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I'VE GOT MY SPINE I'VE GOT MY

Eat, Memory: Orange Crush
By YIYUN LI
NY Times

During the winter in Beijing, where I grew up, we always had orange and tangerine peels drying on our heater. Oranges were not cheap. My father, who believed that thrift was one of the best virtues, saved the dried peels in a jar; when we had a cough or cold, he would boil them until the water took on a bitter taste and a pale yellow cast, like the color of water drizzling out of a rusty faucet. It was the best cure for colds, he insisted.

I did not know then that I would do the same for my own children, preferring nature's provision over those orange- and pink- and purple-colored medicines. I just felt ashamed, especially when he packed it in my lunch for the annual field trip, where other children brought colorful flavored fruit drinks - made with "chemicals," my father insisted.

The year I turned 16, a new product caught my eye. Fruit Treasure, as Tang was named for the Chinese market, instantly won everyone's heart. Imagine real oranges condensed into a fine powder! Equally seductive was the TV commercial, which gave us a glimpse of a life that most families, including mine, could hardly afford. The kitchen was spacious and brightly lighted, whereas ours was a small cube - but at least we had one; half the people we knew cooked in the hallways of their apartment buildings, where every family's dinner was on display and their financial states assessed by the number of meals with meat they ate every week. The family on TV was beautiful, all three of them with healthy complexions and toothy, carefree smiles (the young parents I saw on my bus ride to school were those who had to leave at 6 or even earlier in the morning for the two-hour commute and who had to carry their children, half-asleep and often screaming, with them because the only child care they could afford was that provided by their employers).

The drink itself, steaming hot in an expensive-looking mug that was held between the child's mittened hands, was a vivid orange. The mother talked to the audience as if she were our best friend: "During the cold winter, we need to pay more attention to the health of our family," she said. "That's why I give my husband and my child hot Fruit Treasure for extra warmth and vitamins." The drink's temperature was the only Chinese aspect of the commercial; iced drinks were considered unhealthful and believed to induce stomach disease.

As if the images were not persuasive enough, near the end of the ad an authoritative voice informed us that Tang was the only fruit drink used by NASA for its astronauts - the exact information my father needed to prove his theory that all orange-flavored drinks other than our orange-peel water were made of suspicious chemicals.

Until this point, all commercials were short and boring, with catchy phrases like "Our Product Is Loved by People Around the World" flashing on screen. The Tang ad was a revolution in itself: the lifestyle it represented - a more healthful and richer one, a Western luxury - was just starting to become legitimate in China as it was beginning to embrace the West and its capitalism.

Even though Tang was the most expensive fruit drink available, its sales soared. A simple bottle cost 17 yuan, a month's worth of lunch money. A boxed set of two became a status hostess gift. Even the sturdy glass containers that the powder came in were coveted. People used them as tea mugs, the orange label still on, a sign that you could afford the modern American drink. Even my mother had an empty Tang bottle with a snug orange nylon net over it, a present from one of her fellow schoolteachers. She carried it from the office to the classroom and back again as if our family had also consumed a full bottle.

The truth was, our family had never tasted Tang. Just think of how many oranges we could buy with the money spent on a bottle, my father reasoned. His resistance sent me into a long adolescent melancholy. I was ashamed by our lack of style and our life, with its taste of orange-peel water. I could not wait until I grew up and could have my own Tang-filled life.

To add to my agony, our neighbor's son brought over his first girlfriend, for whom he had just bought a bottle of Tang. He was five years older and a college sophomore; we had nothing in common and had not spoken more than 10 sentences. But this didn't stop me from having a painful crush on him. The beautiful girlfriend opened the Tang in our flat and insisted that we all try it. When it was my turn to scoop some into a glass of water, the fine orange powder almost choked me to tears. It was the first time I had drunk Tang, and the taste was not like real oranges but stronger, as if it were made of the essence of all the oranges I had ever eaten. This would be the love I would seek, a boy unlike my father, a boy who would not blink to buy a bottle of Tang for me. I looked at the beautiful girlfriend and wished to replace her.

My agony and jealousy did not last long, however. Two months later the beautiful girlfriend left the boy for an older and richer man. Soon after, the boy's mother came to visit and was still outraged about the Tang. "What a waste of money on someone who didn't become his wife!" she said.

"That's how it goes with young people," my mother said. "Once he has a wife, he'll have a better brain and won't throw his money away."

"True. He's just like his father. When he courted me, he once invited me to an expensive restaurant and ordered two fish for me. After we were married, he wouldn't even allow two fish for the whole family for one meal!"

That was the end of my desire for a Tangy life. I realized that every dream ended with this bland, ordinary existence, where a prince would one day become a man who boiled orange peels for his family. I had not thought about the boy much until I moved to America 10 years later and discovered Tang in a grocery store. It was just how I remembered it - fine powder in a sturdy bottle - but its glamour had lost its gloss because, alas, it was neither expensive nor trendy. To think that all the dreams of my youth were once contained in this commercial drink! I picked up a bottle and then returned it to the shelf.



MOVIES
from Slate.com

Gross Hysteria: Do the studios really overpay top talent like Peter Jackson?

Studio executives are hardly clueless when it comes to negotiating contracts with A-list talent, although the popularity of The-Moguls-Must-Be-Crazy stories in the media would have you believe otherwise. Examples abound: The Wall Street Journal reported that, "In order to sign actress Cameron Diaz and director Nancy Meyers, the [Sony] studio had planned to offer both women a share of the movie's gross box-office revenue from its first day of release on. It is a practice known as 'first-dollar gross' and it's standard fare for top-tier talent." Variety reported that "20 percent of the gross [of King Kong] is going to [Peter] Jackson." Wired reported that, "A deal worth $20 million against 20 percent of the box office gross [is] the kind of contract Tom Cruise or Tom Hanks generally get."

