For the first time, 20 years since the classic was first released, James Cameron and others reveal their behind-the-scenes secrets.

This year, James Cameron's Oscar-winning Titanic will mark the 20th anniversary of its release. In this second exclusive excerpt from his new biography Leading Lady: Sherry Lansing and the Making of a Hollywood Groundbreaker (Crown Archetype, out April 25), THR's executive features editor picks up Lansing's story as the Paramount Pictures chairman faces the biggest decision of her career: whether to go ahead with Titanic.

By 1996, Sherry Lansing was firmly in place atop Paramount Pictures, comfortable at last in her role as an executive after years as a producer, during which she had worked the system rather than working for it. She was hungry for good material, anxious to find the kind of dramas fueled by the intense emotions that had driven her personal life. Then she heard about a new epic whose rights might, just might, be available.

The industry was abuzz with rumors about Titanic, the first film from director James Cameron since 1994's True Lies. The movie was shrouded in mystery, its script hidden from even the most probing of Paramount's executives. But production chief John Goldwyn's wife, actress Colleen Camp, had recently auditioned for a role and soon an executive at 20th Century Fox slipped the screenplay into Goldwyn's hands.

As soon as he got it, Goldwyn passed it to Lansing, who devoured it in one gigantic bite. Immediately, she knew she'd found gold. She was thrilled by the way Cameron had used a real-life tragedy to propel his fictional story, a Romeo and Juliet tale set against an epic backdrop, as modern in its themes as it was historic in its setting. The movie may largely have been set in 1912, but it was utterly contemporary in its feel.

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"It was a great love story, with an underlying message about female empowerment," she said. "Rose [Kate Winslet] was strong and feisty from the beginning — she's an independent woman who breaks with her class to be with the man she loves [Leonardo DiCaprio]. People underestimated the strength of those characters and how unconventional they were."

She was eager to board the project, but knew Cameron was locked into a deal with Fox and was soon to start production. Then word began to spread about the picture's cost. Stories rumbled through Hollywood that the price was too steep, that Fox executives were desperate to sell off some of the rights. Soon, Lansing learned that the studio was in talks to co-finance the picture with Universal. At the same time, she knew that rival studio was contending with a slew of troubles, including the fallout from Kevin Costner's 1995 drama Waterworld, an ocean-based actioner that had become a byword for profligacy. That, if nothing else, might give it pause when faced with another sea-going drama.

"[Universal Pictures chairman] Casey Silver couldn't run away fast enough," said Fox executive Bill Mechanic. "Everybody thought the movie was nuts."

When Universal wavered, Lansing pounced. Gathering her executives, she launched a coordinated assault, bombarding Fox with calls and reminding its staff about their great shared experiences on Braveheart.

Mechanic didn't see things quite that way. He was angry that Paramount had failed to do the paperwork that would have given Fox a share of Braveheart's best-picture Oscar, and believed the neglect was deliberate.

"They were all calling, saying, 'We had such a good thing on Braveheart,' " he noted. "And I'm like, 'Well, there were some issues.' "

Mechanic would have liked to finance Titanic on his own. He believed in it, was invested in it. But the higher up the ladder the decision-making went, the more anxious everyone seemed. There were bosses to please, shareholders to keep happy. Studio chief Peter Chernin was soon to be elevated to president of News Corp., and the last thing he wanted was a stain on his record. He insisted that Mechanic consider Paramount's offer and said they had five days to close a deal.

Lansing sent Bill Bernstein, her chief of business affairs, to negotiate, and at the end of five straight days of talks — at precisely 2:00 a.m., technically past Fox's deadline — the two sides agreed to split the $109 million budget down the middle.

"The contracts were faxed back and forth and hastily signed," said Lansing. "The deal was done."

Then trouble began. When Lansing was given a detailed budget, she saw one red flag after another. "I hadn't produced such an elaborate movie, but I knew it was light by millions of dollars," she said.

