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Arnold Schwarzenegger and the Art of Re-invention
The icon's greatest financial film success came from his riskiest bet: the comedy "Twins".
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Today, we are talking the strategy behind Arnold Schwarzenegger’s film career.
Also this week:
Will Apple buy Disney?
Community Notes, explained
And them fire X/tweets (including a cat pyramid)
Edmund Hillary and Sherpa Tenzing Norgay were the first people to climb Mount Everest.
Remarking on the 1953 achievement, Hillary said “While on top of Everest, I looked across the valley towards the great peak Makalu and mentally worked out a route about how it could be climbed. It showed me that even though I was standing on top of the world, it wasn't the end of everything. I was still looking beyond to other interesting challenges.”
Hillary's mentality of always seeking out a new challenge is specifically cited by Arnold Schwarzenegger in the Netflix series Arnold, which I recently watched with my wife (it took 8 weeks of negotiation to get her to pause her South Korean drama binge-watching).
The three-part documentary on Schwarzenegger covers each of the main careers he has conquered: bodybuilding (4x Mr. Universe, 7x Mr. Olympia), acting ($4B+ in lifetime box office) and politics (Governor of California). He gives extensive interviews and sheds light on his successes as well as his personal failings.
In addition to an insane work ethic, Schwarzenegger was very strategic about his career choices. One of the best ways to understand his approach is the 1988 comedy Twins, which made Schwarzenegger — aka “The Austrian Oak” (aka one of the best nicknames ever) — the most money of any of his films. Yes, even the legendary action ones.
To break it down, let’s look at:
Schwarzenegger’s early career
The making of Twins
The art of re-invention
Schwarzenegger’s early career
Arnold Schwarzenegger was born in Austria in 1947. He began bodybuilding in his teens and won his first Mr. Universe pro competition in 1967. A year later, he moved to the United States and started his long journey to Hollywood stardom.
One of his idols — British bodybuilder Reg Park — had achieved success playing Hercules in feature films. Similarly, Schwarzenegger dreamed of an acting career while dominating the sport of bodybuilding throughout the 1970s.
Schwarzenegger’s first role was as Hercules in the 1970 film Hercules in New York. He was paid $12,000 and wasn’t credited with his real name (they called him “Arnold Strong”).
Spoiler alert: the film was a bust.
What was Schwarzenegger’s first hit? The legendary 1977 film Pumping Iron (my university roommates and I used to pre-drink while this DVD was playing in the background). However, it was a documentary of Schwarzenegger preparing for a Mr. Olympia competition and not a “starring” role per se.
The first real acting win for Schwarzenegger wouldn't happen until 1982, when he starred in the fantasy action film, Conan the Barbarian. With a much larger profile at the time, he was paid $250,000 and the flick made $69m on a $20m budget.
It was a breakthrough but Schwarzenegger — writing in his memoir “Total Recall” — says he immediately started eyeing the next challenge (the puns in this book title are incredible; Schwarzenegger is “recalling” his life, starred in a film called Total Recall and became Governor of California after a recall election):
…I no longer wanted to be just Conan. The whole idea of making a few Hercules-type movies and then taking the money and going into the gym business like Reg Park went right out the window. I felt I had to aim higher.
I said to myself, “what if I go all out? Really work on the acting, really work on the stunts, really work on whatever else I need to be onscreen. Also market myself really well, market the movies well, promote them well, publicize them well. What if I shoot to become one of Hollywood’s top five leading men?”
The idea was this: In every film, try to expand the audience by 10%. What sounds statistically minuscule came to be, over the course of several films, significant, building Schwarzenegger’s fan base much the way compounded interest swells a savings account.
The plan was aided by the fact that Schwarzenegger did not need to rely on acting to pay his bills. During the 1970s, the champion bodybuilder had invested his prize winnings into a mini-real estate empire.
While Schwarzenegger did do a sequel to Conan, it was his next film choice that really put the strategy of "expanding the audience by 10%" to the test: The Terminator.
Schwarzenegger was originally interested in playing the protagonist but the film’s young writer and director — James Cameron — convinced him to play a robotic villain (wild side note: the studio wanted O.J. Simpson to play the Terminator, but Cameron said he was "too nice").
