How do celebrities get paid?

So we hear on the news that Brad Pitt pocketed $30 million or whatever to star in the latest movie. Or, a star athlete gets a $20 million signing bonus in his contract. In what form do they receive this payment? Is it literally a check or balance transfer for $x million to their bank account? Or does it go to some accountant type person who invests it for them?

Not that I’ve been privy to such, but in your example I’d imagine that the $20 million or some such is partially cash (or checks or what have you like a signing bonus), partially a portion of expected returns from ticket sales and DVD sales, and partially a portion of distribution royalties. I really don’t think that they get it all up front. I’d bet that it’s a total of all the monies to be paid over the lifetime of the project.

Rock stars on the other hand get paid in cash or checks, usually up front if they’re smart about it.

It can be pretty complicated, especially when you get into huge dollars and complex deals. Cluricaun is right that the big deals usually involve a schedule of payments at different points in the process, the actual money paid often depending on certain variables. But even in complicated arrangements, there usually is some substantial money paid up front as a direct cash payment to the celeb.
That money, and all future money in the deal, usually is paid in the form of a check to the celeb’s agency or management company. The agency then deposits that check in its own account (the celeb has given them the authority to receive his money) and writes the celeb a new check, minus the 15% or so commission. So the celeb’s checks often are from William Morris or whatever agency and not from the studio or venue that is paying him.

For information on how rock stars get paid (and exploited by their record companies), see “Courtney Love does the math”.

That’s a very disturbing article. I can’t understand why the top musicians don’t all get together and form their own label. I’ll bet the public would support the heck out of them. I know I would.

Courtney Love does need to learn what sharecropping is if she’s going to keep using the word, though. She probably thinks of sharecropping as it was 100 years ago, not as the useful win-win arrangement it is today.

Star athletes with huge contracts get a paycheck. I know a guy who got his multi-million dollars per season as a paycheck from the team for about $220,000 every two weeks!

The “music industry exploitation of musicians” story is nothing new. Years ago, the band TLC did a lovely rendition of the “new math” in their VH1 “Behind the Music” segment.

You would think that a record label with a model similar to the one that created United Artists might be successful, but wasn’t A&M Records founded by musicians too? And IRS? I’ll bet that they devolved into the same-old same-old too.

This is in a different vein, but I recall when Carson had the Tonight show a guest would sometimes joke about the pay they received for appearing. They referred to it as “scale” and the figure $300.00 was mentioned a few times. I assume that’s what all Tonight guests rec’d. back then. Of course most guests are there to promote themselves, in one way or another.

Back to the OP. In the writing world the publisher writes the checks to the author’s agent. The agent then takes a percentage (usually 15%) off the top and writes a new check to the author for the smaller amount. All future checks for royalties are handled the same way.

Movie stars usually have a manager and an agent (who might or might not be part of the same firm). I have to assume that the check is written to whichever of them is specified in the contract. Yes, $20 million checks do get written, although direct electronic transfer may also happen these days. The one who gets the check - let’s say the manager - has an account in the name of the celebrity. Further checks - or transfers - are made to the agent and the publicist and anyone else who gets a cut. Then either the celebrity draws off the master account or has the money transferred into yet another personal account or to an investment account.

Although it’s a bit more complicated than getting a regular paycheck, there’s nothing basically different except that one more step is added and that the numbers are larger.

A lot of it is based on status. Stars like Brad Pitt and Tom Cruise can get share of the GROSS profits and this is a huge difference.

But the stars get tons of perks, for instance even “C” level stars are able to command salaries for their staffers. This alone is of great benefit. They often get “intangable assets too.” For instance if Brad Pitt takes less he gets script control or control over his next few projects.

Musicwise, the first lp of a group is a throw away. That is why the second LP is always rushed because the group or singer no longer fronts the costs. For instance usually a singer or group must pay back the costs of making the first lp if any monies are made. But not so on second and third lps. (Of course this is changing with the internet etc)

But cry for them not. One super hit can set you for life. Steve Kipner who wrote the lyrics for “Physical” (Olivia Newton-John) received over 3 million for that song alone. And writers are at the bottom so you can imagine what Olivia Newton-John made off that one song alone.

Also remember contracts are not uniform. I recall a major issue with the GoGos was they agreed to split the profits of the songs equally. But this issue was 2 of the members wrote the songs as well as played on the records.

Those two were under the impression the songwriting profit was seperate from the recording profit. And that was a big problem

Darren Hayes says that not even half way thru the second LP of Savage Garden “Affirmation” his partner “Daniel Jones.” Darren said he begged him to finsh so he could go on to a solo career. Jones agreed, and did nothing basically while Hayes finished the lp and did all the singing and absolutely 100% of the promotion. He said it became an issue when the CD “Affirmation” sold millions and Jones still got half the profits for doing basically nothing.

So no one in the business today needs to cry. Most of these people are broke because of drug use or huge entourages. MC Hammer had over 300 people employed by him at near 6 figure salaries. No wonder he went into financial ruin.

The real suckers were before the studio system broke down in the 50s. Those people were salaried and whether they made one or one hundred movies or regardless of the profit they were paid the same. Sound like most peoples jobs doesn’t it.

Movie actors did once. Started their own movie company. You may have heard of it: “United Artists”? As I recall, Mary Pickford, Douglas Fairbanks, and Charlie Chaplin were among the founders.

And regarding the OP, many sports celebraties have contracts that specify that they get paid over many years into the future. Especially true of those with smart agents. After all, their employable lifetime in sports may only be a few years, there are tax benefits to spreading out their paychecks over many years, and many of them are at an age where they aren’t very good about saving for their futures.

For example, Mn Vikings player Herschel Walker played for only 1989-92, but supposedly still receives payments from the Vikings, and will for about 3 more years.