While Alex Hayes was charming the press engaged in a whirlwind promotional tour for the upcoming December release of Moonstruck, the real drama was unfolding behind closed doors in CAA offices.
The negotiation for Rain Man had hit a critical friction point.
In Michael Ovitz's corner office at CAA, the air conditioning hummed against the tension. Sitting across from Ovitz was Bert Fields. Fields was more than an attorney; he was the entertainment industry's premier legal gladiator. With a client list that read like a Hall of Fame. He was there representing Dustin Hoffman.
"Michael, we have a serious problem with these term sheets," Fields said, adjusting his glasses. His voice was calm but edged with steel. "There is a profound lack of respect in the numbers."
The deal on the table was lucrative, but uneven. Paramount had agreed to pay Alex Hayes a $7 million upfront salary against 12% of the worldwide box office gross (first dollar). Alex had actually agreed to lower his backend from his usual 15% to 12% to accommodate a backend deal for his co-star.
However, Dustin Hoffman's offer was $3 million upfront against 4% of the gross.
"Alex is getting three times the backend and more than double the upfront," Fields argued. "Dustin is a senior actor. He is an Academy Award winner. He carries a prestige that Hayes, for all his box office, hasn't earned yet. At the very least, they should be at parity."
Michael Ovitz shifted in his chair, looking momentarily uncomfortable. This was the complexity of "packaging," a strategy CAA had pioneered and perfected.
In a package deal, the agency bundled its own talent—scriptwriters, directors, and actors—and sold the entire project to a studio as a turnkey product. Rain Man was a quintessential CAA package. Originally, the agency had envisioned Bill Murray playing the autistic brother, Raymond, with Dustin Hoffman playing the abrasive brother, Charlie. But development hell had caused delays; Murray moved on to other projects, and Hoffman, fascinated by the savant character, had decided he wanted to switch roles to play Raymond.
"Bert," Ovitz said, replacing diplomacy with brute facts. "We sold this as a package, yes. But the market valuation of our clients is not identical. The numbers don't lie."
Fields stiffened. "Dustin is a legend."
"Dustin is a legend," Ovitz agreed. "But Alex and Dustin are not on the same level anymore."
Ovitz leaned forward. "When was Dustin's last hit? He won the Oscar for Kramer vs. Kramer in 1979. Since then, he has done exactly two films in eight years: Tootsie, which was a smash, and Ishtar."
The mention of Ishtar sucked the air out of the room. The Warren Beatty/Dustin Hoffman comedy, released earlier that year (May 1987), was a notorious, colossal critical and commercial bomb.
"Now look at Alex," Ovitz continued relentlessly. "He has released fifteen commercially successful films this decade. His last film, Top Gun, just crossed $500 million worldwide yesterday."
Fields remained silent, knowing the box office math was unassailable.
"Hollywood is a cruel bitch, Bert," Ovitz said, his voice low. "Here, the only currency that matters is the ability to pull audiences and put butts in seats. Right now, there is no actor on the planet comparable to Alex regarding this."
"Dustin is your own client, Michael," Fields reminded him sharply. "You're supposed to advocate for him."
"And Alex is my agency client. I have to look at the big picture for the agency and the project," Ovitz countered. "Paramount has made their position clear. Their main priority is Alex Hayes. If Dustin walks because of the money, Paramount is ready to make an offer to Al Pacino for the role of Raymond by noon tomorrow."
Fields sighed, the fight draining out of him. He knew Paramount wasn't bluffing. "Dustin won't behappy with this Michael."
"Explain it to him, Bert. You're his friend," Ovitz urged, switching to a persuasive tone. "Look at the projections. If Rain Man has good word of mouth—and with Alex's popularity—it could gross at least $200 million global. "
Ovitz grabbed a notepad. "4% of $200 million is $8 million. Plus his $3 million upfront. That is an $11 million payday for Dustin to star in a prestige drama. That is a massive amount of money for an actor coming off of Ishtar."