Why did Schwarzenegger agree to the re-invention? Well, Cameron is clearly persuasive. But Schwarzenegger also felt the role emphasized his face (not just his super-jacked body) and turned his perceived weaknesses into strengths (his stiffness and so-so English skills were a perfect match for a time-travelling killer robot).
Although he did not need the money, Schwarzenegger said that he tried to at least double his salary for every role, and The Terminator paid him $750,000. The film made $78m on a $6m budget and Schwarzenegger became a Hollywood cultural icon, saying one of the most famous film lines ever ("I'll be back").
In the following years, Schwarzenegger became a full-blown action star. Motivated by competition with Sylvester Stallone (who was flying high with the Rocky and Rambo series), he starred in a number of action hero roles that paid him seven-figure salaries. The films all had universal themes — good vs. evil, revenge, survival — that were easily understood in international markets.
Commando (1985), $1.5m salary: His character John Matrix is as an everyday family man, who also happens to be a retired Special Forces officer with a witty one-liner for every person he kills.
Predator (1987), $3m: His character Major Alan "Dutch" Schaefe leads a team to fight an alien in a jungle location.
The Running Man (1987), $5m: While this film had a lot of on-set drama — including a director change — the original concept was based on a Stephen King story and involved a lot of social commentary.
Red Heat (1988), $5m: Towards the end of the Cold War between the USA and the USSR, he played s a Soviet cop who teams up with a Chicago cop (this was the first American film that was allowed to shoot in Moscow’s Red Square).
An example of Schwarzenegger turning down a role that didn’t fit his roadmap is Universal Soldier, a film about android soldiers that hued too closely to The Terminator (Jean-Claude Van Damme took the role).
Despite the successes, Schwarzenegger felt he was pigeon-holing himself as an "action star" and wanted to branch out.
So, he found a new challenge.
The making of Twins
After The Running Man, Schwarzenegger was skiing in Aspen and met comedy director Ivan Reitman. Schwarzenegger introduced himself and said "I can be a Ghostbuster, too," referring to Reitman's legendary 1984 comedy.
Comedy was the next re-invention.
In Hollywood, there is a concept known as the “Four Quadrants”, which looks at demographic groups along two axes: age (over/under 25) and sex (male/female). Schwarzenegger’s string of action films really only appealed to the 1st quadrant, which is males under 25 (I previously wrote about how Titanic is a “Four Quadrant Blockbuster”).
As Schwarzenegger delved deeper into the Hollywood scene, he began spending more time with comedians and realized that humor was essential for broadening his audience.
He writes in his book:
With action movies…50% of the critics will automatically say, “I hate action movies. I like love stories. I like movies you can take the family to see. This guy just kills people, and kids watch it, and then they go out on the street and kill people.”
Starting with something disarming and funny is a good way to stand out. You become more likable, and people receive your information much better.
Schwarzenegger eventually convinced Reitman to be his comedy steward. The pair recruited comedian Danny Devito to star opposite Schwarzenegger as his long-lost “twin brother”. It was an absurd premise but there was potential for serious humor.
A standard package for all three would be very expensive. Therefore, the trio negotiated for significant back-end points in exchange for very little guaranteed money (if Schwarzenegger took no salary, then it would not really count against his “double my salary every film” strategy).
Schwarzenegger explains in “Total Recall”:
The deal we ended up with guaranteed the three of us 37.5% of all the income for the movie. And that 37.5% was real, not subject to all the watering-down and bullshit tricks that movie accounting is famous for. We divvied up the 37.5% among ourselves proportionally based on what each of us had earned on his previous movie. Because I’d been paid a lot for The Running Man, I ended up with the biggest slice, almost 20%. It made the math simple: if Twins was a decent-sized success and made, say, $50 million, it would put almost $10 million in my pocket.
With the deal in place, the film cost $20m to make (instead of $60m if each of the three main players were paid at their market rates).
To hammer home how absurd this action-to-comedy transition must have looked in the late 1980s, here are thumbnails of Schwarzenegger’s main characters in the lead-up to Twins.
If you watch the 1977 Pumping Iron documentary, you can tell that Schwarzenegger has a great sense of humor in his bodybuilding days (never forget the scene comparing bicep curls to orgasms).
But could he make funny work for a full-length film?
Spoiler alert: Yes.
Released in December 1988, Twins was a smash hit and made $216m in global box office. Schwarzenegger’s take — not including future points on TV, home video and DVD rights — was $40m+ (that’s over $100m in 2023).