In fact, the Hollywood studios never give participants—not even gross players as powerful as Arnold Schwarzenegger, Tom Cruise, Tom Hanks, Jerry Bruckheimer, Steven Spielberg, or Pixar Animation Studios—an unadulterated percentage of the box-office gross, or the video store gross, or any other retail gross. As one top Viacom executive explained, "The first truism of Hollywood is 'Nobody gets gross—not even a top first-dollar gross player.' "

What the top gross players do get are two kinds of compensation: fixed and contingent. The fixed part is the upfront money that gross players are paid whatever happens to the movie. The contingent part is the percentage of a pool called the "distributor's adjusted gross" in Hollywood lawyer lingo. The players get their share of this pool after certain conditions are met, such as the movie earning back the amount of fixed compensation or reaching a contractually defined cash break-even point. The pool is "filled" with the money that the studio's distribution arm collects or, in the case of DVDs, gets credited with. With movies, the pool (eventually) gets the remittance from theaters (anachronistically called "rentals" from the days when movies were rented to exhibitors) left over after the theater owners deduct their share of ticket sales and house allowance and after the distributor deducts "off the top" expenses such as check collection, currency transfers, stamp taxes, duties, and trade-association fees.

With DVDs, the pool gets the "royalties" paid by the studio's home-entertainment arm to its distribution arm. It's a remarkable exercise in self dealing and produces an amount that represents only a small fraction of the studio's actual revenue. The standard DVD royalty is 20 percent of the wholesale price, but a few of the very top stars get a royalty as high as 40 percent. (There is also an alternative arrangement called 100 percent accounting, in which the pool is credited with the home-entertainment arm's total proceeds minus its manufacturing and packaging costs, but this is usually reserved for only full-fledged partners such as Pixar.) In the case of TV licensing, the pool gets the license fee minus the "residuals" paid out to actors, directors, writers, and guild pension plans.

To see how these "gross" participations work in practice, look at Arnold Schwarzenegger's 33-page contract for Terminator 3, which is still considered the gold standard for the super-gross players. For his fixed compensation, Schwarzenegger received $29.25 million—then a record sum. He got the first $3 million upon signing and the balance during the course of principal photography. His "contingent" compensation was 20 percent of the "adjusted gross receipts" of the distributors (Warner Bros. in the United States; Sony Pictures and Intermedia abroad). The "adjusted" part of the equation allowed the studio to deduct the items specified on Page 3 of the contract: "All industry-standard and customary off-the-top exclusions and deductions—i.e. checking, collection conversion costs, quota costs trade association fees, residuals, and taxes." Schwarzenegger's lawyer, Jacob Bloom, is without peer in the entertainment business, but the best he could do here was to cap some of the collection charges at $250,000; he could not touch the residuals or tax deduction. Bloom did manage to get the all-important DVD royalty contribution to the pool raised to 35 percent (although only for Schwarzenegger). As good as this was, it meant that Schwarzenegger was entitled to only 7 percent of what the studios took in from their DVD sales.

Schwarzenegger's contingent compensation would not kick in until the film met the break-even point defined in the contract (click here to see how his contract defines cash break-even). Although the film achieved a $428 million world box-office gross, it just barely reached its cash break-even point, so alas, Gov. Schwarzenegger has earned only a pittance so far from his gross participation beyond his $29.25 million payday. Tom Cruise got a more immediate slice of the action for Mission: Impossible II. In return for his producing, acting, guaranteeing against cost overruns, and paying other gross players their share—including director John Woo's 7.5 percent—Cruise's production company got 30 percent of Paramount's adjusted gross receipts. Since the DVD royalty going into the M:I-2 pool was calculated at 40 percent royalty, Cruise would end up getting 12 percent of the DVD revenue. As part of his unique deal, Cruise did not take upfront fixed compensation (other than the minimum required by the Screen Actors Guild), and, in return, his 30 percent contingent compensation was not deferred until a cash break-even threshold was met.

In this light, Peter Jackson's compensation for King Kong was a relative bargain. Universal paid $20 million in fixed compensation to Jackson's production company not only for his directing services, but also for the scriptwriting and producing services of his collaborators Fran Walsh and Philippa Boyens. (The Terminator 3 budget for script, producers, and directors exceeded $34.5 million.) And, making a sweet deal even sweeter, the New Zealand citizenship of Jackson and his team qualified Universal for a cash subsidy from the New Zealand government that could be as high as $20 million (and by itself could pay Jackson's entire fixed compensation). In addition, once the fixed compensation is earned back, Jackson's company also gets 20 percent of Universal's adjusted gross receipts, which means it will get at least an additional $20 million from movie rentals (which now have passed $200 million worldwide) as well as a huge payoff from future DVDs and TV rights.

Such deals are costly, but not crazy. The studios' business nowadays is entirely driven by one or two huge franchises that serve as worldwide licensing platforms. And the most predictable producers of these windfalls, such as Steven Spielberg, George Lucas, Tom Cruise, Jerry Bruckheimer, and Peter Jackson, are all gross players represented by savvy lawyers and agents who know all the ropes of the movie business. To be sure, not all their projects turn out to be billion-dollar franchises, but they have little downside. Look at King Kong: The upside for Universal was a Midas-touch licensing franchise that would enrich the studio with billions in revenues for years to come. But even if that gamble fails and there are no ape sequels, the studio will lose little if any money on the movie itself—even with Jackson's generous deal. In this big-stakes game, it makes great sense for the studios to recruit the best gross players, as long as the gross they give away is not really the gross.

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