Every major studio has a specialty division that develops smaller movies. And the New York Times suggests Randy Quaid's lawsuit over Brokeback Mountain is a sign of trouble for them. Why should actors take cut-rate pay to make a movie when the studio has every intention of putting its full marketing muscle behind the film and could reap big rewards? (Brokeback will easily earn $300 million worldwide via box office, DVD, TV sales, etc.) The NYT is juggling several different issues and none of them seem to really apply or make sense.
1. These movies are labors of love, not studio profit centers -- movies like Brokeback Mountain don't get made because of studios. They get made because actors and directors and writers have pet projects, labors of love they yearn to film. Brokeback languished for years, even with major talent willing to work for cut-rate pay. So the idea that Universal saw Brokeback as a potentially huge money earner but wanted to squeeze every penny out of the actors to make it even more profitable is silly.
2. Net profits -- Randy Quaid apparently was given some "net points" on the movie. As every single person in Hollywood knows, "net points" are virtually meaningless trinkets, handed out as symbolic gimmes to make people feel good. (Screenwriters and minor actors like Quaid are the sort of people who get net points.) Everyone knows virtually no film EVER delivers a net profit, no matter how much money it makes. Stars with real power get gross points and even "first dollar gross points" and huge upfront salaries. An actor like Randy Quaid would never expect to participate in a movie's profits on any level. The salary he receives is the only money he will ever make and he knows it, his lawyers know it and the studio knows it, even if they placate his ego with some "net points." Quaid never has and never will get a piece of the back end. The idea that he should do so for a movie in which he appears onscreen for maybe five minutes is ludicrous. A really big star making a small movie might have called for a bonus if say it grossed $50 million at the box office. Thus, no problem. They make the film and if it clicks, they make more money.
3. Ira Deutchman, a longtime industry player, says "If, in fact, the smaller movies don't pay off for talent even when they hit, the studio arthouse divisions will stop being able to make the movies. They'll fall into the same trap as the parent companies: if no one believes there's a back end, then actors will want higher and higher salaries to be in those movies." I disagree. The entire budget for the cast was $500,000, a very tiny amount. But whatever the actors were paid, I'm certain that's all they ever expected to make. They made the movie for the chance to work with a world class director and tell a story they were passionate about. Anne Hathaway got to break out of her Disney princess mold. Michelle Williams became an Oscar nominee and confirmed her great taste and burgeoning profile. Jake Gyllenhaal (who needed the film the least, I'd argue)garnered his first positive reviews since The Good Girl in 2002, helping people forget the popcorn trash of The Day After Tomorrow, the flop art film Proof and the dead on arrival war film Jarhead. Heath Ledger -- whose entire film career has been marked by flops with the minor exception of Monster's Ball in which he had a supporting role -- became an Oscar nominee and a leading man with exceptional reviews and the world as his oyster. And Quaid? His recent credits include Treasure Island Kids: The Battle of Treasure Island, Christmas Vacation 2, Kart Racers, Grind, The Adventures of Pluto Nash, Not Another Teen Movie and on and on. His only respectable role in years was on Robert Altman's flop TV series Gun. In 2005, he turned his back on all that crap, starring as Col. Tom Parker in the Emmy-nominated but so-so rated TV movie Elvis, the flop movie Ice Harvest (which at least had fine talent, including John Cusack) and Brokeback. His next two projects? Movies directed by Richard Linklater and Milos Forman.