Fields thought for a moment, running the numbers.
"Fine," Fields nodded, sighing. "I will explain the reality to him."
As Fields left the office, Ovitz shook his head, leaning back in his leather chair. He had wanted to get a better contract for Hoffman, simply out of respect for the actor's talent. But Paramount had been adamant. For the studio, Alex was the irreplaceable asset, not Dustin.
Ovitz pulled a confidential binder from his drawer—a box office analysis report commissioned by the studios. The data was stark. It wasn't just that Alex made successful films; he fundamentally altered the financial DNA of a project.
The report highlighted a "Hayes Factor": when Alex Hayes was attached to a blockbuster project, there was a measurable 33% increase in revenue compared to a replacement-level star. The analysis posited that Top Gun would have been a hit with any young heartthrob—perhaps grossing $350 million. But it was Alex Hayes who pushed it to $500 million.
Studios were no longer just paying for an actor; they were betting on that 33% margin. And as long as Alex delivered that margin, he would be the one dictating the terms, even to legends like Dustin Hoffman.
******
Later that evening, in the quiet study of his Brentwood home, Dustin Hoffman listened as Bert Fields laid out the terms.
The silence that followed was heavy. Hoffman's face tightened, a mix of disbelief and stinging indignation coloring his features. "Three million against seven? Four percent against twelve?" he repeated, his voice quiet but furious. "I have an Oscar, Bert. I have three decades of work. This kid... he's worth three times what I am?"
"It's the market, Dustin," Fields said gently. "After Ishtar... the studio needs insurance. Alex Hayes is the insurance. They see him as the guarantee that people will see the movie."
Hoffman stood up and paced the room. His pride was deeply wounded. It wasn't just about the money; it was about the hierarchy, the brutal realization that his artistic standing had been eclipsed by raw commercial power. He felt minimized, treated like a supporting player in his own potential masterpiece.
But then he stopped pacing and looked at the stack of notes on his desk. For more than six months, he had been meeting with savants, visiting psychiatric facilities, and obsessively observing mannerisms. He had built the character of Raymond Babbitt from the ground up, finding a voice, a walk, a rhythm. He had invested too much of his soul into the research to walk away now. He believed in the role. He believed it was the kind of work that defined a career.
He picked up the contract, feeling the weight of it.
"It's insulting," Hoffman murmured, staring at the page. He looked up at Fields, his eyes hard with resolve. "I'm doing it because nobody else can play Raymond. If I walk, they'll give it to Pacino or someone who won't understand the nuance. I can't let that happen."
He took the pen and signed the document, accepting the terms. It was a bitter pill, but the work was more important than the ego. The deal was done. Rain Man was a go.
*********
Alex Hayes, focused on his commitments for Moonstruck, remained entirely unaware of the delicate financial negotiations and the internal conflict they had caused for his co-star. And even if he had known, it was unlikely the details would have altered his perspective.
For Alex, that massive financial valuation was not a trophy; it was simply a measure of responsibility. He wasn't arrogant about his worth; he was acutely aware of its function in the Hollywood ecosystem. He knew that some of the greatest films—the true artistic masterpieces—often failed to find an audience not because of insufficient talent, but because of insufficient exposure.
The sheer cost of marketing and distribution, coupled with a limited theatrical window, meant that a film without a bankable name to drive publicity and open on a thousand screens could easily vanish, regardless of its quality.
His presence was the guarantee of that exposure. It forced the studio to invest heavily in the project's success. It meant that every member of the crew, every production assistant, every sound engineer, and every other actor involved was significantly more likely to receive their final paycheck because his name ensured the massive marketing budget.
Hollywood was an industry where talent alone was insufficient. Success was a ruthless, quantifiable formula of art, commerce, and pure, concentrated publicity. Alex had consistently delivered the latter two, and he was absolutely unapologetic about claiming the compensation that reflected the entire enterprise's reliance on his commercial leverage.