How profitable and powerful were Smith and Sandler in the 2000s? Their hit films "bought our houses," joked studio executives. But as audience tastes turned to franchise films, the duo became the flashpoint for the implosion of the star vehicle, writes a Wall Street Journal reporter in an excerpt from his new book 'The Big Picture: The Fight for Future Movies.'

In his new book, The Big Picture: The Fight for the Future of Movies, Wall Street Journal reporter Ben Fritz chronicles the dramatic transformation of Hollywood during the first two decades of the 21st century — from the rise of superhero and toy franchises to the near-disappearance of the midbudget adult movie to the new power of streaming services. Drawing on material revealed in the Sony hack plus interviews with key players at companies including Disney, Netflix and Amazon, the book charts the industry’s recent history and where it may be headed next. In this exclusive excerpt, he looks at how the box-office power of Sony’s biggest A-List stars, Adam Sandler and Will Smith, eroded in the face of franchise films.

As Hollywood became obsessed with finding the next big global brand, Sony Pictures executives would state that they were as interested in franchises as anyone else was. But it clearly wasn't true. "People labeled us a relationship studio," then-Sony co-chairman Amy Pascal reflected in 2014. "We were, and it was our strategy."

Of Sony's top 50 movies from 2000 to 2016, more than two-thirds were "star vehicles," in which the talent involved was as big as or bigger than the movie title or the franchise. More than one-third came from just two people: Will Smith and Adam Sandler. Movies they starred in or produced grossed $3.7 billion from 2000 to 2015, generating 20 percent of Sony Pictures' domestic gross and 23 percent of its profits. No other studio was as reliant on just two actors. Their rise and fall illustrate what has happened to movie stars in Hollywood.

Will Smith found his calling as the charming hero that America, and eventually the world, could root for in big action-adventure movies beginning with 1995's Bad Boys. Then next year, he starred in Independence Day, which, at $817 million, remains his highest-grossing movie and established him as a worldwide sensation just when the international market was blossoming.

By 1999, with the hits Men in Black and Enemy of the State, Smith was ready for producing. He and James Lassiter formed Overbrook Entertainment, named after their Philadelphia high school, and signed a three-year, first-look deal with Universal Pictures. The duo didn't get a single movie made. "We were novices, and we hadn't learned the business," Lassiter later reflected. In 2002, they moved their deal to Sony, which made Bad Boys and Men in Black and, most importantly to Smith, 2001's Ali. Budget concerns brought Sony near to killing it but the studio eventually worked out a compromise with Smith and the highly respected, but not exactly frugal, director Michael Mann to make it for $109 million, still a huge budget for an R-rated biopic. Ali grossed only $88 million and lost Sony money. But it got Smith his first Oscar nomination and, true to the Pascal playbook, earned Sony his loyalty.

In contrast, Sandler was a stand-up comedian who earned fans for his Saturday Night Live characters such as Opera Man and Canteen Boy but did not seem destined for stardom like contemporaries Dana Carvey and Mike Myers. Pascal fell hard for Sandler after seeing him in The Wedding Singer. When Chris Farley, who was set to star in a Sony comedy as an underachieving toll collector, suddenly died, she turned to Sandler. Big Daddy was a monster hit, grossing $235 million worldwide. Unlike Smith, Sandler didn't have grand designs for his career or carefully plotted strategies for his company. He was a smart but easygoing schlub who had no pretensions about who he was and why fans loved him. "He wasn't fancy, and he wasn't a dinner-party conversation guy. He was more about the money," said a person close to the star.

Being prolific was the name of the game. Between 2000 and 2015, Sandler starred in 24 movies and produced an additional 13. He proved can't-miss in one dumb but endearing comedy after another. Mr. Deeds, Anger Management, 50 First Dates and others all grossed more than $170 million worldwide.

