Why Tamil producers are risking an indefinite strike to end massive upfront actor fees

What’s driving the conflict?

For the past two years, Kollywood producers—much like their counterparts in Tollywood and Bollywood—have been pushing for a revenue-sharing model. Under this system, actors and technicians forego fixed fees and instead take a percentage of the film’s earnings. For instance, instead of charging a fixed amount, an actor might demand a share like “Rs 30 out of every Rs 100 the film earns.”

Producer Dhananjayan, speaking to SCREEN, said, “When Aamir Khan popularised the idea of foregoing salaries in favour of revenue share, it sparked conversations across industries. Hindi cinema actors like Akshay Kumar and Ajay Devgn have gradually adapted. We expect Tamil actors charging over Rs 20 crore to consider this model as well.”

Earlier, actors resisted due to a lack of financial transparency. Producers often relied on multiple funding sources with high-interest loans, making profit calculations murky.

“Five years ago, that concern was valid,” Dhananjayan explained. “Today, everything is digital and traceable. With structured deals for satellite, digital, and distribution rights, transparency is no longer an issue. Yet, actors remain unwilling.”

The burden of fixed salaries

According to producers, the current system is financially unsustainable.

“Most big films are failing,” said Dhananjayan. “While 2024 was manageable, 2025 has been disastrous. Several anticipated films have bombed. Despite this, actors walk away with massive fixed salaries. How are producers expected to survive?”

With mounting debts and shrinking returns—especially as OTT deals decline—producers argue that risk must be shared more equitably.

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Strike call: A tipping point

On May 2, film shoots across Tamil Nadu are set to come to a halt. While the actors’ body, Nadigar Sangam, has expressed disappointment, producers remain firm. “If producers are incurring losses, everyone must share the pain,” Dhananjayan said. “You cannot only talk about salaried individuals suffering. What about those paying those salaries?” He added that if actors do not come to the negotiating table, the strike could extend indefinitely.

The Parasakthi effect

Interestingly, a recent Tamil film has intensified this debate. Sivakarthikeyan’s Parasakthi, released during Pongal, underperformed at the box office despite minimal competition. Yet, its producer managed to avoid losses. Here’s how: Instead of paying the actor Rs 50 crore upfront, the producer paid Rs 25 crore and offered a share in profits. Similar arrangements were made with other key members of the team. This reduced the initial financial burden significantly.

“Akash Bhaskaran, the film’s producer, paid Rs 25 crore to Sivakarthikeyan upfront, with a promise of a 33% profit share. He followed a similar model with Jayam Ravi, offering Rs 10 crore upfront, and paid the director around Rs 3 crore—effectively halving fixed fees while linking the remaining earnings to the film’s performance. This approach allowed him to complete the film within a Rs 100 crore budget. Had he paid full upfront salaries, the project would have resulted in a loss of nearly Rs 40 crore. Instead, despite a modest box office performance, recoveries from digital and satellite rights helped him break even. The key is protecting capital. If that fails, a producer is finished.”

However, for the actors involved, the deal meant a significant cut in expected earnings—highlighting the risks of performance-linked compensation.

Revenue share vs profit share

Industry experts draw a clear distinction between the two models: Profit-sharing: Actors receive a fixed fee plus a share of profits—but profits can be manipulated through inflated costs. Revenue-sharing: Actors earn a fixed percentage from every revenue stream—box office, OTT, satellite, and music rights—ensuring transparency. This is why many actors prefer revenue sharing over profit sharing.

The Telugu industry model

Top Telugu stars like Allu Arjun, Ram Charan, and Vijay Deverakonda are already working on revenue-sharing models. Even actors who charge fixed fees show flexibility. For instance, Chiranjeevi reportedly adjusted his Rs 100 crore fee to accommodate co-stars and manage the film’s budget—ensuring overall profitability.

“Chiranjeevi typically charges between Rs 75 crore and Rs 100 crore per project. However, for Mana Shankara, he was keen on casting Nayanthara in the lead and reduced his fee to accommodate her Rs 15 crore remuneration. He further lowered his salary to bring Venkatesh Daggubati on board for a cameo, or which the actor was paid Rs 10 crore.”

Industry at a crossroads

Trade analyst Ramesh Bala summed up the crisis: “Out of 100 films, barely 10 succeed. Meanwhile, OTT deals are shrinking. Producers are being pushed to adopt revenue-sharing just to survive. They want actors to share the risk instead of walking away with guaranteed paychecks.”

The shift, however, is easier said than done. For actors accustomed to massive upfront fees, moving to a performance-linked model requires a significant mindset change.

What happens next?

With the strike looming, Tamil cinema stands at a critical juncture. Will actors agree to share the financial risk? Or will the industry face a prolonged shutdown? The answer may emerge as early as May 2—but its impact could reshape the business of filmmaking in Kollywood for years to come.

Attempts to reach actor Vishal for comment were unsuccessful.