmed new projects with male stars who were not as high-ranking as her, her salary had to be reduced to below that of the male lead.
This is the reality of Hollywood; let alone Keira Knightley, even the most powerful and representative actresses in Hollywood today are powerless to fight against it.
After Disney Pictures finalized the actor contracts for Matthew, Johnny Depp, and Keira Knightley, they convened a press conference to officially announce that Jerry Bruckheimer, Gore Verbinski, Johnny Depp, Matthew, and Keira Knightley, among other key creative personnel, would return for the "Pirates of the Caribbean" sequels, with the second and third films scheduled for release in the summer of 2006 and 2007, respectively.
"I'm very happy to return to 'Pirates of the Caribbean'; it will be a great journey," Matthew said to reporters, looking eager to get back to the set. "The crew has the best director, the best actors, the most outstanding cinematographers..."
He generally praised everyone in the crew, and finally said, "I believe 'Pirates of the Caribbean' will definitely become one of the most successful film series in cinematic history!"
After saying this, Matthew did not address reporters' questions about whether he and Keira Knightley would reconcile. He turned and left the press room, entering the adjacent conference room one after another with Johnny Depp.
"Hi, Keira." Matthew met Keira Knightley, who had arrived earlier, as he entered the room. He looked at her and said, "You're tanner than before."
Keira Knightley naturally replied, "I got tanned on an outdoor set."
Matthew leaned in closer and asked in a voice only they could hear, "Are you free tonight?"
Keira Knightley hesitated for a moment, then slowly shook her head, "My flight back to London is at six."
Jerry Bruckheimer then walked in and said loudly, "Everyone, we're going to start working together again. I only have one thing: you must coordinate your schedules. Filming is tentatively set for late 2004 to 2005. Once I finalize the specific timetable, I'll have someone send it to your agents."