Aside from the financial windfall, Twins allowed Schwarzenegger to explore different genres. Over the next decade, he continued to pull eye-watering salaries for comedy, action, sci-fi, comic-book and holiday films:
Total Recall (1990): $10m salary (So many good one-liners)
Kindergarten Cop (1990): $12m (Not my fave)
Terminator 2 (1991): $14m (My vote for greatest action movie ever)
Last Action Hero (1993): $15m (This film bombed so bad that he called up James Cameron to help him recover…and they made the legendary True Lies).
Junior (1994): $15m (Schwarzenegger teamed up with Reitman and DeVito again to play the “world’s first man to give birth”…another wild re-invention)
True Lies (1994): $15m (CLASSIC!!!!!!!)
Jingle All The Way (1997): $15m (True holiday comedy banger)
Batman & Robin (1997): $30m (this set an all-time record for Schwarzenegger, who played the ridiculous Mr. Freeze)
Looking back, Schwarzenegger’s comedy re-invention was a huge risk but perfectly executed from his post-Conan plan: expand the audience. He went from muscles to sandals to villain to action hero to comedy to — eventually — Governor of California in 2003.
The art of re-invention
Reading about Schwarzenegger’s acting journey made me think of three related ideas around creative re-invention:
Don’t let the audience dictate your next move: Super-producer Rick Rubin believes that the artists should follow their own taste and create for themselves first:
“[You] can’t second-guess your own taste for what someone else is going to like. It won’t be good. We’re not smart enough to know what someone else will like. To make something and say, ‘well, I don’t really like it but I think this group of people will like it’, I think [that approach] is a bad way to play the game of music or art.”
If Schwarzenegger did what the audience wanted, he would probably have just done ten more Hercules or Conan films. It was risky to do Twins, but that’s where his taste took him.
Less competition when you try something different: The best examples of re-invention in entertainment are probably pop stars like Prince, Madonna and David Bowie. Each album provided a canvas for a new look and sound. Bowie’s story is instructive. Prior to his major breakthrough with the Ziggy Stardust character in 1972, Bowie spent more than a decade as an unknown artist.
“During the 1960s he was always slightly behind the curve, always slightly after the event, which meant that whenever he tried something new, it had already been done before,” writes biographer Dylan Jones. “So when he dressed up as a soul star, a dandy, a moody long-haired singer-songwriter, nobody took much notice.”
Ziggy Stardust was something new and Bowie found continued success for decades by re-inventing himself every 18 months (instead of just re-hashing Ziggy over and over, which he easily could have done).
Likewise, Schwarzenegger did not want to be typecast and play the same role over and over. The 1980s action star market got saturated quickly with Stallone and other ambitious actors (Dolph Lundgren, Chuck Norris, Jean-Claude Van Damme, Bruce Willis, Wesley Snipes).
Doing a comedy like Twins was a risk but there weren’t many muscle-bound actors trying the same pivot. “Don’t go where it’s crowded,” says Schwarzenegger. “Go where it’s empty. Even though it’s harder to get there, that’s where you belong and where there’s less competition.”
Money and Creative Control: I wrote about Blumhouse Productions a few months ago: the studio makes very successful horror/thriller films by giving directors full creative control (final cut) in exchange for coming in under budget (typically $5m) and a big share of the upside. Many talented directors take the deal — because it allows them to see their vision through (as long as they keep within the budget) — and the model has produced unlikely hits like Get Out, Whiplash, and The Purge.
Twins was a similar deal. Schwarzenegger got to see his comedic vision come to life by minimizing the studio’s upfront investment. And prior to that, he was able to control his creative destiny because he was already financially secure from real estate and bodybuilding.
The concept of money and creative control isn’t just for the arts. Steve Jobs — when he was CEO of both Pixar and Apple in the early 2000s — said a “risk-taking creative environment on the product side” required a “fiscally conservative environment [on the business side]” because “creative people are willing to take a leap in the air, but they need to know that the ground’s going to be there when they get back.”
Let me wrap this up with my favourite summation of Schwarzenegger’s career and his ability to constantly re-invent himself.
It’s from comedian Bill Burr’s 2012 special You People Are All The Same.