Smith was more strategic, starring in 15 films and producing an additional seven during the same period. After Ali, Smith starred in two sequels that Pascal badly wanted, Men in Black II and Bad Boys II. He then proved his romantic-comedy bona fides with Hitch, his ability to draw big audiences to an inspirational drama with The Pursuit of Happyness and his appeal in an original superhero film with Hancock.

Sony paid both stars handsomely for their consistent success: $20 million against 20 percent of the gross receipts, whichever was higher, was their standard. They also received as much as $5 million against 5 percent for their production companies, where they employed family and friends. Sony also provided Overbrook and Sandler's Happy Madison with a generous overhead to cover expenses — worth about $4 million per year. To top it off, Sandler and Smith enjoyed the perks of the luxe studio life. Flights on a corporate jet were common. On occasion, Smith's entourage necessitated the use of two jets for travel to premieres. Knowing that Sandler was a huge sports fan, Sony regularly sent him and his pals to the Super Bowl to do publicity. Back at the Sony lot, the basketball court was renamed Happy Madison Square Garden in the star's honor. When anybody questioned the endless indulgence given to Sandler and Smith, Sony executives had a standard answer: "Will and Adam bought our houses."

Sony wasn't unique in the perks it provided to talent. Warner Bros. had vacation villas in Acapulco and Aspen that stars could fly to on a corporate jet, and Universal had a custom-designed Tuscan villa. But Sony was consistently among the biggest spenders. An internal analysis by the studio found that from 2007 through 2012, it spent 13.5 percent more on "above the line" costs — industry jargon for key creative talent — than other studios.

The star business went south for Sony Pictures starting in 2012. Many at the studio were already embarrassed by 2011's Jack and Jill, a comedy that was insipid even by Sandler's standards; in the film, he played a man and his twin sister. Sony executives didn't want to make it, but it was virtually impossible to say no to one of their biggest stars. It earned Sandler the worst reviews of his career (the Rotten Tomatoes rating was 3 percent) and was his lowest-grossing comedy since the bomb Little Nicky in 2000. Still, it grossed $150 million globally and wasn't a complete disaster. That fate was reserved for his next movie: That's My Boy, the 2012 movie that featured Andy Samberg as the adult son of a middle-aged loser played by Sandler. The $70 million production — a ridiculous cost for a comedy that reflected the star's still-huge paycheck — was a box-office bomb and lost $42.5 million.

That same year, Smith returned to the big screen after a hiatus following 2008's surprise disappointment, Seven Pounds. He starred in a sequel, Men in Black 3, that Sony had been dying to make. Now used to being the dominant creative force in his productions, the unhappy Smith holed up in his 53-foot-long trailer, which featured a screening room, offices for assistants and an all-granite bathroom, while multiple screenwriters reworked the script again and again. The creative conflicts were so severe that production was halted for three months to resolve them. Greenlit with a budget of $210 million, it ended up costing $250 million and barely broke even despite its hefty $624 million gross.

Smith was hardly deterred, though. He had something far bigger in mind. Aware that "star vehicles" were fading and talent needed to get involved in franchises, he developed a project called "1000 A.E." Working out of a "war room" filled with concept art, his Overbrook team envisioned a story set a millennium after the late-21st century destruction of Earth by environmental calamities. Not just a sci-fi franchise meant to reflect contemporary concerns, it would be a "transmedia universe," fleshed out in a 294-page "bible."

Overbrook's not-too-modest pitch document detailed plans for not only the movie and its sequel but also a television show, an animated series, webisodes, a video game, consumer products, theme park attractions, comic books, an "in-school education program in partnership with NASA" and "cologne, perfume, toiletries, etc." Fans would become so engaged, the pitch document advised, "it is also essential to create a stand-alone AE-branded Social Network."