Concerned, she sent Fred Gallo, her head of physical production, to Baja, Mexico, where Cameron had built a gigantic water tank and multilevel sets on a 24-acre piece of land. Gallo found an operation bigger than anything he had ever seen. Some 10,000 tons of dynamite had been used to blow a hole large enough to build the tank, and 1,500 construction workers were hammering away at the vessel, which was almost as large as the original ship. But even this brief visit revealed all sorts of things that could go wrong.

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"Cameron wanted real wallpaper and things like that," Gallo remembered. "I said, 'Why don't you build the sets and have them paint on the wallpaper? No one will ever know.' He wanted a special submarine, and there was only one in the world. It was Russian and he had to have it. They bring it in, and on the first day they have power problems and can't shoot."

When Gallo reported all this to Lansing, anxiety turned to anger as the Paramount team suspected it had been deceived. The budget had gaping holes. Why had Fox not told them this? Lansing's partner at the top of Paramount, Jonathan Dolgen, was livid.

"He said, 'Your budget's running way over! You knew this! We're going to sue you for fraud!' " recalled Mechanic.

Chernin was under immense pressure, and the last thing he needed was a runaway picture whose entire expense rested on his shoulders. So he offered new terms: Instead of a straight 50-50 split, he allowed Paramount to "cap" its investment: it would pay a set amount for half the film, and Fox would cover the rest, including overages.

"We'd never have to pay a dime more," Lansing explained, "no matter how overbudget the movie went."

Assuming a worst-case scenario of $130 million, Paramount agreed to pay half of that, or $65 million.

The deal has gone down as one of the most remarkable in motion picture history, and an embarrassment for Fox, given that Titanic's budget would soar to $210 million. (Fox later benefited from having a larger share of the profits.) As it was, neither party ever imagined how much the movie would eventually take in.

"Jon must have run 10 different scenarios to show how much we could make or lose," said Lansing. "We did them until we were blue in the face, but nobody had ever heard of a movie making $2 billion."

Still, as the Mexico shoot commenced, weekly cost reports came in, indicating that the budget was careening out of control. Mechanic and Chernin were furious that Paramount had gotten away scot-free, while their own relationship was deteriorating as Mechanic felt he was being blamed while Chernin had moved out of the line of fire.

"Everyone thought they were going to lose money," said Cameron. "Nobody was playing for the upside, myself included."

Not even Lansing was sure she had a hit, until she traveled to Mexico early in the shoot. "I walked through the ship, and I was taken back in time," she said. "They'd re-created everything, and the specificity of the details, right down to the period dishes, blew my mind."

She was thrilled with the dailies, but the pressure was growing — especially on Mechanic. "Peter was hiding his head in the sand," he said. "We were losing three out of every five days. We had no estimate of when it would finish or what it would cost to finish at all."

Production delays grew worse as building the ship took far longer than anticipated. The film's director of photography was replaced; several castmembers came down sick with the flu; and almost everyone cowered at the sight of Cameron, terrified of his temper. Mechanic was so alarmed that he drove down to Baja, armed with a list of proposed cuts. There he confronted Cameron in the middle of the night.

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"Jim exploded," he said. "It was 3 or 4 o'clock in the morning, and if he'd had a gun in his trailer he would have shot me. The gist of it was, 'If you're so f—ing smart, you direct the picture.' And he walked off. He stormed out of his trailer, pulled his chauffeur out of the car, and sped off. He was screaming. I said, 'Shut down the shoot until he calls me,' and got in my car and drove back to L.A."

"It was one of those meetings at night, in the middle of a 150-day shoot, where people just didn't see eye to eye," said producer Jon Landau.

Cameron and Mechanic reached a tentative peace and filming resumed. But the problems continued.

"It was terrible," said Lansing. "The picture was going over and over. Everybody had written it off: 'It's going to be the biggest disaster ever.' But Bill kept believing in the film when a lot of other people at that studio didn't."