“Anybody here think they could move to Austria?” he asks the crowd before listing off Schwarzenegger’s resume. “[Then] learn the language, become famous for working out, then be a movie star, then marry into their royalty, and hold public office? How many lifetimes would you need? I’m on my third attempt at Rosetta Stone Spanish!”
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Links and Memes
Will Apple buy Disney? The Hollywood Reporter has a very spicy article on why Apple ($2.8T market cap) could acquire Disney ($157B):
Disney and Apple are tight: “And there has been a long-standing ‘special relationship’ between Disney and Apple: Steve Jobs served on Disney’s board of directors from 2006 until his death in 2011. Iger joined Apple’s board shortly after Jobs died. He resigned from that position Sept. 10, 2019, the same day Apple officially announced that it was getting into the content business through its Apple TV+ service.”
Disney would have to shed some assets: Disney’s linear TV assets other than ESPN include ABC, FX, A&E, Nat Geo and 8 Local TV Stations. Analysts think Disney could sell these for $50B+ to help pay down debt and make Disney a more appealing target for Apple.
Why would Apple do it? The company has $62B on hand but typically does not do large acquisitions (it’s biggest purchase was Beats for $3B in 2014). But, Apple needs content for Apple Vision Pro and Disney has a first-class studio as well as tons of IP and live sports.
The window for a deal is probably now because Iger is on the clock as CEO and Disney looks affordable based on its lacklustre stock performance this year. My guess: very low chance it happens (and any bid would meet huge regulatory scrutiny).
As the article flags, Iger did say this in his memoir: “I believe that if Steve [Jobs] were still alive, we would have combined our companies, or at least discussed the possibility very seriously.”
Community Notes, explained: So X / Twitter has this feature called “Community Notes”, which is a fact-checking tool where qualified users crowd-source information. It’s been useful to debunk false claims in science, politics, pop culture and more. But its most viral claim to fame is when Community Notes just absolutely bodies some poser on the platform. Here is a recent call-out of a “millionaire”:
The Community Note shows up under the post but I went side-by-side for your viewing pleasures. Anyways, a key part of Community Notes is that the voting system uses a mechanism to diminish bias. Ethereum co-founder Vitalik Buterin wrote a detailed analysis of the tool including this takeaway:
But what interests me most about Community Notes is how, despite not being a "crypto project", it might be the closest thing to an instantiation of "crypto values" that we have seen in the mainstream world. Community Notes are not written or curated by some centrally selected set of experts; rather, they can be written and voted on by anyone, and which notes are shown or not shown is decided entirely by an open source algorithm. The Twitter site has a detailed and extensive guide describing how the algorithm works, and you can download the data containing which notes and votes have been published, run the algorithm locally, and verify that the output matches what is visible on the Twitter site. It's not perfect, but it's surprisingly close to satisfying the ideal of credible neutrality, all while being impressively useful, even under contentious conditions, at the same time.
And some other baller links:
Thomas Edison Marketing Hack: “How Thomas Edison Tricked the Press Into Believing He’d Invented the Light Bulb” via Smithsonian Mag.
Taylor-Mania: “Unpacking the Economics of Taylor Swift” via my friend Dan Runcie’s Trapital podcast, which looks specifically at the financial structure of her record deals (including details from leaked documents related to her beef with Scooter Braun).
White Noise Costing Spotify $38m? “Spotify Looked to Ban White Noise Podcasts to Become More Profitable” via Bloomberg. Why? Spotify has made a huge push into podcasts but some users are hacking the system by uploading 10+ hour-long podcast episodes that only play white noise and soothing sounds. The algo pushes this content to users and takes them away from higher-value audio (songs, real podcasts). This issue is costing Spotify $38m in a year ad sales and the company may be throttling the practice. Either way, I’ll be recording 30 hours of my living room fan this weekend.
Vietnamese EV maker VinFast went public last week and saw its market cap rocket to $86B on the first day of trading (more than Ford or GM) but has since shed 40%+ of that value. Based on the fact that the stock has such a thin float — only 1% of the shares are publicly traded — the current valuation is honestly meaningless.
Africa’s $5B Mega-dam: A fascinating 8-minute YouTube video on a massive dam project in Ethiopia being built to divert the Nile River. Egypt — which gets 85% of its water from the Nile — is not happy with the project.
...and here them fire tweets (Xs):
Finally, don’t forget to wish your good buddies a happy birthday lol