Sony executives had mixed opinions on its commercial potential, but they needed franchises and they believed in Smith. Their biggest concern was how much Will Smith the movie would have. Envisioned as a father-son adventure story, the script in some versions focused entirely on a young character played by the star's son Jaden. Ultimately, Will Smith appeared in the movie but spent most of it disabled in a spaceship, giving advice over a communicator to his mobile son. Executives also weren't thrilled with Smith's choice of a director, M. Night Shyamalan, whose once-hot career had cooled. As they put together marketing plans for the May 2013 release, now titled After Earth, Sony executives realized their best bet was a con job. "Conceal Will Smith's injury," reads one marketing document. "It'd be disappointing to our audience to discover that he spends the majority of the film stuck in the ship." But no amount of deception could save the film; it grossed a dismal $61 million in the U.S. and a somewhat better $183 million overseas, but the $149 million production lost more than $25 million. There were no sequels, no TV shows and no video games. The failure was devastating to Smith, who not only acted in and produced the movie but also got his first screenwriting credit.

In the wake of After Earth and That's My Boy, the golden age for Smith and Sandler at Sony was over. As was happening to production companies all around Hollywood, the annual overhead for Overbrook and Happy Madison was slashed in half, to about $2 million each. And "the corporate jet wasn't available so much anymore," said a person close to Sandler.

Following their flops, Sandler and Smith each had only one live-action movie left at Sony before they could start searching for more welcoming backers elsewhere. Pascal's boss, Sony Pictures chairman Michael Lynton, thought that Concussion, about a doctor who discovers the danger of brain injuries to NFL players, should be made at a very low cost with a little-known star. Pascal believed it was the perfect movie to get "back on track" with Smith, an inspirational drama starring one of the world's biggest movie stars along the lines of his megahit The Pursuit of Happyness. But there was a problem. Smith's agents at CAA initially wanted $15 million against 15 percent of the gross — a cut from Smith's usual quote but still a huge number for such a small movie. "I don't know what to do with that," Pascal told Lassiter. "You know what kind of movie this is." Pascal thought they should be able to get him for $10 million, "Let's try $7.5 million," Lynton told her. "He almost got us fired with the last movie." Lynton lost that battle. Smith got $10 million, though nothing close to the 15 gross points that CAA had asked for. He would take up to 50 percent of the movie's profits only after Sony made at least $10 million. That didn't turn out to be an issue. Released a week after Star Wars: The Force Awakens in December 2015, Concussion barely registered at the box office — proving once again the power of franchises over movie stars — grossing just $49 million and losing the studio $25 million.

Sandler's years with Sony also ended with a whimper in 2015 with Pixels, based on a two-minute film about classic video game characters invading Earth. Sony thought it could become an action-comedy franchise in the vein of Ghostbusters and, like After Earth's hope, catapult an aging star into the new world of global franchises. Looking to keep to a tight $110 million despite the extensive visual effects, Sandler took only $5 million upfront in exchange for a big cut of the profits. Pascal promised Lynton that the movie would be different from the typical Sandler fare. "It's insanely commercial," she assured her boss. "No boob jokes, no poop jokes." Critics largely disagreed, calling it "dimwitted … slapdash, casually sexist." But the movie grossed just $245 million and eked out a profit of $10 million, not nearly enough to create a new franchise.

Inside Sony, the conversation was no longer about how to make more money with the stars but how to stop relying on them. "I think one of the answers to your question about what replaces Adam Sandler and Will Smith at the studio is planting commercial writer-directors here," the Sony-affiliated producer Mike De Luca told Pascal in 2014. Star power in Hollywood was fading fast, and Sandler and Smith would soon be on the leading edge of actors abandoning the studios that no longer wanted them and signing with a digital upstart for which they still had real value: Netflix.

Excerpted from The Big Picture: The Fight for the Future of Movies by Ben Fritz. Copyright © 2018 by Ben Fritz. Used by permission of Houghton Mifflin Harcourt. All rights reserved

Ben Fritz is a reporter at the Wall Street Journal covering Hollywood.

This story first appeared in the Feb. 28 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.