HOLLYWOOD: Mad Money

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The most thunderous roar to come out of the West in recent years has been caused by Hollywood stars stampeding toward that newer, more refreshing substitute for the old water hole—the tax hole. As stars went into business for themselves or took percentages instead of salaries, Hollywood's finances have become more spectacular and complex than its love life.

Of all the financial dipsy-doodling, none is more involved than a deal set up by a pair of film writers named Martin L. Rackin and John Lee Mahin. Ten months ago the team found a loose option on Harold Sinclair's Civil War novel, The Horse Soldiers, snapped it up for a token $1 (eventually they paid $30,000 for the book). Looking around for a director, Entrepreneur Rackin went to the best. "For the hell of it, I called John Ford." Before long, Director Ford, a Civil War buff, agreed to do the picture for a $200,000 flat fee plus 10% of the gross after the movie has earned back its production costs.

What about a star? "One night we went over to Ford's for dinner and found 'Duke' [John] Wayne there," recalls Rackin. The Duke joined up for $750,000 and 20% of the net, and later Bill Holden was only too willing to come in on the same ducal terms. Of the rest of the pie, 20% each went to the backers of the whole deal (Mirisch Co.), to the distributor (United Artists), and to Mahin-Rackin. Said Wheeler-Dealer Marty Rackin as Horse Soldiers was being readied for release: "Hollywood's gone crazy. It'll have to find its level again when all this dies down."

Two other notable examples of Hollywood's crazy finances:

¶ According to Hollywood scuttlebutt, Gary Grant has turned the tables on Universal-International. Instead of taking a percentage from the studio for his current film, Operation Petticoat, Grant is said to have persuaded the studio to take a percentage from him (10% of the gross) while he produces the picture.

¶ For appearing in Bridge on the River Kwai, William Holden agreed to 10% of the gross, but for tax reasons wanted it paid to him at the rate of only $50,000 a year. The picture has already made so much money (between $20 and $30 million) that Holden's share now stands at between $2,000,000 and $3,000,000. Not only will it take 40-year-old Holden at least 40 years to get the last of his money, but Columbia can in the meantime invest it and make well over $50,000 a year, thus in effect having got Holden's services in Kwai for nothing.