As word leaked about the nightmare shoot, some of the cast and crew turned against their director. Winslet said at times she was "genuinely frightened of him," while others called him a tyrant.

After the shoot ended, money continued to hemorrhage in postproduction, and relations between the two studios, already cool, became frigid. When Chernin asked Dolgen to kick in some extra cash, he refused.

"We were carrying the movie on our books as a $55 million loss," Chernin explained. "I went to Paramount and said, 'Jon, you can't make what you're making while I'm still underwater. I'm going to get fired for this and you're going to make money standing on my neck.' He turned me down. I was very, very angry."

While Paramount and Fox were at loggerheads, Cameron was at war with both studios. At the former, his wrath fell on Robert Friedman, a longtime Warner Bros. executive whom Lansing had hired as her vice chairman. Cameron despised Friedman's plans for selling the picture, and loathed a trailer he had created. When he cut his own version, Friedman hated that, in turn.

"We got a call from Robbie Friedman saying — and I quote — 'I just saw your trailer and threw up on my shoes,' " said Cameron.

The multiparty warfare continued over everything from the design of the poster to the date when the movie should open, as it became clear the director would not be able to make the planned release — July 4, 1997.

When Lansing called Chernin to discuss it, "Peter was very upset with me," she acknowledged. "He said, 'My dear, you don't have the kind of money that we have in it, and we'll determine when it's going to be released.' I said, 'Good luck to you.' "

The conflict spilled into the open at the Cannes Film Festival, when Friedman and Mechanic came close to a fistfight, before they agreed on a Christmas release.

Throughout "this ugly period," said Cameron, "Sherry remained staunchly supportive of the movie."

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At no point was she more so than when she saw parts of it pieced together for the first time at Cameron's Malibu home.

"Jim said, 'Come out, and I'll show you a few scenes cut together, just a couple of scenes,' " Lansing recalled. "It was a Sunday, and I'd made plans to have dinner with my husband [director William Friedkin] later on. John Goldwyn and I drove out to Jim's home early in the afternoon, and we had a little lunch, and then Jim made the room dark and showed us the first scene, and I was speechless." Cameron asked if she would like to see some more. "Of course," she replied. "And he showed me another scene, completely different, and that was incredible. Then he said, 'Another scene?' And I said, 'Yes!' I lost all track of time."

After an hour — or what she believed was an hour — she said she should call Friedkin to tell him she'd be late for dinner. "I told Jim I was meeting Billy at six," she said. "And Jim said: 'What are you talking about? It's already 8 p.m.' "

That screening "was a big turning point for me," said Cameron, "because we were in a very bleak place emotionally, trying to finish the movie. Everyone was against us. And all of a sudden, we had a studio head saying that somehow, at some level, it had all been worth it."

Lansing only had one reservation: about the song "My Heart Will Go On." "I said, 'Jim, isn't this a little corny?" she recalled. "He said, 'Oh my God, Sherry! The song is fantastic.' "

Titanic premiered November 1, 1997, at the Tokyo International Film Festival and opened domestically December 19 on 2,674 screens.

Contrary to industry expectations, it came in No. 1 at the box office, earning $28.6 million its first weekend on its way to a worldwide total of $2.19 billion. That made it the most successful movie ever, a record broken only by Cameron's Avatar in 2009.

"The picture went 'clean' [into the black] on theatrical alone," said Bernstein, the business affairs executive. "I never saw that happen before."

Titanic was nominated for a record-tying 14 Oscars and won 11, including three for Cameron. The day after the Oscars, Lansing ordered a photo of the moment when he and Landau learned their movie had been named best picture.

"She sent over the photo in a silver frame," said Landau. "It's a moment I'll have forever."

Reprinted from LEADING LADY: SHERRY LANSING AND THE MAKING OF A HOLLYWOOD GROUNDBREAKER Copyright © 2017 by Stephen Galloway. Published by Crown Archetype, an imprint of Penguin Random House LLC.